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Int. J.L.C. 2015, 11(2), 153-173

International Journal of Law in Context

2015
Regulating environmental responsibility for the multinational oil industry: continuing challenges for international law
David M. Ong
© 2022 Cambridge University Press

Subject: International law

Other Related Subject: Energy. Environment.

Keywords: Corporate liability; Environmental damage; International law; International Tribunal for the Law of the Sea;
Multinational companies; Oil companies; Oil pollution; Regulation; State responsibility;

*153 States utilise international law to create opportunities within global markets for private transnational economic
actors, such as multinational oil companies, to invest and/or operate within foreign jurisdictions. However, there is a lack of
directly enforceable international mechanisms against these private actors when they cause environmental damage abroad.
International law responses to this problem range from the establishment of international compulsory compensation schemes,
the proposed expansion of the doctrine of state responsibility to include liability for private actors, and more recently through
litigation in the home states of multinational oil companies. However, both international jurisprudence and US, Dutch
and British domestic case-law reveal an ambivalence towards holding such private transnational economic actors legally
accountable in their home state jurisdictions for violations committed abroad. Certain states (the US and France) that have
suffered environmental damage from the activities of multinational oil companies have responded by reasserting their domestic
regulatory powers to require immediate clean up and compensation, prior to domestic judicial litigation. Other states (Nigeria)
are unable to achieve the same level of effective enforcement due to their weaker political and economic bargaining positions.

Introduction

This paper explores the continuing legal issues arising from the non-compliance of environmental protection standards by
private transnational economic actors operating beyond the national jurisdiction from which they originate. The focus here is
on the activities of the multinational oil industry. This species of private transnational economic actors is taking advantage
of increased opportunities to trade and especially to invest, within different national jurisdictions, following the success of
worldwide efforts at trade liberalisation and investment protection, established through international organisations such as the
World Trade Organization (WTO), 1 the International Centre for Settlement of Investment Disputes (ICSID), 2 and international
treaties such as the Energy Charter Treaty, 3 as well as numerous bilateral investment treaties (known as *154 BITs). 4
Through these multilateral and bilateral treaties, states have used international law to intervene within global markets and create
opportunities for private transnational economic actors, such as multinational oil companies, to invest and/or operate within
foreign jurisdictions. However, when these private economic actors cause environmental damage that is not remedied by the
domestic courts and enforcement agencies within these foreign jurisdictions, there is a lack of international mechanisms that
are directly enforceable against these private transnational economic actors to hold them accountable for their environmental
damage. While several international instruments addressing such environmental damage have been adopted between states, 5
and under the auspices of international organisations such as the Organization for Economic Co-operation and Development

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(OECD), 6 they are not binding directly against the private economic actors involved, and moreover do not establish judicial
or enforcement mechanisms to hold these private actors directly responsible under international law. For example, the
Commentary to the Environment Chapter (VI) of the current, 2011, OECD Guidelines for Multinational Enterprises, states,
inter alia, as follows: "None of these instruments is explicitly addressed to enterprises, although enterprise contributions are
implicit in all of them. … The Guidelines therefore draw upon, but do not completely mirror, any existing instrument. … The
Guidelines are not intended to reinterpret any existing instruments or to create new commitments or precedents on the part of
governments ….' 7

Thus, Part I of this paper will first outline the different international and domestic legal means utilised to render these private
transnational economic actors accountable, responsible and even liable for their non-compliance of domestic environmental
protection standards abroad. International law responses to such damage range from the establishment of international
compulsory compensation schemes, the proposed expansion of the doctrine of state responsibility to include liability for private
actors, and more recently, through litigation in the home states of these multinational oil companies. However, jurisprudence
from the International Tribunal for the Law of the Sea (ITLOS) exhibits a reluctance to hold private actors directly accountable to
public international law. Domestic case-law from the US, the Netherlands and the UK also reveals a general ambivalence towards
holding such private transnational economic actors accountable in their home state jurisdictions for violations committed abroad.
Certain states (the US and France) have responded to this ambivalence at the international level by reasserting their domestic
regulatory power to require immediate clean-up and compensation, prior to domestic judicial litigation.

In Part II, the legal implications of this altogether more forceful approach taken by certain states (the US and France) against the
private transnational economic actors involved will be considered. On the other hand, other states (such as Nigeria) are unable
to achieve the same level of effective enforcement against the multinational oil companies operating within their jurisdictions
due to *155 their weaker political and economic bargaining positions. As we will see below in the Deepwater Horizon and
Erika case-studies, international "best practice' for the clean-up, remediation and compensation for oil spills was "enforced'
against the multinational oil companies involved, namely, BP and Total, even prior to any domestic judicial finding of liability.
This is in stark contrast to the jurisdictional and enforcement difficulties encountered when attempting to ensure clean-up and
compensation for oil pollution in the Niger Delta region, at least in part attributed to omissions by Shell (Nigeria). The relative
negotiating strengths of the host state governments involved, namely, the US (Deepwater), France (Erika) and Nigeria (Niger
Delta) clearly played a part in the different response levels by the multinational oil companies implicated in each of these
case-studies. This disparity is especially evident in the proactive BP and Total responses in the US and France, respectively, as
compared with the paucity of the Shell response in Nigeria. Finally, this paper will conclude by reflecting on the viability of the
different legal approaches towards rendering private transnational economic actors responsible for the environmental damage
caused by their activities beyond their home state jurisdictions.

Key to the arguments presented here is the need to recognise both the initial sense of legitimate expectation, but also more
recently the notion of social obligation that now underpins the legal relationships between private transnational economic actors
and both the states they originate from and operate within. Previously, this sense of legitimate expectation manifested itself in
arguments for the recognition of such private economic actors as legal persons with enforceable rights against states, especially
in the field of investment protection. More recently, the initial sense of legitimate expectation of investment protection on the
part of these private economic actors has transmuted into a growing sense of common obligations, accountability, and ultimately
even acceptance of responsibility on the part of these actors for their actions or omissions, when these cause environmental
damage. However, such acceptance of corporate responsibility is usually voluntary on the part of the private economic actor
involved, rather than the result of the effective enforcement of international norms within the domestic jurisdictions where
these companies operate.

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These groundbreaking developments are also taking place against a backdrop of unprecedented questioning of the role of
the state in the political economic sphere within which these private transnational economic actors operate. In particular, the
regulatory and enforcement roles of the state within their municipal and international legal frameworks are under scrutiny as
never before, even in areas that were traditionally within the domain of states. While the regulatory role of the state is being
questioned, alternative international governance frameworks for holding private transnational economic actors accountable
for their activities both at home and abroad have not necessarily been effective. Thus, individual states have retained their
interventionist and regulatory roles over private transnational actors licensed to undertake economic activities deemed to
be of significant state interest, such as the petroleum industry. In these situations, it is the relative strength of the residual
regulatory power exerted by the host states that ultimately tips the balance either towards or against voluntary compliance by
the multinational oil company involved.

I. International law responses to the challenge of regulating multinational oil companies

The main obstacle for public international law within this context is ensuring the effective implementation and enforcement of
human rights and environmental protection standards by transnational private economic actors, especially when they operate in
foreign (host state) jurisdictions, beyond their home state jurisdictions. Public international law, normally the domain of states,
but increasingly also of inter-governmental organisations such as the United Nations (UN), the World Bank, the International
Monetary Fund (IMF) and the World Trade Organisation, *156 has developed at least two ways to regulate the transnational
activities of private economic actors, such as these multinational oil companies.

First, via the adoption of multilayered global and regional normative instruments targeting transnational business activities. The
adoption of international instruments such as the 2011 UN Guiding Principles on Business and Human Rights 8 (hereinafter,
"Ruggie Guiding Principles'), the 2011 OECD Guidelines for Multinational Enterprises (OECD, 2011), and the 2000 Global
Compact, 9 are all examples of the normative efforts of international governance institutions such as the UN and OECD in
this field. These international normative exercises are designed to appeal directly to the behaviour of multinational businesses
undertaking transnational activities with the aim of ensuring their compliance with, inter alia, international human rights and
environmental protection standards. They have been applauded as being the best legal avenue to internalise such standards
within transnational economic actors, even when compared with the possibility of making claims against US-based corporations
using the Alien Torts Statute before US courts (Koh, 2004, pp. 272-273). Notably, these international instruments confirm the
application of basic human rights and environmental protection principles and standards to private transnational economic
actors, even in their activities abroad. For example, the Commentary to the Environment chapter of the OECD Guidelines
notes that "(t)he Guidelines also encourage enterprises to work to raise the level of environmental performance in all parts of
their operations, even where this may not be formally required by existing practice in the countries in which they operate. In
this regard, enterprises should take due account of their social and economic effects on developing countries' (OECD, 2011,
para. 71).

