New UK legal case on Niger Delta oil spills – a litmus test for justice in the energy transition
In the context of the climate emergency, there is increasing pressure on companies to disengage from fossil fuels. Some international oil and gas companies are indeed disengaging from some projects, but the rationale is frequently financial rather than environmental, so the assets are sold to a new operator and extraction of fossil fuel continues...
[C]ivil society groups are raising concerns about what these companies are leaving behind when they disengage – a legacy of unremedied pollution, damage and human rights abuse...
One of the worst offenders is oil giant Shell, which has been disengaging from onshore oil fields in Nigeria without remediating the damage caused during decades of exploitation. Today, however, in a show of defiance to Shell’s irresponsible disengagement, some 13,000 people from the Niger Delta are filing claims against the company in the UK High Court, seeking remedy for the devastating impact of oil spills.
Shell has filed a defence that should ring alarm bells for oil-affected communities and civil society groups everywhere. Among the most worrying arguments put forward by Shell is that communities cannot seek remedy for spills that happened more than five years before the legal claim. In the context of the Niger Delta, this is particularly egregious because there is ample evidence, from the United Nations, Amnesty International, Milieudefensie (Friends of the Earth Netherlands) and others, that oil spills are frequently not cleaned up properly, leaving damage that persists for many years.
Shell also suggests that the communities cannot rely on a court order to compel Shell to clean up pollution. Despite evidence that Nigerian regulators have failed to enforce adequate clean-up of pollution, Shell insists that “remediation is a regulatory matter, and the power to compel and monitor clean up and remediation is exclusively vested in the Nigerian regulators”. Shell’s argument could, if successful, leave communities with nowhere to turn, and would run contrary to the human right to effective remedy...
The UNGPs and OECD Guidelines make clear that companies must conduct due diligence when they divest or exit. Due diligence entails identifying, preventing and remediating the human rights impacts of the business. This includes both impacts that have already occurred and potential impacts that could occur in the future. A company cannot divest itself out of its due diligence responsibilities.
Importantly, due diligence in the context of responsible disengagement means the exiting company must remediate previous adverse impacts it caused or to which it contributed...
The question of remedy as part of due diligence is particularly important in the fossil fuel sector, given the sector’s long and well-documented history of social and environmental harms. This is, perhaps, one of the most significant challenges for fossil fuel companies: there is no version of a just energy transition that includes a legacy of unremedied human rights and environmental abuses around former oil and gas projects...