Royal Dutch Shell agreed to a $15.5 million settlement Monday to end a lawsuit alleging that the oil giant was complicit in the executions of activist Ken Saro-Wiwa and other civilians by Nigeria's former military regime.
Shell, which continues to operate in Nigeria, said it agreed to settle the lawsuit in hopes aiding the "process of reconciliation." But Europe's largest oil company acknowledged no wrongdoing in the 1995 hanging deaths of six people, including Saro-Wiwa.
"This gesture also acknowledges that, even though Shell had no part in the violence that took place, the plaintiffs and others have suffered," Malcolm Brinded, Shell's Executive Director Exploration & Production, said in a statement.
The lawsuit in U.S. District Court in New York claimed Shell colluded with the country's former military government to silence environmental and human rights activists in the country's Ogoni region. The oil-rich district sits in the southern part of Nigeria and is roughly the size of San Antonio. Shell started operating there in 1958.
The primary complaint against Shell focused on activities by the company's subsidiary, Shell Petroleum Development Company of Nigeria Limited.
The lawsuit said in the 1990s, Shell officials helped furnish Nigerian police with weapons, participated in security sweeps of the area, and asked government troops to shoot villagers protesting the construction of a pipeline that later leaked oil.
The plaintiffs also say Shell helped the government capture and hang Wiwa, John Kpuinen, Saturday Doobee, Felix Nuate, Daniel Gbokoo and Dr. Barinem Kiobel on Nov. 10, 1995.
Wiwa, leader of the Movement for the Survival of Ogoni People, led rallies against Shell. He blamed the company for myriad oil spills and gas fires in the Ogoni region.
"I think he would be happy with this," Wiwa's 40-year-old son, Ken Saro-Wiwa Jr., said in a telephone interview from London. Though Shell denied any wrongdoing, "the fact that they would have to settle is a victory for us."
Besides compensating the families, the money from Shell will pay for years of legal fees. And a large chunk of the settlement — roughly half — will create a trust that will invest in social programs in the country including educational endowments, agricultural development, support for small enterprise and adult literacy programs.
Altogether, the settlement will have a negligible affect on Shell's shareholders, amounting to less than one-hundredth of a percent of Shell's annual revenue. It's comparable to the annual cost of renting one of the supertankers that Shell uses to deliver Nigerian oil to other countries.
"Is it enough to bring back the lives of our clients? Obviously not," said Jenny Green, a lawyer for the Center for Constitutional Rights in New York who helped file the lawsuit in 1996.
But Green said it will send a message to Shell and other multinationals that operate in developing countries.
"You can't commit human rights violations as a part of doing business," she said. "A corporation can't act with impunity. And we think there is accountability in this settlement."
Ralph Steinhardt, a George Washington professor of international law, said he doesn't think Shell got off easy with the settlement.
"It's not the size of the company that's the right measure here," Steinhardt said. "At the end of the day, it's to get some acknowledgment of the plaintiffs and their suffering and the role of the company."
The Shell settlement ends one of several legal battles brought against energy companies by indigenous peoples where they operate.
Villagers in Indonesia are suing Exxon Mobil, claiming it employed guards who kidnapped, tortured and murdered civilians. Chevron awaits a potential $27 billion judgment in Ecuador stemming from a dispute over its role in environmental damages in the Amazon rain forest.
At least one additional lawsuit alleging human rights abuses by Shell in Nigeria is pending in U.S. District Court in New York.
Fourteen years after the Nigerian activists were hanged, Wiwa said he thinks Shell has started to acknowledge that it needs a "social license" to operate in a foreign countries. For example, the company has agreed to pay for a study of environmental damage that drilling has caused the Ogoni region.
"They have a long way to go," he said. "But at least they realize some of their actions can come back to haunt them as we saw in New York."