However, as Blitt observes in relation to the Ruggie Guiding Principles (which observation also applies for the OECD Guidelines
and Global Compact), none of these instruments create binding international law or impose obligations on multinational
enterprises (Blitt, 2012), with many of their provisions using words such as "respect' or "responsibility', rather than "duty' or
"obligation', to convey their normative status (p. 43). Moreover, these instruments do not provide any international means for
enforcing these principles and standards directly against the errant corporations involved, especially when they are operating
abroad. For example, the Ruggie Guiding Principles require states to provide access to effective domestic judicial and non-
judicial remedies addressing business-related human rights abuses (see Ruggie Principles 26 and 27 and attached Commentaries,
supra note 8), but the foundational Ruggie Principle on this issue appears to limit access to such remedies only to situations
"when such abuses occur within their territory and/or jurisdiction' (see Ruggie Principle 25 and attached Commentary in UN,
2011, supra note 8), thereby arguably negating the possibility of access to domestic remedies for abuses committed by businesses

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abroad. Neither is the responsibility for remediation of any damage caused as comprehensive as it could be. As Blitt notes, the
Ruggie Guiding Principles do not impose a remediation responsibility in cases where the adverse impact is linked to a business
entity, but *157 not actually caused by the entity concerned (Blitt, 2012, p. 49, citing UNHRC; see supra note 8, 20-21). Where
there are strong corporate links between parent companies and their subsidiary companies operating abroad, which implicate
these parent companies when their subsidiaries cause damage abroad, the paucity of this provision is thereby exposed.

The second regulatory means utilised in this context is through the institutional networks established both across and within
national jurisdictions aimed at rendering private economic actors that originate from these jurisdictions accountable for their
risky human rights and environmental practices abroad. These institutionalised accountability networks are beginning to make
an impact on multinational oil industry activities, especially through the concerted efforts of civil society groups utilising
these networks. An example of both these normative and networking developments is the utilisation by Amnesty International
and Friends of the Earth in January 2011 of both the OECD National Contact Points (NCPs) and the OECD Committee
on International Investment and Multinational Enterprises (CIME), as well as the provision of testimony before a Dutch
parliamentary committee hearing, to highlight the alleged involvement of the Royal Dutch Shell oil company in the despoliation
of the Niger Delta through its operations in that area (Amnesty International, 2011). However, neither of these international
and national governance and accountability frameworks can ultimately hold such private actors responsible and liable for any
breach of international human rights and environmental standards in their transnational activities. As a recent Chatham House
report on oil theft in Nigeria observes: "In June 2013, an NCP panel in the Netherlands issued a statement criticizing Shell for
publishing data that exaggerated oil theft's role as a cause of oil spills in the Niger Delta. The statement was a limited victory
for environmental activists in the region, but had no discernible effect on oil theft proper' (Katsouris and Sayne, 2013, p. 63).

The continuing difficulties faced by these alternative international governance institutions established to render such private
transnational economic actors accountable for their non-compliance of human rights and environmental norms abroad
highlights the need for a re-configuration of international law so that it can be directly enforced against such private transnational
actors in foreign jurisdictions. Despite evidence of the progressive co-option of private economic actors into acceptance of
international human rights and environmental protection standards by instruments such as the Ruggie Principles, OECD
Guidelines and UN Global Compact, gaps remain with regard to a crucial aspect of the overall public international law system,
namely the direct imputation of responsibility and liability of these private actors, if and when they fail in their performance
of these co-opted international principles, rules and standards. The following subsections chart some of the possible pathways
towards rendering such actors legally accountable, responsible, and even liable, for their breach of international norms and
standards in the human rights and environmental protection fields.

1.1 State intervention establishing compulsory international compensation schemes

A further international law response, at least within specific fields of economic activity deemed to be ultra-hazardous from an
environmental perspective, is to establish international compensation schemes that extend to cover the activities of non-state,
private transnational economic actors. Examples of these mechanisms are the international civil liability and compensation
schemes (established by treaties) for oil spills from tanker shipping, 10 and damage from nuclear power *158 generators. 11
Under these schemes, members of these industries are compelled to contribute towards compensation funds that are applicable
on a worldwide basis. Focusing on the international agreements applying to oil cargo shipments, the first of these is the
International Convention on Civil Liability for Oil Pollution Damage 1992 (1992 CLC), which governs the liability of ship
owners for oil pollution damage. 12 Under this Convention, the registered ship owners incur strict liability for pollution damage
caused by the escape or discharge of persistent oil from their ships. This means that they are liable even in the absence of fault.
The compensation limits are dependent on the tonnage of the oil tanker ship. The International Oil Pollution Compensation
Fund 1992 established under the International Convention on the Establishment of an International Fund for Compensation for

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Oil Pollution Damage, 1992, 13 which supplements the 1992 CLC, compensates victims when compensation under the 1992
CLC is unavailable or inadequate. The 1992 Fund is financed by contributions levied on any legal person who has received
in one calendar year more than 150,000 tonnes of crude oil and/or heavy fuel oil (contributing oil) in a Member State of the
1992 Fund. 14 Most major oil companies are therefore required to contribute to this Fund. The Supplementary Fund Protocol
was then adopted in 2003, and entered into force in 2005, thereby establishing the International Oil Pollution Compensation
Supplementary Fund, 2003. The Supplementary Fund provides additional compensation beyond the amount available under the
1992 Civil Liability and Fund Conventions. The total amount available for compensation for each incident is 750 million Special
Drawing Rights (SDR), 15 including the amounts payable under the 1992 Conventions. 16 These internationally managed
compensation fund schemes pay out on the basis of strict, no-fault liability but with the quid pro quo proviso that claims
from each incident are subject to strict upper limits on the total amount of compensation payable. They are arguably also
examples of Ruggie Principle 29, calling for business enterprises to establish or participate in effective operational-level
grievance mechanisms for individuals and communities who may be adversely impacted, to make it possible for grievances to
be addressed early and remediated directly (see Ruggie Principle 29 and attached commentary, supra note 8).

However, even these international civil liability and compensation schemes do not engender formal international legal sanctions
against the companies undertaking these activities. Moreover, the narrow focus of these international civil liability schemes
should not be overlooked. The international oil spill compensation schemes, for example, only cover oil tanker cargo movements
*159 using this specific mode of transportation. Indeed, an experts workshop held at the Paris Oceanographic Institute on
30 March 2012 concluded that "the international framework does not comprehensively address the safety and liability issues
related to offshore oil activities' (Richotte, 2012, p. 12).

Within the offshore exploration/production sector of the oil industry, one recently amended regional arrangement, which
entered into force on 1 January 2014, is the 1975 Offshore Pollution Liability Agreement (OPOL). This is not an international
convention but a private agreement between sixteen (oil and gas company) operators in the offshore sector, adopted under the
auspices of the Offshore Pollution Liability Association Ltd. 17 OPOL imposes strict liability on operators of offshore facilities
and guarantees payment of compensation up to a limit currently set at US$250 million per pollution incident. The current parties
to OPOL are the sixteen operators of offshore facilities within the jurisdiction of any of the "Designated States' to the Agreement.
These include the UK, Denmark, Germany, France, the Republic of Ireland, the Netherlands, Norway, the Isle of Man, the Faroe
Islands, and Greenland. Cameron, however, observes that this limit is not "anywhere near sufficient' (Cameron, 2012, p. 211)
to tackle large releases of oil, such as in the Deepwater Horizon case (p. 211) Moreover, he notes that although an international
convention would be the ideal approach for the establishment of a global regime, the negotiation and implementation process
would take years to complete, which would in turn lead to a "long time period of uncertainty for operators and contractors, and
… diverse and unpredictable reactions from some regulatory bodies' (p. 218).

