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REUTERS
Shell shocked
n November 10 1995 in a prison in Port
O Harcourt, Nigeria, a nameless hangman
slipped a noose around the neck of Ken Saro-
Wiwa. Several minutes later, the activist’s
inert body hung lifeless from the end of the

and in the dock

By Oliver Balch
As Shell finally stands trial for its alleged
complicity in the death of Nigerian activist
Ken Saro-Wiwa, the case could have significant
implications for international corporate liability
rope. It was a busy day for the hangman – he
had eight more executions to do.
More than a decade later, oil major Royal
Dutch Shell is due in court in New York on
charges of complicity in the deaths.
The connection between these two
events remains hotly disputed. Only a few
facts enjoy general consensus. No one
contends that the nine men, all leaders of
Nigeria’s Ogoni people, were executed. Few
outside Nigeria’s former junta seriously
argue that the Nigerian court provided a
free and fair trial. Nor is there dispute that
Shell was one of the largest foreign
investors in the Ogonis’ oil-rich homeland.
Beyond that, the issue remains a mishmash
of grey.
The relatives of the activists argue that
the executions were carried out with the
“knowledge, consent and/or support” of
Shell. The case is being brought in the US
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Ethical Corporation • June 2009
REUTERS
under the controversial Alien Tort Claims
Act (ATCA), also known as the Alien Tort
Statute.
From the outset, Shell has denied all
involvement in the hangings. Indeed, the
company says it spoke out both publicly
and privately on human rights on “a
number of occasions”. After the prosecution
of the activists, Shell’s chairman appealed to
the head of the Nigeria’s military regime for
clemency.
The new court case has been heralded as
a landmark for corporate accountability. But
why? And what could it mean for other
companies?
Aliens in New York
To understand how an Anglo-Dutch oil
company happens to find itself in a US
court for alleged abuses in Nigeria requires
some background.
At the heart of the issue lies the ATCA.
The statute allows for international human
rights violations to be heard in a US federal
court. First ratified in 1789, the legal prin-
ciple behind the act finds its origins in
British common law: namely, that a defen-
dant can be sued wherever they are found
for anything they have done anywhere in
the world.
Despite the law’s wide-ranging poten-
tial, it sat gathering dust in legal textbooks
for two centuries. Only in the 1980 did liti-
gators seek to test it in court.
Initially, the attentions of US litigators
focused on perpetrators of state-led human
rights abuses. A Paraguayan citizen brought
the first case, successfully using the ATCA to
sue a policeman who tortured and killed his
son. Subsequent cases concentrated on indi-
viduals who committed international torts
or government leaders who ordered them
to do so.
In 1995, an important legal development
occurred. A ruling in a suit against the
Bosnian Serb alleged war criminal Radovan
Karadzic held that non-government offi-
cials could also be sued under the ATCA.
Into that bracket fell private companies. The
ruling has inspired an incremental trickle of
ATCA cases against companies, each of
which has helped refine and clarify the
precise intention of the statute.
Over the years, two legal prerequisites
for ATCA cases have emerged. First, the
offence in question must constitute an egre-
gious contravention of international human
rights. So torture and genocide count, for
example, but refusing the right to collective
bargaining would not. Second, the accused
Business and human rights 13
Who was Ken Saro-Wiwa?
Author, television producer and environmental
activist, Kenule “Ken” Beeson Saro-Wiwa was
president of the Movement for the Survival of
Ogoni People (Mosop), a Nigerian civil rights group.
In 1990, Mosop published a bill of rights that
accused the then junta of governmental neglect,
lack of social services and political marginalisation.
Under Saro-Wiwa, Mosop led campaigns against
Shell and other multinational companies, which
it accused of causing environmental damage in
the Niger delta.
Saro-Wiwa and eight fellow activists were
sentenced to death by a Nigerian court for breaking
a ban on public gatherings. They were executed on
November 10 1995. In 1996, relatives of the
deceased initiated a lawsuit in the US against oil
company Shell for alleged complicity in the execu-
tions. The case (Wiwa v Royal Dutch Petroleum,
96-cv-8386) was filed under the Alien Tort Claims
Act. The US district court of New York’s southern
The struggle goes on
district was scheduled to hear the case from May 26.
company must be shown to have know- law, Sebok states. That is to say, the concept
ingly aided and abetted the perpetrator. of being held responsible for substantially
After much to-ing and fro-ing between and knowingly aiding an extrajudicial
the appeal courts, US district judge Kimba murder is well established.
Wood recently ruled that the plaintiffs in Nor are US courts unwilling in principle
the Saro-Wiwa case met the necessary to hear ATCA cases against companies.
requirements to proceed to trial.
REUTERS
Legal minefield
It comes as no surprise that activists
throughout the world have welcomed the
judge’s decision. Or that they are eagerly
watching how the case develops.
“The ATCA is a huge, huge benefit for
those that want to use the American legal
system, American courts and the American
damages structure to address wrongdoing
around the world,” says Prof Anthony
Sebok of New York’s Cardozo law school,
Yeshiva University.
Getting a case to court is one thing, but
gaining a victory is quite another, he admits.
To date, only Alabama-based mining
company Drummond and California-domi-
ciled oil company Chevron have actually
been sued in a US court under the ATCA. In
neither case did the plaintiffs win.
Not that affected parties should lose
heart. Several companies have settled out of
court. California-based energy company
Unocal, which stood accused of complicity
in human rights abuses in Burma, is a
notable example.
The claims made against Shell are “not
exotic” from the perspective of municipal A flaring breach
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14 Business and human rights Ethical Corporation • June 2009

