Stop Oil Companies from Denying, Delaying, and Derailing Local Justice

Last week, a Federal High Court in Delta State, Nigeria, handed down a judgment for 15.4 billion naira – about 100 million U.S. dollars – against Royal Dutch/Shell’s Nigerian subsidiary, declaring Shell liable for the damage caused by the mammoth, decades-long Ejama-Ebubu oil spill.  The judgment also ordered Shell to remediate the affected land to its pre-spill condition.  Yet in light of a promised appeal by Shell, the people whose lands and livelihoods were destroyed by Shell’s negligent actions are years from seeing any relief.  Shell claims to obey local laws and respect communities’ rights.  However, Shell, like other oil companies in cases worldwide, has employed questionable tactics that overwhelm local courts, seeking to deny, delay, and ultimately derail the judicial process in a bid to avoid liability.

There has been a longstanding war of words between Shell and Ogoni groups over the Ejama-Ebubu spill – communities claim that Shell’s negligence caused the rupture, while Shell blames retreating Biafran rebels, who supposedly blew up the pipeline as they withdrew during Nigeria’s civil war.  What is certain is that when Shell repaired its facilities and started pumping oil again after the civil war was over, it did nothing to patch the leak, which continued to gush crude onto farmlands and into waterways for at least fifteen years.  Ogoni activist Ken Saro-Wiwa, who was later murdered by the Nigerian military government, played a key role in bringing the greivous toll of the Ejama-Ebubu spill to light and demanding compensation from the oil company. (ERI was involved in the suit against Shell for its complicity in the imprisonment, torture, and death of Saro-Wiwa and others, which Shell settled for $15.5 million last year.)

Shell’s conduct in the court battle for compensation followed a predictable pattern, which aggrieved communities have seen again and again when seeking justice from oil companies:

Delay.  The Ejama-Ebubu case was first filed in 2001, after Nigeria’s transition to a civilian government.  In order to drag out the litigation, Shell attempted to file interlocutory (interim) appeals no fewer than 27 times.  In other words, each time the court decided a preliminary issue in favor of the plaintiffs, Shell tried to suspend the proceedings in order to appeal to a higher court.  Under most circumstances, final judgments may be appealed but not interim orders; in the end, Shell was allowed to file interlocutory appeals only three times out of its twenty-seven attempts.  In the course of nine years of litigation, Shell managed to outlast two judges; the judge who finally decided the case was actually the third to be assigned to it.

Denial.   Shell’s only response to the allegations against it was denial – instead, it pointed its finger at the locals.  Yet at trial, according to presiding Justice Ibrahim Buba, it declined to call any evidence to support any of its factual defenses.  This is a common pattern – both Shell and Chevron have claimed for years that the vast majority of their oil spills in Nigeria have been caused by sabotage rather than their own poor record of maintenance, but have failed to produce evidence to back up their assertions.  While it is undoubtedly true that local criminal and insurgent gangs have been known to purposely damage oil facilities, the notion that the lion’s share of environmental damage in the Delta is self-inflicted by the local communities who have to live with the consequences is absurd; what’s more, it is belied by reports of the corroded, leaky pipelines that sprawl across the region.  ERI has seen the same pattern of finger-pointing in, for example, its case against Occidental Petroleum, in which Oxy blames a successor company for pollution in the Peruvian Amazon.

Shell’s actions in this case thus fit a disturbing trend in international oil company liability cases – first, blame others; second, avoid international scrutiny; and third, overwhelm local courts and governments with limited resources.  The company blamed Nigerian troops as the culprits for the Ejama-Ebubu blowout, has fought to prevent courts in the US and the Netherlands from considering Niger Delta environmental claims against them, and ran circles around the Nigerian trial court for nine years.  In the same vein, the indigenous plaintiffs in an oil pollution case against Chevron in Ecuador have watched the company systematically close off avenues of redress and sap the will of the Ecuadorian state to provide justice.  Chevron began by blaming Ecuador for the damage, proceeded to shut down litigation in the US, and is now attempting to derail the follow-up litigation in Ecuador – which it expressly invited – by shaking down the Ecuadorian government in front of an international arbitration tribunal.

Of course, the Ejama-Ebubu  case could be worse – at least in this case, Shell at least has had the courtesy to appeal a judgment it doesn’t like.  Five years ago, in the case of Gbemre v. Shell, a Nigerian court declared gas flaring illegal and unconstitutional, but Shell continued to flare gas.  The plaintiffs went back to court a month later to file contempt proceedings, but the flaring continues apace to this day.   Far from respecting the laws and institutions of Nigera, Shell is betting on the Nigerian courts’ limited resources and the unwillingness of Nigerian politicians to force the issue.  And to date, its wager has paid off: it has found that the one sure way to avoid a negative judgment in the Niger Delta is simply to disregard it.

At its worst, the Ejama-Ebubu spill inundated several square miles of land under literally yards of oil.  The land remains uninhabitable and ravaged to this day.  The oil disaster in the Gulf of Mexico (BP, incidentally, was Shell’s partner in Nigeria at the time of the spill) has also served to remind Americans of the half-century of environmental destruction that Western oil companies have unleashed on the Niger Delta.  Now, as we consider the proper legal response to BP’s negligent destruction of our own wetlands and traditional ways of life, the US government should take the following steps to prevent such acts in countries that are less able to stop them:

• Pledge financial support and capacity development to legal systems in oil-rich developing countries to handle environmental and human rights claims arising out of oil production
• Denounce efforts by Western companies to derail judicial processes in which they are defendants
• Clarify to arbitral tribunals that US investment treaties are not meant to circumvent or extinguish personal claims against US companies
• Declare that US courts are open to enforce judgments against multinational companies over which the US has jurisdiction, if such enforcement is frustrated locally by judicial weakness or political factors
• Improve forum non conveniens laws to ensure that US courts will exercise their jurisdiction in cases where plaintiffs are denied justice through the misconductof multinational companies