Royal/Dutch Shell Case

Royal Dutch Shell began oil production in the Niger Delta region of Nigeria in 1958 and has a long history of working closely with the Nigerian government to quell popular opposition to its presence in the region. From 1990-1995, Nigerian soldiers, at Shell’s request and with Shell’s assistance and financing, used deadly force and conducted massive, brutal raids against the Ogoni people living in the Niger Delta to repress a growing movement in protest of Shell. Ogoni land is a 404-square-mile (1,050 km2) region in the southeast of the Niger Delta basin.

Economically viable petroleum was discovered in Ogoni land in 1957, just one year after the discovery of Nigeria’s first commercial petroleum deposit, with Royal Dutch Shell and Chevron Corporation setting up shop throughout the next two decades. The Ogoni people, a minority ethnic group of about half a million people who call Ogoni land home, and other ethnic groups in the region attest that during this time, the government began forcing them to abandon their land to oil companies without consultation, and offering negligible compensation.

This is further supported by a 1979 constitutional addition which afforded the federal government full ownership and rights to all Nigerian territory and also decided that all compensation for land would “be based on the value of the crops on the land at the time of its acquisition, not on the value of the land itself. ” The Nigerian government could now distribute the land to oil companies as it deemed fit. The 1970s and 1980s saw the government’s empty promises of benefits for the Niger Delta peoples fall through, with the Ogoni growing increasing dissatisfied and their environmental, social, and economic apparatus rapidly deteriorating.

The Movement for the Survival of the Ogoni People (MOSOP) was formed in 1992. MOSOP, spearheaded by Ogoni playwright and author Ken Saro-Wiwa, became the major campaigning organization representing the Ogoni people in their struggle for ethnic and environmental rights. Its primary targets, and at times adversaries, have been the Nigerian government and Royal Dutch Shell. The concerns of the locals were that very little of the money earned from oil on their land was getting to the people who live there, and the environmental damages caused by Shell’s practices.

In 1993 the Movement for the Survival of the Ogoni People (MOSOP) organized large protests against Shell and the government, often occupying the refineries. Shell withdrew its operations from the Ogoni areas. The Nigerian government raided their villages and arrested some of the protest leaders. On November 10, 1995, nine Ogoni leaders (the “Ogoni Nine”) were executed by the Nigerian government after being falsely accused of murder and tried by a specially-created military tribunal.

The executions were met with an immediate international response. The trial was widely criticized by human rights organizations and the governments of other states, who condemned the Nigerian government’s long history of detaining their critics, mainly pro-democracy and other political activists. The Commonwealth of Nations, which had also pleaded for clemency, suspended Nigeria’s membership in response. The United States, the United Kingdom, and the EU all implemented sanctions, but not on petroleum (Nigeria’s main export).

Shell maintained that it asked the Nigerian government for clemency towards those found guilty but that its request was refused. A 2001 Greenpeace report claimed that “two witnesses that accused them [Saro-Wiwa and the other activists] later admitted that Shell and the military had bribed them with promises of money and jobs at Shell. Shell admitted having given money to the Nigerian military, who brutally tried to silence the voices which claimed justice”. Shell denied these accusations and claimed that MOSOP was an extortionary movement that advocated violence and secession.

As of 2006, the situation in Ogoni land has eased significantly, assisted by the transition to democratic rule in 1999. However, no attempts have been made by the government or an international body to bring about justice by investigating and prosecuting those involved in the violence and property destruction that have occurred in Ogoni land, although a class action lawsuit has been brought against Shell by individual plaintiffs in the US. Later on June 2009, the oil giant Shell has agreed to pay $15. 5 Million in settlement.

Supporters of the legal action said the fact that Shell had walked away from the trial suggested the company had been anxious about the evidence that would have been presented had it gone ahead. Jennie Green, a lawyer with the Centre for Constitutional Rights who initiated the lawsuit in 1996, said: “This was one of the first cases to charge a multinational corporation with human rights violations, and this settlement confirms that multinational corporations can no longer act with the impunity they once enjoyed.

“Human rights experts believe the settlement will have a substantial impact on other multi-national corporations. Anthony Di Caprio, a lead lawyer representing the Ogoni side, predicted it would “encourage companies to seriously consider the social and environmental impact their operations may have on a community or face the possibility of a suit”. Ques. No. 1: Does Shell bear some responsibility for the problems in the Ogoni region Nigeria? Answer: Without any doubt, Shell bears some significant responsibilities for the problems in the Ogoni Region Nigeria.

The foreign investors do not have any legal obligation to contribute for the development of the country where they operate. But, Royal Dutch Shell must have some social responsibilities and moral obligations towards the people whose livelihood and surroundings are being affected by their operations. The conflict in Ogoni land, Nigeria actually rooted from the lack of social and economic securities of Ogoni people. Royal Dutch Shell has been operating in Ogoni land, Nigeria since 1958. During this time, it has extracted some $30 billion worth of oil from the region.

