The Anglo-Dutch oil company Shell has just been condemned on appeal by the Dutch court for pollution in two villages in Nigeria. The complaint of the local residents is successful after 13 years of proceedings that some plaintiffs were unable to follow through. The Dutch court's decision is historic as it is the first time that a multinational company has been condemned by the Dutch courts for the activities of one of its subsidiaries on the African continent.
Shell’s conviction by the Dutch court will go down in history. The Nigerian subsidiary of the Dutch oil company is held “liable for damages resulting from spills” of crude oil, which caused pollution in the villages of Goi, Ikot Ada Udo and Oruma, in the Niger Delta, south-western Nigeria.
The decision of the court in The Hague is a relief for the farmers who are being supported in these proceedings by the non-governmental organisation (NGO) Milieudefensie, the Dutch branch of the Friends of the Earth organisation. They are four farmers and fishermen who filed a lawsuit against Shell in the Dutch courts in 2008, asking its parent company Royal Dutch Shell to fund clean-up works and pay compensation for damage caused by leaks on its pipeline.
A decision contested by Shell
In its judgment of Friday January 29th, 2021, the Dutch court ordered Shell to compensate three of the four plaintiffs in the case. However, the plaintiffs will still have to wait to receive this compensation, as the amount of compensation will have to be determined. In addition, in the Nigerian villages affected by the oil pollution in Nigeria, Royal Dutch Shell will have to equip its pipeline with a leak detection system to prevent further pollution.
Prior to this verdict by the Court of Appeal in The Hague, “Dutch multinationals could act with impunity in developing countries (…) and that has changed now,” rejoices Donald Pols, CEO of Milieudefensie. “It is a great relief for the people of the Niger Delta that Shell has been held accountable for its injustice to the oil-producing communities,” said Emere Godwin Bebe Okpabi, king of the Ogale community in the Niger Delta.
Although Shell is challenging the Dutch court ruling, arguing that sabotage was the cause of the leaks on its pipeline. ” We continue to believe that the spills in Oruma and Goi were the result of sabotage, so we are disappointed that this court has reached a different conclusion on the cause of the spills,” Shell Nigeria said.
A ground-breaking verdict
Shell’s conviction by the Dutch court is unprecedented for a group whose subsidiary operates in Africa. On this continent, where many multinationals invest via local subsidiaries or subcontractors, the courts do not always have the means to investigate and therefore to pass judgement on a pollution situation such as in the villages of the Niger River Delta in Nigeria.
“The Nigerian courts are naturally the relevant courts to hear claims related to pollution suffered in the territory of the Ogoni people, since this environmental damage occurred in Nigeria. Nevertheless, the various proceedings before the Nigerian courts have not, for the time being, allowed the case to be settled,” explains Chancia Ivala Plaine, a Paris-based lawyer specialising in environmental law.
However, on November 30th, 2020, in another case, the Nigerian courts confirmed Shell’s conviction in 2010, half a century after an oil spill that severely affected River State. The Nigerian subsidiary of the Anglo-Dutch company is expected to pay up to 400 million dollars in compensation for the Ejama-Ebubu community, the main victim of the ecological disaster. In the face of these environmental crimes, which are multiplying in the context of the exploitation of fossil fuels and minerals in Africa, many observers and even some investors are now advocating the application of the duty of vigilance of companies vis-à-vis their subcontractors or subsidiaries in regions such as Africa where they share market shares.
The duty of vigilance of multinationals
For the time being, legislation is still being put in place to judge environmental crimes and the non-respect of human rights by the subsidiaries of multinationals. Breaches of due diligence pose legal problems, particularly for victims of pollution in many cases. This question has been raised in the case of the French company Total, which wants to exploit an oil field near Lake Albert in Uganda. The oil thus exploited will transit through Tanzania via a pipeline whose construction should require the displacement and expropriation of many local residents.
Faced with this situation, several NGOs, including Friends of the Earth, have brought the problem before the French courts on the basis of the law on the duty of vigilance of parent companies and ordering companies, dating from 2017. But in December 2020, the Versailles Court of Appeal decided to transfer the case to the Commercial Court. NGOs found the decision unacceptable, stating that it is “contrary to the spirit of the law” and “is damaging to its application”.
However, according to environmental law specialist Chancia Ivala Plaine, in several countries, such as France, the legislature has adopted regulations concerning the duty of vigilance, thus following the global trend towards enshrining the responsibility of companies, specifically any (multinational) parent company, with regard to human rights and environmental abuses perpetrated by its foreign subsidiary.
Businesses commit themselves to
The Anglo-Dutch company Shell is thus the first multinational to be condemned under the duty of vigilance that many countries wish to apply. In January 2021, for example, the United States decided to close its doors to major palm oil producers for human rights abuses. While the facts are taking place in Malaysia, Africa is directly affected by such a phenomenon with oil palm plantation projects developing in the continent’s large forest massifs.
It is in this context, and that of the pandemic, which has accelerated awareness of the risks involved, that Didier Reynders, European Commissioner for Justice, announced on April 29th, 2020 that the European Commission would present a legislative initiative by 2021 on the duty of vigilance of companies that give orders to their sub-contractors with regard to human rights and the environment.
Without waiting, and beyond the political and legal will, many multinationals have chosen to respect their Corporate Social Responsibility (CSR) for a more sustainable exploitation of the planet’s resources, while respecting human rights. In April 2020, to ensure that respectful companies do not have to suffer from unfair competition, 105 investors representing $5 trillion in assets under management even joined forces to ask governments to make the duty of vigilance mandatory for companies. Multinational companies have even become pioneers in this area, such as Schneider Electric. The French industrial group, which has many assets on the African continent, is ranked first in the recent ranking of the most sustainable companies by the Canadian magazine Corporate Knights.
Jean Marie Takouleu