Abuja — More than 13,500 Nigerians joined their communities in a lawsuit against Shell Plc before a landmark UK trial that could have far-reaching implications for parent-company responsibility over the actions of foreign subsidiaries, Bloomberg reported yesterday.
The residents of the crude-rich Niger Delta are suing Shell's holding company and its Nigerian unit over oil spills they say have devastated their land and waterways. They are trying to persuade a UK court to order the energy giant to pay compensation and clean up the environmental damage.
But Shell said its parent company cannot be legally liable for what happened in the West African country. If the oil giant loses the upcoming trial, it could open UK-incorporated firms -- including in the energy and mining industries -- to potentially costly lawsuits in British courts from groups around the world that accuse them of harm through overseas subsidiaries, the report said.
More than 11,300 members of the Ogale community in Rivers state registered their claims at the UK High Court on January 27, according to a news release published by their British law firm, Leigh Day, on Thursday.
They joined 2,335 people from the Bille fishing settlements and lawsuits brought on behalf of the communities that have been going through the English courts since 2015, the firm said. The four cases are being managed together.
"The communities have had their way of life devastated by the spills and are asking for Shell to clean up their oil and compensate them for their loss of livelihoods as their ability to farm and fish has been largely destroyed," Bloomberg quoted Leigh Day as saying.
Shell's Nigerian subsidiary has reported 55 spills in Ogale since September 2011, 16 of which occurred since the start of 2020, according to the law firm.
"The overwhelming majority of spills related to the Bille and Ogale claims were caused by illegal third-party interference" such as theft and sabotage, a Shell spokesperson said by email. "We strongly believe in the merits of our case," the company said. The communities disagree with the firm's claim that its Nigerian unit has adequately cleaned up the spills.
Two UK courts denied the Nigerians' application to sue Shell in the UK before the Supreme Court ruled in February 2021 that there is a "good arguable case" that the company's parent could owe the communities a duty of care and be legally responsible for the pollution at the heart of the case. That set the stage for a trial that's expected to take place next year.
Shell denies its parent company is liable, according to its defence filed in November 2021. The firm's Nigerian subsidiary "is fully equipped to manage all aspects of its operations in the Niger Delta," it said.
According to Nigerian law, the communities cannot seek compensation for leaks caused by third parties or that occurred more than five years before the suits began, and only the Nigerian government can compel Shell to clean up spills, the company said in the defence.
The Niger Delta is "a highly complex operating environment" and litigation "does little to address the real problem in the Niger Delta," which is pollution caused by criminality, Shell said by email.
The communities have rejected those arguments. Shell's parent company "failed to take reasonable care to prevent the claimants from being harmed by spills of oil" from its subsidiary's facilities, the Ogale community said in a reply in March 2022.
While Shell has been the largest oil producer in Nigeria for decades, the firm is trying to offload its remaining onshore and shallow-water licenses. A separate dispute in a local court involving a different Niger Delta community over oil spills that Shell says never happened has put the sale process on hold while the company's appeal is resolved.
If Shell's case succeeds at trial, the arguments would "essentially deprive" most Nigerian communities living with legacy pollution of "any legal remedy against oil companies," according to Leigh Day.