A Dutch court Wednesday ruled that Royal Dutch Shell's Nigerian subsidiary was responsible for a case of oil pollution in the Niger Delta and ordered it to pay damages in a decision that could open the door to further litigation.
The district court in The Hague (The Netherlands) said SPDC, a wholly-owned subsidiary, must compensate one farmer, Mr Friday Akpan, but dismissed four other claims filed against the Dutch parent company.
Four Nigerians and campaign group Friends of the Earth filed suits in 2008 in The Hague, where Shell has its global headquarters, seeking reparations for lost income from contaminated land and waterways in the Niger Delta region, the heart of the Nigerian oil industry.
The case was seen by environmental activists as a test for holding multinationals responsible for offences at foreign subsidiaries, and legal experts said other Nigerians affected by pollution might now be able to sue in the Netherlands.
Shell said the case would not set a precedent because its parent company was not held responsible.
The farmer who won compensation, 52-year-old father of 12 Friday Akpan, said he was very happy with the judgment because it would allow him to repay his debts.
"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," he told Reuters .
"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."
Meanwhile, the Nigerian unit of Royal Dutch Shell is happy over the court ruling that all the contentious oil spill cases brought against it by some communities in the Niger Delta were caused by criminal activities.
Oil spill cases caused by criminal activity -- Shell
Managing Director of the Shell Petroleum Development Company, SPDC, and Country Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu, was quoted in an email statement as saying: "We welcome the court's ruling that all spill cases were caused by criminal activity."
ERA foresees more actions against oil coys
The Environmental Rights Action, ERA, an affiliate of FoE, in a telephone interview with Vanguard, described the Dutch court judgment as "a mixed blessing."
Spokesman for the group, Mr. Philip Jakpor, said: "The court ruling in favour of the farmer from Ikot Ada Udo, Akwa Ibom State has set a precedent on environmental activities because companies can be charged in their home countries for their actions in the host countries."
He added that "there will be a ripple effect because a lot of aggrieved communities in the Niger Delta have been violated, and in the days and weeks ahead, communities will take on the companies in their home lands. This is because in Nigeria the oil companies have found ways to twist the judicial processes in their favour and they have continued to indulge in double standards in their style of operations, different from what they do in Europe or America.
"You see that the Dutch court blamed Shell for allowing the spill in Ikot Ada Udo to continue for months without stopping it on the claims that it was sabotage, whereas, they dare not try that in the Western countries under any circumstance."
Shell declares victory on all counts
Shell in its statement insisted that the Dutch 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. Furthermore, the court ruled that Royal Dutch Shell Plc is not liable and dismissed all claims of Friends of the Earth.
"Only in the case of Ikot Ada Udo the court ruled that Shell Petroleum Development Company of Nigeria Ltd, SPDC, could have prevented the sabotage by plugging the well at an earlier stage. In this particular case saboteurs opened the valve (above surface) with a wrench.
"In 2010, SPDC took the necessary measures to contain the well. This was also acknowledged by the court. For Ikot Ada Udo the proceedings will continue between SPDC and Mr. Akpan to establish damages, if any.
Friends of the Earth also argued that SPDC did not clean-up the spill sites properly. This allegation was dismissed by the court.
Sunmonu also argued that "For SPDC, no oil spill is acceptable and we are working hard to improve our performance on operational spills. In the past years, we have seen a decline in operational spill volumes. These spills, however, were caused by sabotage and the court has, quite rightly, largely dismissed the claims."
But ERA maintained that oil companies operating in Nigeria are not honest in reporting the spill cases. Jakpor said; "We don't trust their figures because the companies normally under-report the volume of spill.
"Take for instance, the volume reported by Vanguard on Tuesday that Shell spilled over 26,000 barrels last year, I can bet you that the figure could have been more than 100,000 barrels, and because of the nature of our environment, in terms of regulation and control, the companies continue to get away with such malpractices". .
"The fact that a subsidiary has been held responsible by a Dutch court is new and opens new avenues," said Menno Kamminga, professor of international law at Maastricht University.
The court did not just examine the role of the parent company, but also looked "at abuses committed by Shell Nigeria, where the link with the Netherlands is extremely limited," he said.
Meanwhile,the Senate has said Shell must within the next two weeks submit a detailed report of its activities with regard to remediation, where it has access to and where as a company, it has not been able to go and carry out its work.
The Senate also picked holes with the quality of remediation done on oil spills in their host communities and the method in which the remediation contracts were awarded. The legislators argued that the jobs were awarded to local contractors that had little or no professional competence in handling such assignments, noting that this further compounded the problems rather than solved them.
These were revealed when the Senator Bukola Saraki-led Senate Committee on Environment and Ecology, met with the management of Shell to brainstorm on issues relating to oil spills in the Niger Delta.
Senator Saraki who noted that the committee discovered during their visits to the areas that there were no signs of remediation as claimed by Shell, said: "The method of remediation is of concern to us. We saw a contractor just exporting the contaminated soul, and imports fresh soil to fill the area. That is not the way it should be done."
Also commenting, the Vice Chairman of the Committee, Senator Benedict Ayade, PDP, Cross River North urged Shell to come up with methods in line with best practices in the remediating of spill sites globally. He stressed that Shell must stop the use of obsolete equipment and those that were no longer effective in curing soils that had been damaged by oil spills.
In his response, the Shell boss, Sumonu admitted: "I am not denying the fact that some sites have not been properly done; there are some contractors who will not do good jobs; there are contractors who will cover up and run away, especially the sites that are isolated."
He told the lawmakers that between 2006 and 2012, about 1,500 sites had been remediated and they represented only those areas where Shell officials had access.
According to him, the company faces problems relating to illicit practices, security and lawlessness and these have really affected their efforts at cleaning up the spills, adding that there was an average of 200 spills annually due to the activities of criminals.
Sumonu who noted that beyond remediation, the company was doing a lot to reduce the number of spills, adding that it has started laying pumps beneath the earth 4.5m deep, just as he promised the committee that he will liaise with relevant agencies to ensure the company's access to the places where there are spills so as to commence remediation on them.
According to him, all those sites within Shell's right of way were immediately attended to, but sites that were off the right of way usually were not accessible due to community problems and insecurity.
He added that illicit activities of criminals and the compromise of security personnel had further compounded the problems, arguing that in such situations Shell's personnel were at a risk attempting to gain access into such zones.
He, however, promised the committee that there will be a serious improvement in 2013, as Shell planned to put in place proper remediation in the sites accessible to it, "provided the conditions are right."