On 23 June, fossil fuel company Royal Dutch Shell (“Shell”) faced the UK Supreme Court over claims that they have contributed to significant environmental problems in Nigerian communities. Oil extraction has caused “decades of pollution," including contamination of water wells with carcinogenic chemicals and damage to vegetation which has "destroyed the livelihoods of fishing and farming communities". The question for the Supreme Court is whether it has jurisdiction over these claims against Shell Petroleum Development Company (SPDC), Shell’s subsidiary, which is jointly operated with the Nigerian government.
FACTUAL BACKGROUND
The United Nations Environment Programme (UNEP) documented these disastrous effects in a 2011 report. Outlining the environmental damage, the report claimed that the restoration could be “the world’s most wide-ranging and long-term oil clean-up exercise ever” if communities were to be brought back to full health. The report found that in at least 10 communities with contaminated water, public health was seriously threatened. The UNEP set out several urgent recommendations related to cleaning up the oil spills.
Shell disputed the report, claiming it does not account for the fact that many recommendations require coordination with the Nigerian government. Shell has also claimed that it has already acted on the majority of recommendations directed at the company. However, Shell’s own records show that one community has suffered “at least 40 oil spills from its pipelines and equipment since 1989”.
In January 2017, the UK High Court ruled that Shell was not responsible for this damage as it did not exercise control over the SPDC. The judge considered the need for caution when passing judgement on the legal systems of other nations and said that there was no evidence that the Nigerian judiciary was not "taking concrete and effective steps" to deal with the case. The affected communities now argue that Shell must answer for the actions of the SPDC because the Company is registered in London.
In 2019, the case of Vedanta came before the UK Supreme Court. It found that a parent company can be held accountable for the actions of "their subsidiaries and their commitments to the communities". Amnesty International’s Head of Business and Human Rights has spoken about how the Vedanta case applies to the Shell dispute, explaining how this trial could benefit other communities that wish to come forward alleging similar harm. However, others are concerned that this would lead to an "increase in tort-claim tourism".
Multiple NGOs have collated a report stating that the communities affected are still waiting for proper clean-up of the oil spills. This report refers to “the urgency for governments–including those of the UK…to issue strong legislation mandating companies to respect human rights and environmental standards across their global operations”. It also highlights that many recommendations in the 2011 UNEP report have not been implemented.
THE PRESENT CASE
Shell argued that the case against its subsidiary should be tried in Nigerian courts, rather than in the UK, and claimed that the oil spills were caused by oil theft, sabotage, and illegal refining. However, the communities are seeking justice through UK courts due to delays in the Nigerian system, where the case may take decades to resolve. Law firm Leigh Day, which is representing the communities, has assessed that there is "sadly no prospect of justice in Nigeria".
The CORE Coalition and the International Commission of Jurists also submitted joint evidence highlighting comparative law and both human rights and environmental protection standards, suggesting that Shell owed a duty of care to the appellants. The same organisations successfully submitted similar evidence to the Supreme Court in the Vedanta case.
THE POSSIBLE FUTURE IMPACT OF THIS CASE
The appeal by the Nigerian communities allows for the possibility that British companies could be held liable for their subsidiaries’ actions abroad, setting an important precedent for their responsibilities. If successful, it could open up prospects of further litigation against many companies. Shell’s business model may also come under pressure to change for the better, as this litigation places a “much needed spotlight” on its practices. The judgment is expected either later this year or in early 2021.
Tanya is a Law student heading into the final year of her degree at the University of Manchester. She is interested in bringing attention to human rights issues arising from her Pro-Bono work at University (volunteering at the Legal Advice Centre and taking part in volunteering projects). Her main goal is to become a Barrister practising in either Criminal or Family Law.