European Journal of International Law | 30 April 2026
Shell and the creation of international investment law, 1957–1968
by Wiebe Hommes, Laurens Ankersmit
Abstract
This article explores the role that Shell – in particular, through its legal department – played in shaping international investment law from 1957 to 1968. Drawing on a wide range of archival sources, including personal correspondence and governmental archives, it reconstructs Shell’s strategic campaign to protect foreign investments. It does so by analysing the activities of key Shell lawyers such as Lord Hartley Shawcross, John Blair, George Winthrop Haight, Louis Sandberg and Jan Wouter Josephus Jitta. These individuals lobbied governments, drafted treaties and shaped legal precedents to safeguard corporate interests. As a result, the article sheds light on the broader implications of corporate influence on international law, revealing how Shell’s legal strategiescontributed to the current system of investor-state dispute resolution, a system, in other words, that cannot be seen in isolation from the interests of the oil industry.
1 Introduction
In the 2024 opera The Shell Trial, a musical interpretation of the court case in the Netherlands against Shell on carbon dioxide reduction, a dramatic moment unfolds when the chief executive officer of Shell makes his case. As his bass rumbles through the theatre, he proclaims: ‘I don’t make the laws, I am bound by them.’1 As such, the argument goes, the corporation simply follows the rules that states have put in place. In this article, we argue that Shell is not merely bound by the rules of international law. Rather, we show that, in the case of international investment law, Shell, primarily through its legal division, was highly active in attempting to make those laws. Drawing upon a great variety of original archival sources from the Netherlands and the USA, we reconstruct these attempts and show how these Shell lawyers, during the ‘critical juncture’ in the history of investment law, aimed to be closely involved in the creation thereof.2 This is not to say that the entirety of investment law has been created by Shell. Its lawyers did not get everything they desired, nor was it the sole actor in this field. Some of these attempts failed, sometimes states altered their input and sometimes other actors took over. Yet, as these lawyers set out to protect the interests of the oil industry, they themselves were on occasion surprised by how much success their lobby yielded. As such, we argue, they helped to shape several elements of investment law still in place today, a system that therefore cannot be seen in isolation from the interests of fossil fuel companies.
In doing so, this article builds on recent interest in the history of international investment law. In particular, since the study of Taylor St. John on the origins of the International Centre for Settlement of Investment Disputes (ICSID) and the impact of the lobby practices of the World Bank, this has become a vibrant field.3 After St. John’s seminal work, others have moved the field further, with Nicolás Perrone shedding light on the distinct impact of private interest and individual ‘norm entrepreneurs’,4 whilst Filip Batselé has mapped the details of how big oil and international finance aimed to further their interests through the transnational business association known as the Association internationale pour la promotion et la protection des investissements privés en territoires étrangers (APPI).5 On a more specific level, detailed studies on the emergence of individual bilateral investment treaties (BITs) have highlighted the models used and the intricate negotiations and private interests involved in these first steps of investment protection on a bilateral basis.6 Still, questions remain, particularly whether the path that emerged from this critical juncture in the history of international investment law was determined by private interests.7
This article adds to both sides in this debate. On the one hand, we note that Shell had more than a pronounced interest in international investment law: these Shell lawyers employed a variety of tactics to actually shape it, ranging from strategic litigation to lobbying. By showing these different attempts, we concretize the study of Perrone, providing clear examples to the more abstract notion of how private interests shaped the legal imagination. Yet, on the other hand, as Taylor St. John rightly notes, these attempts cannot not be seen in isolation from the states themselves.8 Primarily building on Dutch state archives, we bring the statal element back into the picture and show Shell’s lobbying to shape that position. In doing so, we aim to bring both worlds – those of states and private interests – together. For while we agree with St. John’s point that, ultimately, it was the states that held control, this does not negate the impact that Shell could have. The Netherlands, on occasion, merely penned down what the corporation put forward, leaving the line between the state and the private actor in international law-making blurry at best. Moreover, we argue that these Shell lawyers applied the first colour on a canvas on which other actors, such as states, would continue to paint.
Primarily, by taking a corporation as the starting point, it flips the story from the regulation of the corporation by international law9 to the interest in, and impact of, a major corporation on international law.10 Such a move matters, for as Patricia Clavin has noted, even though the regulation of the corporation in law as such is relatively well known, ‘we know much less about how business agency shaped the generation of international law’.11 And while the fact that corporations are interested in international law, and lobby to help form it, should not come as a surprise,12 how they have done so and to what extent they have been successful often remains shrouded in mystery.13 This becomes particularly acute in the case of Shell, a corporation that has been noted to ‘go at it alone’ beyond the transnational business association of which it was a part.14 As such, we explicitly build on Batselé, who has noted that the role of the lawyers of Shell in this regard ‘deserves further research’.15 This article takes up that gauntlet.