Despite this, the economic condition of Ogoni people remained poor. They were involved in subsistent agriculture mostly and the employment rate of Ogoni people by Royal Dutch Shell has been very low – 85 out of 5000 employees in Nigeria. It implies the Ogoni people, as a powerless minority, were clearly overlooked by Royal Dutch Shell in case of job allocation. Moreover, the Ogoni people did not receive the shares of the revenue that the government promised to pay back to the communities where the oil was produced.

Although, in 1992 the percentage of revenue rose to 3%, the money was totally lost in different layers of corrupted Nigerian government. There were 96 oil wells, 2 refineries, 1 petrochemical complex and 1 fertilizer plant in Ogoni in 1994, but there was none to develop the unfinished hospital and fund the schools in that region. Corruption and mismanagement has long deprived the people of Ogoni land from the benefits of the region’s resources. In addition, lands of Ogoni have severely suffered from environmental degradation caused by the Royal Dutch Shell operations.

As claimed by most Ogoni people, Royal Dutch Shell provided neither enough environmental safeguard nor some form of compensation to protect their agricultural fields from frequent oil spills that contaminated soil and groundwater. Instead, they blamed the Ogoni people for deliberate sabotage, planned in order to back up claims for compensation and environmental degradation. These circumstances have seriously hurt the morale of the Ogoni people and provoked them to protest against the Royal Dutch Shell and the government in 1993.

The farmers’ claims were valid as Royal Dutch Shell continuously kept exploiting their agricultural land without any fair compensation. Instead of handling the disputes by itself, Royal Dutch Shell addressed the then militant government of Nigeria to take the charge. Mismanagement and corruption; embezzlement of oil revenues; the suppression of activists and communities who sought a cleaner environment, an end to abuses and a fairer distribution of resources — all were particular features of military government. Royal Dutch Shell was widely seen as complicit in these abuses and even to have fuelled conflict.

The government took a violent approach towards Ogoni people, wounding and killing hundreds of people without any justification. This was a clear deplorable violation of human rights in Ogoni land, Nigeria. From the above analysis, the role played by Royal Dutch Shell in sorting out the disputes with Ogoni people is questionable. Its role in Nigeria has been a matter of severe criticism around the world after the execution of Ken Saro Wiwa and his eight associates without any justification, which is said to be a result of Royal Dutch Shell’s “Discreet Diplomacy” in favor of the military government.

Through the following approaches Royal Dutch Shell would have played a better role in conducting the social and moral duties towards Ogoni people. * Royal Dutch Shell should have modified its hiring policies while operating in Nigeria. More Ogoni people should have been hired. By increasing the employment rate, Royal Dutch Shell could reduce the Ogoni people’s dependency on subsistent agriculture along with improved their economic condition. * Royal Dutch Shell must have maintained good relation with the community people in the region they operate.

As the people in the Ogoni land were already politically, socially and economically insecure, positive attitude from the oil companies would have improved their level of trust. Raising awareness about the company itself and their motives would have been the best option. It would have benefited Royal Dutch Shell as Ogoni people would have been more supportive and cooperative towards them. * As the government of Nigeria was already corrupted and evidence of their mismanagement with the distribution of oil revenues were apparent, Royal Dutch Shell should have been more proactive to protect the social and economic rights of Ogoni people.

Royal Dutch Shell could contribute directly into the Ogoni region’s development plans, like building hospital and funding the schools as well other public projects. Doing so, it could have offset the Ogoni people’s continuous claims about lack of compensation and environmental degradation against Royal Dutch Shell. * In the face of 1993 protest, Royal Dutch Shell should have not have fueled the conflict by addressing the oppressing and corrupted military government. It should have settled the dispute through international standards of conflict management to give fair chance to the people of Ogoni

land to express their opinions and protect their human rights. * Most importantly, Royal Dutch Shell should have modified their policies regarding the environmental protection of the regions in which they operate. We know that, prevention is better than cure. There is always some sort of environmental degradation associated with industrial activities and there will be. But the companies must think ahead of time to minimize it as much as possible and compensate the regional people for that level of degradation.

If Royal Dutch Shell had carried out their responsibilities in appropriate manner, it would have been better off in their operation in Nigeria. In addition, they would have gained positive corporate image from all around the world rather than being criticized for their malicious corporate practices in Ogoni land. Ques. No. 4: Was the response of Western governments to the execution of Ken Saro-Wiwa about right, too excessive, or too mild? What should have been the appropriate response? Answer: One can confidently say that the response of Western Governments to the execution of Ken Saro-Wiwa was too mild.

