Shell settles while outgoing CEO mulls motivation

A double-dose of bad news for Shell - a $15.5m out of court settlement and more exec pay palaver.

Last Updated: 31 Aug 2010

Royal Dutch Shell has paid $15.5 million in settlement of a US legal action taken by the families of the late Ken Saro-Wiwa and other Ogoni activists from Nigeria. The dispute relates to the hanging of Saro-Wiwa by the Nigerian military government back in 1995, in which it was alleged the oil company was complicit.

The litigation has continued for 13 years and the settlement comes a week before the trial was due to begin in New York. The case was brought under the Alien Tort Statute of 1789 in which foreign nationals have the right to file suits in US courts for international human rights violations.

Although the settlement involves no admission of liability by Shell the result is a further battering to the company’s already tarnished reputation. The case had claimed that at the request of Shell, who provided financial aid for the Nigerian armed forces, soldiers used deadly force and carried out brutal raids on the Ogoni people throughout the 1990s in order to put down a movement against the oil company. 

It’s a stark reminder that quite apart from the deleterious effects of pumping carbon into the atmosphere, getting oil out of the ground in the first place can be a dirty old business in every sense. When things go wrong, lives can be lost.

Shell's drilling in the oil-rich Niger Delta began in 1958 and it remains the largest oil business in Nigeria, owning some 90 oil fields across the country. Human rights experts are already heralding this as a landmark case in the way multi-nationals behave in sensitive areas where environmental damage is caused by their activity.

In a rather embarrassing coincidence, Shell has also hit the headlines today on the vexed subject of executive pay. The luckless corporate affairs department must feel under siege.

At a conference in Dubai the outgoing CEO Jeroen van der Veer has conceded that earning shed loads more money would not have made much difference to his leadership performance. You have to realise,’ he said in an interesting if oblique observation, ‘If I had been paid 50 per cent more, I would not have done it better. If I had been paid 50 per cent less, then I would not have done it worse.’

We’re not sure how far this gnomic utterance advances the Fat Cat debate. But we feel sure Shell’s increasingly irate shareholders would like to know what kind of a job he’d have made if he’d been paid 90 per cent less. Or, indeed, 90 per cent more.

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