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Spill: Shell pays N15bn to Rivers community

By BusinessNews Staff on January 8, 2015

Oil giant, Shell, has paid the sum of £55m (about N15.4bn) as compensation to residents of Bodo area of Rivers State, where two oil spills occurred in August and December 2008.

Amnesty International and the Centre for Environment, Human Rights and Development, in an emailed statement on Tuesday, said Shell’s long-overdue compensation payout to the community was an important victory for the victims of corporate negligence.

The £55m is split into £35m for 15,600 individuals and £20m for the community.

Six years after two oil spills destroyed thousands of livelihoods in the Bodo area, legal action in the United Kingdom had driven Shell to make an out-of-court settlement of £55m to compensate the affected community, according to the statement

In 2011, the people of Bodo, represented by the law firm, Leigh Day, began court proceedings in the UK against Shell Petroleum Development Company of Nigeria.

“While the payout is a long awaited victory for the thousands of people who lost their livelihoods in Bodo, it shouldn’t have taken six years to get anything close to fair compensation,” said the Director of Global Issues, Amnesty International, Audrey Gaughran.

“In effect, Shell knew that Bodo was an accident waiting to happen. It took no effective action to stop it, then it made false claims about the amount of oil that had been spilt. If Shell had not been forced to disclose this information as part of the UK legal action, the people of Bodo would have been completely swindled,” he added.

The Managing Director, SPDC, Mr. Mutiu Sunmonu, said in a statement confirming the compensation, “From the outset, we’ve accepted responsibility for the two deeply regrettable operational spills in Bodo. We’ve always wanted to compensate the community fairly and we are pleased to have reached the agreement.

“We are fully committed to the clean-up process being overseen by a former Netherlands’ Ambassador to Nigeria. Despite delays caused by divisions within the community, we are pleased that clean-up work will soon begin now that a plan has been work out with the community.

“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.”

According to him, SPDC has made efforts to raise awareness of the issue with the government of Nigeria, international bodies like the United Nations, the media, civil society and international non-governmental organisations.

“We will continue to play an active role in the search for solutions. We urge all those with influence, including Bodo community leaders and NGO groups to support this effort,” Sunmonu said.

The wait for compensation was said to have taken its toll on the residents, many of whom had their fishing and farming livelihoods destroyed in the spill. Throughout this time they have had to live with ongoing pollution and without compensation, many have faced grinding poverty, the statement added.

“The compensation is a step towards justice for the people of Bodo, but justice will be fully achieved when Shell properly cleans up the heavily polluted creeks and swamps so that those who rely on fishing and farming for their income can begin to rebuild their livelihoods,” said the Director of Programmes, Centre for Environment, Human Rights and Development, Styvn Obodoekwe.

“I am very happy that Shell has finally taken responsibility for its action,” says Pastor Christian Kpandei, a Bodo fish farmer, whose fish farm was destroyed by the oil spill. “I’d like to thank the lawyers for compelling Shell to make this unprecedented move.”

According to the statement, Shell has always accepted that the two Bodo oil spills were the fault of failures on the company’s pipeline at Bodo, but publicly – and repeatedly – claimed that the volume of oil spilt was approximately 4,000 barrels for both spills combined, even though the spills went on for weeks.

In 2012, Amnesty International, using an independent assessment of video footage of the first oil spill, calculated that the total amount of oil split exceeded 100,000 barrels for that incident alone.

During the legal action in the UK, Shell had to finally admit that its figures were wrong and it had underestimated the amount of oil spilt in both cases. However, it has still not confirmed how much oil was actually spilt, according to the statement.

Shell was also forced to reveal that it had been aware, at least since 2002, that most of its oil pipelines were old, and some sections contained “major risk and hazard.”

[Punch]

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