Justice at last – Dutch court orders Shell to compensate Nigerian farmers for oil spill harm
“Victims of environmental pollution, land grabbing, or exploitation now have a better chance to win a legal battle against the companies involved,” announced Donald Pols, director of Friends of the Earth Netherlands, on the victorious outcome of the 13-year-long court case against Shell’s devastating oil impacts in the Niger Delta.
This is the story of Milieudefensie’s Shell oil spill case.
Four Nigerian farmers and Friends of the Earth Netherlands (Milieudefensie) were claiming compensation from Shell for damages from pipeline leaks in the Nigerian villages of Oruma and Goi and a well leak in the village of Ikot Ada Udo between 2004-2007. The plaintiffs were also demanding that Shell effectively cleans up the contamination and takes measures to prevent further oil spills. Shell denied liability, blaming the spills on sabotage and claiming that the clean up has been carried out satisfactorily.
The appeal court in the Hague ruled on Friday 29 January that Royal Dutch Shell’s Nigerian subsidiary must compensate the Nigerian villages for oil contamination that brought death, illness and destruction. The court also judged that the Netherlands-based Royal Dutch Shell breached its duty of care by not doing enough in response to the oil spills. This is the first time that a parent company (Royal Dutch Shell) has been held responsible for acts of its foreign subsidiary (Shell Petroleum Development Company of Nigeria Limited). Crucially the compensation amount has yet to be determined in a follow-up damage assessment procedure.
This historic ruling comes after a legal battle that has dragged on for so long that two of the Nigerian farmers involved have died since it was first filed in 2008. One of those farmers was Chief Barizaa Dooh whose son, Eric Dooh, became one of the plaintiffs in the case and reacted to the verdict,
“Finally, there is some justice for the Nigerian people suffering the consequences of Shell’s oil. But it is a bittersweet victory since two of the plaintiffs, including my father, did not live to see the end of this trial. It is a long time victory that we have been dreaming of. It is not only a victory for me, it is a victory for the entire Niger Delta region, the Ogoni people, the civil society organisations. It is a victory for me and my family. It is a victory for humanity.”
Since 1976, over two million barrels of oil have polluted Ogoniland in thousands of oil spills. Pipelines operated by Shell still traverse the land, creeks and waterways and leakages mean that the area is still plagued by oil spills today. Yet in the face of such destruction, local communities and international solidarity campaigns have stood up for justice and exposed Shell’s violations to the world for decades. Peoples impacted by oil pollution in Nigeria have travelled to neighbouring African countries to warn them first hand of the impacts of oil extraction as part of a global movement to ‘leave the oil in the soil’ and protect our climate.
Shell oil spill case verdict in detail:
The court decided that Shell’s Nigerian subsidiary was responsible for multiple cases of oil pollution. The judge assessed the claims substantively under Nigerian law, according to which a heavy burden of proof rests on the party who claims sabotage of pipelines, in this case Shell. This meant that sabotage had to be demonstrated beyond any reasonable doubt, something Shell failed to provide for the Oruma and Goi pipelines. Shell Nigeria (Shell Petroleum Development Company of Nigeria Limited) is therefore liable for the damage resulting from the oil leaks.
The appeals court ordered both the Anglo-Dutch parent company Royal Dutch Shell and Shell Nigeria, its subsidiary, to install a warning system in the Oruma pipeline, so that future leaks are detected sooner, limiting damage.
On the question of the clean up, the court held that it has not been shown that Shell Nigeria has not sufficiently cleaned up the affected areas around Oruma and Goi. Any residual contamination may be included in a damage assessment procedure.
In the case of the oil well at Ikot Ada Udo, the court established sabotage, but no decision was made on Shell’s liability. The court requested clarity on the state of the clean up and how far the pollution has spread, details on which both parties radically disagree. So the case will continue.
Wider implications of the Shell oil spills case
The legal victory against Shell is an inspiration for the growing global movement to end corporate impunity. The Nigerian farmers who brought this case and whose land Shell has poisoned are not an isolated incident. For peoples and communities who are victims of pollution and rights’ violations, this victory gives them hope that they can, through legal means and political action, hold transnational corporations like Shell accountable.
In the streets, parliaments and courtrooms across the world people are demanding new binding rules to hold corporations accountable. At the United Nations, countries are negotiating to establish a new internationally binding treaty on transnational corporations with respect to human rights. A treaty that would give victims of corporate violations access to justice and challenge the economic and political power of transnational corporations. The European Commission has also committed to introduce human rights due diligence legislation in 2021 to increase corporate accountability.
This historic verdict against Shell sets a powerful precedent for other claims against transnational corporations that have committed human rights violations overseas. It is the first foreign direct liability case to result in an enforceable decision on the merits, in favour of the claimants. It is the first case where a parent company was found to owe a common law duty of care to claimants residing in a third state. This case also touches on the complex but vital issues of extraterritorial Duty of Care, burden of proof and direct obligations for transnational corporations.
Shell was found to have a limited duty of care in relation to responding to the spills. Shell knew, at least since 2010, that no leak detection system (LDS) was installed at Oruma and should have used its position to get Shell Nigeria to install an LDS there. Shell Nigeria has violated its duty of care in not doing so. The court has only recognised the parent company duty of care: Shell in this case is only liable for preventing or minimising further damage with the installation of a warning system. This is a very important first step, but it does not go far enough. Shell and Shell Nigeria have a duty to install a state-of-the-art LDS that detects leaks in minutes to hours. It must be installed within one year under penalty of EUR 100,000 per day.
The burden of proof highlighted in this case is also significant. Far too often it falls on the victims not the perpetrators to bear the burden of proof. But in this case it was Shell not the plaintiffs who had to prove – beyond reasonable doubt – that the oil leaks were the result of sabotage in order to avoid liability for the damage caused. It is also worth noting that in this case that burden of proof only applied to Shell Nigeria and not the parent company.
Channa Samkalden, the plaintiffs’ lawyer, explains the implications of this case:
“It is now clear that a parent company can have a duty to interfere in the behaviour of its subsidiary. Shell has not been able to hide behind its corporate veil to escape responsibility for the oil pollution in the Niger Delta. It will have to deal with that liability risk and – even though this judgment applies only to Shell – so will other transnational corporations.
This hasn’t been an easy road for my clients – and we are still not there. Let’s hope that other victims – be it in the Niger Delta or abroad – will have an easier path to justice.”
Questions that remain outstanding are what the financial compensation will actually amount to and whether there will be an effective enforcement of the ruling, made by a Dutch court but to be implemented in Nigeria. This is often a challenge in countries where transnational corporations are active.
This legal victory over Shell’s violations in Nigeria may only be the beginning. Shell is also facing a groundbreaking climate court case led by Friends of the Earth Netherlands and supported by more than one million people globally. If successful, the judge would require Shell to comply with global climate goals and reduce its emissions by 45% by 2030 and would set a huge precedent of holding fossil fuel corporations responsible for the climate crisis. A verdict is expected on 21 May 2021.
Main image: Channa Samkalden, the plaintiffs’ lawyer, and Donald Pols, director of Friends of the Earth Netherlands, celebrate the verdict in the Hague. © Marten van Dijl
