An United States Appeal Court has dismissed a case against Royal Dutch Shell Plc (RDSa.L) in which the oil company was accused of helping Nigerian authorities to violently suppress protests against oil exploration in the 1990s.
Judges in the U.S. Court of Appeal for the 2nd Circuit in New York ruled that until the Supreme Court deemed otherwise, corporations could not be held liable in U.S. courts for violations of international human rights law.
The case was brought under a 1789 U.S. statute, the Alien Tort Statute (ATS) by families of seven Nigerians who were executed by a former military government for protesting Shell’s exploration and development.
Shell has denied allegations of involvement in human rights abuses.
Jonathan Drimmer, a partner of Steptoe & Johnson LLP in Washington and an authority on the statute, said the strong dissent suggested that there would be a further appeal.
“Will it result in the conclusion of those lawsuits? It’s going to depend on each individual case,” Drimmer said.
One of those is a complainant seeking to hold corporations such as Ford Motor Co. (F.N), General Motors Co (GM.UL) and International Business Machines Corp. (IBM.N) liable for aiding and abetting authorities in South Africa under apartheid — the decades-long system of racial segregation and suppression of the black majority by the white minority rulers until the early 1990s.
The accusations against Shell included violations connected with the 1995 hangings of prominent activist Ken Saro-Wiwa and eight other protesters by Nigeria’s then-military government.
Chief Judge Dennis Jacobs and Judge Jose Cabranes said in a written ruling that the trial judge, who declined to dismiss some claims against Shell, should have thrown out all claims.
The opinion noted that no corporation has ever been subjected to any form of civil or criminal liability under the international law of human rights.
“We hold that corporate liability is not a discernible, much less universally recognised, norm of customary international law that we may apply pursuant to the ATS.
in a dissenting opinion, Judge Pierre Leval wrote:
“According to the rule my colleagues have created, one who earns profits by commercial exploitation of abuse of fundamental human rights can successfully shield those profits from victims’ claims for compensation simply by taking the precaution of conducting the heinous operation in the corporate form.”
The cases are Wiwa et al v. Royal Dutch Petroleum Corporation et al, U.S. District Court for the Southern District of New York, No. 96-08386 and Nos. 06-4800 and 06-4876 in the U.S. Court of Appeals for the 2nd Circuit.