Watershed Dutch court ruling against Shell

30 January 2013

Brussels/The Hague, January 30, 2013 - A Dutch court has ruled today that Shell is responsible for not preventing the pollution of farmlands at Ikot Ada Udo, Akwa Ibom State in Nigeria. The case brought by Friends of the Earth Netherlands and four Nigerian farmers is an important victory for Nigerian people and the environment.

This is the first time that Shell has been ordered by a court to pay compensation for damage caused by its operations. The Nigerian justice system has never been able to accomplish this.

Geert Ritsema of Milieudefensie/Friends of the Earth Netherlands, said: "This verdict is great news for the people in lkot Ada Udo who started this case together with Milieudefensie [Friends of the Earth Netherlands]. But the verdict also offers hope to other victims of environmental pollution caused by multinationals. At the same time, the verdict is a bitter disappointment for the people in the villages of Oruma and Goi – where the court did not rule to hold Shell liable for the damage. Fortunately, this can still change in an appeal."

The case is unique because it is the first time that a Dutch multinational has been brought before the court in its home country for environmental damage caused abroad. The case focused on just three of the thousands of oil leaks in Nigeria. In the case, the plaintiffs demanded that Shell clean up the oil pollution in the villages, compensates the farmers for the damages suffered and maintains the oil pipelines better in the future.

Court rules that the relationship with parent company was not proven

Milieudefensie/Friends of the Earth Netherlands and the Nigerian farmers will appeal the decision in the Goi and Oruma cases, as well as the principle point of the liability of the Royal Dutch Shell (RDS) parent company.

The reason that the court did not decide to hold the parent company liable for damage done in Nigeria was that Milieudefensie was denied access to evidence which proves that Shell's international parent company based in the Netherlands (RDS) determines the daily affairs of Shell's Nigerian subsidiary (SPDC). RDS owns 100% of SPDC shares. SPDC's profits (estimated at €1.8 billion annually) are deposited in the Netherlands. Nevertheless, under existing laws, RDS cannot be held liable for the damage done on the basis of these facts alone. Milieudefensie must prove that governance actually comes from the headquarters in the Netherlands. Because Shell has not been ordered by the court to allow access to internal company documents which would expose this governance, it has been very difficult to prove this.

Situation in the EU

Paul de Clerck of Friends of the Earth Europe, said: "Many European companies are involved in similar situations to that of Shell and are causing environmental damage outside Europe. We see a clear gap in European legislation. It allows European parent companies such as Royal Dutch Shell to pocket the profits from a foreign subsidiary, but these parents cannot be held liable for the damage they cause while making those profits."

Friends of the Earth Europe is urging the European Commission to take steps to ensure that parent companies are automatically held liable for the actions of their foreign subsidiaries (parent liability). Next week (February 6) the European Commission will discuss with stakeholders steps it can take to limit the adverse human rights and environmental impacts of business.

Sabotage/negligence

Milieudefensie/Friends of the Earth Netherlands finds it incomprehensible that the court ruled that Shell has convincingly proven that sabotage was involved in two of the three villages. The court has allowed itself be convinced by a number of blurry Shell photos and poor quality video images. Milieudefensie remains convinced that poor maintenance is the cause of the spills. But even in oil spills where sabotage is involved, Milieudefensie believes that Shell bears responsibility and is liable for the damage. An oil giant cannot leave 7,000 kilometres of pipeline and hundreds of installations unprotected and unguarded in a politically unstable and economically underdeveloped region.

Scope of the disaster

An oil disaster has been ongoing in Nigeria for the last several decades. Tens of millions of barrels of oil have been spilled there since the 1950s. In oil disasters such as that of the 'Exxon Valdez' tanker near Alaska or the 'Deepwater Horizon' oil drilling installation in the Gulf of Mexico, there was massive public interest and outrage was extensive, and an emergency plan was enacted with great speed. The Nigerian disaster is a silent one, which has disastrous consequences for people, wildlife, nature and the environment, but little is being done about it.

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Contacts:

For questions about the court case, please contact the Milieudefensie press office, +31(0)20-5507333.

Note for the press:

More information on the background of the case can be found on www.milieudefensie.nl.

Images can be accessed via www.milieudefensie.nl/publicaties/fotoalbum/fotoalbum-internationaal/shell-rechtszaak/ and are copyright-free (with photo credit).

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