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UK court says Shell legally liable for spills caused by oil thefts in Nigeria

23 June 2014

On June 20 the London High Court ruled that Royal Dutch Shell can be held legally liable for spills caused by oil thefts if it fails to provide reasonable protection for its pipeline infrastructure. The ruling was hailed by green groups as a victory for locals in the Delta region of Nigeria whose environment has been badly affected by continuing spills caused by oil thieves tampering with pipelines.

Stock image
Stock image

Judge Robert Akenhead of the London Technological and Construction Court ruled Shell is responsible for taking reasonable steps to protect its infrastructure, including installing leak detection systems, surveillance equipment and anti-tamper equipment. Shell does not have such equipment in its Nigerian fields, though they are considered mandatory in oilfields in the developed world.

This is the first time Shell has had its environmental record in Nigeria on trial by a British court. The thousands of compensation cases in often corrupt Nigerian courts drag on for years and often end with victims being paid a pittance. Until now, Shell has paid compensation only for spills caused by equipment failure.

Oil thefts in Nigeria have reached an industrial scale, with some estimates claiming up to $35 million worth is stolen daily.

After the ruling, lawyers representing Nigerian fishermen rejected Shell's £30 million ($50 million) compensation for the Bodo Creek spill, considered one of Nigeria's worst environmental disasters, with some experts saying it caused the largest loss of mangrove habitat ever caused by an oil spill.

Shell documents say the leak started October 5, 2008 and a total of 1,640 barrels of oil was spilled. Government and community documents say the leak started August 28, and industry experts estimate up to 4,320 barrels of oil was flooding Bodo each day for at least 72 days.
London law firm Leigh Day said Shell's offer amounted to about 1,000 pounds ($1,700) for each of 30,000 people who lost their livelihoods.

Amnesty International has accused Shell of manipulating oil spill investigations and wrongly reporting the cause and volume of oil spills devastating the Niger Delta, and of making false claims about cleanup measures.

“Today’s ruling is a shot across the bows for Shell” said Audrey Gaughran, Amnesty International’s Director of Global Issues. The court’s message is clear – if you don’t take adequate measures to protect your pipelines from tampering, you could be liable for the damages caused.”

But Shell disputed this interpretation of the ruling. In a press release it said that the fact that Judge Akenhead ruled that the Nigerian Oil Pipelines Act was adequate for compensating oil spills, and limited the scope of the UK litigation to an assessment of actual damages caused, was in fact a victory for the company.

“From the outset, we’ve accepted responsibility for the two deeply regrettable operational spills in Bodo,” Mutiu Sunmonu, managing director of the Shell Petroleum Development Company of Nigeria Ltd., said in the statement. “We want to compensate fairly and quickly those who have been genuinely affected and to clean up all areas where oil has been spilled from our facilities.

“We hope the community will now direct their UK legal representatives to stop wasting even more time pursuing enormously exaggerated claims and consider sensible and fair compensation offers,” Sunmonu said.

The next round of litigation is scheduled for May 2015.

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