1.2 International Tribunal for the Law of the Sea reluctance to expand international responsibility

Such international oil spill compensation schemes, whether established by agreements between states, or through private,
contractual-type liability agreements between corporate/industry representatives within each sector/region of the multinational
oil industry, may prove to be the way forward on this issue, as well as other types of environmentally hazardous activities, such
as deep-seabed mining. This is because there are continuing indications that the international adjudication bodies established
by states are reluctant to fully co-opt private actors within the doctrine of state responsibility and liability for breaches of
international norms. For example, when the question of responsibility for possible damage to the deep-seabed "Area' beyond
national jurisdiction was considered by the Seabed Disputes Chamber of the International Tribunal on the Law of the Sea, 18
it became clear that the Chamber was reluctant to apply any form of overarching joint and several liability upon both states
and the entities they license to conduct mining activities in the "Area'. 19 As the Chamber itself observes, in the event of any

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damage to the "Area' and its resources, as well as marine environmental damage, 20 the notion of joint and several liability
entails that where different (state and non-state) entities have contributed to the same *160 damage, then full reparation can
be claimed from all or any of them. 21 However, the Chamber then asserts that this form of (joint and several) liability is not
provided for under the liability regime established in Article 139, paragraph 2, of the Convention. 22

While confirming the international responsibility of sponsoring states for ensuring that activities in the Area are carried out in
conformity with Part XI of the Convention under Article 139, paragraph 2, 23 the Chamber also noted that under Article 22 of
Annex III to the Convention, the contractor shall have responsibility or liability for any damage arising out of wrongful acts in
the conduct of its operations. Thus, the Chamber emphasised that the international responsibility of the sponsoring state was
dependent on its due diligence when regulating any private economic actors that these states may license/permit to operate such
mining activities. The Chamber took the view that "in order for the sponsoring State's liability to arise, there must be a causal
link between the failure of that State and the damage caused by the sponsored contractor'. 24 The Chamber went on to state that
"[t]his means that the sponsoring State's liability arises not from a failure of a private entity but rather from its own failure to
carry out its own responsibilities. In order for the sponsoring State's liability to arise, it is necessary to establish that there is
damage and that the damage was a result of the sponsoring State's failure to carry out its responsibilities. Such a causal link
cannot be presumed and must be proven.' 25

Thus, if a sponsoring state has done all it can to reasonably discharge its due diligence duties vis-à-vis the regulation and
supervision of its licensees, then no state responsibility will arise, despite the fact that damage has occurred within the deep-
seabed Area. Indeed, in the view of the Chamber, if the contractor has paid the actual amount of damage, as required under Annex
III, Article 22, of the Convention, then there would be no room for reparation by the sponsoring state. 26 On the other hand,
failing to exert sufficient due diligence over their licensees' activities might well result in state responsibility under international
law, even if the damage is actually caused by the private economic actor holding the licence/permit from the state concerned.

However, the Chamber also accepted that: "[t]he situation becomes more complex if the contractor has not covered the damage
fully. It was pointed out in the proceedings that a gap in liability may occur if, notwithstanding the fact that the sponsoring State
has taken all necessary and appropriate measures, the sponsored contractor has caused damage and is unable to meet its liability
in full. It was further pointed out that a gap in liability may also occur if the sponsoring State failed to meet its obligations but
that failure is not causally linked to the damage, ….' 27 This raised the issue of whether the sponsoring state has "a residual
liability, that is, the liability to cover the damage not covered by the sponsored contractor', on which the Chamber noted, opinio
juris among states was divided. 28 In the view of the Chamber, "the liability regime established by article 139 of the Convention
and in related instruments leaves no room for residual liability'. 29 In such situations, the Chamber refused to consider extending
even a residual form of international responsibility or non-fault liability to the sponsoring state concerned. Instead, the Chamber
was of *161 the view that the Authority may wish to consider the establishment of a trust fund to compensate for the damage
not covered, drawing attention to Article 235, paragraph 3, of the Convention, which refers to such a possibility. 30

Following its assessment of the applicability of the Conventional rules on attribution of liability for damage to the deep-seabed
Area, the Chamber goes on to examine the general international law applicable to such situations, observing that: "In the event
that no causal link pertaining to the failure of the sponsoring States to carry out their responsibilities and the damage caused
can be established, the question arises whether they may nevertheless be held liable under the customary international law
rules on State responsibility.' 31 The Chamber then moved to consider whether customary international law may be used to
fill the gap in the deep-seabed liability regime established in Part XI of the Convention and related instruments, noting that
Articles 139, paragraph 2, first sentence, and 304 of the Convention state that their provisions are "without prejudice' to the

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rules of international law. 32 After further noting that the efforts made by the International Law Commission (ILC) to address
the issue of damages resulting from acts not prohibited under international law have not yet resulted in provisions entailing
state liability for lawful acts, the Chamber again draws the attention of the Authority to the option of establishing a trust fund
to cover such damages not covered otherwise. 33 It will not have gone unnoticed that the solution mooted by the Chamber here
is both conceptually and practically similar to that which is already in place for tanker oil spill pollution compensation and
liability for nuclear power generation accidents. While the Chamber does not elaborate on which of the entities concerned -
whether the sponsoring states, or their licensees, or both - should contribute towards this trust fund, this option does allow for
the possibility that the private economic actors undertaking deep-seabed activities will be included within the proposed trust
fund. These private economic actors will thus be captured by public international law in line with the risks their activities pose
to the fragile deep-seabed environment that is subject to the "common heritage of mankind' principle.

1.3 Litigation by Niger Delta communities before domestic US, Netherlands and UK courts

A further legal response to the alleged damage caused by the overseas activity of multinational oil companies is aimed at
rendering them accountable before the domestic courts of their own, home, jurisdictions rather than through the application
of international regimes. Traditionally, the main legal obstacles to such litigation by alleged victims of multinational oil
companies operating abroad before the domestic courts of the home jurisdictions of these companies are two-fold: first, there
is a presumption under international law against the extra-territorial exercise of jurisdiction by domestic courts, also known as
the forum non conveniens rule, that normally prevents them from adjudicating on claims that arise from foreign jurisdictions.
Second, there is the company law doctrine of the "corporate veil', which provides that the liability of a subsidiary company should
not be visited upon the parent company of that subsidiary, especially when the parent company is resident in a different national
jurisdiction. Both these doctrines continue to present difficulties for attempts to enforce legal accountability for multinational
oil company activities within foreign jurisdictions. It should also be noted that even if/when the extra-territorial jurisdiction and
corporate veil issues are overcome, any municipal court decisions in the home state jurisdictions of the parent company must
be accepted by the local courts in the jurisdictions of the subsidiary company for enforcement against them.

*162 Three recent cases within different domestic jurisdictions, namely, the US, the Netherlands and the UK, serve to focus
attention on these continuing legal issues arising from activities conducted by multinational oil companies operating beyond
their home jurisdictions. In each of these cases, representative individuals or groups from Niger Delta communities claimed
compensation from the Shell oil multinational corporate group. The analytical arrangement of these cases reflects first, the
upholding in Kiobel v. Royal Dutch (Shell) Petroleum of the presumption against the extra-territorial application of the US
federal Alien Torts Statute (ATS) by the US Supreme Court. This is followed by the Akpan v. Royal Dutch Shell & SPDC/
Shell Nigeria case, where The Hague District Court set aside the presumption against extra-territorial jurisdiction to hold the
Nigerian subsidiary company of Shell liable under the common law tort of negligence but declined to lift the corporate veil and
implicate the Royal Dutch Shell parent company (in the Netherlands) for this breach of a duty of care amounting to negligence
by its Nigerian subsidiary. Finally, continuing litigation in the Bodo Community and Shell Petroleum Development Company
(SPDC) of Nigeria (Shell Nigeria) case confirms the extra-territorial application of Nigerian law by the High Court in the UK
to adjudicate claims of tortious liability against SPDC/Shell Nigeria but has not yet yielded a final decision on total damages
and costs.

In the first of these cases, namely the US Supreme Court decision in the Kiobel v. Royal Dutch (Shell) Petroleum on 17 April
2013, 34 the plaintiff(s) from the Ogoniland region in Nigeria alleged that the multinational corporate defendant (Royal Dutch
Shell), which also has major operations in the US, aided and abetted human rights abuses by the Nigerian government. However,
the Supreme Court ruled against the extra-territorial application of the 1789 US Alien Torts Statute and disallowed liability
claims against the US-based corporate entities of Shell related to the SPDC/Shell Nigeria. 35 As Wuerth succinctly observes:

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"[o]n the facts of the case - the relevant conduct took place within the territory of a foreign sovereign, the claims did not
"touch and concern" U.S. territory, and the foreign defendants had no more than a "corporate presence" in the United States -
the Court held that the presumption [against extra-territorial application of the ATS] was not overcome.' (%C0Wuerth, 2013,
p. 603). Apart from emphasising the difficulty of establishing extra-territorial claims under the ATS, this ruling has also cast
doubt on whether corporations can be defendants under this law (Slawotsky, 2011, pp. 186-187), although, as Slawotsky notes,
this aspect of the ruling has been questioned in subsequent US court decisions and would result in an asymmetrical situation
whereby corporate rights to investment protection under international law are not matched by remedies for corporate violations
of international law (p. 201).

