Borja Fernández Burgueño. Permanent Code: FERB03039209

Sustainable Development and Management - EUT1072 Prof. Ugo Lachapelle

Table of content

1. Introduction ................................................................................................................................... 1

2. Royal Dutch Shell and Human Rights ........................................................................................... 1

2.1 About Royal Dutch Shell ........................................................................................................ 1

2.2 Kiobel v Royal Dutch Shell Petroleum CO ............................................................................. 2

3. Conclusion .................................................................................................................................... 4

Human Rights Petitioners,

vs.

Royal Dutch Shell Respondents

2013 This study will analyze whether or not Shell holds any

responsibility and liability for the violations of Human Rights in

Nigeria. Shell has been accused of polluting and destroying the

environment and of complicity of torture and murder in the U.S.

Supreme Court. From this specific case we will analyse how the

International law system works when judging a corporation.

Kiobel v. Royal Dutch

Shell Petroleum CO.

No. 10-1491.

12th of March

1

1. Introduction

The legal principle of universal jurisdiction allows national courts to try cases of the most

egregious crimes against humanity and the gravest violations of Human Rights (H.R.) even

though they were committed in a third country. However, this controversial doctrine is not

worldwide accepted and has not yet been applied to judge a corporation in a United States

court under the Alien Tort Statue. Kiobel v. Royal Dutch Shell Petroleum CO could be the

first case in which a non-American corporation would be punished by a U.S. court for

committing H.R. crimes in a third country.

After giving a general overview of Shell’s actual situation and of how the company operates

in Nigeria, both arguments of Shell and of the petitioners about whether or not a U.S court

can hear the case will be exposed. Finally, in the conclusion, I will explain the importance of

this case and I will give my personal approach.

2. Royal Dutch Shell and Human Rights

2.1 About Royal Dutch Shell

2.1.1 Royal Dutch Shell

Royal Dutch Shell is a global group of oil and gas companies. The group operates and

employs people in more than 801 countries and territories. Its headquarters is settled in the

Netherlands –The Hague-, whereas its registered office is placed in the United Kingdom -

London2. During 2011, the company had a $470,171 Million revenue

3 and nowadays controls

2% of the world’s oil production and 3% of the world’s gas production4. In the last 5 years

the dividend per share of Shell (RDSA) has grown by 9.19%5.

The company’s culture claims that their “aim is to meet the energy needs of society, in ways

that are economically, socially and environmentally viable, now and in the future”6.

Therefore, one can always say that its social responsibility is focused at all the shareholders,

according with R. Edward Freeman’s theory of corporate’s social responsibility in which he

included as shareholders all the parties “who can [be] affected or [are] affected by the

achievement of the firm’s objectives”7 -and thus is in opposition to the Milton Freidman’s

theory8. Nonetheless, based on the following events, we can appreciate that that phrase is not

accurate with the company’s way of doing business in Nigeria.

2 2. 1.2 Royal Dutch Shell in Nigeria

Royal Dutch Shell employs around 90 thousand people9 and, among them, 2.22%

10 are

Nigerian employees. In Nigeria, this corporation operates in the south coastal territories

<map_1> and has a big amount of oil and gas projects and investments in that area11

. The

corporation’s production in 2011 was around 385 thousand boe/d (barrels of oil equivalent

per day)12

. During the same year, important discoveries were made in that African country13

<map_2>. According with the Shell’s social analysis in the annual company’s report,

“[s]ecurity in Nigeria remained relatively stable during 2011”14

, but Shell has not always had

this opinion.

Since the late 1950’s, Shell has been working in the oil industry in Ogoniland 15

<map_3>.

Shell’s oil contamination in Ogoniland was severely impacting many components of the

environment16

, human health, security, livelihoods and destroying all the fishing resources,

the major economic activity of the Ogoni population17

. Shell claimed that those negative

externalities were all caused by sabotage and denied any responsibility18

. Nowadays the

United Nations Environment commission affirms that the environmental restoration may take

between 25 to 30 years19

.

2.2 Kiobel v Royal Dutch Shell Petroleum

2.2.1 Facts, timeline and general allegations

In 1993 the peaceful movement of Ogonis to fight against Shell’s environmental degradation

in the Niger Delta had already grown too much for the Dutch corporation and the company

decided to ask the government for military support to control the local demonstrators. From

that point, which matches with the start of Sani Abacha dictatorship -1993 to 1998-, to 1995

Shell, with the government support, has actively intervened in violations of H.R. such as

“torture, extrajudicial execution, prolonged arbitrary detention and crimes against

humanity”20

. Insofar Shell’s agents helped and incited several attacks committed against the

Nigerian people who opposed Shell’s environmental violations21

. So as one can see, Shell

violated H.R.22

and, therefore, that “could be considered as an offence against the law of

nations”23

.

