"Philippines Climate Accountability Bill: loss and damage in domestic legislation", 18 Dec 2023

The Climate Accountability Act (CLIMA), a bill currently before the Philippines Congress, seeks to hold corporate actors to account for their contributions to climate change. Given that the Philippines is a nation extremely vulnerable to the harmful impacts of the climate crisis, Filipino legislators are proactively seeking to establish mechanisms to help alleviate loss and damage from climate change...while also pursuing calls for climate justice.

...CLIMA is the first Southeast Asian bill that sets a minimum due diligence standard for corporate actors with respect to climate change. However, CLIMA...goes far beyond the disclosure and due diligence obligations...One of the innovative features of the bill is the way in which it brings together wide-ranging elements from legal scholarship, practice and activism on climate issues...

The bill incorporates the concept of due diligence, explicitly referring to the UN Guiding Principles on Business and Human Rights, the climate-related application of which is also...being debated by European legislators in the context of the EU’s Corporate Sustainability Supply Chain Due Diligence Directive.

...[T]he Philippines bill has a much clearer focus on mandating businesses to proactively address the impacts of their activities on climate change and “do no harm” than its European comparator does....[B]usinesses must adopt measures to quantify, report and reduce their greenhouse gas emissions throughout their value chains...shifting away from business-as-usual activities that exacerbate climate change impacts...CLIMA proposes a tax credit regime for businesses that comply with the due diligence standard of care set out in the bill and contribute to the Philippines’ clean energy transition...Failure to comply with various provisions may lead to...penalties equivalent to 15% of a business’ gross income...

The ‘polluter pays principle’...is clearly addressed in...the bill... The bill...seeks to expressly recognise and provide remedies for harm that is already being suffered by citizens, including negative impacts on mental health, as well as harm that is likely to be unavoidable...

The bill establishes a Doctrine of Last Clear Chance, manifesting in an obligation for the Carbon Majors to “substantially reduce greenhouse gas emissions to be faithful to their duty of care”...

...[T]he bill also tries to mitigate the risk of ‘just transition litigation’, through addressing some of the negative social consequences that an energy transition away from fossil fuels may generate...

The bill combines requirements of transition planning and due diligence with substantive emission reduction obligations, alongside stringent accountability mechanisms and a novel approach to redress for those suffering loss and damage...