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Niger Delta community rejects Shell’s $51m compensation

By BusinessNews Staff on June 25, 2014

A London-based law firm, Leigh Day, representing about 15,000 fishermen who dragged Royal Dutch Shell to a British court, has stated that the fishermen from Bodo community in Gokana Local Government of Rivers State have rejected an offer of $51 million from Shell for “some of the largest oil spills in history.”

The President of the Technological and Construction Court, Justice Akenhead, ruled on Friday that Shell can be legally liable for oil thefts if it fails to protect its pipeline infrastructure.

Shell countered the judgment was favorable in limiting litigation to “an assessment of actual damages sustained” in spills, and said the judge ruled the company’s arguments “correct in all the crucial points.”

Shell’s offer from September 2013 to settle the case for 30 million pounds or about $51million remained on the table.

But Leigh Day lawyers for 15,000 fishermen who lost their livelihoods in oil spills in 2008 and 2009 called Shell’s offer laughable.
The court delivered judgment on preliminary issues raised in the legal action brought against Shell.

The ‘preliminary issues hearing’, which took place last April, was the first time Shell had to face a formal court proceedings in the UK for its environmental record in the Niger Delta, following two massive oil spills in 2008 and 2009.

Shell offered $51million in compensation for two oil spills after a London court on Friday rejected a larger claim.

Shell’s Corporate Media Relations Manager, Mr. Precious Okolobo said in a statement that Justice Akenhead, in his ruling, accepted that the interpretation of Nigerian law by Shell was correct in all the crucial points argued before the court.

According to him, Akenhead accepted that the Nigerian Oil Pipelines Act provides a comprehensive and complete regime for compensation for oil spills.

The Managing Director of the Shell Petroleum Development Company of Nigeria Limited (SPDC), Mr. Mutiu Sunmonu, has however, called on the affected community to direct their UK lawyers to stop wasting more time pursuing enormously exaggerated claims, saying the company wants to compensate fairly and quickly those who have been genuinely affected and also clean up all the affected areas.

Commenting on the preliminary ruling, Sunmonu acknowledged that from the outset, Shell had accepted responsibility for the two deeply regrettable operational spills in Bodo.

“We want to compensate fairly and quickly those who have been genuinely affected and to clean up all areas where oil has been spilled from our facilities, including the many parts of Bodo which have been severely impacted by oil theft, illegal refining and sabotage activities.

“We hope the community will now direct their UK legal representatives to stop wasting even more time pursuing enormously exaggerated claims and consider sensible and fair compensation offers,” he added.

Around 11,000 or 15,000 residents of the Bodo community represented by a UK law firm, Leigh Day appealed in 2011 to a London court for more than 300 million pounds in compensation for the spilling of 500,000 barrels of oil.

The London High Court on Friday rejected the community’s attempts to expand the scope of the compensation, ruling that the pipeline operator could not be held responsible for damage caused by oil theft.

[This Day]

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