The heads of the Western World tried to persuade the Nigerian government with political pressure which was not sufficient to solve the crisis regarding horrid violations of human rights by Shell and the government itself. The human rights violation was taking place in Ogoni region for years. It was their land that Shell was using to pump in their profits while giving Ogoni people nothing in return. Because of being deprived of any financial gains from Shell’s activities, the poor Ogoni people had to solely depend on their livelihood on persistence farming.

Even that earning source was put in danger as Shell’s operation standards were faulty and frequently resulted in oil spills that caused irreversible damage to the farming lands. When Ogoni people had suffered for ages and tried to stand up for their basic human rights, Shell collaborated with the military government and decided to suppress them completely. They even went to the extent of killing anyone who stood in their corrupt ways. The military government went to wipe out entire villages in order to stop the protests against Shell.

The name ‘Kill and Go’ of one of their units suggest that it was absolute horror that unfolded when Ogoni people demanded things which should have been given to them long time back. In this protest, Ken Saro-Wiwa, the leader of MOPOS along with his eight other members paid their blood. Ken Saro-Wiwa’s execution took place on no legal grounds and the trial was ‘staged’ in a military court. To begin with, after the world came to know about the wrongdoings that were occurring in Nigeria the Western World stepped forward with different approaches to put a stop to it.

British Commonwealth asked Nigeria to go back to democratic ruling system in two years. U. S Ambassador stated that they would not sell military equipments to Nigeria and put a halt on giving them financial aids. British Prime minister put a ban on armed sales to the country and imposed embargo on Nigeria’s products. Even European Union took a step back from helping the country with further aids. These all reflect only one side of the story. Their mild treatment of the matter is reflected in the way that none of the countries put a ban on sales of oil service equipment to Nigeria.

USA continued to be one of the largest buyers of Nigerian oil and other countries which have national companies working in the Nigerian oil industry also continued their trade with the country. No actions were taken against Shell and they continued with their operations. Not only that the liquefied natural gas project which made matters out control and ultimately lead to the execution of Ken Saro-Wiwa was not stop. It is quite clear that at the end of the day, the Western leaders prioritized their own gains rather than lending a hand to call for humanity.

The result of this mild treatment was Nigerian people continued to suffer. From 1999 civilian government have been restored but has sired no improvements in Nigeria’s situation. The government has continued to respond aggressively and exerted excessive force to demand of communities for their rights. And even the military forces have been held accountable for their actions than they previously were. Even in 2003 and 2004 mass killings have taken place in other ethnic communities over oil disputes.

Trade Sanctions and prohibitions on investment stand little chance of being effective even when there is widespread international support. And even if a few countries decide to ignore the embargo – which they might for cheap oil – it will likely fail. It seems that trade sanctions are not particularly effective in pressuring governmental change and are merely symbolic. The appropriate response of the Western governments could have been: * Thorough investigation by amnesty and environmental organization and provide more direct support to the people of Ogoni land.

* As there was no direct action other than criticism taken place against Royal Dutch Shell, International judicial bodies could have pressurized it for improving their corporate policies regarding environmental protection and human rights. * Independent monitoring bodies should be formulated. These regulatory bodies should be from free from the internal and external influence when it comes to the fairness and transparency of reports. * Ogoni people should be more aware of their rights and the government should be more supportive to the minority communities in protecting the human rights.

The local government must be pressurized by the international associations for human rights and environmental protection in order to enforce stricter laws and policies inside the country. * Shell and also the other MNCs should be obliged to carry on their corporate social responsibilities. They should give back a certain amount of their profits in order to make the local communities better. In addition, it could have a monitoring system of itself, formulated to ensure the revenues contributed to community are being utilized in the right manner for the

betterment of the community. * Better compensation plan should be constructed through international standards and proper timely implications must be ensured. Thus, these responses could have played a more constructive and affective role in solving the continuous disputes at Nigeria and better off both the oil companies and the countries in which they operate. Reference: Royal Dutch/Shell: Human Rights in Nigeria * Synopsis: http://www. guardian. co. uk/world/2009/jun/08/nigeria-usa http://en. wikipedia.

org/wiki/Royal_Dutch_Shell http://www. guardian. co. uk/environment/gallery/2010/mar/05/curse-black-gold-nigeria http://www. guardian. co. uk/business/2009/jun/30/oil-royaldutchshell * Ques. No. 1: http://en. wikipedia. org/wiki/Shell_Nigeria http://en. wikipedia. org/wiki/Petroleum_industry_in_Nigeria http://en. wikipedia. org/wiki/Conflict_in_the_Niger_Delta http://wiwavshell. org/shell’s-environmental-devastation-in-nigeria/ * Ques. No. 2: http://www. amnestyusa. org/ http://www. reliefweb. int/