Shell in Nigeria: The Case for New Legal Strategies for Corporate Accountability

One of the most thoroughly-documented and long-standing cases of corporate abuse in the world is that of Shell petroleum's decades-long conflict with the Ogoni people in the Niger Delta. This blog reviews several of the cases filed by the Ogoni community to obtain remedy from Shell, as an example of the challenges that face even the most activist of affected communities. This blog accompanies a July 3, 2018 webinar on human rights and business, co-hosted by Corporate Accountability Lab and the Peruvian human rights organization Ankawa Internacional.

 Charles Wiwa fled the Ogonilands after the execution of his relative, Ken Saro-Wiwa, and the persecution of his family. He was one of the plaintiffs in  Kiobel v. Royal Dutch Petroleum  in the US, as well as a petitioner in the case before the African Commission. 

Charles Wiwa fled the Ogonilands after the execution of his relative, Ken Saro-Wiwa, and the persecution of his family. He was one of the plaintiffs in Kiobel v. Royal Dutch Petroleum in the US, as well as a petitioner in the case before the African Commission. 

As a multinational oil company, Shell has subsidiaries across the world, with extraction sites from Australia to Venezuela. While Shell has made billions off of these enterprises, many of the communities in which they operate have been left impoverished and contaminated. The Ogoni case is so extreme that Amnesty International has called upon the UK, Dutch and Nigerian governments to initiate a criminal investigation into their activities there.

For those not familiar with this case, the human and environmental impact of Shell’s repeated oil spills, in addition to the political violence against activists who challenged Shell, is massive.

The Ogonilands were historically characterized by great biological diversity, rich soil, and abundant fishing. The unique mangroves of the Niger Delta formed an ideal habitat for several species of fish, which lived in close proximity to the fishing and farming communities there. In the 1950’s, Nigeria gained independence from Great Britain, just after Royal Dutch Shell and the Nigerian government entered a joint venture to begin oil exploration in the Niger Delta.

Oil spills began as early as the 1960s. By the 1970s, gas flaring, repeated spills, and acid rain began to kill off or contaminate the fish, or drive them to cleaner waters, and undermine the soil’s ability to support agriculture.  As the food became scarce and the water unpotable, the Ogoni organized the Movement for the Survival of the Ogoni People (MOSOP) to nonviolently resist Shell. In the mid-1990s, Nigerian soldiers, allegedly at the behest of Shell, began murdering Ogoni activists at protests and dragging them from their homes in the night, burning houses and raping women. Nine high profile Ogoni activists, including Ken Saro-Wiwa, the leader of MOSOP, were falsely accused of murder, arrested, and publicly hanged in 1995. Over 3,000 Ogoni fled to Benin, where they lived, sometimes for years, in refugee camps.

Today, the crisis continues. While the Ogoni succeeded in their efforts to stop drilling in their territory, the oil pipelines running above ground, as well as improperly decommissioned oil infrastructure, continue to spill oil into the soil. In 2011, the United Nations Environmental Program conducted a study and determined that “oil spills continue to occur with alarming regularity,” despite Shell’s supposed absence from the territory. It also found that the water was contaminated with carcinogenic benzene (including one well that tested at 900 times WHO-approved levels), contaminated air and soil, and disintegrating wetlands. The health effects of this contamination have been insufficiently studied, but residents of the Ogonilands report extraordinary rates of premature death and miscarriage.

The US government has used the Foreign Corrupt Practices Act (FCPA) to go after Shell for their notorious and repeated bribery of Nigerian officials, but FCPA cases don’t do anything for the victims of the company’s misdeeds.

In the midst of this, the Ogoni have been extraordinary advocates for their cause. They have traveled the world seeking justice, from the African Commission on Human and Peoples' Rights, to UK, US and Dutch courts, to even using the OECD non-judicial grievance mechanism. Because of this, they provide an excellent case study in the availability of remedy for victims of corporate abuse.

So, did the Ogoni obtain justice? The answer is complicated, so we break it down here:

African Commission on Human and Peoples’ Rights

In 1996 a Nigerian and a US NGO filed a complaint with the African Commission on Human and Peoples’ Rights, alleging that the Nigerian government, in collaboration with its national oil company and Shell, engaged in irresponsible oil development practices, polluting the Ogoni territory. In addition to the spills, the complaint dealt with the Nigerian government’s protection of Shell’s economic interests by destroying homes, burning crops, killing protesters and exposing the Ogoni to a climate of terror, in violation of seven articles of the African Charter.