What campaigners say

“Regardless of the outcome of the trial, the fact that one of the planet’s most powerful companies finds itself in the
dock changes everything. From now on, no transnational corporation involved in possible human rights abuses will
feel completely safe.”
George Monbiot, journalist and campaigner

“The cases that have gone to trial may not have been great cases, but certainly the law still stands and with the right
set of facts you could see a jury verdict and a potential settling.”
Anthony Sebok, professor of law, Benjamin N Cardozo school of law, Yeshiva University

“There is a huge risk that if the judge decides there’s enough evidence not to throw out the case previously, then
there’s enough evidence for the jury to find the corporation liable.”
Bridget Arimond, director, International Human Rights Programme, Northwestern University school of law

“[The ATCA] is one of the few mechanisms that we have in the western world to hold companies to account for their
activities abroad. That’s why the ATCA needs to be strengthened.”
Steve Kretzmann, executive director, Oil Change International

“If Shell loses, it would have a very positive effect on corporate behaviour internationally, recognising that whatever
they do outside the US they can be held to account for at home. That’s the message we want to send to corporate
boardrooms: just because they’re not in the US, they’re not above the law.”
Marco Simons, legal director, EarthRights International

“Our experience has been that litigation focuses the minds of CEOs wonderfully … The best outcome would be for this
litigation to serve as a wake-up call for corporate executives to say this [human rights] is a serious issue.”
Naomi Roht-Arriaza, professor of law, Hastings college of law, University of California

“The fact that this has come to court is very significant. It means that a lot of the company’s ways of working and
operations with internal procedures will be dragged through the courts and will become part of the public domain.”
Peter Frankental, economic relations programme director, Amnesty International UK

