A case alleging that Shell was involved in the death of Ken Saro-Wiwa, an author and former Nigerian environmental activist, reached a New York federal trial court today.
According to the plaintiffs, Mr. Saro-Wiwa died in 1996 at the hands of the militarily-controlled Nigerian government as the result of his campaign against the oil drilling practices of Royal Dutch Shell. As reported in the Financial Times ("Old Law Exhumed by Rights Fighters," May 26, 2009), his final words were, "Lord, take my soul but the struggle continues."
As described by The New York Times ("Oil Industry on Trial," May 22, 2009), "The trial...will examine allegations that Shell sought the aid of the former Nigerian regime in silencing Mr. Saro-Wiwa, a vociferous critic, in addition to paying soldiers who carried out human rights abuses in the oil-rich but impoverished Niger Delta where it operated."
The case is being pursued under a heretofore little known federal statute, the Alien Tort Claims Act, which has been used to give parties allegedly injured by the wrongdoing of another outside the U.S. a way to pursue the action in U.S. courts. This, of course, is an extremely simplified version of the Act, but suffice it to say the use of the Act to seek recovery in the U.S. is of great concern to many multinational firms.
According to the FT, "The potential of these lawsuits to generate huge damages and disastrous publicity now hovers, according to one lawyer whose firm defends big companies, 'very close to the consciousness of corporate America acting overseas.'"
I do not pretend to be an expert on the Act or on the facts of the Saro-Wiwa claim for that matter. However, what is clear is that multinational natural resources-related firms -- whether they like it or not -- may be required to appear before an American federal court to answer for their allegedly illegal behavior that may have taken place thousands of miles from the U.S.
It also underscores the fact that natural resources firms operating around the world, sometimes in quite "isolated" locations, need to be mindful of their relationships with the communities in which they operate.
The American legal process is oftentimes a long and complicated affair, and there is no telling what will happen with the claim by Mr. Siro-Wiwa's relatives. However, the "anything goes" attitude that at least some (and perhaps way too many) firms have taken with regard to the communities in which they operate must be a thing of the past -- unless their shareholders are willing to answer for the misdeeds of the company.
A logical next question is, what about Chinese firms that operate as "arms" of the government. Are they particularly concerned about their corporate actions? I'm afraid I don't know the answer to that, but I fear the people in Sudan would tell an awful story about their relationships with Chinese oil firms operating there.