The Supreme Court decision in Kiobel confirming the lack of extra-territorial application of the ATS to claims originating
from Nigeria cannot be directly compared with The Hague District Court decision of Akpan v. Royal Dutch Shell & SPDC/
Shell Nigeria rendered on 30 January 2013 in The Hague, Netherlands, 36 as the forum non conveniens rule is now arguably
redundant in continental European courts, due to the Brussels Regulation on Jurisdiction and the Recognition and Enforcement
of Judgments in Civil and Commercial Matters (Brussels I Regulation), which stipulates, inter alia, that a defendant shall be sued
in its domicile, and that the domicile of a *163 company is in the location of its corporate headquarters or its registered office. 37
However, these cases are linked by the nationalities of the claimants (Nigeria) and the corporate defendants (Royal Dutch Shell
multinational group), as well as the fact that both these cases took place before domestic courts in foreign jurisdictions. Both
sets of claimants also suffered from what Meeran has characterised as the lack of access to local justice, due to several possible
reasons, including an inability to fund lawyers and experts to represent them in their local courts, as well as the persecution of
claimants, and corruption, such that often the only prospect of obtaining justice in claims against multinational companies is
to pursue claims in their home courts, where victims may obtain the services of lawyers in a position to represent them on a
contingency fee or pro bono basis (Meeran, 2011, p. 10).

The Akpan case was initially brought against both the parent Royal Dutch Shell company, as well as its subsidiary in Nigeria -
SPDC/Shell Nigeria, for its neglect of an oil spill that caused damage to adjoining farmland and fishing ponds in the Niger Delta
region. According to Bekker, this lawsuit was the first time a Dutch multinational company has been sued before The Hague
District Court in the Netherlands for allegations of pollution damage caused by its subsidiary company abroad (Bekker, 2013).
In the Akpan case, Nigerian farmers and fishermen victims from the neighbouring villages of Goi, Oruma and Ikot Ada Udo
lost their livelihoods when a leaking SPDC oil wellhead polluted their fields and fishing ponds. The (representative) individual
claimant, Akpan is a Nigerian farmer and fisherman who supported himself by exploiting land and fish ponds near Ikot Ada
Udo in Akwa Ibom State in Nigeria. He was supported in his claim by Vereniging Milieudefensie, a Dutch Non-Governmental
Organisation (NGO) "whose objective is the worldwide promotion of environmental care'. 38 The joint claims of Akpan and
Milieudefensie relate to two specific oil spills in 2006 and 2007 from an oil well, the wellhead of which was capped above
ground but tampered with, causing the two spills. Following some initial remedial work in 2007, the wellhead was finally sealed
off against sabotage by means of a concrete plug. 39 The joint plaintiffs brought claims against both the Royal Dutch Shell plc
parent company and the SPDC/Shell Nigerian subsidiary before The Hague District Court, Netherlands, inter alia, claiming
compensation and an order for SPDC to clean up the remaining oil contamination.

In response, SPDC/Royal Dutch Shell contested the jurisdiction of the Dutch courts to adjudicate on the above issues, requested
that the court declare that it has no jurisdiction over the claims against the SPDC, and, moreover, that the plaintiffs were abusing
the relevant Dutch law by initiating proceedings against Royal Dutch Shell, the parent company of SPDC/Shell Nigeria. A
further legal issue concerned the standing of the Dutch NGO as a joint plaintiff, alongside Akpan as a representative claimant
from the affected Nigerian communities, in relation to the claims for environmental damage in Nigeria.

The Akpan v. Royal Dutch Shell & SPDC/Shell Nigeria decision thus confirms the jurisdictional, corporate veil and domestic
legal enforcement challenges referred to above when attempting to invoke liability against the Netherlands-based Royal Dutch

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Shell parent company for the activities of its subsidiary company - SPDC, based in Nigeria. 40 The jurisdictional challenge
alluded to here *164 relates to the difficulty that bringing an extra-territorial claim presents for most national legal systems
around the world. On the other hand, an amicus curiae submission by a group of Dutch international lawyers to the Kiobel
v. Royal Dutch (Shell) Petroleum case before the US Supreme Court concluded as follows: "Dutch case law is therefore
incompatible with any alleged rule of customary international law prohibiting the exercise of jurisdiction by domestic courts
over claims such as those pursued by the Petitioners here. To the contrary, recent Dutch case law suggests that such claims are
indeed recognized by the courts.' 41 The collective view of these Dutch university academics was confirmed in the Akpan case.

In a significant interlocutory Judgment on its jurisdiction on 24 February 2010, 42 The Hague District Court unequivocally
affirmed that "the forum non conveniens restriction no longer plays any role in today's private international law'. 43 Moreover,
The Hague District Court found that it had jurisdiction over the claims against both corporate defendants, namely, the Shell
subsidiary in Nigeria (SPDC), and the Shell parent company (Royal Dutch Shell) in the Netherlands. 44 The close connection
between these two entities meant that a joint hearing was justified for reasons of efficiency. 45 In passing, it should be noted
that the court, and indeed the relevant Dutch and EU laws that it based its decision on jurisdiction in this case, may be said to be
fulfilling Ruggie Principle 26, which calls for consideration of ways to reduce legal, practical and other relevant barriers that
could lead to a denial of access to effective domestic judicial remedies for addressing business-related human rights abuses.

Following this determination on its jurisdiction, The Hague District Court then ruled that the applicable law in these proceedings
would be Nigerian law, 46 noting in passing that Nigerian law is a common-law system based on English law. 47 The court had
previously observed that "under certain circumstances, based on Nigerian law, the parent company of a subsidiary may be liable
based on the tort of negligence against people who suffered damage as a result of the activities of that (sub-) subsidiary'. 48
Next, the admissibility of Milieudefensie's claims against Royal Dutch Shell and SPDC/Shell Nigeria as separate claimants
were considered. Here, the court held that Milieudefensie's claims clearly went beyond the individual interests of Akpan,
in that remediating the soil, cleaning up the fish ponds, purifying the water sources and preparing an adequate contingency
plan for future responses to oil spills - if ordered - would benefit not only Akpan, but the rest of the community and the
environment in the vicinity of Ikot Ada Udo, as well. 49 Moreover, the court considered that Milieudefensie's campaigns aimed
at stopping environmental pollution in the production of oil in Nigeria were designed to promote the environmental *165
interests of Nigeria. 50 Finally, the court held that such local environmental damage abroad would fall within the description
of Milieudefensie's objective in its articles of association, i.e. to promote environmental protection worldwide. 51

However, while The Hague District Court initially ruled in favour of the admissibility of the Dutch NGO's claims to defend
environmental interests in Nigeria before the courts in the Netherlands, 52 it ultimately rejected the Dutch NGO's claims in
substance because oil pollution in Nigeria does not directly affect Milieudefensie's interests and did not give rise to an actionable
claim by the Dutch environmental NGO based in Amsterdam, the Netherlands under Nigerian law. The fact that under the
relevant Dutch law Milieudefensie can protect the interests of third parties in law does not mean that any damage to those third
parties can be considered to be damage to Milieudefensie itself. 53 The court further noted that under Nigerian common law,
there was no proximity between SPDC in Nigeria and Milieudefensie in Amsterdam for any damage that occurred in Nigeria.
Thus, Shell et al. had not violated any duty of care in respect of Milieudefensie and the court dismissed the claims by and for
Milieudefensie. 54

Moving on to the issue of Royal Dutch Shell (RDS) parent company liability for its subsidiary, SPDC/Shell Nigeria, in its final
rulings of 30 January 2013, The Hague District Court dismissed all claims against the parent company - RDS - because under
Nigerian law a parent company in principle is not obligated to prevent its subsidiaries from injuring third parties abroad, and in

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the present case there were no special reasons to deviate from the general rule (Bekker, 2013). 55 Specifically, Milieudefensie
had argued that by making the prevention of environmental damage as a result of the activities of its operating companies -
including SPDC in Nigeria - a key objective of its well-publicised overall corporate policy, RDS had assumed a duty of care
regarding the manner in which SPDC's oil operations in Nigeria are conducted. In this regard, the RDS-SPDC/Shell Nigeria,
parent-subsidiary corporate relationship was compared with that in the Chandler v. Cape plc case before the UK Court of
Appeal. 56

