A fundamental lack of democracy in the formation of trade policy in Britain lets oil companies sue governments across the world if they take action on climate change, according to a new report from The Ecologist in partnership with Abolish Westminster.

The special issue looks at obscure legal clauses the Department for Business and Trade (DBT) keeps putting into British trade deals. Many other countries around the world include these clauses – called Investor State Dispute Settlement (ISDS) mechanisms – in their own trade agreements.

These clauses mean that governments can be sued by foreign companies if they pass laws that damage the future profits those companies hoped to get from any investments into their country. Britain is currently being sued under such a clause because of a high court ruling that blocked the opening of a new coal mine in Cumbria last year.

According to Adam Ramsay, the author of the report and editor of the Abolish Westminster newsletter, all kinds of foreign businesses can use these clauses to sue governments that pass laws that damage their profits, but it is fossil fuel companies that are the main companies actually doing so, often suing governments that attempt to take action on climate breakdown or pollution.

The research last year showed that the treaties the companies use most often are ones agreed by Britain. Indeed, Britain’s trade deals cause almost as much climate-changing pollution as the country’s domestic economy. And elected MPs have almost no say over trade deals.

The new report looks into why Britain is at the centre of a “spiderweb of treaties trapping the world into a fossil-fuelled future”. The conclusion is that it results from a combination of imperial history, Whitehall inertia, and the fact that Britain is “probably the least democratic of the world’s democracies”.

Ramsay, an investigative journalist, said: “The constitutional system of the ancient British state means that trade deals are signed under the ‘royal prerogative’ rather than parliamentary authority. This means there is pretty much no democratic accountability of how they happen. But in reality, everyone is accountable to someone, and British trade policy is being utterly shaped by big business.”

In Labour’s first year in power in the current administration, meetings between government ministers at DBT and Shell and BP were more frequent than the business secretary’s Question Time. And the advisory committee known as the department’s Board of Trade, appointed under Labour, includes the chief executive of BAE Systems and senior lobbyists for the car and banking industries.

The report also highlights how Brexit has damaged accountability of trade policy, leading to what it calls ‘corporate capture’ of the process.

Caroline Lucas, a former Green Party MP and MEP, used to work as a trade policy expert with Oxfam. She said: “UK trade policy remains cloaked in secrecy. Ironically, as a member of the European Parliament’s international trade committee I had far greater opportunities to scrutinise European trade policy and to hold decision makers to account than I ever had as an MP over UK trade policy at Westminster.”

Read the full report, Oil in the wheels of justice?

Brendan Montague is editor of The Ecologist.