A court decision in the Netherlands that allows a Nigerian farmer to sue oil giant Shell could trigger liability and compensation claims by citizens in developing countries against multinationals in Europe.

 

In December, a Dutch court ruled that there is a basis to hold Shell liable in the Netherlands for its negligence in Nigeria. A Nigerian farmer claims compensation for the damage he is said to have suffered because of oil leakages of underground pipelines.

 

Eric Dooh, a farmer from the village of Goi in Ogoniland filed the complaint together with the environmental group Milieudefensie of Friends of the Earth. In his village, 150 barrels of oil contaminated his ground and the waters he and his father used for fishing. Moreover, the oil caused fires, Dooh and the NGO said. They claim the leakages are the result of poor maintenance and, therefore, they demanded compensation for the damage caused from Shell and its Nigerian subsidiary company.

 

The case was part of a larger legal dispute, which was brought by four Nigerian farmers and the NGO. They filed the complaint against Shell and its Nigerian operating company in 2008 in the Netherlands, where the multinational has its seat.

 

Shell argued that this was an insufficient basis. In the company’s view, the case should be brought before a court in Nigeria where the leaking and the alleged damage occurred.

 

The Dutch judges, however, rejected this argument in December and ruled that the case against both Shell and the Nigerian firm is admissible. “It cannot be established in advance that the parent company is not liable for possible negligence of the Nigerian operating company,” the court said in a statement. In the judgment, the judges explained that the link between the mother company, Royal Dutch Shell, and its subsidiary, Shell Petroleum Development Company of Nigeria (SPDC), was sufficiently clear.

 

Shell further argued that the leaks have been caused by sabotage and therefore the company could not be held liable for the damage caused. The judges said, however, that it is too early for such a conclusion. Instead, they ordered Shell to provide access to certain documents on the oil spilling, which so far were kept secret.

 

The decision could set a precedent for similar cases worldwide. In theory, it means that citizens of other countries can sue companies registered in the Netherlands for the negligence of their subsidiary companies.

 

Thus, they don’t have to rely on their national justice system anymore which, especially in developing countries, is often inaccessible. In the future, they could turn to a court in the Netherlands if a Dutch company is involved. “It is vital that multinationals are made to answer for action abroad that would never be accepted in their home countries,” said Amnesty International researcher Mark Dummett.

 

“This ruling is a ray of hope for other victims of environmental degradation, human rights violations and other misconduct by large corporations,” said Geert Ritsema of Milieudefensie, which started the case together with the Nigerian farmers.

 

In Nigeria and against Shell alone, this could lead to a huge amount of compensation claims by communities. Ritsema said it could be tens of billions of euros in damages.

 

In Nigeria, the Niger Delta is the region with the highest oil production in Africa. Shell is the largest oil company operating there with around 50 oil fields and 5,000 kilometers of pipelines. The company has recorded four oil spills in December 2015, and 1,693 since 2007. According to organizations such as Amnesty International, the actual number could be much higher. The oil has not only devastating consequences for the environment, but it has also contaminated land and rivers which two thirds of the population rely on for food, Amnesty said in a recent report.

 

According to Reuters, Shell’s subsidiary SPDC said in a statement to be disappointed with the ruling: “We believe allegations concerning Nigerian plaintiffs in dispute with a Nigerian company, over issues which took place within Nigeria, should be heard in Nigeria.”

 

The December decision overturns the ruling of a Dutch District Court, which determined in 2013 that the leaks could have been the result of sabotage and, therefore, Shell could not be held liable for negligence.

 

The appeals judges in December did not answer the question whether Shell is actually legally responsible for the spills.

 

This question will be finally dealt in the upcoming months. The proceedings are set to continue in March.