Press release from Solutions for Our Climate (SFOC)
SFOC sues KOGAS for gambling away public money on fossil fuel project
KOGAS announces Board of directors has decided in favor of investing in controversial new offshore gas project.
March 6, 2025 (SEOUL) – Solutions for Our Climate (SFOC) is suing South Korea’s state-owned Korea Gas Corporation (KOGAS) to demand the company cancel its plans to invest in the new Coral North offshore floating liquefied natural gas (FLNG) project in Mozambique.
The lawsuit raises two key concerns:
* Gas demand is declining worldwide, and KOGAS already reports poor return on investment for its existing overseas projects. The company’s refusal to reveal the new project’s profitability study violates shareholder rights – SFOC sued KOGAS for this in 2024. For a public financier to become involved in such risk without proper due diligence would be irresponsible.
* The Coral North project estimates a climate impact of 489 MtCO2eq emissions over its lifetime—over two-thirds of South Korea’s annual emissions. Funding this project would put South Korea even further off track to meet its climate targets, and therefore violates the rights of future generations to a healthy environment.
South Korea’s economy is deeply intertwined with fossil fuels. It is the second-largest public financier of overseas fossil fuels, and the world’s largest builder of LNG carriers which enable the global gas trade. Despite this, Korea recently canceled or delayed large-scale LNG projects due to declining domestic demand and rising construction costs.
The global LNG market is heading toward oversupply driven by massive expansions in Qatar, the United States, and other regions. For KOGAS to proceed with this investment would lock South Korea into a decades-long gas project, causing massive emissions with no guaranteed profit.
Seyun Lee, a plaintiff representing the rights of KOGAS shareholders, asked “For whom did the Board approve the investment decision? Why make investments that don’t align with long-term corporate value, financial health, or sustainable growth? Don’t put my money at risk.”
In a landmark case last year, South Korea confirmed the state’s legal responsibility to protect its citizens from climate change. Plaintiff Seoyoon Kim, representing youths in the current case, argued that “KOGAS’ investment in new gas development directly violates this principle [and] undermines intergenerational equity.” It has become clear that climate change will disproportionately affect younger generations.
Gas development in Mozambique is already under international scrutiny. Fossil fuel giant TotalEnergies indefinitely suspended its own Mozambique LNG project in 2021 due to violent insurgency, with allegations that Mozambique forces operating out of Total’s complex were involved in human rights violations. The region has been heavily militarized since 2021 following a violent insurgent attack.
Today, Mozambique is experiencing violent protests over an alleged fraudulent election. By mid-January, 314 people had been killed, another 700 people had been shot with live bullets, and more than 3,000 people had been injured. Illegal detentions numbered 4,236. These numbers are considered to be conservative.
As the world focuses on fossil fuels impacts, financiers will be pressed to justify exploiting resources in conflict-ridden areas. South Korea already underperforms on its climate responsibilities, and investing in another decades-long emissions machine in a conflict zone ridden with humanitarian, political and economic risks is not in the best interest of the South Korean people nor its shareholders.
Yujung Shin, an attorney at Solutions for Our Climate, stated, “Korean state-owned enterprises have a track record of making fossil fuel investments overseas that lack transparency and accountability. This lawsuit seeks to establish that such investments not only undermine the government’s climate commitments but also constitute corporate malpractice by neglecting fundamental financial and environmental risks.” She further emphasized, “The court must affirm that public institutions have a legal duty to integrate climate risks and sustainability into their investment decisions.”
Anabela Lemos, director at Justiça Ambiental, said, “The legal action that SFOC is taking is significant in relation to the Mozambican context of a repressive regime that is making it increasingly difficult to challenge leaders or decisions that are bad for our country. The people of South Korea would be wise to question if their tax funds should be used in support of activities that will harm the peoples of both Mozambique and South Korea.”
Eva Pastorelli, campaigner at ReCommon, said “Energy companies are well aware of the project’s negative impacts on ecosystems, human communities and their livelihoods and therefore should be held accountable for the consequences their choices will have.”
https://moz24h.co.mz/south-korean-civil-society-sues-over-fossil-fuel-gamble/?utm_source=dlvr.it&utm_medium=blogger