However, The Hague District Court found that "the special relation or proximity between a parent company and the employees of
its subsidiary that operates in the same country cannot be unreservedly equated with the proximity between the parent company
of an international group of oil companies and the people living in the vicinity of oil pipelines and oil facilities of its (sub-)
subsidiaries in other countries'. 57 Moreover, "the duty of care of a parent company in respect of the employees of a subsidiary
that operates in the same country further only comprises a relatively limited group of people, whereas a possible duty of care
of a parent company of an international group of oil companies in respect of the people living in the vicinity of oil pipelines
and oil facilities of (sub-) subsidiaries would create a duty of care in respect of a virtually unlimited group of people in many
countries'. 58 Thus, The Hague District Court held that a similar duty of care to that which was found by the UK Court of
Appeal in Chandler could not be *166 as reasonably, fairly and justly found in relation to RDS and SPDC/Shell Nigeria. 59
The Royal Dutch Shell group of (parent) companies was therefore absolved from the liability of its Nigerian-based subsidiary
- SPDC/Shell Nigeria - for its lack of effective action to prevent oil spill damage from wellhead leaks resulting from sabotage
by third persons. 60

On the other hand, The Hague District Court held that it was fair, just and reasonable to rule that SPDC/Shell Nigeria had a
specific duty of care in respect of the people living in the vicinity of the oil wellhead, especially fishermen and farmers like
Akpan, to take reasonable security measures against sabotage. 61 As an operator acting reasonably, SPDC could have properly
secured the oil wellhead at relatively low cost, which would in turn have considerably reduced the risk of sabotage. This lead
the court to the conclusion that, in this specific case, SPDC had violated its duty of care in respect of Akpan and committed
a specific tort of negligence. 62 As there was a causal link between the violation of this specific duty of care by SPDC and
the damage suffered by Akpan, SPDC was liable to pay Akpan compensation for this damage. 63 However, this ruling then
raises the enforcement issue noted above. A continuing legal question is whether this Hague District Court decision on liability
and compensation against SPDC/Shell Nigeria can be enforced and complied with in Nigeria, especially given the lack of
compliance by SPDC to domestic Nigerian court decisions in other Niger Delta cases of a similar nature in the past. 64

Turning to the third domestic jurisdiction in which similar lawsuits have been brought by representatives of local Nigerian
communities against SPDC/Shell Nigeria; in The Bodo Community v. The Shell Petroleum Development Company of Nigeria
Ltd., representatives of the community brought claims before the UK High Court, on behalf of some 15,000 or more Nigerians
living in the neighbouring Bodo and Gokana areas. 65 These claims for compensation were initially lodged against both RDS
and SPDC/Shell Nigeria for oil spills that had polluted the creek, rivers and waterways as well as the mangrove areas in the
Bodo region. The damage was estimated to have affected an area of 20 km 2 in the Gokana Local Government Area of Rivers
State in Nigeria. SPDC has admitted liability for damage resulting from two major oil spills in 2008/2009, in particular to the
waterways used by this fishing community in the Niger Delta. The amount of oil spilt is estimated to be as large as the spill
following the Exxon Valdez disaster in Alaska in 1989, and the amount of coastline affected is said to be equivalent to the
damage done following the BP Deepwater Horizon disaster in the Gulf of Mexico in 2010 (considered below). However, this
admission of liability is currently subject to further litigation over the full extent of the oil spillages and their timing. 66

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Proceedings against RDS and SPDC began in the UK High Court on 6 April 2011. However, in August 2011, Shell was reported
to have accepted legal responsibility for the two spills, stating, *167 inter alia, that: "SPDC accepts responsibility under the
Oil Pipelines Act for the two oil spills both of which were due to equipment failure. SPDC acknowledges that it is liable to pay
compensation - to those who are entitled to receive such compensation' (Vidal, 2011). In an agreement between the parties,
SPDC has agreed to formally accept liability and concede to the jurisdiction of the UK courts, which means that the claim
against RDS, the parent company of SPDC in Nigeria, has ceased (Leigh Day and Co, 2011).

In the subsequent UK High Court adjudication on the extent of SPDC liability, a similar legal finding to the duty to prevent
possible sabotage of the oil wellhead that was held by the Dutch court in the Akpan case has also emerged in the Bodo Community
litigation before the High Court. This relates to the extent to which the word "protect' in the relevant Nigerian legislation (Section
11(5)(b) of the Oil Pipelines Act, 1990) involves an additional obligation to that of "maintain or repair' the pipeline concerned.
As Akenhead J held: "The real issue revolves around whether the required protection gives rise to any liability separate to the
maintenance and repair obligation, and, if so, how far the scope of protection goes.' 67 He goes on to state that: "Whilst I do
not consider that the word "protect" is exactly and necessarily synonymous with maintenance or repair [of a pipeline], logic
suggests that they may well overlap in practice; … the usual definitions [of "protect"] can be seen to be closer to shielding from
danger, injury or change and keeping safe and taking care of. … [I]t is my judgment that the protection requirement within
Section 11(5)(b) involves a general shielding and caring obligation.' 68 He then concludes that: "neglect by the licensee in the
protection of the pipeline [as defined above] which can be proved to be the enabling cause of preventable damage to the pipeline
by people illegally engaged in bunkering which causes spillage could give rise to a liability ….' 69 Thus, in both these cases -
Akpan before The Hague District Court, based on the common-law tort of negligence and Bodo before the UK High Court, based
on interpretation of the relevant statue - it has been determined that it is the failure to protect/prevent the relevant oil wellhead/
pipeline from acts of sabotage that cause oil spill damage that can give rise to liability on the part of the operating oil company.

II. State reintervention to ensure appropriate corporate responses to oil spills: international "best practice'?

Having outlined and assessed the legal challenges faced at both international and domestic jurisdiction levels in relation to
asserting accountability for multinationmal oil companies operating in foreign jurisdictions, this Part (II) will provide two
examples of (host) state-induced corporate responses to oil spill clean-up, remediation and compensation. Significantly, these
state "enforcement' actions against two different, so-called "super major' multinational oil companies took place prior to the
ultimate domestic judicial decisions on their corporate liability for these major oil spills. These two examples: the BP/US and
Total/French/EU responses to the Deepwater Horizon and Erika oil spills, respectively, arguably represent international "best
practice' in this field.

*168 2.1 Deepwater Horizon/Macondo offshore oil well spill (BP/US)

Following the Gulf of Mexico Deepwater Horizon/Macondo offshore oil well disaster on 20 April 2010, 70 the Obama
administration, through the US Coast Guard, and without in any way relieving other responsible parties of liability, directed
British Petroleum (BP), as the designated operator of the well, to establish a single claims facility for all Responsible Parties to
centralise claims processing for claimants. As an initial response to its acceptance of corporate responsibility and liability, BP
announced on 16 June 2010, that it would create a US$20 billion escrow account to satisfy claims resolved by the Gulf Coast
Claims Facility (GCCF) and certain other claims, including natural resource damages. BP established an irrevocable Trust (for
the announced escrow account) on 6 August 2010, designating three trustees with fiduciary responsibility to collect promised
contributions from BP and make disbursements to permitted categories of beneficiaries. It committed BP to fund the Trust on a
quarterly basis over three and a half years for a total of $20 billion to be paid into the Trust until 2014. The funding schedule for
the escrow account agreed to by the administration and BP was for contributions by BP of $5 billon a year for four years. BP later

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confirmed that the funding schedule would include an initial deposit of $3 billion, which was made on 9 August 2010, with an
additional deposit of $2 billion in the fourth quarter of 2010 and then $1.25 billion a quarter until the entire $20 billion has been
deposited. The Trust was to pay some OPA-compensable claims (under the US federal Oil Pollution Act (OPA) of 1990) 71 and
some other claims for personal injuries that are not OPA-compensable, but for which BP would be liable under other US federal
or state laws, such as the Jones Act or state oil pollution acts. Under Section 1002 of the OPA 1990, each person responsible
for a vessel or a facility from which oil is discharged, or which poses the substantial threat of a discharge of oil, into or upon
the navigable waters or adjoining shorelines or the exclusive economic zone is liable for the removal costs and damages. BP
established the GCCF to provide a mechanism for individuals and businesses to file claims for costs and damages incurred as
a result of the Deepwater Horizon oil spill. Under the OPA 1990, these claims can cover damage to natural resources, including
clean-up and remediation costs for wildlife habitats and ecosystems. 72 The GCCF began operations and started accepting claim
forms on 23 August 2010. The GCCF, administered by Kenneth R. Feinberg, drew funds from the Trust to pay the claims. 73
Thus, liability for the damage caused was being enforced at the domestic US (federal and state) jurisdictional level. Indeed, as
noted above, BP has already been subjected to unprecedented US federal government fines totalling US$4.5 billion. 74

