Settlement Closes the Book on a Nigerian Tale

I, for one, enjoy a good civil trial. You never know what you might learn.

The business papers this morning are reporting, however, that Royal Dutch Shell will settle a case accusing it of human rights abuses in Nigeria in the mid-1990s for $15.5 million—as the Times puts it, a “striking sum given that the company has denied any wrongdoing.”

Too bad about that. It sounded like their might have been some good stories there:

The settlement, announced late Monday, came days before the start of a trial in New York that was expected to reveal extensive details of Shell’s activities in the Niger Delta.

The announcement caps a protracted legal battle that began shortly after the death of the Nigerian activist Ken Saro-Wiwa in 1995. Mr. Saro-Wiwa, Shell’s most prominent critic at the time in Nigeria, was hanged by that country’s military regime after protesting the company’s environmental practices in the oil-rich delta, especially in his native Ogoni region.

The case was brought by his son, his brother and eight others, “who accused Shell of seeking the aid of the former Nigerian regime to silence the critic, as well as paying soldiers who had carried out human rights abuses in the impoverished region where it operated.”

The case presented interesting legal issues. It was brought under the Alien Tort Claims Act,

an arcane United States law that has been increasingly used for lawsuits asserting human rights violations occurring overseas. The Supreme Court ruled 6 to 3 in 2004 that foreigners could bring cases before American courts in some limited circumstances, like crimes against humanity or torture, and the courts have decided that a wide variety of defendants, including multinational corporations, can be called to account. Royal Dutch Shell is headquartered in the Netherlands.

Just last week, the Second Circuit appeals court in New York gave the final go-ahead for the trial in Manhattan federal court.

The Journal provides good background on how it all got started:

A massive oil spill in Ogoniland in 1970 inspired Mr. Saro-Wiwa, founder of the Movement for the Survival of the Ogoni People to launch two decades later a campaign against Shell’s Nigerian onshore unit. The campaign led to the abandoning of oil production in Ogoniland in 1993.

The Times adds some more:

Mr. Saro-Wiwa, who founded the Movement for the Survival of the Ogoni Peoples in 1990, was one of Shell’s most forceful critics because of the damage done to the delta communities, including gas flaring and the destruction of mangroves to make way for pipelines.

The point isn’t that Shell is guilty. It denies wrongdoing and says the settlement is a “humanitarian gesture.” Some of the money will go into an educational and social trust fund for the Ogoni people.

Plus, you never know how these trials will go, as the Times notes:

So far, no corporation has been found guilty under the alien tort law. Last year, a jury cleared Chevron of wrongdoing after it was accused of complicity in the shooting of Nigerian villagers who occupied an offshore oil barge in 1998 to protest its environmental record and hiring practices.

The plaintiffs say they’re satisfied, that the settlement sends a message of accountability and helped to avoid protracted litigation and inevitable appeals.

Still, it would have been interesting.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.