Kanika Datta: Big Oil slips on the little people

Royal Dutch Shell in an out-of-court settlement in Nigeria

Fourteen years after the poet Ken Saro-Wiwa and nine others were hanged for protesting against Nigeria’s environmental practices in the oil-rich Niger delta, Royal Dutch Shell has finally blinked. In a landmark settlement on Tuesday, the world’s third largest company agreed to pay $15.5 million in an out-of-court settlement ahead of a court case by relatives accusing it of complicity with that country’s military regime in human rights abuses.

Part of this money will be paid to the relatives of those who were executed by General Sani Abacha’s military junta after trumped-up trials. The rest will go into an education and trust fund to benefit Saro-Wiwa’s Ogoni tribe, the inhabitants of the delta whose livelihoods have been destabilised by Shell’s activities. This commitment, Shell was careful to highlight, was over and above what the corporation already spends on such activities there.

Shell, however, emphatically denied any admission of guilt and described the settlement as a “humanitarian gesture”. It is telling, though, that the agreement came ahead of the trial that was due to start in New York in a few days and would have brought under intense scrutiny Shell’s activities in the Niger Delta — including oil spills and gas flares that make Nigeria sub-Saharan Africa’s biggest emitter of carbon dioxide.

Going by the protests by Nigerians all over the world and indignation buzzing on the World Wide Web, Shell has fooled no one. One comment from the US sums up the general attitude: “…a $15.5 million is trivial compared to the ecological damage and the violence and death caused the Ogoni people. No European (western) [sic] or the US would have tolerated what Shell did in Ogoniland.”

Too true. Indeed, the payout amounts to 0.6 per cent of Shell’s 2008 net profits and a minuscule 0.003 per cent of its revenues.

Ken Saro-Wiwa Junior, the poet’s son who spearheaded the legal case against Shell, expressed satisfaction at the settlement but wrote a nuanced and dignified response in The Guardian: “In the end we collectively agreed to settle because the terms and conditions of the offer from Shell enabled us to gain some measure of psychological or financial relief, provided for a contribution towards the future development of our community.

“But it also enabled us to advertise the settlement as a living, breathing example of how and why the commitment to peace, non-violence and dialogue is the best way to resolve the challenges in the Niger Delta.”

There is no doubt that this is a critical milestone for global corporations venturing into poor countries for growth and profits. The suit was filed under something called the Alien Torts Claim Act that admits lawsuits against US corporations for human rights violations overseas.

No corporation has been found guilty under this law yet, though it is being increasingly used. Still, Monday’s settlement could encourage many more tribes in that region who have also been impacted by Shell’s activities to follow the Ogonis’ lead.

It is also worth noting that the Niger delta has been a region of chronic instability. Tribes — much like India’s Naxalites — frequently disrupt activities in their quest for a share of the oil wealth Shell and others pump out from there. Nigeria derives 90 per cent of its revenues from oil and gas, little of which is invested in local communities and global oil companies pretty much have a free hand in the delta.

The reason the Shell settlement should be of special interest to India is that we stand on that cusp of transition in which more and more communities will face the downside of economic expansion. The struggles of Vedanta, Arcelor Mittal, Posco, the Salim group and scores of Indian business houses to acquire land for mammoth projects have been a potent indicator of the tensions ahead. Now, the prime minister has suggested that environmental clearances should not be a hindrance to industrial projects. He means well, of course, since the ministry of environment had emerged one of the last bastions of rentiering within government. But the unintended consequence of this approach could well be the bludgeoning of community rights on the altar of industrialisation.

Like the Ogoni people, most land-losers in India have little wherewithal to adjust to life without their one source of wealth or the collateral damage of health problems caused by pollution. And that’s because, like Nigeria, these states have invested so little in social infrastructure that their citizens are uniquely disempowered. The solution, as Nitish Kumar in Bihar has discovered, is simple, but the political will to kick-start the transformation remains the challenge.