*169 This swift admission of BP's overall corporate responsibility, 75 coupled with its advance acceptance of an initial multi-
billion US dollar liability for the Deepwater Horizon spill, and moreover, the establishment of a formal institutional framework
for the management of compensation claims in the form of the GCCF, can be favourably contrasted with the decades-old struggle
to engage Shell (and other International Oil Companies (IOCs)) with their responsibility and liability for oil spills in the Niger
Delta. Many NGOs and commentators have drawn attention to the gulf of difference between efforts to clean up, remediate and
compensate oil pollution damage in the recent Deepwater Horizon spill, as opposed to the continuing lack of such efforts over
spills of similar overall magnitude in the Delta region over a greater length of time (Vidal, 2010). For example, a local civil
society organisation, the Human Rights Writers' Association of Nigeria (HURIWA) not only applauded a landmark July 2010
Nigerian Federal High Court decision requiring SPDC to pay the Ejama-Ebubu community the sum of N15.4 billion as special
and punitive damages, but also advised the defaulting SPDC/Shell Nigeria to pay the damages in line with "international best
practices' [sic], drawing a lesson from the response of both the White House and Capitol Hill to the Deepwater Horizon disaster
in the US (Iriekpen, 2010). Indeed, Milieudefensie, the Dutch chapter of the Friends of the Earth (FOE) environmental NGO
network, has labelled the wide disparity between the BP and Shell responses to the Deepwater Horizon and Niger Delta spills,
respectively, as "Shell's double standard' (Milieudefensie, 2011, pp. 8-9).

2.2 Erika oil tanker spill (Total/France/EU)

A second example of voluntarily induced corporate efforts at clean-up, remediation and compensation is evidenced from the
Total oil company response following the Erika oil tanker spill off the French coast of Brittany. 76 Total (as the oil cargo owner)
and several ship (worthiness) classification societies were sued by French local authorities (and wildlife NGOs) for the clean-
up and remediation costs and obtained an initial order for Total to pay out millions of euros in clean-up and remediation costs.
Faced with French government and public pressure, Total committed these sums in advance of its appeals against this initial
order, and even when it won the appeal, did not take steps to recoup its outlay for the Erika clean-up. The facts and legal issues
arising from the Erika incident are summarised below.

On 12 December 1999, the 25-year-old Maltese-registered oil tanker Erika (19,666 gross tonnage) broke in two in the Bay of
Biscay, some 60 nautical miles off the Brittany coast, western France, releasing tonnes of heavy fuel oil into the Atlantic. All
members of the crew were rescued by the French maritime rescue services. Some 400 kilometres of shoreline were affected by
oil. Although the removal of the bulk of the oil from shorelines was completed quite rapidly, considerable secondary cleaning
to remove residual contamination was still required in many areas. Operations began in spring 2001 and were mostly completed
by November 2001. More than 250,000 tonnes of oily waste were collected from shorelines and temporarily stockpiled. Total

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SA, the French (major) oil company that owned the oil cargo of the Erika, engaged a contractor to deal with the disposal of the
recovered waste and this operation was completed in December 2003. According to Total, immediately following the sinking,
the company established the Atlantic Coast Task Force and spent more than ##200 million to remedy the consequences of the
oil spill through a clean-up *170 of hard-to-access areas of the coastline, pumping out the cargo remaining in the wreck, and
the treatment of waste collected along the coast (see Total, 2008).

Initial compensation claims were settled by the international oil pollution compensation scheme established by states, as
described above. The maximum amount of funds available for compensation under the applicable international tanker oil spill
compensation scheme, namely, the 1992 CLC and the 1992 Fund Convention, for the Erika incident was 135 million SDR,
then equivalent to around ##185 million. Both the French state and Total SA also made undertakings to "stand last in the
queue' for the final redemption of oil spill clean-up and remediation costs. 77 The different categories of claims allowed include
the following headings: property damage and loss of tourism, damage to mariculture and oyster farming, shellfish gathering,
fishing boats, fish and shellfish processors, and the costs of clean-up operations. Following the Erika and Prestige incidents, a
Supplementary Fund Protocol to the 1992 Fund Convention was adopted in 2003 and entered into force in 2005, providing (for
those IOPC Member States who chose to make additional contributions) a much higher limit of compensation (Supplementary
Fund Protocol). 78

Aside from the clean-up and remediation costs incurred by Total in the immediate aftermath of the incident, both criminal
charges and civil liability claims were also brought against Total in the Criminal Court in Paris. A number of claimants,
including the French government and several local authorities, joined the criminal proceedings as civil parties, claiming
compensation totalling ##400 million. In its Judgment, delivered in January 2008, the Criminal Court held the following four
parties criminally liable for the offence of causing pollution: the representative of the ship owner (Tevere Shipping), the president
of the management company (Panship Management and Services Srl), the classification society (RINA) and Total SA. The
Paris Criminal Court of First Instance also recognised (i) the civil right to compensation for damage to the environment for a
local authority with special powers for the protection, management and conservation of a territory, as well as (ii) the right of an
environmental protection association to claim compensation, not only for the moral damage caused to the collective interests
which it was its purpose to defend, but also for damage to the environment which affected the collective interests which it had
a statutory mission to safeguard. Regarding these civil liabilities, the Judgment held the four parties jointly and severally liable
for the damage caused by the incident and awarded claimants in the proceedings compensation for economic losses, damage
to the image of several regions and municipalities, moral damages and damages to the environment. Moreover, the Judgment
considered that Total SA could not avail itself of the benefit of the channelling provision of Article III.4(c) of the 1992 CLC, 79
since the Court held it was not the charterer of the Erika, as the charterer was one of Total SA's subsidiaries. The Judgment
considered that the other three parties, RINA in particular, were also not protected by the channelling provisions of the 1992
CLC, since they did not fall into the category of persons performing services for the ship under Article III.4(b). 80

The Judgment concluded that French domestic law should be applied to the four parties and that therefore the four parties had
civil liability for the consequences of the incident. The compensation *171 awarded to the civil parties by the Criminal Court
of First Instance was based on national law. The Court held that the 1992 Conventions did not deprive the civil parties of their
right to obtain compensation for their damage in the Criminal Courts, and awarded claimants in the proceedings compensation
for economic loss, damage to the image of several regions and municipalities, moral damages and damages to the environment.
The Court assessed the total damages in the amount of ##192.8 million, including ##153.9 million for the French state. The four
parties held liable, including Total, appealed against both the criminal and civil liability aspects of this Judgment. However,
without admitting its liability, Total SA nevertheless made voluntary payments in full and final settlement to the plaintiffs, who
accepted them, including to the French local and state governments, totalling ##171.5 million. Accordingly, Total estimates that
it has spent over ##370 million in total to clean up, remediate and compensate for the damage resulting from the Erika incident.

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In its Judgment on 30 March 2010, the Court of Appeal of Paris confirmed the Judgment of the Criminal Court of First Instance,
and held, respectively, the representative of the ship owner (Tevere Shipping), the president of the management company
(Panship Management and Services Srl), the classification society (RINA) and Total SA all criminally liable for the offence
of causing pollution. The Court of Appeal also confirmed the fines imposed by the Court of First Instance. The Court found,
inter alia, that Total was imprudent in implementing its vessel vetting process and ordered Total to pay the original (criminal)
fine imposed by the Court of First Instance, to the amount of ##375,000. However, on the civil liability aspects of this case,
the Court of Appeal reversed the finding of the Criminal Court of First Instance and decided that Total SA was "de facto' the
charterer of the Erika and could therefore benefit from the channelling provisions of Article III.4 (c) of the 1992 CLC, since
the imprudence committed in its vetting of the Erika could not be considered as having been committed with the intent to cause
such damage, or recklessly and with knowledge that such damage would probably result. The Court of Appeal thus held that
Total SA did not incur civil liability for the consequent oil spill. However, the appellate court also decided that the voluntary
payments made by Total SA to the civil parties following the Judgment of the Criminal Court of First Instance were to be
regarded as final payments which could not be recovered from the civil parties (see Maritime Executive, 2010). Significantly,
Total did not contest this finding of the Court of Appeal.