In 2002, Esther Kiobel sued against Royal Dutch Shell Petroleum in the United States District

Court for the Southern District of New York (Esther Kiobel, Individually and on behalf of her

husband, Dr. Barinem Kiobel, ET AL; v.; Royal Dutch Petroleum CO., ET AL). In 2006, the

Court dismissed a few of Kiobel’s arguments but allowed claims of encouraging “arbitrary

3

arrest and detention; crimes against humanity; and torture or cruel, inhuman, and degrading

treatment to stand”24

. On October 1th 2012 petitioners and defendants reargued whether or

not the Court can hear violations of the law of nations occurred in a third country25

. The

answer of this question will drastically change the way that companies operate abroad.

2.2.2. Has the U.S.A. jurisdiction to judge a non-national company in a third country for H.R.

violations?

a) Arguments pro

The Alien Tort Statute <annex 4> (ATS), enacted in 1789, gives jurisdiction to the US’s

districts courts of any civil action committed by an alien for a tort violating the Law of

Nations26

. Thus, those egregious International Law violations committed by Shell may be

judged under the ATS.

Petitioners claim that extraterritorial limitations may not be a limit of the application of ATS

based in the precedent U.S. court decisions27

like in Filartiga v. Pena-Irala, in which non-

Americans were punished for committing torture in Paraguay.

Mr. Hoffman, Kiobel’s barrister, alleged that the cause of action in this case does not

undermine the restrictions on ATS jurisdiction established in 2004 in the case Sosa v.

Alvarez-Machain28

29

. Those restrictions are that the violation must be comparable to the

characteristics of the international crimes of the 18th century which the ATS illustrated in

1789. Filartiga’s case affirms that the 21th century torturers have become like the pirate and

slave traders in the 18th century30

, therefore Sosa’s restrictions do not hinder the application

of the ATS.

b) Arguments against

If the U.S. Supreme court rule in favor of Kiobel, that will set a precedent for other countries

to sue an American organization for a H.R. violation even though it was committed in a third

country, including the United States31

.

In International Law, one of the main requirements of any issue is the exhaustion of local

remedies. Thus, before bringing a lawsuit to the U.S., Kiobel have to sue the company in

Nigeria, the Netherlands and the United Kingdom32

. Furthermore, responders claim that the

fact that political asylum was given by the United States to the petitioners does not create a

meaningful connection33

to judge the case.

The last main argument of the defendants is that the ATS can be applied when judging an

individual, but there is no legislation which allows the U.S. to punish an entirely foreign

4

corporation with no connection to the United States for a cause of action that occurred outside

the borders34

.

3. Conclusion

Over the last years, international corporations have been directly involved in H.R. violations,

such as those committed in the Democratic Republic of Congo during the civil war by around

80 companies from developed countries35

36

. During the Nuremberg Trials the court said that

“[c]rimes against international law are committed by men, not by abstract entities, and only

by punishing individuals who commit such crimes can the provisions of international law be

enforced”37

. Nonetheless, I do think that corporations must not be excluded from an

International Court jurisdiction. This argument is consistent with the recognition of corporate

legal responsibility in the domestic legal systems38

and with the post-World War II legal

international framework- which has as its basic principle the protection of Human Rights39

.

The Human Rights Declaration does not make a distinction between Human Rights violations

committed by individuals or organizations. Thus, they have to be equally protected whether

the crime was committed by a company or by an individual.

In June 2012 Donald B. Verrilli, the United States Solicitor General, submitted a brief of the

case to the U.S. Supreme Court supporting Royal Dutch Shell’s arguments40

. During the last

decades, the U.S. government has been commanding several hostile attacks against countries

with the excuse that they were not threatening its citizens according with the H.R. principles.

But when it comes to decide whether or not the most deplorable H.R. crimes could be brought

to a court in order to judge them in a fair U.S. tribunal, they are met with great resistance

from Obama’s government. However, without taking into account the U.S.’s foreign policy

incongruences, in my opinion, the United States Solicitor General is right. If the U.S.

