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01/29/2013 06:08 PM

Battling Big Oil

How Four Nigerian Villagers Took Shell to Court

By Nils Klawitter

Four Nigerian villagers from the Niger River delta have challenged mighty Shell in a Dutch court. They complain that the oil giant has caused environmental devastation and ruined their homes. A verdict in the unprecedented case is expected on Wednesday.

Royal Dutch Shell CEO Peter Voser likes to talk about the good deeds his company performs worldwide. "Sustainable development and social performance is absolutely key in the way we do our business," says Voser, a Swiss national. The head of Shell feels a duty to pursue such noble objectives as observing human rights and protecting the environment.

Not everyone affected by his global business, however, would agree that he is particularly successful. Take, for example, Eric Dooh, a Nigerian.

Earlier this January, he once again returned to his fish ponds, or at least to what was left of them after they were exposed to Shell's oil in the Niger delta. This was once Dooh's home. It was where his father taught him how to fish. He learned to catch crabs and tilapia, and how to find his way back to his village, Goi, guiding his canoe through the shallow waters of the mangrove-lined courses of the waterways and channels. It is located in Ogoniland, about an hour's drive southeast of the city of Port Harcourt.

The village no longer exists. "The fish are gone," says Dooh. After the fish disappeared, the people gradually left Goi. They were driven out by a large oil spill from a Shell pipeline. It happened more than eight years ago, but the lagoons and fish basins are still coated with black oil. In Goi, it smells as if you were filling up your gas tank on a freshly tarred road.

It is for that reason that Dooh, 44, has filed a lawsuit against Shell, not in Nigeria but in the Netherlands, where the company is headquartered. "I want them to clean this up properly," he says. On Wednesday, Dooh will appear before the district court in The Hague for the delivery of the verdict, together with three other fishermen who joined the suit and with supporters from the environmental group Friends of the Earth.

They will be facing an armada of lawyers. Shell is a powerful entity, and not just in the Netherlands, with $470 billion (€350 billion) in annual sales, 90,000 employees and 43,000 filling stations in more than 80 countries. Experts estimate that the multinational corporation earns about $1.8 billion in profits annually with its Nigerian oil wells alone. For Shell, both money and reputation are on the line, and its attorneys have tried to block the trial for four years.

Largely Immune to Lawsuits

Ultimate responsibility, says Shell, lies with the local subsidiary, the Shell Petroleum Development Company (SPDC), which is involved in a joint venture with the Nigerian government. But the court agreed with the plaintiffs' argument that strategic decisions for the African country are made at Shell headquarters in The Hague.

No matter how the case turns out, the fact that a major corporation is being sued for the first time in a European court for environmental damage in a developing country will have consequences. Until this suit, energy companies had seemed largely immune to lawsuits from the developing countries where they produce their oil and gas. Dutch judges could choose to set an example in the Shell case -- as well as creating a legal debt of sorts. In the future, people who live in countries where European companies benefit from a lack of legal enforcement may be granted recourse to assert their rights.

In Nigeria, the legal situation isn't even that bad, at least in theory. The Nigerian constitution includes protections for water and soil. Petroleum laws stipulate "fair and adequate" compensation after oil spills.

Many legal experts and non-governmental organizations hold that this even applies to cases of sabotage, which are still widespread in the Niger delta, even though many of today's rebels are more interested in business than politics.

Some tap into pipelines and operate illegal refineries. Others have accepted hundreds of millions of dollars in amnesty funds and spend their days lounging in luxury hotels or provide armed guards to protect the pipelines that they used to blow up. To its credit, Shell has also agreed to clean up spills caused by acts of sabotage.

But what good are laws and promises in a poverty-stricken country that earns a fortune from the oil business, while two thirds of the population live on less than $1.25 a day? Nigeria is considered one of the most corrupt countries on earth. While its citizens have almost no access to clean drinking water, each of its 109 senators is paid an annual salary of about $1.5 million. In such a country, whether something is considered "clean" or not is often just a matter of money.

