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Opinion

Lawyers’ insights on corporate legal accountability: Channa Samkalden, Prakken d’Oliveira, Netherlands

Business & Human Rights Resource Centre

Channa Samkalden reflects on the decision of the Hague Court of Appeals in the lawsuit against Shell in the Netherlands regarding oil pollution in Nigeria.

1.Why is this case important?

The case is important because it was one of the first cases to argue parent company liability - and (as far as I know) it became the first where a parent company duty of care for the activities of a subsidiary abroad was indeed established. Oil pollution in the Niger Delta has been an immense problem for decades – and Shell has never really been held accountable for it. A crucial first step was taken in 2015 when the Court of Appeal of The Hague confirmed the jurisdiction of the Dutch courts and opened the route to justice for the Nigerian farmers and Friends of the Earth. Five years later the court concluded that Shell Nigeria must pay compensation and that Royal Dutch Shell must see to it that a Leak Detection System is installed on the Nigerian pipeline.

2.How does it (the case/ ruling) impact the work you do?

My practice focusses entirely on business & human rights and this has been one of my main cases since over 10 years, so this is a landmark decision for me on a personal level as well. In cases like this, the defense of corporations is often that parent company responsibility is basically a ridiculous suggestion. Shell too argued that our case was evidently without cause, and that my clients simply had no clue of the way Shell operates as a group or of the technical specifics underlying their claims. The ruling makes it clear that this is a pointless line of defense for corporations. The court even found that certain companies within the Shell-group acted as a ‘vehicle’ for the parent company – thus largely ignoring the legal structure of the group while focusing on its practical organization. That is a warning for other companies too. Of course, this ruling is about Shell and Nigeria – but it shows that parent company liability is a risk that corporations will need to actively deal with. The judgement of the Supreme Court of the United Kingdom in the Okpabi-case is yet another confirmation of that fact.

3.What are the remaining challenges?

We have now taken the major legal hurdles, but there are still many complications ahead. The compensation for the claimants must still be determined. Milieudefensie (Friends of the Earth the Netherlands) represented the other victims of the oil spills and while their claim was allowed, it is still unclear how and when they will get compensated. Safeguarding this process and making sure that everyone gets what they are entitled to is a whole new challenge on its own. We also don’t know how cooperative Shell will be in this process. This case may have helped to open up a new horizon for victims of corporate abuse. But it is also another confirmation of the fact that the real solution must be found in the prevention of these problems.