Shell- Crimes in Nigeria and its Aftereffects

Armaan Agarwal, Mayur Sanjunath Sannesi, Arham Dharewa, Roshni Priyadarshini Rout,
Harshit Agarwal, Khushi Sharma, Yash Manani, Advaith S Vasisth, Sreejith Biswal, Kirat
Arora, Shruti Daga, Tushar Singh (1BBAH B)
School of Business and Management, Christ (Deemed to be University)
BECO 161 B: Economics of Corruption
Dr Yadu C R
th
26 November 2022

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INTRODUCTION

What is Corruption?

Corruption is the misuse of authority for personal benefit. Corruption destroys confidence,
undermines democracy, stifles economic growth, and makes inequality, poverty, social
division, and the environmental problem worse. Corruption may occur in any setting,
including business, government, the judiciary, the media, civil society, and every conceivable
industry, from infrastructure and sports to health and education. Politicians, government
employees, civil servants, businesspeople, and the general public are all susceptible to
corruption. In order for corruption to thrive and for the corrupt to launder and conceal their
unlawful money, it frequently relies on professional enablers like bankers, attorneys,
accountants, and real estate agents as well as opaque financial systems and anonymous shell
corporations.

Shell in Nigeria

Shell has been active in Nigeria since 1937 and throughout the entire time it has been
destroying the country and literally taking control over it. The company has been involved in
the numerous activities and has caused civil rights movements across the country. Over the
previous 50 years, an estimated 1.5 million tonnes of oil have leaked into the Niger Delta
ecosystem. This quantity equates to around one "Exxon Valdez" leak every year in the Niger
Delta. Many of the spills occurred in delicate habitats for fish, birds, and other wildlife,
causing further biodiversity loss and, in turn, worsening local communities' economic
conditions. The spills contaminate nearby water supplies that are used for drinking, cooking,
bathing, doing laundry, and fishing. Additionally, they emit harmful fumes into the
atmosphere, sometimes making villages uninhabitable and resulting in serious illness for
those unable to leave. Older pipelines and other poorly maintained infrastructure are to blame
for a large number of oil spills. Not just oil spills the company is to be blamed for kidnapping
killings and what not, for which it has been entirely responsible. Despite Shell’s dirty record

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in Nigeria and elsewhere, the company continues to try to falsely portray itself as “green” in
its advertising, a practice known as “greenwashing.”

The Centre for Constitutional Rights (CCR), EarthRights International (ERI), Paul Hoffman
of Schonbrun, DeSimone, Seplow, Harris & Hoffman, and other human rights lawyers have
filed a number of lawsuits since 1996 to hold Shell liable for human rights abuses committed
in Nigeria, including summary execution, crimes against humanity, torture, inhumane
treatment, and arbitrary arrest and detention.

The Royal Dutch/Shell group and Brian Anderson, the leader of its Nigerian branch, are the
targets of the cases.

OUTLINE

Chima Williams, an environmental lawyer from Nigeria, did not foresee a 13-year legal
struggle that would result in a historic decision and earn him a renowned environmental
award when he filed a lawsuit against Shell plc, the world's largest oil company.

Williams, the executive director of Environmental Rights Action/Friends of the Earth

Nigeria, was successful in persuading the Court of Appeal in the Hague that Shell plc was
accountable for the operations of its subsidiary in Nigeria, Shell Petroleum Development
Company of Nigeria (SPDC), as well as for oil spills that wreaked havoc on nearby
farmlands.

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Four farmers from the Goi and Oruma communities in the nation's oil-rich but impoverished
Niger Delta region filed the lawsuit against Shell Nigeria, claiming that huge pipeline
breaches had left their crops in ruins.

The Court of Appeal of the Hague ultimately found Shell Nigeria (SPDC) responsible for the
oil spills and ordered them to compensate the farmers on January 29, 2021. Additionally,
SPDC was mandated to conduct a thorough cleanup of the communities' damage.