Supreme Court decides that it has jurisdiction over this case, then this would lead to other

courts all over the world to start judging foreign companies according to their own H.R.

interpretation. Furthermore, one company could be judged in several States for the same

cause of action.

I believe that these types of lawsuits have to be brought to an international justice court, like

the International Criminal Court. However, an amendment of the Article 25 of the Rome

Statute (“The Court shall have jurisdiction over natural persons pursuant to this Statute”)

has to be done in order to allow the International Criminal Court to try a case of a violation of

5

H.R. committed by a legal person. Until that point, if a country’s domestic court does not

judge a company for a crime committed in its territory, the corporation will remain

unpunished.

6

References:

1 About Shell, Our people http://www.shell.com/global/aboutshell/who-we-are/our-

people.html 28/01/2013

2 Annual Investor’s handbook Royal Dutch Shell plc. financial and operational information,

2011. Page 89

3 Annual Investor’s handbook Royal Dutch Shell plc. financial and operational information,

2011. Page 11

4 Annual Investor’s handbook Royal Dutch Shell plc. financial and operational information,

2011. Page 2

5 Blooberg, Royal Dutch Shell PLC http://www.bloomberg.com/quote/RDSA:LN 28/01/2013

6 About Shell, Who we are http://www.shell.com/global/aboutshell/who-we-are.html

7 R. EDWARD FREEMAN Strategic Management: A Stakeholder Approach. Cambridge

University Press. 1984 Page 25

8 MILTON FREADMAN The Social Responsibility of Business is to Increase its Profits. The

New York Times Magazine, September 13, 1970

9 About Shell http://www.shell.com/global/aboutshell/who-we-are/our-people.html

28/01/2013

10 Annual Investor’s handbook Royal Dutch Shell plc. financial and operational information,

2011. Page 56

11 Annual Investor’s handbook Royal Dutch Shell plc. financial and operational information,

2011. Page 17

12 Annual Investor’s handbook Royal Dutch Shell plc. financial and operational information,

2011. Page 23

13 Annual Investor’s handbook Royal Dutch Shell plc. financial and operational information,

2011. Page 14

14 Annual Investor’s handbook Royal Dutch Shell plc. financial and operational information,

2011. Page 23

15 United Nations Environment Programme (UNEP). Environmental Assessment of

Ogoniland Executive Summary 2011. Page 1

16 United Nations Environment Programme (UNEP). Environmental Assessment of

Ogoniland Executive Summary 2011. Page 2

17 United Nations Environment Programme (UNEP). Impacted marine ecosystem

investigation in Gokhana reveals widespread contamination. Port Harcourt, 4 June 2010

7 18

Shell YouTube Official Chanel. Mutiu Sunmonu comments on UNEP Ogoniland oil spil

report Uploaded on the 4th of Aug 2011

http://www.youtube.com/watch?feature=player_embedded&v=0aHa4VbQBZ8

19 United Nations Environment Programme (UNEP). Environmental Assessment of

Ogoniland Executive Summary 2011. Page 5

20 Petitioners' Supplemental opening brief Case No. 10-1491 In the Supreme Court of The

United States. Statements of the Case. Petition granted: 10/17/11. Page 25

21 Petitioners' Supplemental opening brief Case No. 10-1491 In the Supreme Court of The

United States. Statements of the Case. Petition granted: 10/17/11. Page 25

22 Supreme Court of the United States. Kiobel v Royal Dutch Petroleum CO. No. 10-1491.

Transcription of the arguments. MR. HOFFMAN. Page 3 line 11-17

23 ALSTON, PHILIP AND GOODMAN, RYAN AND J. STEINER, HENRY. International

Human Rights in Context: Law, Politics, Morals. Chapter 13: Horizontal Interpenetration. a)

Universal Jurisdiction. Page 1173

24 HOLTON-BASALDUA, CLAIRE AND CARUVANA, DEAN. Kiobel v. Royal Dutch

Petroleum (10-1491). Cornell University Law School, Legal Information Institute. LII

Supreme Court Bulleting. 2012

25 Supreme Court of the United States. Kiobel v Royal Dutch Petroleum CO. No. 10-1491.

Transcription of the arguments.

26 Title 28 of the United States Code: Judiciary and Judicial Procedure. Alien’s action for

tort 28 USC § 1350

27 Petitioners' Supplemental opening brief Case No. 10-1491 In the Supreme Court of The

United States. Statements of the Case. Petition granted: 10/17/11. Page 28

28 Petitioners' Supplemental opening brief Case No. 10-1491 In the Supreme Court of The

United States. Statements of the Case. Petition granted: 10/17/11. Page 28, 29 and 32.