The Nigerian government failed to participate in the process, and the Commission found a violation of all seven articles. The Commission ordered the government to stop the attacks on Ogoni communities, conduct an investigation into the human rights violations and prosecute officials of the security forces as well as the national Nigerian oil company, to pay compensation to victims, including resettlement assistance, to clean up the land and rivers, and to inform the population about health risks. It appears that little, if any, of this was done. In addition, Shell was not a part of this case, because as a general matter, there is no corporate liability in these human rights tribunals.

While the court did find the Nigerian government responsible for many of these harms, it was not able to force Nigeria to comply with the judgment, to hold Shell accountable, or to obtain remedies for the victims. While the regional human rights bodies have been successful in obtaining compliance with judgments in many cases, they still do not have the same enforcement abilities as domestic courts.

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OECD Guidelines for Multinational Enterprises

The OECD Guidelines for Multinational Enterprises have a non-judicial grievance mechanism. Using the UK and Dutch National Contact Points (NCP), Friends of the Earth and Amnesty international filed OECD complaints against Shell related to their misrepresentations about the Niger Delta crisis. Specifically, Shell had greatly exaggerated the sabotage of its pipelines and the contribution of that sabotage to the environmental crisis in the region. After going through a process with Shell in which both sides submitted evidence, and some findings were produced by the NCP, both Amnesty and Friends of the Earth withdrew their second complaint, finding that the process was fruitless. The complainants’ assessment of the mechanism at that time was that the NCP had little ability to influence Shell’s actions or the actions of its subsidiary in the Niger Delta.

Kiobel and other US Cases

As quick background, the Alien Tort Statute (ATS) gives aliens (non-US citizens) the ability to sue in US federal courts for violations of international law. This has been interpreted to include a narrow set of offenses, including genocide, torture, extrajudicial killing and crimes against humanity. This is an old law, possibly created to deal with crimes against ambassadors and crimes on the high seas (think piracy), but there is little legislative history to provide context. After two hundred years of very rare use, the statute was dug back up in the 1970s, and by the 1990s was being used to sue companies for human rights abuses around the world.

One of the first uses of the ATS against a corporation was a case filed by a group of Ogoni against Shell in the US second circuit, challenging Shell’s participation in the execution of the nine Ogoni activists mentioned above. The plaintiffs in this case, Wiwa v. Royal Dutch Petroleum, were represented by the Center for Constitutional Rights and Earthrights International, and settled for $15.5 million in 2009. Note that the actions challenged here were only those that rise to that very high ATS standard, and so do not include the widespread oil contamination of the territory, or related health effects, because these harms are not sufficiently egregious to create a claim under the ATS. There is no environmental harm that has risen to this level to date, even though the effects of the repeated oil spills in the Ogonilands on human life has been devastating.

In 2009, a similar case was filed in the US, representing a group of Ogoni relatives of the Ogoni 9: Kiobel v. Royal Dutch Petroleum. This case, essentially identical to Wiwa, did not settle. Instead, it wound up before the US Supreme Court. The Court dismissed the case on jurisdictional grounds, saying that the ATS could not be applied outside of the US, based on a doctrine called the “presumption against extraterritoriality.” This doctrine stands for the idea that if the legislature that passed a law did not intend for it to apply outside of the US, it doesn’t. I won’t get into the arguments for why, in this case, the legislature did intend for it to apply outside of the US (recall that the Supreme Court has opined that it was created for piracy), but this decision had an almost immediate impact on a significant percentage of international human rights cases under consideration in US courts. In this case, even though Shell was present in the US and the plaintiffs were present in the US, the crimes that the plaintiffs alleged occurred outside of the US, so federal courts lacked jurisdiction to hear those claims.

As if this wasn’t bad enough, the Court went even further this year. In a case called Jesner v. Arab Bank, the US Supreme Court ruled that foreign corporations can not be held liable under the ATS, even though they do business in the US or are otherwise present there.

This has a huge impact, not just for the Ogoni, but for victims of human rights abuse around the world, and particularly those who are harmed by a US company. What the ATS offered was a way to bring international legal norms into the US legal system.  Following the Kiobel and Jesner decisions, victims of corporate human rights abuse overseas will have to look elsewhere for justice.

