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31 Aug 2022

Oil firm Rockhopper successfully sues Italy after ban on oil drilling

In 2022 the UK oil firm Rockhopper successfully sued Italy for £210m in compensation following the Italian government's decision to ban oil drilling off the Italian coast.

The case was brought under the Energy Charter Treaty, an investment agreement that includes investor-state dispute settlement provisions which allow corporations to sue states for decisions that damage their profits - regardless of whether those decisions are designed to protect human rights of the environment.

The pay out was calculated to include Rockhopper's anticipated future profits, and was six times larger than the £33m that Rockhopper had spent developing their operations at the Ombrina Mare oil field.

Cleodie Rickard, a trade campaigner at Global Justice Now, said: “It is a travesty that an oil company like Rockhopper can get this massive payout through secretive tribunals in the energy charter treaty. Fossil fuel companies are making obscene profits in the cost of living crisis and now they also want to make more money when governments actually take action to limit something like offshore oil drilling. This case will have a chilling effect on climate action, as climate scientists have warned."

Italy have left the Energy Charter Treaty, but remain open to being sued under the Treaty for 20 years under the 'sunset clause'.