In Denial


The case of Shell entailed more than just the oil company; the Ogoni people and the land they used to subsist were affected by Shell’s oil wells.  The company’s involvement in Nigeria caused many problems for the people there and instigated many issues with the government and the country.  Shell’s collaboration with the Nigerian government, the spills from their pipes, and their contribution to the country all had a great effect onNigeriaand subsequent occurrences, including a trial. Edwin Hartman’s article on corporate rights and obligations reflects on Shell’s responsibilities their business venture inNigeria.  There are different views on how and what Shell should have contributed to the country, but there are also certain things Shell had the obligation to do.   The company did not follow through on their corporate duties and this led to two court cases, one of which ended with Shell paying a settlement to affected families.

As was previously presented in the Shell case, contributing to theNigeria’s economy and helping the Ogoni people was clearly not on the corporation’s agenda. Shell harvested the oil fromNigeriaand disregarded the well-being of the native population, which had a great effect on the people.  The Nigerian people already had bad living conditions, and the oil wells only added to their troubles.  For a good amount of time, the Ogoni were not able to voice their opinion and speak up on matters concerning them and their land.  The Ogoni had no say in their own government along with no “pipe-borne water, no electricity, [and] no job opportunities” (Shell Harvard Case, 9).  This shows how corruptNigeriaand Shell were; they worked together but excludedNigeria’s own citizens and people.  Ken Saro-Wiwa soon came into the picture and helped represent the Ogoni and communicated their environmental situation to a greater audience.

Saro-Wiwa played a large role in the case of Shell operating inNigeria.  Shell often refuted his claims about the company’s operations and denounced him as the Ogoni’s spokesperson, but he still emerged as the leading spokesperson for the Ogoni.  His determination posed a threat to Shell, in the company’s mind, and they did all they could to remove him from the situation.  In June of 1954, he was imprisoned at Port Harcourt Prison for sabotage against Shell after three arrests in previous years for apparent treason; he was released on July 22.  In 1994, Saro-Wiwa was prevented from attending a reception in honor of elected Ogoni leaders. Many Ogoni became furious, stormed the reception site, and apparently killed four Ogoni leaders who helped organize the event.  That same day, Saro-Wiwa, along with fourteen others, were arrested and charged with the murder of the four individuals, although he retreated to his house when barred from attending the reception.  Saro-Wiwa believed “the trial had been rigged in order to find him guilty and made no effort to defend himself” (Shell Harvard Case, 12).  The trial proceeded with a lack of evidence and two witnesses testifying to being bribed by the government to give a false testimony.  The judge refused to “consider evidence that Shell had bribed witnesses to implicate Saro-Wiwa in the Ogoni murders” (Shell Harvard Case, 12).  Despite all of these, Saro-Wiwa was found guilty along with nine other defendants in 1995.  On November 10, 1995, Saro-Wiwa was hung.

In 1996, after the trial inNigeriaand the hanging of Ken Saro-Wiwa, many groups and human rights attorneys began to bring up series of cases to hold Shell accountable for their actions inNigeria, specifically human rights violations.  Many of the cases brought up against Brian Anderson and Royal Dutch Shell include holding Shell accountable for “summary execution, crimes against humanity, torture, inhuman treatment and arbitrary arrest and detention” (The Case Against Shell).  Eventually, a trial date was set for May 27, 2009 by the United States District Court for the Southern District of New York.

During the trial inNew York, many court documents were revealed that were not present in the trial inNigeria.  Some court documents revealed that “in the 1990’s Shell routinely worked withNigeria’s military and mobile police to suppress resistance to its oil activities, often from activists in Ogoniland, in the delta region” (Vidal).  In 2009, confidential memos, witness statements, and other documents were also released.  These showed that Shell “regularly paid the military to stop the peaceful protest movement against the pollution, even helping to plan raids on villages suspected of opposing the company” (Vidal).  Even more evidence was revealed in aNew Yorkfederal court in 2009, which accused Shell of “collaborationg with the state in the execution in 1995 of writer Ken Saro-Wiwa and other leaders of the Ogoni tribe” (Vidal).  More documents show that Shell agreed to pay Nigerian army to retrieve a truck on their part, which ended with one Ogoni man dead and two others wounded.  Shell defended itself by saying their payment was made “as a show of gratitude and motivation for a sustained favourable disposition in future assignments” (Vidal).  All of this evidence proves the speculation of Shell collaborating with the Nigerian government and causing many deaths.  At the end of the trial, Shell paid $15.5 million to the eight families in the settlement, $5 million of which will set up a trust fund called “Kiisi…to support educational and other initiatives in theNigerdelta” (Pilkington).  This settlement is one of the largest payouts by a multinational corporation charged with human rights violations.  The scale of the payment is “seen by experts in human rights law as a step towards international businesses being made accountable for their environmental and social actions” (Pilkington). Brian Anderson, who was the director of Shell Nigeria, continued to deny Shell’s role in military operations even after the settlement.  In 2009, he said that Shell “played no part in any military operations against the Ogoni people, or any other communities in theNigerDelta, and we have never been approached for financial or logistical support for any action” (Pilkington).  AlthoughAndersondenies the allegations about Shell, the company finally took responsibility of its actions inNigeriaand its real operations were made known to the public.  It may have occurred forcefully with a trial in federal court, but the company ultimately knew it had done wrong and ended up paying over $15 million for its misconduct.   Hopefully this case will have an impact on other multi-national companies and encourage them to consider the social and environmental impacts of their operations.  This trial just goes to show what can happen when companies are not concerned about the effects of their operations and hopefully it set new standards for companies.