Comparing the two case-studies presented in this Part, the pre-emptive regulatory actions by the US and France and the
comprehensive responses of BP and Total in the Deepwater Horizon and Erika incidents to these actions, respectively, can be
contrasted with the lack of timely response by SPDC/Shell Nigeria to the continuing oil pollution of the Niger Delta region.
This disparity in the individual corporate responses to major polluting events also speaks volumes for the clear differences in
the respective corporate/host state relationships in Nigeria, as compared with the US and France.

Conclusion

This paper began by observing that international normative exercises aimed at rendering multinational oil companies that
are culpable of environmental damage in foreign jurisdictions accountable for their actions or omissions continue to suffer
from a lack of enforceable international mechanisms to ensure corporate responsibility for such damage abroad. In the
absence of international/transnational enforcement mechanisms, the present analysis has highlighted new legal developments
heralding the possibility of improving the accountability, responsibility, and even liability, of multinational oil companies. Two
modes of action have been examined here: first, the establishment by states of international civil liability schemes compelling
individual legal persons involved in ultra-hazardous activities to contribute towards an established compensation fund. Relying
on examples from the oil transport and nuclear power generation *172 industries, it should be possible for states to expressly
regulate by similar international agreements, liability for compensation for breaches of international law by private economic
actors in many other fields of transnational economic activity. Second, pre-emptive regulatory action following recent examples
of the US and the French governments, resulting in what is arguably now international "best practice' in corporate responsibility
on the part of BP and Total, respectively, for the clean-up, remediation and compensation of environmental and other damages
arising from oil spills.

Finally, it remains to be seen whether the latest legal frontline that has been opened on this issue, namely, the cross-jurisdictional
pursuit of the parent company, Royal Dutch Shell, through its subsidiary company, SPDC (Nigeria) in both Dutch and UK courts,
will yield the requisite justice for the Niger Delta communities and its environment in the face of arguably decades of corporate
misbehaviour in this region. Despite the withdrawal of the forum non conveniens doctrine in the Akpan and Bodo Community
cases by The Hague District Court and the UK High Court, respectively, the continuing reluctance of both domestic courts (and
international tribunals, such as the ITLOS) to ultimately extend international responsibility to private actors operating beyond
their national jurisdictions is clear. In the same vein, the continuing absence of even suitable legal nomenclature denoting such
responsibility for breaches of international norms by private actors is notable, in the sense that we still talk of "state' responsibility
for breaches of international law, as opposed to "corporate' or "individual' responsibility, apart from the imputation of individual

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criminal responsibility for war crimes. Within this context, enforcing international responsibility and liability on the part of
private economic actors operating transnationally across different national jurisdictions for their breaches of international norms
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Professor of International and Environmental Law, Nottingham Law School, Nottingham Trent University. Email:
[email protected]

Footnotes

1 Since 26 June 2014 the WTO has 160 members; see online: <http://www.wto.org/index.htm> (last accessed 23
March 2015).
2 The ICSID is an autonomous international institution established under the Convention on the Settlement of
Investment Disputes between States and Nationals of Other States (the ICSID or the Washington Convention)
with more than 140 Member States; see ICSID online: <https://icsid.worldbank.org/apps/ICSIDWEB/Pages/
default.aspx> (last accessed 23 March 2015).
3 The Energy Charter Treaty was adopted on 17 December 1994 in Lisbon, and entered into force in April 1998.
As of June 2013, forty-even states have ratified the Treaty and a further four states have signed but not yet
ratified it. Part III of the Treaty, including arts. 10-17, covers "Investment Promotion and Protection'; see online:
<http://www.encharter.org/index.php?id=7&L=0> (last accessed 23 March 2015).
4 About 1,800 of these BITs from around the world are searchable through the "investment policy hub' website of
the UN Commission Trade and Development UNCTAD, online: <http://investmentpolicyhub.unctad.org/IIA>
(last accessed 23 March 2015).

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5 These include the 1992 Rio Declaration on Environment and Development, adopted at the UN Conference
on Environment and Development (UNCED); see UNEP online: <www.unep.org/Documents.Multilingual/
Default.asp?documentid=78&articleid=1163> (last accessed 23 March 2015).
6 See, for example, the OECD Guidelines for Multinational Enterprises. OECD membership now extends to
thirty-four countries; for information on the OECD, see online: <http://www.oecd.org> (last accessed 23 March
2015).
7 These Guidelines have been updated five times since they were first adopted in 1976 as one of four instruments
of the OECD Declaration on International Investment and Multinational Enterprises. The most recent
update of the Guidelines was adopted on 25 May 2011, following a consultation process with a wide range
of stakeholders and partners. See paras. 68, 69 and 70, respectively, of the Commentary on the Environment
chapter (VI) of the OECD Guidelines, online: <http://mneguidelines.oecd.org/2011Environment.pdf> (last
accessed 23 March 2015).
8 The UN Human Rights Council endorsed the "Guiding Principles on Business and Human Rights:
Implementing the United Nations "Protect, Respect and Remedy" Framework' on 16 June 2011. These
Principles were proposed by the UN Special Representative on Business and Human Rights, John Ruggie,
Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations
and Other Business Enterprises, as part of his report to the Council; see UN Doc. A/HRC/17/31, 21 March
2011.
9 Adopted on 26 July 2000, and subject to further iterations and developments on 6 September 2005 and 19
February 2008, respectively, the UN Global Compact is a strategic policy and networking initiative for
businesses that are committed to aligning their operations and strategies with ten universally accepted principles
in the areas of human rights, labour, environment and anti-corruption. Among the ten principles that businesses
commit to implementing in their activities, Principle 8 provides that they "undertake initiatives to promote
greater environmental responsibility' (see online: <http://www.unglobalcompact.org/> (last accessed 23 March
2015)).
10 The International Oil Pollution Compensation Funds are three intergovernmental organisations (the 1971 Fund,
the 1992 Fund and the Supplementary Fund) which provide compensation for oil pollution damage resulting
from spills of persistent oil from tankers (for further information see online: <http://www.iopcfunds.org/> (last
accessed 23 March 2015)).
11 The international nuclear civil liability regime was initially embodied in two instruments, i.e. the Vienna
Convention on Civil Liability for Nuclear Damage of 1963 and the Paris Convention on Third Party Liability
in the Field of Nuclear Energy of 1960, both of these linked by a Joint Protocol adopted in 1988. The Paris
Convention was later added to by the 1963 Brussels Supplementary Convention. This was followed by the
adoption of a 1997 Protocol to Amend the 1963 Vienna Convention on Civil Liability for Nuclear Damage, as
well as a further Convention on Supplementary Compensation for Nuclear Damage (for further information,
see online: <http://www.iaea.org/Publications/Documents/Conventions/liability.html> (last accessed 23 March
2015)).
12 For text and information see online: <http://www.iopcfunds.org/about-us/legal-framework/1992-civil-liability-
convention/> (last accessed 23 March 2015).
13 See online: <http://www.iopcfunds.org/about-us/legal-framework/1992-fund-convention-and-supplementary-
fund-protocol/> (last accessed 23 March 2015).
14 See online: <http://www.iopcfunds.org/about-us/legal-framework/1992-fund-convention-and-supplementary-
fund-protocol/> (last accessed 23 March 2015).
15 The unit of account used in these Conventions is the Special Drawing Right, as defined by the International
Monetary Fund.
16 See online: <http://www.iopcfunds.org/about-us/legal-framework/1992-fund-convention-and-supplementary-
fund-protocol/> (last accessed 23 March 2015).
17 Information on the Agreement and Association is accessible online: <http://www.opol.org.uk/index.htm> (last
accessed 23 March 2015).
18 See Responsibilities and Obligations of States Sponsoring Persons and Entities with respect to Activities in the
Area, Advisory Opinion of the Seabed Disputes Chamber of the International Tribunal for the Law of the Sea,
ITLOS Case No. 17, rendered 1 February 2011, online: <http://www.itlos.org> (last accessed 23 March 2015).
For a comprehensive assessment of the implications of this Advisory Opinion for the progressive development
of international law, see French (2011).