'Fictitious Name'

The negotiations between the oil companies and the leaders of the affected villages are often held in secret, and "without any formal court action being involved," according to a report by Amnesty International. To make the deals seem legitimate, the affected villages later receive a large number of receipts from the companies hired to do the cleanup. The four plaintiffs received 27 of these reports. In some of them, not even the date of the leak was correct.

Bopp van Dessel is familiar with the paper battles. He headed Shell's environmental studies department in Nigeria in the mid-1990s. "One Greenpeace report was more effective than writing 40 'impact assessment reports' for Shell," he says. In Goi, someone named "Nwin Dooh" had signed documents confirming that the cleanup activities had been performed. "It's a fictitious name. That person doesn't exist," says Eric Dooh.

Shell was unwilling to comment on the matter, as it was on many other questions SPIEGEL asked. For the oil multinational, the cleanup in Goi ended in 2007 as noted in the cleanup reports. According to the company's website, the affected villages were as good as clean.

Mene Tomii, 79, still remembers when the drilling companies first arrived, and how he rubbed his hands together with glee when the first oil bubbled from the ground in 1958. Tomii is one of the kings of the region. He arrives in a brightly waxed, slightly dented black Mercedes. Back then, he says, Shell had summoned the villages chiefs to a meeting in a Methodist church.

"If you're lucky, we will find oil under your land, and then you'll be set for life," the Shell managers promised, Tomii says. He can still hear their promises today. "What they eventually paid, if anything, was one shilling in compensation for each tree that was used for economic gain." But the business boomed, and today the Dutch-British company has been extracting petroleum from Nigerian soil for more than 54 years.

Oozing into the Delta

Some 9,000 kilometers (5,590 miles) of pipelines were laid in the bush to transport the oil. In some places, Shell didn't even bother to bury them.

In 2011 alone, there were 181 leaks from the often antiquated and porous lines. Even Shell admits that there have been some maintenance problems. The company blames the majority of the accidents, including the 2004 Goi disaster, on sabotage.

In the last 50 years, an estimated 1.5 million tons of Shell's oil have leaked into the river delta, an amount corresponding to nearly one Exxon Valdez accident per year. Environmentalists estimate that about 77,000 liters a day are still oozing into the delta today.

The United Nations has now joined the ranks of critics of the oil companies and of the Nigerian government. A 2011 study documents the poisoning of groundwater in the region. In a village occupied by the Ogoni people near a pipeline, people were drinking water contaminated with cancer-causing benzene -- in concentrations 900 times above the threshold established by the World Health Organization.

Eric Dooh began to feel the side effects of oil production as a young boy. "I knew at an early age what oil spills were, and that the explosions around us had to do with the exploration of oil fields." After one detonation in 1987, his father's chicken barn collapsed, killing a thousand animals. Again and again, oil could be seen bubbling from nearby Shell pipelines. The family's three large fishponds and dozens of spawning ponds were also constantly filling up with the black oil. People started getting eczema.

Blaming Theft

"At some point my father had had enough. He was tired of the handouts Shell used to keep us and the villages quiet, and he sued them," says Dooh. It wasn't an easy step for his father, one of the village elders of Goi. As a young man, he himself had worked on Shell's drilling rigs. But soon he ran out of the money he needed to pursue the case. A case filed in Port Harcourt in 1993 hasn't been decided to this day.

The village of Goi met its end in October 2004, after a major oil spill in the nearby Trans-Niger Pipeline. An oil slick spread through the channels for days and finally caught fire. The lagoon burned for almost a week, and 15 hectares (37 acres) of mangrove forest was in flames. Goi became a ghost town.

Dooh's father died in 2011, but before his death he decided to file another lawsuit against Shell, this time with the help of Friends of the Earth, which now supports his son in The Hague.

The suit came as a shock to Shell. Among the Dutch upper classes, it had long been seen as impudent to so much as criticize the oil giant. It seemed unbelievable that four Nigerian fishermen could take the company to court. But that was only the beginning.

