Leading article: Big business and moral responsibility

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Today's court hearing in New York against Shell for complicity in the execution of the Nigerian writer Ken Saro-Wiwa and his fellow Ogoni activists in 1995 is about much more than a single company and one terrible act of violent suppression. Ultimately, it is about the moral responsibilities of multinational companies operating in the developing world.

The facts of the Saro-Wiwa case are disturbing enough. Having for years led non-violent protests against Shell's activities in the Niger Delta, Mr Saro-Wiwa was condemned to death by a military court without proper legal representation or anything approaching a fair trial. John Major, the British prime minister at the time, called it "judicial murder". Most of the world would not have even graced it with the word "judicial".

Those facts are clear. What is now to be aired in the court are allegations that the oil giant was directly implicated in the arrest and executions. Shell deny any direct involvement, saying that it urged clemency on the then president, Sani Abacha. But Ken Saro-Wiwa's son and brother maintain that Shell actively aided the government in getting rid of a campaigner who had become a thorn in the company's flesh.

The facts of the case should prove revealing. But, in throwing light on one particular incident, the case will also help to illuminate the broader issue of the behaviour and attitudes of multinational companies in the developing world. From oil and gas, to diamonds and uranium, valuable commodities are rarely found where it is simple to extract them. And more often than not they are also found in areas with weak and corrupt governments.

A large share of the benefits of any extraction tends to accrue directly to the officials who hand out the licences and not to the local people whose lives are most directly affected by the process. Indeed – as in the Shell case in Nigeria – the extraction can exacerbate regional tensions as local groups demand a share in the profits and some mitigation of the environmental impact.

Companies such as Shell argue that they can only obey the rules as laid down by the government which has given them the licences. They claim that their primary responsibility is to their shareholders. But, in saying that, they are absolving themselves from any responsibility for the wider effects of their activities.

At issue in this lawsuit is the question of whether a powerful international company such as Shell can turn a blind eye to the impact of its behaviour on local people in the countries in which it operates. And does the imperative to maximise shareholder returns justify co-operating with a corrupt government? There is a lot more than Shell's reputation hanging on the result of this trial.

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