Shell Oil Settles!
A settlement has been reached today in the case Wiwa v Royal Dutch Shell. The amount has been announced as $15.5 million. The plaintiff’s have stated that the possibility of appeals could have dragged the case on for much longer. $5 million of the funds will be held in trust to rebuild the devastated Ogoni community in the Niger delta region of Nigeria. Rights groups are hailing the settlement as a victory for the cause of human rights.
I agree that this is a moment for celebration. But while a settlement is a positive step in any litigation, I think it’s good to be cautious about getting too excited. Here’s why:
– Shell has admitted to no liability on their actions
– a public record of Shell’s actions has not yet been made available, depriving the world of knowledge about the real perpetrators of the case (although plaintiffs’ briefs are available)
– the Alien Tort Claims Act still remains shaky: Talisman (Sudan), UnoCal (Burma), and now Royal Dutch Shell (Nigeria) have all avoided a judgment on the record
– $15 million pales in comparison to the nearly $1 trillion of oil revenue that has been produced at least in part by Shell Oil for the Nigerian government
– Shell Oil already dedicated funds to basic infrastructure projects, including schools, in the late 1990s; as far as I know these funds reached into the single digit millions
– $15 million is not nearly enough to clean up the rampant environmental degradation in the Ogoni area
How was the settlement calculated?
To put it simply, $15 million was weighed against the cost of continued litigation. This includes not only legal fees but also the emotional toll of continuing to litigate against a company which could drag the case on for another decade. Now the plaintiffs can get on with their lives, and the lawyers can clear their dockets to fight for justice in other areas. Is $15 million too low? Time will tell. Let’s see if Shell actually cleans up after itself and prevents such environmental degradation and human rights violations from happening again.
The lesson here is that corporations cannot act with impunity, and courageous rights groups will be watching them.
We’ll see what happens as the details of the case unfold.
Visit the home page of the trial at the Center for Constitutional Rights here.
Check out the film Crude here for the case against Chevron-Texaco in Ecuador. If this case is any indication, Chevron-Texaco made an enormous tactical error in transferring its own case to Ecuador, as a relatively low cost settlement could have been achieved in their $27 billion lawsuit
