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Shell strikes Nigerian oil spills compensation deal

07 January 2015, 06:46

London - Royal Dutch Shell has agreed a multi-million-dollar settlement to compensate 15 600 Nigerian fishermen over two serious oil spills in 2008 after a three-year legal battle, both parties announced Wednesday.

The Anglo-Dutch energy giant's Nigerian arm has agreed to pay 55 million ($83.5 million, 70 million euros) to people in Bodo, a town in southern Nigeria, Shell and the fishermens' London-based lawyers Leigh Day said.

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, Leigh Day said.

Also Read: Parliament says Shell should pay $4 bln for 2011 oil spill

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.

Amnesty International claimed the first leak could have exceeded 100 000 barrels, while Leigh Day claimed both spills could have entailed 600,000 barrels.

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 is set to clean up the affected area.

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.

"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."

Shell 'committed' to clean-up

The clean-up of Bodo Creek is expected to begin over the next two to three months.

"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."

Also Read: Shell Nigeria denies it lied to Dutch court

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."

Amnesty called the settlement an "important victory for the victims of corporate negligence".

The London-based human rights group claimed many Bodo residents had their fishing and farming livelihoods destroyed by the spills and, without compensation, have faced poverty in the years since, it said.



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