In regards to the court case against Shell and the company’s operations inNigeria, there were corporate responsibilities that never came into play.  The company rarely displayed motivation to better the country as a whole and benefit the Ogoni and Nigerians; Shell never showed initiative to follow through on their corporate duties.  According to Donaldson, there are three categories of corporate duties: the duty to avoid depriving people of their rights; the duty to help protect people from such deprivation; the duty to aid those who are deprived.  Hartman expands on these three correlative duties to make one more, which he says is “avoiding helping to deprive” (Hartman, 165).  According to Hartman, Shell had the duty to avoid helping to depriveNigeriaand the people of the country.  It is more complicated than just avoiding depriving people and it moves into the actions and obligations of the company.  Shell being inNigeriacreated a corrupt relationship between the company and the government and this caused many problems.  The people ofNigeria, specifically the Ogoni in the case of Shell, were left out of the decisions and operations of Shell even though they occurred in their country.  Shell seemed to deliberately disregard the Ogoni, and did not feel the need to compensate them for the damage their operations caused on the Ogoniland.  This goes against the duty to “avoiding helping to deprive” and Shell was neither avoiding nor helping either way.  Shell was not bettering the lives of the Ogoni or Nigerians, instead it was causing harm.  Shell being inNigeriadirectly supported government corruption and damage to the environment.  Removing itself from the country would eliminate some of the corruption and oppression caused by the company.  “American businesspeople operate on foreign shores in bad societies under repressive regimes” and in some cases, “American companies are directly responsible for the repression” (Hartman, 169).  This all holds true with the case of Shell.  By operating inNigeria, the company played a role in the repression of the Ogoni and the execution of Ken Saro-Wiwa.  If Shell realized it was disregarding its corporate responsibilities, things might have changed and many people may have been kept alive.

Shell may have tried to convince others that its operations inNigeriawere improving the country and providing money for the Ogoni.  After the trial and the release of many documents, the allegations of corruption and damage were proved to be correct.  Shell can no longer deny its role in military operations and deaths of many Nigerians.  Shell should have initially taken responsibility of its actions and made more of an effort to right its wrongs.  Denying its actions and responsibilities only brought a suit against them, which ended in a settlement to the affected families.   Hopefully this will remain a reminder for other foreign-operating corporations that doing and denying your wrongdoings can cause more harm after the fact, and they must be held responsible for them, even on foreign soil.

Works Cited

Hartman, Edwin. “Donaldson on Rights and Corporate Obligations.” 163-172. Print.

HarvardCollege. “Royal Dutch/Shell in Nigeria(B).” Harvard Business School (2009). Print.

Pilkington, Ed. “Shell Agrees to Pay Compensation for Execution of Saro-Wiwa and Ogoni Protesters.” The Guardian. 8 June 2009. Web. 3 Nov. 2011. <http://www.guardian.co.uk/world/2009/jun/08/nigeria-usa&gt;.

Vidal, John. “Shell Oil Paid Nigerian Military to Put Down Protests, Court Documents Show.”The Guardian. 2 Oct. 2011. Web. 3 Nov. 2011. <http://www.guardian.co.uk/world/2011/oct/03/shell-oil-paid-nigerian-military&gt;.

“Wiwa v. Shell – The Case Against Shell.” Wiwa v. Shell. 2009. Web. 3 Nov. 2011. <http://wiwavshell.org/the-case-against-shell/&gt;.

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This entry was posted in Blogging, Business, Cases (Real World), Ethics, Government, Society and tagged , , , , , . Bookmark the permalink.

2 Responses to In Denial

  1. Jordi says:

    Did their settlement acknowledge wrong-doing? Usually the do not allowing both parties to keep telling whatever story they like despite the transfer of money.

  2. Jordi says:

    Shell paid the military. Wow. That seems like a smoking gun in terms of Shell doing much worse than “avoiding helping.”

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