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Shell Nigeria strikes oil spill compensation deal

07 January 2015

Royal Dutch Shell has agreed to pay £55million ($83.5m) to fishermen in Bodo, a town in the Ogoniland region of southern Nigeria, Shell and the fishermens' London-based lawyers said on January 7. A total of 15,600 Nigerian fishermen will receive the compensation for the consequences of two serious oil spills in 2008 after a three-year legal battle.

Stock image
Stock image

The Shell Petroleum Company of Nigeria (SPDC) will pay around £35 million to the individual claimants, and a further £20 million to the community.

The out-of-court settlement averted a full trial at the High Court in London and the money has been paid to the claimants' lawyers. Each individual will receive around £2,200, equivalent to around three years' income on the Nigerian minimum wage.

SPDC accepted in November that the spills, caused by operational failures on the Bomu-Bonny pipeline in Bodo, were greater than the previously-reached total figure of 4,144 barrels, though they did not give an amount. Environmental and human rights groups claim the spills were much larger.

SPDC said the leaks were "highly regrettable", but insisted most oil pollution in the Niger River Delta region was caused by theft and illegal refining. Separately, SPDC has said it will clean up the affected area.

An Amnesty International report into the effects of the oil spills in Bodo said that the spills had caused headaches and eyesight problems.

The price of fish, a local staple food, rose as much as tenfold and many fishermen had to find alternative ways to make a living, the report added. A separate UN study said local drinking water sources were also contaminated.

Chief Sylvester Kogbara, chairman of the Bodo council of chiefs and elders, said his community was happy the case had finally been laid to rest, according to AFP.

"The hope is that this will forge a good relationship with Shell for the future, not only with the Bodo people but with all the Niger Delta communities that have been impacted in the same way as us," he said. "Due to the cordiality of the conclusion of this agreement with Shell, we are hopeful that the clean-up of the Bodo environment will follow suit in no distant time."
The clean-up of Bodo Creek is expected to begin over the next two to three months.

Nigeria is Africa's biggest crude producer, but much of the Niger Delta oil region remains deeply impoverished.Decades of spills have caused widespread pollution in the region.
"From the outset, we've accepted responsibility for the two deeply regrettable operational spills in Bodo," said SPDC managing director Mutiu Sunmonu.

"We've always wanted to compensate the community fairly and we are pleased to have reached agreement. We are fully committed to the clean-up process being overseen by the former Netherlands ambassador to Nigeria. We are pleased that clean-up work will soon begin now that a plan has been agreed with the community."

Sunmonu added: "However, unless real action is taken to end the scourge of oil theft and illegal refining -- which remains the main cause of environmental pollution and is the real tragedy of the Niger Delta -- areas that are cleaned up will simply become re-impacted through these illegal activities."

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