A Dutch court has rejected a bid by Nigerian farmers to hold Shell responsible for oil damage to their villages, in a case that environmental groups had hoped would set a precedent for global corporate responsibility.
Instead, The Hague district court ruled on Wednesday that Anglo-Dutch Shell's parent company could not be held responsible for the pollution, as only subsidiary Shell Nigeria was responsible for one oil leak.
The court "dismissed all claims against the parent companies ... since pursuant to Nigerian law a parent company in principle is not obliged to prevent its subsidiaries from harming third parties abroad," judge Henk Wien said.
The four farmers and fishermen, backed by lobby group Friends of the Earth, first filed the case in 2008 against the Netherlands-headquartered oil giant in a court thousands of kilometres from their homes.
Environmental groups had hoped the case would open the floodgates for hundreds of similar claims around the world.
Judge Wien said, however, that Shell's Nigerian subsidiary must pay damages to the farmers and fishermen in one of their claims, relating to oil spills near the Niger Delta village of Ikot Ada Udo.
"Shell Nigeria has been sentenced to pay damages in one of the cases. All claims in the other four proceedings have been dismissed," Wien said.
It was the first time a Dutch company was sued in the Netherlands over damage in another country, in this case oil pollution.
The farmers wanted Royal Dutch Shell to clean up the mess, repair and maintain defective pipelines to prevent further damage, and pay out compensation.
Environmentalists want the Netherlands, and other Western nations, to pass laws forcing companies to enforce the same environmental responsibility standards abroad as at home.
Mene Eric Barizaa Dooh, the only plaintiff present in court on Wednesday with the others in Port Harcourt in Nigeria, said his group would likely appeal.
In a landmark ruling, the Dutch judiciary in 2009 declared itself competent to try the case despite protests from Shell that its Nigerian subsidiary was solely legally responsible for any damage.
Oil pollution has ravaged large swathes of the Niger Delta, situated in the southeast of the world's eighth-largest oil producer, which exports nearly two million barrels a day.
Shell, the biggest producer in the west African nation where it has been drilling for the last half-a-century, denied responsibility.
The company pinned oil spills between 2004 and 2007 on illegal theft and sabotage.
Friends of the Earth however says the scale of Nigeria's oil pollution was twice that of the five million barrels dumped in the Gulf of Mexico after the explosion on BP's Deepwater Horizon rig in 2010, the biggest ever marine spill. Shell disputes the Nigerian figure and puts it much lower.
The UN's environmental agency released a landmark report in 2011, saying decades of oil pollution in the Niger Delta's Ogoniland region may require the world's biggest ever clean-up and could take up to 30 years.