On January 29, 2021, a Dutch appeals court reversed a lower court decision and found Royal Dutch Shell’s Nigerian subsidiary, Shell Petroleum Development Company of Nigeria (SPDC), responsible for several oil spills impacting three Niger Delta communities. In a first for a Dutch court, it also found that Royal Dutch Shell, SPDC’s parent company, breached a duty of care for foreign operations.
This blog post considers the significance of the Dutch court’s decision for the thousands of people whose health, livelihoods, and lives have been negatively impacted by Shell’s activities in the Niger Delta and for the advancement of parent company accountability for overseas human rights and environmental abuse.
Shell’s abuses in Nigeria
Shell is implicated in decades of abuse against communities in the Niger Delta and their environment. Frequent oil spills from Shell’s long-standing operations in Nigeria began as early as the 1960s. After a few years, spills, gas flaring, and acid rain began to destroy the Niger Delta’s soil, water, and biodiversity and the health and livelihoods of its fishers, farmers, and communities. Today, there are still communities that cannot access safe drinking water.
Faced with this environmental degradation and threat to their livelihoods and survival, members of the Niger Delta community began organizing non-violent resistance to Shell in the 1990s. They paid gravely, as the emblematic 1995 case of the Ogoni Nine -- community leaders and activists including Ken Saro-Wiwa who were publicly hanged for crimes they did not commit -- shows. Even after Shell halted operations in the Niger Delta, the military, allegedly backed by Shell, reportedly retaliated against environmental and human rights defenders resulting in thousands of deaths, the destruction of communities, and a mass exodus of people out of the region.
Although Shell has stopped drilling in the region, oil spills continue. Friends of the Earth Netherlands, who brought the case that the Dutch court decided last week, reports that today 16,000 babies die annually from the lasting pollution, and life expectancy in the Niger Delta is ten years lower than in the rest of the country. Adding to these continued impacts of Shell’s operations on the people of the Niger Delta, the Nigerian government only began a cleanup program five years ago, which has been largely ineffective and is marred by corruption.
The court’s decision
In 2008, nearly 13 years ago, Nigerian Plaintiffs Alali Efanga, Friday Alfrad Akpan, Chief Fidelis A. Oguru, and Eric Dooh, represented by Friends of the Earth, sued Shell in the Netherlands, where Royal Dutch Shell is based. The plaintiffs alleged that SPDC caused four oil spills that rendered villagers’ farmland and ponds unusable and sought damages for lost income. In these areas, past spills have never been cleaned up, and new spills continue. (Read Friends of the Earth’s press release on this monumental court decision here.)
In 2013, the District Court of The Hague held that Shell was not responsible for the spills, finding that the spills were the result of sabotage, as Shell had argued. The plaintiffs appealed the decision.
Last Friday, The Hague Court of Appeal found SPDC responsible for most of the oil spills in question and liable for the harms the spills caused. The company now owes damages to three of the four plaintiffs and to their communities that the spills harmed. (The court found that Shell had proved that the fourth spill was a result of sabotage and has not yet decided on liability.) This is one of the few instances in which individuals who have lost their livelihoods because of contamination Shell caused will be individually compensated. Past settlements have tended to lump thousands of community members together, drastically diminishing reparations each individual receives.
The court also found that Royal Dutch Shell, the parent company, violated its duty of care with regard to operations overseas. The court ordered Shell to ensure that a leakage detection system is implemented in the pipelines in Nigeria. This ruling is significant because it is the first time a Dutch court has held a Dutch parent company accountable for breaching its duty of care abroad. Not only did the appeals court recognize that parent companies have a duty of care with respect to their subsidiaries’ operations abroad, but it found that the duty of care could be violated -- and that in this case it was violated. This may open the door for more corporate accountability cases in Dutch courts against parent companies for duty of care breaches overseas.
The Associated Press quoted Friends of the Earth Netherlands director Donal Pols on the victory: “Up until this morning, Dutch multinationals could act with impunity in developing countries ... and this has changed now.” Pols continued:“From this moment onwards, Dutch multinationals will be held accountable for their activities and their actions in developing countries. And that’s an enormous victory for the rights of law globally.”
The New York Times quoted Friends of the Earth Nigeria lawyer Chima Williams on this historic ruling: “Now the oil companies will know that they cannot continue to act with impunity. And that a day will come when they will be held accountable for their misdeeds.”
It is difficult in jurisdictions around the world, and particularly in the United States, to hold parent companies accountable even for cases of extreme environmental harm and human rights abuses overseas. This decision, coupled with NGO calls on the European Commission to introduce ambitious, binding human rights due diligence legislation, gives us hope that, at least in Europe, the needle is moving on parent company liability for overseas human rights and environmental abuse.
Avery Kelly is a Staff Attorney at Corporate Accountability Lab.
