Okpabi v. Royal Dutch Shell

Over 42,000 Nigerians from the communities of Bille and Ogale in the Niger Delta attempted to sue Royal Dutch Shell in the United Kingdom Court system, arguing that Royal Dutch Shell, which is incorporated in the U.K., is responsible for oil spills in the area associated with its Nigerian subsidiary Shell Petroleum Development Company of Nigeria.

In February 2021, the U.K. Supreme Court ruled that the Nigerian farmers and fishermen can sue Shell in U.K. Court.

Background
Two Nigerian communities, Bille and Ogale, allege that they have suffered systematic and ongoing oil pollution for years because of Shell’s operations in the Niger Delta. The local environment, economy and drinking water have all been affected by oil pollution. The communities have seen mangrove forests damaged by oil spills from a pipeline run by the Shell subsidiary. The local economy, which is dependent on farming and fishing has also suffered due to oil pollution. In 2011, the United Nations Environment Programme found that Ogale’s water wells were polluted and signs have been erected around the town prohibiting the use of water wells. A report from various environmental NGO's found that oil companies had systematically failed to clean up oil pollution in the Niger Delta.

Much of the oil operations in the area are carried out by the Shell Petroleum Development Company of Nigeria, a subsidiary of Royal Dutch Shell. Faced with limited prospects for justice in Nigerian courts, the claimants sought to bring a case in U.K. courts, where Royal Dutch Shell is incorporated. The case was brought as a tort of negligence under common law of Nigeria, which is the same as that of England and Wales.

Relevant Law and Principles

 * Duty of Care

Ruling
In a 2017 ruling, a U.K. High Court ruled that Royal Dutch Shell could not be sued because it was merely a holding company that did not control operations of its Nigerian subsidiary. In February 2018, a Court of Appeal in London upheld the High Court decision. Finally, in February 2021, the U.K. Supreme Court ruled in favor of the Nigerian citizens, saying that Royal Dutch Shell could be sued in U.K. Court for the pollution caused by its subsidiary in Nigeria.

Takeaways
The case sets a precedent that multinational fossil fuel companies can be held accountable for the actions of their subsidiaries in other countries. U.K. common law is used in countries such as Canada, Australia, and New Zealand which makes this a potentially highly impactful precedent.

Links

 * UK Supreme Court case summary