Dutch Court Orders Shell To Pay Compensation For Oil Spillage In Nigeria

For Royal Dutch Shell, it was a case of win some, lose some Wednesday as a Dutch court ordered its Nigerian affiliate, Shell Petroleum Development Company (SPDC), to pay damages to a Nigerian farmer for oil pollution.

The court, however, dismissed four other claims filed against the parent company, in which the plaintiffs were seeking compensation from the oil giant for the pollution of their farmlands and destruction of their means of livelihood.  

Four Nigerians and an interest group, Friends of the Earth, had filed the suit in 2008 in The Netherlands, where Shell has its global headquarters, seeking reparations for loss of income from contaminated land and waterways in the Niger Delta.

In its ruling, The Hague Civil Court held that the Royal Dutch Shell could be held partially responsible for pollution in the Niger Delta, saying the company should have prevented sabotage at one of its facilities.

The court ruled that SPDC should be held responsible for a pipeline leak poisoning farmland in the Niger Delta, as it had failed to take adequate measures to prevent sabotage.

The judges ordered SPDC to pay an unspecified amount as compensation to 52-year-old Friday Akpan for breach of duty of care by making it too easy for saboteurs to open an oil well head that leaked on to his land.

“Shell Nigeria should and could have prevented this sabotage in an easy way. This is why the district court has sentenced Shell Nigeria to pay damages to the Nigerian plaintiff,” the judges said.

Yesterday’s judgment was believed to be the first time a Dutch court has held a multinational's foreign subsidiary liable for environmental damage and ordered it to pay damages.

In its official reaction to the ruling, SPDC Managing Director and Country Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu, said the company welcomed the court verdict that all spill cases were caused by criminal activity.

The court ruled that the four oil spills at Oruma, Goi and Ikot Ada Udo between 2004 and 2007, which have been the subject of litigation, were caused by sabotage.
However, only in the case of Ikot Ada Udo that the court ruled that SPDC could have prevented the sabotage by plugging the well earlier enough.

In this particular case, it was established that saboteurs opened the valve above the surface with a wrench.

But the Dutch court rejected the case brought by other Nigerian farmers and the environmental pressure group, saying the leaking pipelines were caused by saboteurs, not Shell’s negligence.
The court accepted Shell’s argument that the spills were caused by sabotage and not poor maintenance of its facilities, as had been argued by the plaintiffs.

They said they could no longer feed their families because the region had been polluted by oil from Shell’s pipelines and production facilities.

The pollution is as a result of oil spills in 2004, 2005 and 2007, they said.
Reacting to the judgment afterwards, the parent company said it was “happy” with the verdict.

It said it would pay compensation, adding that it did not lose the case. “It was not an operational failure. The leak was the consequence of sabotage,” Royal Dutch Shell’s Vice-President for Environment, Allard Castelein, said.

He said Shell would negotiate the amount of damages with the farmer, but that an appeal could postpone the outcome of those talks.

Akpan, the farmer who won the compensation and has 12 children, said he was very happy with the judgment.

“I am not surprised at the decision because there was divine intervention in the court. The spill damaged 47 fishing ponds, killed all the fish and rendered the ponds useless. I had borrowed the money from the agriculture loans board and had no way to pay it back,” he told Reuters in Port Harcourt.

“Since then, I have been living by God’s grace and on the help of good Samaritans. I think this will be a lesson for Shell and they will know not to damage people’s livelihoods,” he added.

Friends of the Earth spokesman, Geert Ritsema, said they would appeal against the acquittals “because there is still a lot of oil lying around. These sites need to be cleaned.”

SPDC, which has been ordered to compensate Akpan, in its reaction, said the vast majority of oil pollution in the Niger Delta was caused by oil thieves and illegal refiners and acknowledged that the problem had affected the daily lives of the people of the oil-rich region.

Sunmonu stated that the company also “welcomes the court’s ruling that all spill cases were caused by criminal activity.”
“This causes major environmental and economic damage, and is the real tragedy of the Niger Delta. SPDC has made great efforts to raise awareness on the issue with the government of Nigeria, international bodies like the UN, the media and NGOs. We will continue to be at the forefront of discussions to find solutions,” he said.
He explained that for SPDC, no oil spill was acceptable, adding that Shell is working hard to improve its performance on operational spills.