Bringing the corporations to account

One of the recurring motifs of the public debate around the global financial crisis has been the level of community anger at corporate excess - especially the incredibly high wages paid to some CEOs, and the question of what role “greed” has played in creating the current crisis.

More broadly, community concern at corporate behaviour seems to go in cycles. It surfaces at different times, often around the collapse of a company or sector. One recent example of this is the loss of managed investment companies Great Southern and Timbercorp, who owe billions of dollars to investors and creditors.

But beyond short term reaction, there is also a broad-based and well organised consumer and environmental movement that continues to work to hold companies to account. This work is usually “under the radar” of media interest but there have been some significant developments of late that deserve mention.

One key tactic used by these movements is to initiate legal proceedings to challenge perceived poor corporate behaviour, and a number of these cases have been propelled into mainstream awareness in recent weeks. The obvious one is that of Wiwa v Shell, which saw petroleum giant Royal Dutch Shell being taken to court in the USA over allegations that the company requested, financed, and assisted the Nigerian military when it used deadly force to repress opposition to Shell’s operations in the Ogoni region of the Niger Delta in the 1990s.

Royal Dutch Shell began oil production in the Niger Delta in 1958 and there has been a long history of popular opposition to its presence in the region. This case was initiated after the execution of well known Nigerian activist Ken Saro Wiwa and eight other Ogoni men by the Nigerian military dictatorship in 1995. Almost 14 years later, 10 plaintiffs from the oil rich Delta had succeeded in getting Shell to court to face these charges. Most of these people are either family members of the deceased victims or people who were injured by military forces in the 1990s. This was possible through the work of community based groups in the USA and the fact that that country has a law that allows foreign nationals to bring human rights lawsuits against corporations (the Alien Tort Statute).

The lawsuits have been brought against Royal Dutch Shell and Brian Anderson, the head of Shell’s Nigerian operation at the time. But literally a few days before the case was due to proceed to trial, Shell negotiated an out of court settlement of US$15.5 million, as a “humanitarian gesture”.

Jennie Green, the attorney who initiated the lawsuit in 1996 said of the outcome, “this was one of the first cases to charge a multinational corporation with human rights violations, and this settlement confirms that multinational corporations can no longer act with the impunity they once enjoyed”.

Other cases come to mind: the International Labor Rights Fund has taken on Exxon Mobil Corporation, over allegations that its predecessor companies, Mobil Oil Corporation and Mobil Oil Indonesia, hired military units of the Indonesian national army to provide security for their gas extraction and liquefaction project in Aceh, Indonesia. Members of these military units have been accused of perpetrating human rights abuses against local villagers. ExxonMobil was accused of not taking any proactive measures against these activities by the security forces employed by them.

Friends of the Earth (FoE) took Shell to court in Nigeria over its continued gas flaring in the Niger Delta. It won the case but Shell is yet to heed the Federal Court determination. FoE then worked with residents of the Niger Delta to launch a case in The Netherlands, where Royal Dutch Shell is headquartered. The company faces legal action for repeated oil spills, and the associated human rights impacts of these spills.

Even though the Wiwa v Shell case did not proceed to trial, it has helped establish a principle that goes well beyond Shell and Nigeria. We are all keenly aware of the power of corporations in the local and global economy. One example of this is the widely documented role of the “greenhouse mafia” in influencing climate change policy in Australia. With more than half of the largest economies now being corporations rather than countries, it is more important than ever that the community has the ability to ensure that corporations, no matter how powerful they may be, will be held to universal human rights standards.