Cheers in Nigeria after Shell agrees to pay $15.5 million

Royal Dutch Shell oil company's decision to settle a multimillion-dollar civil suit with the families of executed Nigerian activists is bringing a mixture of cheers and relief.

As part of the out-of-court settlement mediated in New York City, Shell has agreed to pay $15.5 million to the families of environmental activists in Nigeria's oil-rich Niger Delta region, including that of author Ken Saro-Wiwa. The families had alleged that Shell had provided arms to the Nigerian government for the repression of the Ogoni people, who live in areas where Shell was operating.

Shell says it welcomes the settlement as the beginning of a "reconciliation" process, but denies the allegations lodged against it.

"Shell has always maintained the allegations were false," says Malcolm Brinded, Shell's chief spokesman. "While we were prepared to go to court to clear our name, we believe the right way forward is to focus on the future for the Ogoni people, which is important for peace and stability in the region."

By paying $15.5 million to the families of the nine Ogoni activists, Shell "acknowledges that, even though Shell had no part in the violence that took place, the plaintiffs and others have suffered," Mr. Brinded says.

Closure for a long legal battle?

Shell's settlement closes the chapter on one of the longest legal battles brought by indigenous people against large oil companies prospecting around the world. In Indonesian courts, Exxon Mobil faces a civil suit alleging that the company's guards kidnapped and tortured local villagers. In Ecuador, Chevron faces a potentially massive judgment for alleged environmental damage in the Amazon rain forest. Shell's case is significant, however, because of the sheer amount of oil that comes from the Niger Delta. More oil comes to the US from the Gulf of Guinea than from the Saudi Arabian peninsula.

Shell hopes its settlement will close the door on a very contentious period, but activists say this may be just the beginning.

"We welcome this settlement, and we believe this should be the beginning of a changed attitude between the Ogoni community and Shell," says Ledum Mitee, president of the Movement for the Survival of the Ogoni People in Lagos, Nigeria's commercial capital. "But we believe there are several other victims of the repression of the 1990s in Ogoniland who are not covered by this settlement, and they should be also covered."

The case against Shell was filed in the US under the Alien Tort Claims Act, an 18th-century law that allows foreigners to lodge complaints against corporations that operate in the US, even for actions committed on foreign soil. The plaintiffs were family members of nine Ogoni activists who were protesting against environmental damages and other alleged abuses by Shell and its employees in the Niger Delta.

The plaintiffs argued that Shell supplied arms to the Nigerian government of President Sani Abacha – the name that launched a million e-mail scams – which then used those arms against civilian activists. In 1995, Nigerian courts sentenced Mr. Saro-Wiwa and eight other Ogoni activists to hang, on charges that they had encouraged attacks on local Nigerian officials in the Niger Delta.

In addition to compensation for the plaintiff families, Shell has agreed to set up a trust fund intended for the Ogoni people, which would go toward providing education, skills development, agriculture, small-enterprise development, and adult literacy. Shell also intends to continue community development work including roads, electricity, agriculture, youth training and development, and microcredits for women's groups, even though Shell has not operated in Ogoni areas since 1993, when local protests and occasional attacks shut its operations down.

Or just the beginning?

Emmanuel Emmanuel, an activist at the Center for Social and Corporate Responsibility in the Niger Delta city of Port Harcourt, said the Shell settlement was "an important first step."

"It's an acknowledgement of failure in corporate responsibility," says Mr. Emmanuel, whose group uses its Shell stock as leverage to push for better corporate behavior in the Niger Delta. Shell may deny any legal responsibility for the deaths of Saro-Wiwa and the other activists, but Emmanuel says he believes this settlement is intended to "limit the damage and try to silence other cases that might come up in the US."

But Shell's strategy may backfire, he adds. "This will go on and on," Emmanuel says. "There will be more cases because there are lots of legacies in the Niger Delta."