For the first time in 103 years, the company was also called to testify before the Dutch parliament. Ian Craig, Shell's director for sub-Saharan Africa, sought to justify the environmentally harmful practice of flaring off natural gas, which is a byproduct of oil production, as well as the spills by claiming that such adverse effects were not a problem in another West African country, Gabon. Craig also claimed that Shell's operations in Africa were subject to the same standards as anyplace else.

Former Shell employee Bopp van Dessel tells a different story. "The facilities in Nigeria were in conformity with neither internal nor international standards." While the company used shiny drilling equipment in Western countries, van Dessel hardly recognized the same equipment in Nigeria. "Every Shell facility I saw was dirty. There was a terrible stench, and it was clear to me that the area was being devastated."

The Distance between Nigeria and the Netherlands

To be on the safe side, Shell attorneys took over from executives at hearing for the case brought by the four fishermen in The Hague. But this time, the millions upon millions of dollars the company has spent on social projects are not going to help Shell.

To be sure, the company has invested a significant amount of money in Nigeria, building roads and schools, and paying for programs to help people set up businesses. But of what use are such programs when human drinking water is contaminated? New hospitals are a good idea, but it's grotesque to realize that most of the patients are being treated for health issues associated with contaminated water or respiratory problems caused by the constant gas flares.

The attorneys were almost weepy when they presented one of their key arguments, asking the judges to consider that the managers of the subsidiary, SPDC, are not just confronted with a foreign language, but also with a completely different "legal culture," to which they are not accustomed. "The distance between Nigeria and the Netherlands is large, not only in geographical terms."

But sometimes the government and the company are surprisingly close. Shell CEO Voser, for instance, likes to appear personally to discuss a planned petroleum law with the Nigerian president. And according to one company report, Voser even sees his bonus affected when there are oil spills in Nigeria. According to Wikileaks, Shell's longstanding regional vice-president for sub-Saharan Africa, Ann Pickard, boasted of having her own people situated in all government ministries.

And then there is Shell's theory that all three spills that are the subject of the trial in The Hague were the work of saboteurs or oil thieves. "It's hard to believe everything that Shell ascribes to thievery," says Nnimmo Bassey, an architect who was forced to go underground by the former military regime. "Allegedly almost seven million liters are being tapped every day," says Bassey, a winner of the Alternative Nobel Peace Prize and one of Nigeria's best-known activists. "Such numbers are impossible to check."

'Unmanageable'

There is an agency to investigate leaks and spills, says Bassey with a smile, but it's "dependent on Shell's expertise and helicopters." The oil multinational's only comment is that it has a professional working relationship with all government authorities, as it does in the case of the leak that contaminated Alali Efanga's fish ponds in Oruma in 2005. He too is suing Shell. And in his case, everything once again points to sabotage, at least that's what the company says. But according to internal company reports, there was already talk of "extensive and severe wall loss" in the pipes in the mid-1990s. In 1999, corrosion in the neighboring Kolo Creek Pipeline was deemed "unmanageable."

"The pipe was already leaking periodically before 2005," says Efanga, who now works as a financial accountant. Shell has no comment on the incident. The company also did not respond to questions as to how, if there had been sabotage, the grass around the site in question could remain intact, and why the saboteurs would have dug a hole more than 2 meters (6 feet) deep to drill a hole into the bottom of the pipeline.

"There are laws enabling people to seek damages, but no one enforces them," says David Amakiri, the king of Oruma, who works for Shell. He is not particularly complimentary of the company. Did the community benefit for the oil boom? He says that Shell built a road to his royal palace, an assembly hut where photos of him and his ancestors hang above worn sofas. "That was all. Since 1971."

It will be a long time before fish can be caught in Oruma and Goi again -- 30 years, UN employees told Eric Dooh, who wants to return to his lagoon. He hopes to one day build a small bed-and-breakfast in this spot with the nice view of one of the meandering delta waterways. One day, he says.

Translated from the German by Christopher Sultan

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