In a legal dispute that had been closely watched by multinational companies and environmental organizations, a Dutch court Wednesday dismissed most of the claims brought by Nigerian farmers seeking to hold Royal Dutch Shell accountable for damage by oil spilled from its pipelines.
The decision, by the District Court of the Hague, was unusual in that it was brought in a Dutch jurisdiction against a Dutch company for activities overseas by a foreign subsidiary.
Shell, which has its headquarters in the Hague and its registered offices in London, acclaimed the decision as a vindication.
The company had argued that the oil spills were not its fault, but the result of criminal tampering.
“This ruling will enable more people to understand what is happening on the ground in Nigeria,” Jonathan French, a Shell spokesman, said. “We have this rampant problem of criminal activities: oil theft, sabotage, and illegal refining. That is the real tragedy of the Niger Delta.”
The company, which obtains 12 percent of its oil and gas from Nigeria, has long been dogged by accusations that its activities there cause serious environmental problems and human rights abuses.
In 2009 it agreed to pay $15.5 million to end a lawsuit brought under the U.S. Alien Tort Claims Act arising from the 1995 execution of the author Ken Saro-Wiwa, a critic of the company and the Nigerian government’s actions in the Niger Delta.
That U.S. law has been interpreted as having broad jurisdiction, even over foreign multinationals.
Shell denied that it bore any responsibility for Mr. Saro-Wiwa’s death, but said it wanted to end the litigation and move on.
In the case decided Wednesday, which was filed in 2008, four Nigerian farmers and fishermen, working with the environmentalist group Friends of the Earth, claimed that their livelihoods had been ruined by oil that spilled from Shell pipelines in their villages.
While the pollution damage itself was not in dispute, Shell argued that the spills had been caused by so-called bunkering — oil theft from the pipelines — as well as outright sabotage.
The court agreed with Shell in most of those spills, around the villages of Goi and Oruma.
But it held that in one spill, near the village of Ikot Ada Udo, the local subsidiary, Shell Petroleum Development Co. of Nigeria, was liable for damages — as yet unspecified — to one farmer.
In that case, the court said, “sabotage was committed in a very simple way in 2006 and 2007 by opening the overground valves with a monkey wrench,” something that “Shell Nigeria could and should have prevented.”
“I am not surprised at the decision because there was divine intervention in the court,” Reuters quoted the farmer, Friday Akpan, as saying. “The spill damaged 47 fishing ponds, killed all the fish and rendered the ponds useless.”
Joel Trachtman, a professor of international law at the Fletcher School of Law and Diplomacy in Medford, Massachusetts, said that, in theory, the court’s finding in favor of Mr. Akpan meant that “multinational companies could find their foreign subsidiaries held to a higher standard, higher even than locally owned companies.”
That, he said, “conceivably could deter foreign investment in Nigeria.”
But Mr. Trachtman noted that the court also rejected any liability for the parent company. That limited the implications of the ruling. Mr. Trachtman said that facet of the decision was in keeping with global legal principles. “Usually courts around the world accept the separate existence of a subsidiary corporation,” he said. “They don’t pierce the veil to hold the parent responsible.”
Evert Hassink, a spokesman for the Dutch chapter of Friends of the Earth, described the court ruling as “mixed.” The court’s refusal to assign any responsibility to the parent company was disappointing, he said. But “we’ve succeeded in establishing the principle of going to court in the Netherlands or Europe because of what happened in another country,” he said.
Article source: http://www.nytimes.com/2013/01/31/business/global/dutch-court-rules-shell-partly-responsible-for-nigerian-spills.html?partner=rss&emc=rss