Shell, Nigeria and the Search for Justice: When Corporate Power Meets Community Harm

The Impact of Western Companies on African Countries

Shell’s investment in Nigeria has contributed significantly to economic growth. According to Shell’s 2020 sustainability report, its subsidiaries employed 11,700 people, paid USD 900,000,000 in taxes to the Nigerian government, awarded USD 800,000,000 in contracts to Nigerian suppliers and funded All On, a non‑profit supporting renewable energy startups. SPDC also reduced gas flaring by 90 per cent since 2002.

However, these benefits exist alongside serious harm. Gas flaring releases toxic substances into the air. A Centre for Constitutional Rights report identified 100 flare sites in Nigeria in 2009. The same report alleges that Shell colluded with the Nigerian government to suppress protests in the Ogoni region using deadly force.

Shell’s profit‑driven operations have come at a high cost to communities whose suffering does not appear on corporate balance sheets. Although Shell has taken steps to reduce harm and support local projects, large‑scale business inevitably produces environmental and social exploitation. The law attempts to address these consequences.

How Parent Companies Are Held to Account

Parent companies are usually held liable through a tortious duty of care. In Chandler v Cape Industries (2012), the court held that a parent company can owe a duty of care to those harmed by its subsidiary if the relationship between them is sufficiently close.

In Vedanta Resources v Lungowe (2019), the Supreme Court explained that duty of care should be assessed using the Caparo guidance. Courts consider whether harm was reasonably foreseeable, whether proximity exists between claimant and defendant and whether imposing a duty is fair and reasonable.

Actions that may create a duty of care include:

• the parent company knowing the subsidiary’s operations were unsafe
• intersecting business operations
• the parent company having superior knowledge of health and safety risks
• the subsidiary relying on the parent company’s expertise

Because many subsidiaries operate outside UK jurisdiction, courts must first determine whether there is a triable case in the UK. In Vedanta, the court found that the parent company exercised sufficient control over the subsidiary. In Okpabi v Shell (2021), the Supreme Court held that the Ogale and Bille communities had a “good arguable case” that Shell was responsible for pollution due to its public commitments to health and safety and its global policy frameworks.

Legally, parent companies and subsidiaries are separate entities. Intuitively, claims should be brought against the subsidiary in its home jurisdiction. However, there are circumstances where bringing the claim against both entities is justified.

Where Should Parent Companies Be Held to Account?

The jurisdiction question was central in Vedanta. The claimants were from Zambia, and the pollution originated from a mine owned by Vedanta’s subsidiary, KCM. Lord Briggs initially reasoned that Zambia was the most practical forum. The pollution occurred there, the claimants lived there, and KCM was subject to Zambian law. A Zambian judgment would also be enforceable in the UK.

Despite this, the court held that the trial should proceed in the UK. The decision turned on substantive justice. Lord Briggs concluded that the claimants might not obtain justice in Zambia due to the absence of conditional fee arrangements, lack of legal aid and limited experience among Zambian legal teams in handling complex cases.

Although Lord Briggs emphasised that the Zambian judiciary is competent, his reasoning implied that the entire legal profession lacked capacity to handle such claims. This raises concerns. It is not sustainable for African claimants to rely on foreign courts for justice that should be accessible in their own countries. It is difficult to accept that an entire legal profession is incapable of managing such cases. The question becomes: what level of competence would satisfy the requirement for substantive justice?

Conclusion

Foreign companies have brought economic benefits to African countries, including jobs, government revenue and support for local enterprise. However, these gains come with high environmental and social costs. Air pollution, oil spills and community harm are well documented. Documentaries inspired by Burna Boy’s music, such as Whiskey, highlight the devastating effects of pollution on Nigerian communities.

Parent companies can be held liable through duty of care, especially when they impose group‑wide policies. Successful claims encourage better standards and provide compensation for victims. Yet bringing claims in one’s own country remains extremely difficult, and pursuing justice abroad is even harder.

It is in the interests of justice for parent companies to be accountable in their home jurisdictions. However, people in developing economies cannot continue relying on Western courts for justice that should exist at home. How to bring justice closer to African communities is another story that demands urgent attention.