UK Cases

Shell is UK and Dutch company, so members of the Ogoni community have pursued remedy from the company in both countries. The biggest success has been the Bodo case in UK courts. The case arises from two specific oil spills in 2008 and 2009. After the spills, Shell failed to take appropriate steps to stop the spills in a timely manner, among other violations of Nigerian law. These were massive, well-documented spills affecting the land of thousands of Ogoni people. 15,000 plaintiffs sued Royal Dutch Shell (parent) and Shell Petroleum Development Corporation (SPDC). In exchange for an agreement to drop the parent company, SPDC accepted personal jurisdiction in the UK court and settled the case for 55 million pounds and a remediation plan. This is the most successful legal effort by the Ogoni to date, and provides some compensation for a small percentage of the harmed community members.

Another case, brought by 45,000 Bille and Ogale farmers from Western Ogoniland, goes after the generalized harm to the community in the most direct manner of any of the cases. The Ogale based their claims off of the 2011 UNEP report, showing that the Ogale community had the most serious case of groudwater contamination in the territory, including drinking water containing carcinogenic benzenes at over 900 times the WHO guidelines, as mentioned above.

One interesting facet of this case is the type of harm they are attempting to remedy: the 45,000 farmers seek damages for the broad effects on their community of over 50 years of repeated spills, widespread contamination, and the effects of that contamination on the health and livelihoods of the residents of that area. Generally, this type of generalized harm can be difficult to address through legal mechanisms because of difficulty in showing causation, or who was at fault, exactly when the wrongdoing occurred. But this is also the crux of the problem: the Ogoni people, and the people of the Niger Delta more generally, have been victims of such a long-standing abuse that nearly every aspect of their lives has been negatively impacted: from their individual incomes, the economy in general, the natural environment, their health and the future of their children. This case looked at the whole picture and attempted to challenge that harm.

The other piece of this case that is interesting is that the Ogale plaintiffs wanted to focus on Royal Dutch Shell, the parent company, rather than the Nigerian subsidiary. From a global human rights perspective, there are good reasons to do this. Companies who reap profits from their overseas operations should have some responsibility for the harms their various legal entities produce in the course of producing those profits. But as a practical matter, the corporate shell game is extremely effective. In this case, the court found that RDS did not have a duty of care toward the Ogale farmers. While the Nigerian subsidiary likely would have a duty of care toward the Ogale, the British court lacked personal jurisdiction over the subsidiary. So long as companies can keep the responsibility assigned to an entity in the corporate family over which the relevant court lacks jurisdiction, they can avoid liability in their supply chains nearly all of the time. This type of ruling has caused some scholars to advocate for an expanded duty of care to deal with transnational corporate abuse.

The plaintiffs appealed, and the appeals court upheld the dismissal of their case.

Dutch Cases

Ogoni members of the Oruma, Goi and Ikot Ada Udo communities filed suit in the Netherlands based on a specific oil spill that polluted their farm land and fish ponds. In addition, Ester Kiobel, the widow who was the named plaintiff in the Kiobel case in the US, filed suit there for the murder of her husband and the other Ogoni 9. These cases remain pending.

Litigation in Nigeria

Hundreds of cases have been filed against Shell in Nigerian courts over the past 25 years. Without getting into details on these cases, plaintiffs have had little success. There are a number of reasons for this, including the way the relevant statutes are written, but the position taken by many in the affected communities is that Shell’s notorious corruption, including bribery that has resulted in two FCPA investigations, makes them impervious to suit. As one of the Ogoni Kings, King Emere Okpabi put it “You can never, never defeat Shell in a Nigerian Court. A case can go on for very many years. You can hardly get a judgment against an oil company in Nigeria. Shell is Nigeria and Nigeria is Shell.”

The Western Legal System Has Failed the Ogoni

Incredibly, these efforts, spanning four countries as well as international fora, have not resulted in a restoration of the Ogonilands to their prior state, nor have many of the victims been compensated monetarily for the extraordinary losses they have suffered. The primary barriers to justice have been procedural, dismissing cases on jurisdictional grounds. While these cases have represented groups of Ogoni, the harms they suffered have been translated through individualistic, Western legal systems. The collective harms suffered by the community, including the human impacts of the harms to the environment, have been neither remediated nor compensated.

This is a striking illustration of the current state of legal regulation in the global economy, showing that transnational corporations enjoy the rights afforded them by domestic and international legal regimes (including those that protect their assets and real property, intellectual property and enforce their contracts), while evading responsibilities that would attach were they natural persons. While the Ogoni people suffer starvation, poverty and displacement, Shell continues to thrive as the world’s second largest oil company.

Charity Ryerson is a co-founder and Legal Director for Corporate Accountability Lab.

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