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Nigerian parliament recommends Shell should be fined $3.6 billion for 2011 oil spill

28 November 2014

The Nigerian House of Representatives Committee on Environment has said Shell Nigeria Exploration Company (SNEPCO) should pay $3.6 billion (604 billion naira) for the Bonga oil spill in 2011, which was caused by the company’s faulty equipment.

Stock image
Stock image

According to Nigerian media site Channels TV, the Chairman of the Committee, Uche Ekwunife, gave the directive on November 26 during an investigative public hearing on the Bonga crude oil spill, which occurred on the December 20, 2011.

“Since all efforts by this committee were tactfully rebuffed by SNEPCO, (it) has decided to adopt the damage assessment report submitted by NOSDRA as the lead agency in all oil spill management,” Ekwunife said. The National Oil Spill Detection and Response Agency (NOSDRA) previously recommended a fine of $5 billion.

Half of the total represents punitive damages and the rest direct and indirect losses, loss of income, provision of water and forestry.

NOSDRA estimated that around 40,000 barrels were spilled when a hose broke free from a tanker loading crude at an offshore platform operated by Shell  subsidiary SNEPCO, producing a slick which covered an area of around 950 sq. km.

The parliament's decision is non-binding as it only has the power to recommend fines to the government and cannot enforce them.

Shell declined to comment. The company has previously said it took responsibility for the spill and had cleaned the area.

Shell is also being pursued in a class action case for two other spills in the Niger Delta in 2008. In June, it offered 30 million pounds ($51 million) in compensation to 15,000 residents in the Bodo Community but this was rejected.

The United Nations Environment Programme has criticised Shell in the past for not doing enough to clean up spills and maintain infrastructure.

Nigeria is Africa's largest oil exporter and an OPEC member but the environmental toll has been huge. The mangrove creeks of the delta region are heavily polluted mainly due to leaks from illegal pipeline tapping and sabotage.

Foreign companies have been selling their stakes in onshore oilfields in Nigeria after becoming frustrated with industrial scale theft and resulting spills, which show no signs of abating.

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