UK:Landmark case against Treasury chucked out

Published by MAC on 2009-11-16
Source: The Journal (Scotland)

Landmark case against Treasury chucked out

Campaign groups to appeal verdict that unconditional purchase of RBS was legal

Nick Eardley, The Journal (Scotland)

21 October 2009

Campaigners have reacted angrily after a court case which saw the Treasury accused of breaking its own rules on the spending of public money when buying the Royal Bank of Scotland (RBS) was thrown out of court yesterday.

The case, which sought a judicial review over claims that investing in RBS broke government promises to combat climate and human rights abuses, was halted after a judge ruled that the Treasury acted within the law to protect the interests of its shareholders.

Campaigners have said they will appeal the decision.

Deborah Doane, director of the World Development Movement (WDM)- one of groups involved in the action- said: "We're incredibly disappointed wit the court's decision not to allow a full hearing on this important case and will be appealing the judgement.

Essentially the judgement means that the RBS' profits come before the climate and human rights of people."

The Treasury became a majority shareholder of RBS last year after rescuing the bank from the brink of collapse.

Campaign groups involved in yesterday's action claimed that RBS' investments in companies involved in oil exploitation and human rights abuses were unlawful.

Rosa Curling, the solicitor representing campaigners, said: "This is clearly a disappointing result and we have advised our clients to appeal the decision.

"The government has set up an obligation for all government bodies to assess the environmental consequences of its decision and projects and it has failed to do so in relation to the management of RBS investments."

The group involved in the action comprised of the WDM, student pressure group People and Planet and London based environmental group Platform.

A spokesperson for People and Planet said: "When the government bailed out RBS without placing any conditions on what could be done with the cash, they broke their own rules.

"RBS has used billions of pounds of our money to fund projects inflaming wars, stoking human rights abuses and driving climate change.

"The Treasury argued that any bank which does not do these things could be sued by its shareholders for not maximising profit. That the judge accepted this is terrifying, and of course we are appealing."

Amongst the more controversial companies which the RBS holds stakes in are Tullow Oil- which is involved in extraction of oil on the Uganda-Congo border- and Vedenta Resources which has been criticised by the government for failing to respect indigenous rights in India.