While rejecting responsibility for the spills, which it said were caused by sabotage of its
subsidiary's pipes, Shell had advocated for the case to be tried in Nigeria. A Dutch lower
court concluded in 2013 that the parent company of Shell could not be held accountable for
wrongdoings carried out by its Nigerian affiliate. Williams claims that despite this, he and his
legal team persisted because they had proved that Shell Nigeria, a subsidiary of the parent
company in the Netherlands, had "authority flow" and could not, therefore, be exempt from
its decisions and actions.

That's what provided us the assurance to challenge the ruling, Williams said, and the Court of
Appeal agreed with us that the district court erred.

"The jurisdictional decision was the first one we received in our favour. The Hague-based
Dutch High Court said they have jurisdiction to hear the cases from Nigeria. That was the
first obstacle we overcame, he remarked.

Shell issued a statement following the decision in January of last year, saying, "We continue
to believe that the spills in Oruma and Goi were the result of sabotage. In light of the fact that
sabotage, oil theft, and illegal refining are "a major challenge" in the area, we are
disappointed that this court has reached a different conclusion regarding the cause of these
spills and in its finding. Following the decision from last year, four farmers from the Goi and
Oruma communities reached a settlement with Shell Nigeria, according to company
spokesman Bamidele Odugbesan, who told CNN that representatives are "working amicably
on the actualization of the judgment."

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The largest oil-producing region in Africa, the Niger Delta, is home to Shell. Due to the
hundreds of spills that occur there each year, its population have high rates of poverty and a
greatly deteriorated environment.

We have rivers that are hardly fishable, farmlands with low yields, groundwater that is 900
times above WHO levels of benzene pollution, and thousands of neonatal deaths annually as
a result of spills. Oil pollution has decreased the neuroplasticity of the brain, according to
Niger Delta activist Saatah Nubari, who spoke to CNN.

The Niger Delta is a cemetery for the living, and unless we audit the entire environment, we
won't be able to determine the extent of the damage.

For many years, Shell has blamed locals' theft and sabotage for the majority of spills. The
Shell Nigeria official told CNN that "almost 95% of the spill accidents in our activities are
caused by sabotage." In all of our efforts around the world in 2021, we only noticed crude
theft in Nigeria. And this affects how much it costs us. When one of our facilities is damaged
and a leak occurs, we have to spend money to halt the spill, repair the damage, clean up, and
remediate the environment, according to Odugbesan. Since oil companies are "untouchable
and unaccountable in Nigeria, communities and people go foreign courts to obtain justice,"
according to Nubari.

Williams concurs that it is challenging to hold international corporations accountable through

Nigerian government institutions. According to Shell Nigeria's spokesman Odugbesan, the
company paid out roughly 50 billion naira ($11 million as of last year) in 2021 after being
sued by another community, refuting the notion that Shell is untouchable in Nigeria.
Williams has experienced highs and lows throughout his protracted David-versus-Goliath
legal battle. Williams praised additional court rulings that were victories for the harmed
people in the Niger Delta.

"Since January 29th, there have been numerous favourable court rulings both inside and
outside of Nigeria, some of which have resulted in significant monetary awards. These
rulings have significantly improved environmental protection in the Niger Delta.

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TIMELINE

1936 - The Royal Dutch Shell Group establishes a Nigerian venture with the precursor
company of BP Plc. The first shipment of oil from Nigeria takes place in 1958.

April 1973 - Nigerian government takes a stake in the venture. Over the coming years, the
government increases its stake and BP exits.

1979 - The Shell Petroleum Development Company of Nigeria (SPDC) is established,

incorporating assets of the older Shell-BP consortium. Over time, the Nigerian National
Petroleum Corporation comes to own 55 percent, Shell owns 30 percent, France’s Total owns
10 percent and Italy’s Eni 5 percent. Shell remains the operator.

1990 - The Movement for the Survival of the Ogoni People (MOSOP), led by firebrand
environmental rights activist Ken Saro-Wiwa, starts campaigning for a fairer share of oil
wealth for the Ogoni people living on oil fields and compensation for environmental damage.

January 1993 - MOSOP organises protests of around 300,000 Ogoni people against Shell
and oil pollution. Nigeria’s military government occupies the region.

April 1993 - Shell forms Shell Nigeria Exploration and Production Company Limited
(SNEPCo), which signs Production Sharing Contracts to develop offshore oil and gas
interests.