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19 Such activities are regulated under Part XI of the 1982 UN Convention on the Law of the Sea (UNCLOS) and
associated regulations promulgated by the International Sea-bed Authority (ISA).
20 Para. 179 of the Advisory Opinion, supra note 18.
21 Ibid., para. 201.
22 Ibid.
23 Ibid., para. 182.
24 Ibid., para. 181.
25 Ibid., para. 182.
26 Ibid., para. 202.
27 Ibid., para. 203.
28 Ibid.
29 Ibid., para. 204.
30 Ibid., para. 205.
31 Ibid., para. 183.
32 Ibid., para. 208.
33 Ibid, para. 209.
34 US Supreme Court, 133 (US) S.Ct. 1659 (2013) 17 April 2013.
35 Ibid., 1668-69.
36 Akpan v. Royal Dutch Shell plc/SPDC (Nigeria) LJN: BY9854, Rechtbank's-Gravenhage, C/09/337050/HA
ZA 09-1580, 30 January 2013. For an unofficial English translation of this Judgment, see online: <http://
www1.milieudefensie.nl/english-publications/Judgmentc̈ourtcaseS̈hellïnj̈urisdictionm̈otionÖruma.pdf> (last
accessed 23 March 2015).
37 See arts. 2 and 60, respectively, of Council Regulation (EC) No 44/2001 of 22 December 2000. Official Journal
of the European Communities, L 12/1, 16.1.2001, online: <http://eur-lex.europa.eu/legal-content/EN/TXT/
PDF/?uri=CELEX:32001R0044&from=EN> (last accessed 23 March 2015).
38 Akpan v. Royal Dutch Shell plc/SPDC (Nigeria) at note 53: para. 2.4 (unofficial English translation; see supra
note 36).
39 Ibid., para. 2.11.
40 The parent-subsidiary corporate relationship was described by The Hague District Court as follows:
"Defendants SPDC and RDS are legal entities that are part of the Shell Group. RDS is headquartered in The
Hague (Netherlands); since 20 July 2005, it has been at the head of the Shell Group. Through subsidiaries, RDS
holds all shares in its sub-subsidiary, SPDC. SPDC is the Nigerian legal entity that conducts the oil production
operations in Nigeria for the Shell Group.' (See Akpan v. Royal Dutch Shell plc/SPDC (Nigeria) at note 53,
para. 2.2.)
41 Brief of Professor Alex-Geert Castermans (Leiden University), Professor Cees Van Dam (Utrecht University),
Dr Liesbeth Enneking (Utrecht University), Dr Nicola Jägers (Tilburg University), Professor Menno Kamminga
(Maastricht University), as Amici Curiae in support of the Petitioners, Esther Kiobel et al., v. Royal Dutch
Petroleum Co. et al., Respondents, June 13, 2012. No. 10-1491. Online: <http://www.nipr-online.eu/upload/
documents/20120820T040709-Dutchl̈egals̈cholarsK̈iobelämicusb̈rief.pdf> (last accessed 23 March 2015).
42 Vereniging Milieudefensie v. Royal Dutch Shell Plc/SPDC (Nigeria). ECLI:NL:RBSGR:2010:BM1469, online:
<http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBSGR:2010:BM1469> (last accessed 23
March 2015).
43 Akpan v. Royal Dutch Shell Plc/SPDC (Nigeria) at note 53, para. 4.6 (unofficial English translation, see supra
note 36).
44 Ibid., para. 4.7.
45 Ibid., para. 4.1.
46 Ibid., para. 4.9.
47 Ibid., para. 4.10.
48 Ibid., para. 4.3.
49 Ibid., para. 4.11.
50 Ibid., para. 4.12.
51 Ibid.
52 Ibid., para. 4.14.
53 Ibid., para. 4.35.
54 Ibid.

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55 Referring to para. 4.26 of the Judgment.

56 Ibid., para. 4.27; see Chandler v. Cape plc, CA [2012] EWCA Civ 525, on appeal from the High Court of
Justice (Queens Bench Division) Wyn Williams J [2011] EWHC 951 (QB).
57 Akpan v. Royal Dutch Shell Plc/SPDC (Nigeria), para. 4.29 (unofficial English translation, see supra note 37).
58 Ibid.
59 Ibid.
60 Ibid., para. 4.34.
61 Ibid., para. 4.44.
62 Ibid., para. 4.45.
63 Ibid.
64 Essex Business and Human Rights Project (10 December 2012), "Corporate Liability in a New Setting: Shell
and the Changing Legal Landscape for the Multinational Oil Industry in the Niger Delta', at 63-109, online:
<http://www.essex.ac.uk/ebhr/documents/niger_delta_report.pdf> (last accessed 23 March 2015).
65 See "Particulars of Claim', Claim No. HQ11X01280, in the High Court of Justice, Queen's Bench Division, 23
March 2012.
66 The Bodo Community v. Shell Petroleum Development Company of Nigeria Ltd [2014] EWHC 1973 (TCC)
20 June 2014, per Akenhead J., at para. 7. On 7 January 2015, Shell agreed a compensation package of £55m
to compensate 15,600 Nigerians from the Bodo community; online: <http://www.leighday.co.uk/News/2015/
January-2015/Shell-agrees-55m-compensation-deal-for-Nigeria-Del>.
67 Ibid., para. 92.
68 Ibid.
69 Ibid., para. 93.
70 On 20 April 2010, an explosion on an ultra-deepwater semi-submersible offshore rig, the Deepwater Horizon
killed eleven crewmen and ignited a fireball seen 56 kilometres (35 miles) from the explosion. After 36 hours of
burning, the rig sank on 22 April, leaving the Macondo well it had drilled in the Gulf of Mexico gushing onto
the ocean bed and causing the largest offshore oil spill in the history of the US. The spillage continued for 152
days until 19 September 2010, when BP confirmed the completion of cementing operations to prevent further
oil from spilling from the Macondo well to which the Deepwater Horizon was attached when it exploded. The
Deepwater Horizon was leased by BP America Production Company (BP) as part of the Macondo project. For
an initial discussion of the liability issues arising from this disaster, see Abeyratne (2010, p. 125).
71 Oil Pollution Act 1990 33 U.S.C. para. 2701(20) and para. 2702(b)(2)(A).
72 33 U.S.C. para.2701(20) and para. 2702(b)(2)(A).
73 United States Government Accountability Office (GAO), Report on Deepwater Horizon Oil Spill: Preliminary
Assessment of Federal Financial Risks and Cost Reimbursement and Notification Policies and Procedures,
GAO-11-90R (Washington, DC: 12 November, 2010). Online: <http://www.gao.gov> (last accessed 23 March
2015).
74 BP's total of $4.5 billion in federal penalties includes $2.4 billion for the National Fish and Wildlife Foundation,
a $1.256 billion criminal fine, and $350 million for the National Academy of Sciences - all payable over five
years - and a $525 million civil penalty to the Securities and Exchange Commission (see Reuters, 2013).
75 BP's overall corporate responsibility for the Deepwater Horizon oil rig explosion and consequent loss of life,
as well as environmental damage from the resulting oil spill, has now been confirmed by findings in the final
investigation report of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) of
the US Federal Ministry of the Interior into the disaster; see BOEMRE (2011).
76 See IOPC (1999), "Erika Oil Tanker Break-up & Spill Incident', Report of the International Oil Pollution
Compensation Funds (IOPC) 12 December 1999, updated 9 May 2011. Online: <http://www.iopcfund.org/
erika.htm> (last accessed 23 March 2015).
77 IOPC (2008), Annual Report 2008, p. 78. Online: <http://www.iopcfunds.org/uploads/
tx_iopcpublications/2008_ENGLISH_ANNUAL_REPORT.pdf> (last accessed 23 March 2015).
78 IOPC (2010), Annual Report 2010, p. 6. Online: <http://www.iopcfunds.org/uploads/
tx_iopcpublications/2010_ENGLISH_ANNUAL_REPORT.pdf> (last accessed 23 March 2015).
79 Art. III.4 states, inter alia, that "no claim for compensation for pollution damage may be made against the
owner otherwise than in accordance with this Convention. Subject to paragraph 5 of this Article, no claim
for compensation for pollution damage under this Convention or otherwise may be made against: … (c) any
charterer (how so ever described, including a bareboat charterer), manager or operator of the ship; ….'

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80 Art. III.4 states, inter alia, that "… no claim for compensation for pollution damage under this Convention or
otherwise may be made against: … (b) the pilot or any other person who, without being a member of the crew,
performs services for the ship; ….'
© 2022 Cambridge University Press
Int. J.L.C. 2015, 11(2), 153-173

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