29Supreme Court of the United States. Kiobel v Royal Dutch Petroleum CO. No. 10-1491.

Transcription of the arguments. MR. HOFFMAN. Page 57 line 12-18

30 United States Court of Appeals, Second Circuit. Filartiga v. Pena-Irala, 630 F.2d at 890

31 Supreme Court of the United States. Kiobel v Royal Dutch Petroleum CO. No. 10-1491.

Transcription of the arguments. MR. HOFFMAN. Page 6 line 4-9

32 Supreme Court of the United States. Kiobel v Royal Dutch Petroleum CO. No. 10-1491.

Transcription of the arguments. CHIEF JUSTICE ROBERTS. Page 55 line 19-20

8 33

Supreme Court of the United States. Kiobel v Royal Dutch Petroleum CO. No. 10-1491.

Transcription of the arguments. GENERAL VERRILLI. Page 41 line 9-11

34 Supreme Court of the United States. Kiobel v Royal Dutch Petroleum CO. No. 10-1491.

Transcription of the arguments. GENERAL VERRILLI. Page 51 line 6-16

35 GOTZMANN, NORA. Legal Personality of the Corporation and International Criminal

Law: Globalization, Corporate Human Rights Abuses and the Rome Statute.

University of Queensland, Brisbane, Australia. Queensland Law Student Review. The journal

of criminal law & Criminology. 98, No.3. Page 39

36 BATWARE, BILLY. The role of Multinational corporations in the Democratic Republic of

Congo. MA Peace and Conflict Studies. Academic Council on the United Nations System.

Multinational corporations in the DRC. Pages 3 to 6 http://acuns.org/wp-

content/uploads/2012/06/RoleofMultinationalCorporations.pdf

37 The United States of America, the French Republic, the United kingdom of Great

Britain and Northern Ireland, and the Union of Soviet Socialist Republics et. al v. Goering

1946/10/01

http://www.worldcourts.com/imt/eng/decisions/1946.10.01_United_States_v_Goering.pdf

Page 53

38 GOTZMANN, NORA. Legal Personality of the Corporation and International Criminal

Law: Globalization, Corporate Human Rights Abuses and the Rome Statute.

University of Queensland, Brisbane, Australia. Queensland Law Student Review. The journal

of criminal law & Criminology. 98, No.3. Page 38

39 MANFRED NOWAK. Human Rights Handbook for parliamentarians. Office of the

United Nations, High Commissioner for Human Rights. Nº 8, 2005. Chapter 1. Page 1

http://www.ipu.org/pdf/publications/hr_guide_en.pdf

40 UNITED STATES SUPPLEMENTAL OPENING BRIEF Case No. 10-1491 In the

Supreme Court of The United States. June 2012

9

Annex:

Map 1:

Annual Investor’s handbook Royal Dutch Shell PLC. FINANCIAL and OPERATIONAL

information, 2011. Page 23

http://reports.shell.com/investors-

handbook/2011/servicepages/downloads/files/entire_shell_ih11.pdf

Map 2:

Annual Investor’s handbook Royal Dutch Shell PLC. FINANCIAL and OPERATIONAL

information, 2011. Page 15

http://reports.shell.com/investors-

handbook/2011/servicepages/downloads/files/entire_shell_ih11.pdf

10

Map 3:

No Silence in Asylum. http://www.thecommonspace.org/2001/07/communities.php

07/02/2013

Annex 4:

Title 28 of the United States Code: Judiciary and Judicial Procedure. Alien’s action for tort 28

USC § 1350:

“The district courts shall have original jurisdiction of any civil action by an alien for

a tort only, committed in violation of the law of nations or a treaty of the United

States.”

11

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Multinational corporations in the DRC. 05/11/2011

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FREEMAN, R. EDWARD. Strategic Management: A Stakeholder Approach. Cambridge

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GOTZMANN, NORA. Legal Personality of the Corporation and International Criminal

Law: Globalization, Corporate Human Rights Abuses and the Rome Statute.

University of Queensland, Brisbane, Australia. Queensland Law Student Review. The journal

of criminal law & Criminology. 98, No.3. 2008.

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12

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UNITED STATES SUPPLEMENTAL OPENING BRIEF Case No. 10-1491 In the Supreme

Court of The United States. June 2012

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