“Judges have not used their discretion so far
to suppress the use of this litigation
[although] they are still trying to under-
stand what the law means,” Sebok adds.
Yet important legal barriers still exist.
Some are practical. Affected communities
are often located in remote corners of the
“The ATCA is a huge, huge
benefit for those that want
to use the US legal system”
Anthony Sebok,
Cardozo law school
world where communication during the
pre-trial stage can be difficult. Persuading a
US jury to connect with events on the
ground in far-off jurisdictions also presents
its problems.
In addition, the financial cost of building
an effective case can be prohibitive, adds
Marco Simons, legal director at EarthRights
International, counsel for the plaintiffs – the
relatives of the executed men – in the Shell
case. “You are litigating against large corpo-
rations with lots of resources so cases can
often be very expensive,” Simons says.
And companies are not slow to exercise
their legal muscle – known in legal circles
as “snowing” the opposition. In Shell’s
case, the oil major’s submission of innu-
merable legal motions successfully delayed
the case for more than 12 years.
“Most cases that have been brought
against corporations under the ATCA have
been dismissed at least once, which is why
so few cases have gone to trial so far,”
Simons says.
The grounds for dispute are substantial.
The ATCA, it should be noted, is a statute of
only one sentence. Most objections rest on
one of two issues: jurisdiction and liability.
Simons identifies a number of “cynical”
ways that companies exploit each of these
avenues. Creating jurisdictional anomalies
by shielding themselves behind layers of
subsidiaries is one popular tactic. Shifting
corporate headquarters offshore to remove
themselves from US jurisdiction represents
another.
Efforts at legal evasion are becoming
harder, however. “When this case was filed,
so many of the legal issues were unsettled
and undecided. Many of those have since
been decided over the years,” Simons says.
Though important, greater legal clarity
Connecting with a NY jury not easy
only constitutes a first step. Affected parties
still need to gather the requisite evidence to
win their case.
“We spent 10 years working on the law
part, [proving] that you could actually bring
these cases … Now attention is turning to
the fact that you still have to convince a
jury,” observes Prof Naomi Roht-Arriaza of
California University’s Hastings College of
Law.
Historic landmark
The Shell case should shed some light on
this second, evidentiary stage of ATCA liti-
gation. What facts are required to prove a
company “aided and abetted” in human
rights abuses? Is proof of regular meetings
with the perpetrators enough? All this
remains to be decided in court.
Whatever the jury decides, the very fact
that the case is proceeding to trial is
noteworthy, says Prof Bridget Arimond,
director of the international human rights
ECM June NEW:Layout 1 26/5/09 12:21 Page 15
Ethical Corporation • June 2009
programme at Northwestern University’s
school of law.
“This will finally give the plaintiffs their
day in court … It also calls on Shell to
account for its actions in front of a court.
That in itself is significant,” she says.
From a reputational perspective, Shell is
entering dangerous ground. Reporters will
be waiting with pens poised as Shell’s
What Shell says
Shell would not respond directly to questions about the
case. The company said in a statement:
“The allegations made in the complaints against Royal
Dutch Shell concerning the 1995 executions of Ken Saro-
Wiwa and his eight fellow Ogonis are false and without
merit. Shell in no way encouraged or advocated any act
of violence against them or their fellow Ogonis. We believe
that the evidence will show clearly that Shell was not
responsible for these tragic events.
REUTERS
defence lawyers answer awkward questions
about, say, the company’s precise relation-
ship with Nigeria’s military government or
the presence of armed government forces
on its facilities.
Already environmentalists are using the
case for publicity purposes. Under the Shell-
Guilty Campaign, an international coalition
of activist groups is calling on Shell to
“The executions in 1995 of Ken Saro-Wiwa and his
eight fellow Ogonis were tragic events that were carried
out by the Nigerian government in power at the time.
“Shell attempted to persuade that government to grant
clemency; to our deep regret, that appeal – and the
appeals of many others – went unheard, and we were
shocked and saddened when we heard the news.
“Shell remains committed to reconciliation, peace and
return to normality in Ogoniland.”
Business and human rights 15
What is the ATCA?
Ratified by the first US Congress in 1789, the Alien Tort
Claims Act enables victims of international human
rights abuses to sue in US federal courts. In recent
years, the ATCA has been used to try and hold multi-
national companies to account for alleged complicity
in human rights violations, including torture, extraju-
dicial killing, forced labour and genocide. To date,
only two cases have reached court. In both inci-
dences, the jury found against the plaintiffs.
The text of the act says: “The district courts shall
have original jurisdiction of any civil action by an alien
for a tort only, committed in violation of the law of
nations or a treaty of the United States.”
Alien refers to any “non-US national”. Tort is
defined as “damage, injury, or a wrongful act done
wilfully, negligently, or in circumstances involving
strict liability, for which a civil suit can be brought.”
explain its continued use of gas flaring in
Nigeria – a topic not even addressed
directly by the case.
“There’s a real cost for companies of
having these cases heard at all. Not just the
legal costs, but the reputational costs and
the fact that there will be a lot of material in
the public domain that could possibly be
used against them,” says Peter Frankental,
economic relations programme director at
