Shell is right to pay up and move on
Why is Shell paying nearly £10m to settle claims of human rights abuse in Nigeria if it is not guilty? Because it is cheaper to pay up than fight on – even if it encourages further claims.
Royal Dutch Shell denies any involvement in the 1995 execution of Ogoni writer Ken Saro-Wiwa and atrocities against eight others who protested against the oil company’s Niger Delta exploration.
Yet, even though Shell is an Anglo-Dutch company operating in Africa, US laws have been used to accuse it of crimes against humanity. And after 13 years fighting the case it was scheduled to come to court. Shell might have won, but despite Chevron winning another US case involving Nigerian shootings last year, its Niger pipeline continues to be bombed by militants.
Shell states it agreed the settlement “in recognition of the tragic turn of events in Ogoni land even though Shell had no part in the violence that took place”. However it was working in a country with a violent regime and thus working with that government: when the regime killed protestors Shell took the blame – and the wealthy oil company is still around to prosecute when the politicians have been overthrown.
The Saro-Wiwa execution was one of several environmental and social issues used to attack Shell in the 1990s and it undoubtedly did damage. A court case would have put the incident back in the headlines. Paying $15.5m to the victims and Ogoni people is cheap compared with the loss of corporate reputation, nevermind the legal fees.
Shell must be wishing it had paid out earlier. The cost is equivalent to a small part of its corporate social responsibility budget.
The risk is that paying Danegeld encourages the Danes to return. It is the same argument over whether to pay ransoms to hostage-takers. There are lobby groups lining up to use the US laws to pursue global issues against other companies.
But they would do that whether or not Shell paid up: their objective is anti-corporate publicity and legal victories are merely one way to achieve that. They have got Shell’s Nigerian past back in the headlines and can now move on to their next victim. Shell did the right thing.