Clearly, Shell was (and is) far from a monolithic entity: it was composed of a myriad of departments, companies and individuals, where its decentralized departments enjoyed a considerable amount of leeway.16 However, questions of investment law were, well, matters of law. As such, it was a specialized topic on which engagement was primarily carried forward by a small part of Shell’s legal division. Five lawyers emerge as key individuals in this regard, and they were spread out over the Hague, London and New York. Prime amongst these individuals was Lord Hartley Shawcross, head counsel and director in London.17 There, he was joined by counsel John Blair. In New York, Shell employed George Winthrop Haight as counsel. In The Hague, finally, Louis H. (Lout) Sandberg was the crucial figure, being head of the legal division for the Bataafse Petroleum Maatschappij (BPM), which was the Dutch branch of Shell, and Jan Wouter Josephus Jitta, who was also a lawyer for BPM, played an important part in lobbying the Dutch government. Closely orbiting this ecosystem, but not formally employed by Shell, was Sir Elihu Lauterpacht. He was Shell’s preferred external counsel on matters of international law, with the company labelling him as one of their own.18
The role of these lawyers, even though their numbers seem small, should not be under-estimated. They were, as Perrone has shown, influential ‘norm entrepreneurs’.19 As such, they were mobile and transnational individuals who will emerge through this story in many different settings, providing legal advice, lobbying governments and drafting treaties. Throughout their life, they also turned up in different venues: we encounter Sandberg in the APPI, Blair was involved with the International Chamber of Commerce (ICC) and Haight was highly active in the American Bar Association.20 Yet these loose relations should not obscure the fact that, despite some autonomy, they were all formally employed by Shell to serve its interests in the period under consideration.21 Their connection to Shell ran deep. Even when Sandberg retired from Shell in 1962 and was hired by a different corporation, he remained in touch with his Shell colleagues and consciously attempted to further not just the interests of his new employer but also the specific interests of Shell. In that regard, their geographical spread had a distinct advantage when it came to lobbying: it allowed Shell to be in touch with three governments at the same time, providing the corporation with an edge over other oil companies and giving it access to information and developments that, on occasion, was even more complete than that of the individual state.22
When it comes to research on Shell, the elephant in the room is the fact that its archives are not publicly accessible.23 This presents some major challenges for any historical research on the corporation as there are simply many things out of reach: board room discussions and centralized decision-making in principle remain out of sight. It is therefore no surprise that very little literature on these individual corporations exists in the first place. However, in the absence of access to the central archive, we have opted to present a kaleidoscopic image of Shell’s campaign. We have been able to achieve such an image by using a myriad of other archives. First, we consulted the personal archives of the key individuals themselves, such as George Haight and Dirk Stikker, both of whom were directly involved with Shell.24 Second, we consulted the archive of a company whose archive is accessible, the N.V. Deli Maatschappij.25 This company is of particular interest because Sandberg became its counsel on investment, and, as such, his entire correspondence with his Shell colleagues on various matters is available. This gives an extremely rare and unique insight into the internal workings of the legal division and its considerations. Finally, we looked more specifically at the engagement with Shell and the Dutch state on crucial moments, using the archives of the Ministries of Foreign Affairs, Economic Affairs, Justice and Development Aid.26
There are clear drawbacks to such an approach. For one, it does not allow for a water-tight claim of all of Shell’s lobbying practices, contacts or centralized strategy making. We therefore do not claim to have uncovered all of Shell’s connections or strategies. Moreover, this focus on a single corporation entails certain blinders as it cannot shed light (despite occasional mentions in the archives consulted) on the lobbying attempts of other corporations or international finance. Yet, on the basis of what is available, it does become possible to reconstruct the motives, considerations and strategies of these actors regarding these moments and to shed light on these practices.27 Finally, the focus on the Netherlands does mean that one cannot fully grasp the impact of Shell’s lobbying on other states, yet it has one clear added value: Shell was ‘Royal Dutch’ and, as such, closely involved with the Dutch state. The archival insights from the Dutch archives highlight the outsized influence of Shell on that state, while the papers of the Haight archives shed light on its distinct lobbying of the USA and the United Kingdom (UK).28
This article proceeds in a chronological fashion and is set up as follows: in section 2, it lays out the motives and background of Shell and positions it as a company distinctly interested in matters concerning investment protection and introduces the key legal problem that these lawyers identified in the decolonizing world. In section 3, it turns to the Indonesian nationalization measures of 1957 and shows the quest of Shell’s lawyers to find legal redress through strategic litigation with an eye on establishing legal precedent on international law through the domestic courts. It highlights the interest of Shell therein primarily through one specific case, the so-called Bremen tobacco case. It shows how the corporation became involved in this case to combat the ‘act of state doctrine’. In section 4, it sheds light on how this case turned into a battle for what ‘modern international law’ would mean and how Shell’s lawyers framed this to serve the interests of the fossil fuel industry. Yet it also highlights other initiatives that they employed to create such a ‘modern’ international law – namely, through the Organisation for Economic Co-operation and Development (OECD) and early BITs. In section 5, it turns to the attempts of Shell’s lawyers to dismantle a deeply threatening account of international law – namely, the campaign for permanent sovereignty over natural resources. It highlights the lobby to shape Resolution 1803 of 1962 as we follow the lawyers’ actions to alter the resolution from providing economic decolonization to one providing international law as a way to protect private investments. Finally, it turns to the clearest alternative to national solutions in investment disputes – namely, the creation of ICSID and its first emergence in the Dutch-Indonesian BIT of 1968. All in all, this article aims to uncover, as far as possible, the attempts of one corporation, primarily through its legal department, to shape a fossil fuel-friendly version of investment law. Some of these attempts distinctly failed, other routes proved more successful. Yet, as these lawyers engaged in strategic litigation, drafted treaties, lobbied states and sought to alter resolutions, we argue that they helped to create a system that cannot be seen in isolation from these attempts.