Amnesty International UK.
Certainly, a Shell victory will send a sigh
of relief through corporate legal depart-
ments. But it would be pre-emptory to
interpret such an outcome as the death
knell for the ATCA, Arimond argues.
“If Shell wins, it means that in this partic-
ular case the plaintiffs were not able to
muster enough evidence … [but] these
cases are going to be continued to be
brought,” she says.
Naturally, a win for the plaintiffs would
jettison the case into genuine landmark
territory. A verdict against Shell would
mark the first time a company has been held
liable in the US for human rights abuses that
occurred in a foreign jurisdiction. That’s the
stuff of litigation history.
Potent precedent
Before trial, few legal experts would predict
on which side the jury would fall. On a
positive note, most at least expect a verdict.
If Shell was going to settle out of court, the
argument runs, it would have done so
already.
Conjecture about the implications of the
case should Shell lose is rife. For the
company itself, there is the question of
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16 Business and human rights
Corporate reputation needing a top up?
damages. A guilty verdict would leave Shell
facing a fine that could easily run into
millions of dollars. While the possibility of
appeal exists, jury-decided cases are difficult
to overturn. As for the reputational damage,
a loss does not bear thinking about.
The impact will also be felt at the general
corporate level. US-domiciled companies
operating in any overseas territory will
suddenly face the prospect of being held to
account “at home”, says Simons of Earth-
Rights International.
“That’s the message we want to send to
corporate boardrooms: just because they’re
not in the US, they’re not above the law,” he
says.
A guilty verdict would also alert potential
litigants. What has so far remained a trickle
of cases could potentially turn into a flood.
“It would show to affected communities
in developing countries that this [the ATCA]
is a clear way to go – that they can take a
company to court in its home country,”
argues Paul de Clerck, corporate campaigner
at Friends of the Earth International (FoE).
Another possible impact could be to inter-
nationalise the ATCA. Litigators outside the
US are already experimenting with similar
cases. In France, for example, attempts are
being made to sue energy company Total for
human rights offences during the construc-
tion of a gas pipeline in Burma.
In the UK, meanwhile, the public interest
law firm Leigh Day & Co has pursued a
Remediation and reconciliation
in the Niger delta
Over the past 10 years, Shell has introduced new prac-
tices, technology and environmental management
systems designed to “largely prevent” long-term
impacts in the areas of its Nigerian operations. The
company has a remediation programme in place that
commits to rehabilitate land degraded by oil opera-
tions and spills to environmentally acceptable
conditions. In 2007, the company completed the clean
up of 61 out of 74 outstanding sites. Local communi-
ties refused access to eight of the remaining sites.
Work continues on the final five.
Shell supports measures to bring about reconcilia-
tion with the Ogoni people, but says it is “is a delicate
process, and one that cannot be rushed”. The
company suspended its activities in the region in
1993 after three and a half decades of operations.
Shell states that it welcomes the Nigerian president’s
appointment of a facilitator to mediate the reconcilia-
tion process with the Ogoni people. It maintains that
resuming oil production in Ogoniland is dependant on
the support of all Ogonis.
Ethical Corporation • June 2009
number of international civil liabilities
claims under ordinary tort law. In 2003, for
example, it recovered damages worth
£10.5m against UK-based mining company
Cape for causing asbestosis in South Africa.
The arguments for adopting ATCA-style
legislation beyond the US are growing,
according to Steve Kretzmann, executive
director of campaign group Oil Change
International. He says: “The double stan-
dards that exist today are not acceptable in
today’s world. It’s not okay to value
Nigerian life or Ecuadorian life less than
American life or British life.”
FoE’s De Clerck agrees. Shell’s defeat
would send a “clear signal” to lawmakers in
the European Union, he argues. Last year, the
Coalition for Corporate Justice, a group of
civil society organisations that includes FoE,
submitted a legislative proposal on the lines
of the ATCA to the European commission.
Ideal outcome
Speculation surrounds the legal implica-
tions of the Shell case. But what could it
mean for corporate practice?
One immediate issue revolves around
“wilful ignorance”. A recent report by the
United Nations Human Rights Council
finds evidence of lawyers advising compa-
nies not to undertake human rights risk
assessments. Knowing about potential risks,
they argue, could increase the companies’
future liability.
A judgment against Shell would rubbish
such advice and force a “proactive
approach” from companies, according to
Amnesty’s Frankental. “The whole balance
of liability would change and there would
be an overwhelming case for companies to
do much greater due diligence on human
rights,” he says.
Greater legal scrutiny will also force
companies with existing internal controls to
ensure that these are robust. Standardised
due diligence procedures will no longer
suffice, says Hastings College’s Roht-
Arriaza. They must be industry-specific.
“The ideal outcome would be … for
companies to start pre-empting legislation.
You would end up with fewer cases because
corporations would be doing a better job at
policing themselves,” Roht-Arriaza says.
The legal teams in the Shell v Saro-Wiwa
suit are due to wrap up their arguments on
June 19. The case’s repercussions will
inevitably serve to shape the future of inter-
national corporate accountability. Just how
much, however, depends on the jury’s
verdict. I