With Corporate Accountability in Limbo in the U.S., a Small but Significant Victory in the Netherlands

Home / Blog / With Corporate Accountability in Limbo in the U.S., a Small but Significant Victory in the Netherlands

In a small, but significant victory for corporate accountability, a Dutch court this week ruled that Shell Petroleum Development Company of Nigeria Ltd, a wholly-owned subsidiary of Royal Dutch Petroleum (Shell), must compensate a Nigerian farmer for losses resulting from a pipeline leak that poisoned farmland in the Niger Delta.

The suit against Shell Nigeria and its parent Shell, brought by Friends of the Earth Netherlands on behalf of Nigerian farmers, sought damages for widespread oil pollution caused by inadequate infrastructure maintenance.  Shell argued that the oil spills were a result of sabotage, not poor maintenance of its facilities. Although the court appeared to accept Shell’s argument, it concluded that Shell Nigeria could have easily prevented the sabotage.

Even though the court ultimately dismissed most of the claims brought by the Nigerian farmers against Shell Nigeria, and all of the claims against the parent corporation, the ruling is nevertheless a significant milestone. It marks the first time a multinational corporation has been found liable in Dutch court for damage caused overseas. The court examined the role of the parent company as well as the actions committed by Shell Nigeria, despite the fact that the link between Shell Nigeria and the Netherlands is limited.

The case holds particular significance for Nigerians, long affected by oil pollution, as similar legal victories have proved unattainable in Nigerian courts. Shell’s operations in Nigeria have had a devastating impact on communities in the Niger Delta. A 2011 Report by the United Nations Environment Programme (UNEP) concluded pollution was so severe environmental restoration of Ogoniland could take up to 30 years. The report faulted Shell for failing to properly maintain its facilities and found its remediation efforts inadequate and ineffective. Shell has also been implicated in human rights atrocities against the Ogoni people. In 2009, Shell paid more than $15 million to settle Wiwa v. Shell, a case against it brought against it under the Alien Tort Statute for its role in the execution of environmental activist Ken Saro-Wiwa, and eight other leaders of the Ogoni tribe who had been critical of both Shell and the Nigerian governments activities in the region.

Meanwhile, the U.S. Supreme Court could decide the companion to the Wiwa case, Kiobel v. Royal Dutch Petroleum (Shell), at any moment, the implications of which cannot be overstated. The future of the Alien Tort Statute, and corporate accountability for human rights abuses, hangs in the balance. The Court will ultimately decide whether corporations should have to account for the environmental and human rights abuses they commit overseas – or whether they are, as Shell believes, above the law.

One of the questions asked by the Supreme Court is why Shell, which is not a U.S. company, should be held liable in U.S. courts for actions that it has taken in other countries. Other countries don’t seem to have a problem with this notion; now a Dutch court has held a Nigerian corporation (Shell Nigeria) liable for actions that it took in Nigeria.

The rest of the world is watching. Will the U.S. choose to be an example for justice and equality or will it allow corporations to act with impunity at any cost?

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