Holding Shell Accountable

Oil spill
Oil spill

In October 2004, a massive oil spill occurred from Shell's Trans-Niger pipeline, running through Ogoniland to the Bonny export terminal. Following the spill a fire broke out. The fire and the oil reached the mangrove area of the Goi community.

 

In June 2005, an oil spill from a high pressure pipeline operated by Shell, in Oruma, Bayelsa State was discovered. The oil spread into many fish ponds. All aquatic life in the ponds - not only fish but also lobsters, oysters crabs and prawns - died, leaving the community members with little food and income for many years.

 

Shell's role in Nigeria

 

These two cases are unfortunately far from being isolated. They instead represent a constant pattern, mostly determined by Shell's indifference and contempt for the local population of the Niger Delta, their livelihood and the environment more generally. A study conducted by Friends of the Earth Netherlands in 2008[1] concludes that when operating in the Niger Delta Shell does not employ internationally recognized standards to prevent and control pipeline oil spills. Shell does not invest enough money to meet international standards and to replace its aging infrastructure in Nigeria despite having made $31 billion profits in 2008.

 

Most of the 27 million people living in the Niger Delta depend on the water, fish and agricultural products of the Delta for their livelihood. According to available statistics, in the last 30 years more than 400,000 tons of oil have spilled into the creeks and soils of southern Nigeria. Some 70 per cent of the oil has not been recovered. Oil spills significantly affect the health and food security of rural people living near oil facilities. In the period 1997 - 2006, according to its own annual reports, Shell Nigeria experienced about 250 oil spills each year. Others (Friends of the Earth Netherlands 2008) fear that Shell is significantly underreporting the spills. Large part of the spills are caused by aging infrastructure and human errors of the oil companies. Although Nigerian law clearly establishes the responsibility of oil companies in case of spills, hundreds of compensation claims brought in front of Nigerian courts, remained stuck in the Nigerian judiciary system.

 

Oil makes up for up to 80% of Nigeria's budgetary revenues and 95% of Nigeria's foreign exchange earnings. Nigeria is the eighth-largest oil producer in the world and accounts for the production of about 4% of the world's crude oil. Oil and gas operations are carried out on about 50% of the territory of the Niger delta. This oil richness has however not let to an increase of the living standards of the local population. The percentage of the population living in poverty grew from 28% in 1980 to 66% in 2000. Shell is the largest oil operator in Nigeria. It's subsidiary Shell Nigeria operates in a joint venture, which accounts for about 40% of Nigerian oil production.

 

The court case

 

While the aforementioned cases of oil spills are nothing exceptional, the reaction to them was. As the Nigerian courts were not willing to act for Nigerian farmers and fishers, victims of these two oil spills together with Friends of the Earth Netherlands, brought the case in front of a court in The Hague. It was the first time that a Dutch Transnational Corporation was brought to trial before a Dutch court for damages caused abroad.

Shell denied any responsibility and argued that a Dutch court has no jurisdiction over its Nigerian subsidiary, which cannot be called to account before a Dutch court. Shell also claimed that the parent company headquartered in the Netherlands could not be held accountable for the consequences of the action of the subsidiary in Nigeria. Shell asserts to have no influence on the working practices of its Nigerian subsidiary. It is worth noting here that Shell is the sole shareholder of its subsidiary in Nigeria.

On December 30th 2009 the court in the Hague held that the Dutch court has jurisdiction over the operations of Shell Nigeria. Given that Shell has now lost this point, an important hurdle has been overcome, and the 'real' lawsuit can now begin.

 

The current court case in the Netherlands together with the Joint Statement of the Swedish and the Spanish Council Presidency in November 2009, which stated that the EU should take the global lead in Corporate Social Responsibility,[2] represent a unique opportunity to push for the adoption at EU level of legally binding rules for Transnational Corporations operating in third countries.

 

 

Thomas Lazzeri

 

 

 

 


[1] Steiner, R., 2008 Double standards?: International Best Practice Standards to Prevent and Control Pipeline Oil Spills, Compared with Shell Practices in Nigeria.

[2] For more information on the Joint Statement please see the November 2009 News Update or consult our webpage at http://www.aefjn.org/index.php/74/articles/corporate-social-responibility-news-update---november-2009.html

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