1993 - Shell ceases production in Ogoniland.

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November 1995 - Saro-Wiwa and eight other MOSOP leaders are executed by Sani
Abacha’s military government on alleged murder charges, to worldwide horror. Nigeria is
suspended from the Commonwealth.

Late 1990s - Over time, Shell’s focus shifts to offshore exploration, where it enjoys better
margins and fewer threats of attack by militants.

October 2003 - SPDC pumps more than 1 million barrels of oil per day.

2005 - Shell starts production at the giant Bonga offshore field.

2006 - Militant group MEND (Movement for the Emancipation of the Niger Delta) emerges
and begins to attack Shell facilities. Like MOSOP it seeks a great share of oil wealth for the
Delta’s people and remediation for oil spills. SPDC pump stations and platforms in Niger
delta are attacked and production falls.

2008 - Two large spills, a result of operational faults, hit the community of Bodo in
Ogoniland in the Niger Delta. Tens of thousands of barrels of oil are spilt.

January 2010 - SPDC sells some onshore fields and says it is no longer looking to Nigeria
for growth.

April 2011 - Shell and Italy’s Eni acquire oil production licence (OPL) 245, a large offshore
field, for $1.1 billion from local company Malabu.

August 2011 - A U.N. report criticises Shell and the Nigerian government for contributing to
50 years of pollution in Ogoniland which it says needs the world’s largest oil clean-up,
costing an initial $1 billion and taking up to 30 years.

March 2012 - A group of 11,000 Nigerians from Bodo, Ogoniland, launch a suit against
Shell at the London High Court, seeking tens of millions of dollars in compensation for the
2008 oil spills.

January 2013 - A Dutch court rules that Shell could be held partially responsible for
pollution in the Niger Delta, saying the company should have prevented sabotage at one of its
facilities. Four Nigerians and Friends of the Earth filed the suit originally in 2008 in the
Netherlands.

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January 2015 - Shell accepts liability for the Bodo spills, agreeing to pay 55 million pounds
($83 million at the time) to Bodo villagers and to clean up their lands and waterways.

May 2018 - Court case against Shell and Eni over the 2011 OPL 245 acquisition starts in
Milan. Nine current and former executives and contractors, including ENI Chief Executive
Claudio Descalzi, are accused by Italian prosecutors of paying bribes to secure the license.

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CONCLUSION

The Ogoni case has sparked debate, inspired change, and advanced CSR. Shell's CSR
initiatives, however, have many flaws. Successful CSR need government support in order to
advance. The best that corporations can do in the absence of legal enforcement is to take a
"soft law" approach to CSR, in which they can voluntarily implement CSR policies but are
not compelled to do so by law. Memorandums of Understanding (MoU), which are informal
agreements that have generally failed for Nigerian tribes, are still in place for the majority of
Nigeria's operations with Shell. Shell might be compelled to offer the same types of
employment possibilities globally as they do in Nigeria if the government adopts more "hard
law" regulations, setting a better example for businesses and nations around the world. This
does not mean that the government is solely to blame. Despite Shell's prudent financial
decision to employ CSR as a kind of damage control in Nigeria, the company's strategies
elsewhere appear to be reactionary rather than forward-thinking. However, Shell is now a
role model for other businesses trying to adopt CSR, according to Litvin. Even though the
crisis cost innocent Nigerian lives, it resulted in a greater good, even though Shell's CSR
goals may not have been motivated by pure altruism. Shell has come under fire for supporting
the Sudanese civil war and the Apartheid regime. Hence, we can conclude that shell has done
devastating activities in Africa and now has been held responsible for all its activities and
punished accordingly. But still Nigerian people have complained that shell has not done the
cleaning process efficiently and is still accountable for doing so.

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TEAM LIST (1 BBA H B) Economics of Corruption class

1. Armaan Agarwal
2. Mayur Sanjunath Sannesi
3. Arham Dharewa
4. Roshni Priyadarshini Rout
5. Harshit Agarwal
6. Khushi Sharma
7. Yash Manani
8. Advaith S Vasisth
9. Sreejith Biswal
10. Kirat Arora
11. Shruti Daga
12. Tushar Singh

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