Shell settles one lawsuit but faces another

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Shell has ended a 13-year lawsuit with a 15.5 million US dollar out-of-court settlement. The Anglo-Dutch oil giant says the settlement is not an admission of guilt in the case, in which it was accused of complicity in the execution of Ken Saro-Wiwa and eight other Nigerians in 1995.


Author and activist Ken Saro-Wiwa founded the Movement for the Survival of the Ogoni Peoples in 1990, a non-governmental organisation campaigning for a fairer distribution of the oil wealth and demanding an end to the environmental degradation of Ogoni land. Mr Saro-Wiwa was a forceful critic of Shell’s operations in the Niger Delta.

Difficult position
The case was due to go to trial in Manhattan in the coming days under a law that allows non-citizens to bring overseas human rights violations before US courts. The out-of-court settlement is not surprising, according to Caroline Bain, an oil industry analyst with the Economist Intelligence Unit.

“Shell were in quite a difficult position. There have been a couple of other cases that have gone through this procedure in the US court. They tend to be very time consuming, very costly and involve a lot of bad publicity for the companies concerned. So an out-of-court settlement was on the cards, even though they haven’t admitted to any guilt in the case.

“We had the experience with Chevron of a similar case that lasted ten years with a lot of negative publicity. People only tend to read the headlines, and I think Shell wanted to avoid being in the headlines for a number of years on an emotive issue like human rights violations.”

Tread carefully
Human rights activists hailed the settlement as a tacit admission of responsibility and a precedent for other cases. Ken Saro-Wiwa Jr., Mr Saro-Wiwa’s son  and a plaintiff in the case, said in a Guardian column today that the settlement was a compromise of head and heart.

“History will show that this was a landmark case,” he said. “Multinationals now know that a precedent has been set, that it is possible to be sued for human rights violations in foreign jurisdictions.”

Ms Bain said oil companies will take notice of their ever more vulnerable position.

“I think the multinational companies have already had to wake up to far more socially and environmentally aware policies. They are very anxious to ensure that there’s no repetition of this type of case.

“They are also in a relatively weak position at the moment. The number of reserves they are actually controlling or have got a stake in across the world is diminishing, and national oil companies are increasingly the main holders of oil reserves. So the multinationals have to really tread very carefully to ensure that they don’t make enemies along the way, whether it be with local people or with governments.”

The settlement is not the end of Shell’s problems. Another lawsuit was filed last year on behalf of Nigerian plaintiffs by Friends of the Earth Netherlands. The case concerns three specific oil spills that cost several families their livelihoods.

Millions of people in the Niger Delta live in poverty despite the region’s oil riches. Anne van Schaik of Friends of the Earth said the settlement is a sign that large oil companies will start to take responsibility for the actions of their subsidiaries.

“One of the most important things is that people can have a normal way of living. The traditional way of living in the Niger Delta is one of farmers and fishermen, and I think it’s very important that nature is restored back to the original state. Then you have a way of income and from that you can build your life.

“If everything is polluted because of the oil spill and you don’t even have access to clean drinking water, then your whole means of living is destroyed. And that of course is grounds for terrorism and all kinds of other attacks.”


Shell maintains the allegations are false. The settlement is a "humanitarian gesture", said Shell executive Malcolm Brinded in a press statement.

“While were prepared to go to court to clear our name, we believe the right way forward is to focus on the future for the Ogoni people, which is important for peace and stability in the region,” he said. “This gesture also acknowledges that, even though Shell had no part in the violence that took place, the plaintiffs and others have suffered.”

A third of the settlement will go into a trust fund for the Ogoni people.


Listen to the full interview with Friends of the Earth Netherland's Anne van Schaik:

Photo by Brian Shaad