Dutch Ruling: Shell Mostly Cleared in Nigeria Oil Spills

Shell Environment Vice President Allard Castelein passes a banner of Friends of the Earth activists at the Dutch court. Zoom
AP

Shell Environment Vice President Allard Castelein passes a banner of Friends of the Earth activists at the Dutch court.

A closely watched environmental lawsuit against oil giant Shell has ended in mixed results. A court in The Hague cleared the company of wrongdoing in oil spills in the Niger Delta, but ordered its subsidiary to compensate one farmer for revenue lost because of the damage.

A Dutch court has cleared multinational oil giant Royal Dutch Shell in a pollution case brought on by several Nigerian farmers, but found the company's local subsidiary was negligent in one case of environmental damage.

In its closely watched decision on Wednesday, the court ordered the subsidiary, Shell Nigeria, to pay damages to a farmer for breach of duty of care. It found the company did not do enough to prevent saboteurs from opening an oil well head, causing oil to leak onto the farmer's land. The plaintiffs had argued environmental damage caused by Shell pipelines and production facilities robbed them of farming and fishing income.

The Hague Civil Court rejected four other similar claims brought on by the group of Nigerian farmers against the parent company. Environmental group Friends of the Earth, which aided the farmers in filing the case, hailed the court's order to compensate the one victorious farmer, but said it was "stunned" at the dismissal of the other claims.

"This is the first time that Shell has been ordered by the court to pay compensation for damage," said Geert Ritsema of Friends of the Earth. "The Nigerian justice system has never been able to accomplish this." The environmental group said it planned to appeal the ruling, which could delay negotiations between Shell Nigeria and the farmer on the amount of compensation.

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Photo Gallery: Oil in the Mangroves
The farmer, 52-year-old Friday Akpan, said he was happy with the decision. "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 news agency Reuters in the Niger Delta city of Port Harcourt. "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."

The pollution stemmed from oil spills in 2004, 2005 and 2007, the plaintiffs alleged. Ritsema said Wednesday's ruling opens the door for hundreds of other Nigerians from Akpan's home village in the Niger Delta to sue Shell in Dutch courts in the future.

Case Could Set Legal Precedent

Royal Dutch Shell's vice president for environment, Allard Castelain, said the parent company did not lose the case, and that the oil spills that brought on the lawsuit were the product of sabotage, not operational failure -- a key distinction.

"It's clear that both the parent company, Royal Dutch Shell, as well as the local venture ... has been proven right," he said. "The complexity lies in the fact that the theft and the sabotage is part of an organized crime ... that siphons away a billion dollars a month."

The case in The Hague was closely watched as the first in which a Dutch-registered company was sued in a domestic court for the activities of a foreign subsidiary.

Shell Nigeria is the largest oil and gas firm in the energy-rich west African country. The Niger Delta, home to some 31 million people, accounts for more than half of Nigeria's oil production.

Shell counted 198 oil spills at its facilities in the Niger Delta last year, leaking out 26,000 barrels of oil. It says about 80 percent of the spills were caused by sabotage or theft. Locals in the region accuse Shell of underreporting the number of oil spills per year.

A similar lawsuit against Shell is pending in a British court, where residents of the Bodo community in Nigeria accuse the company of spilling 500,000 barrels in 2008. Shell admitted responsibility in two incidents but says the amount of oil released into the environment was much less. The case is to be heard in the High Court in London next year.

acb -- with wire reports

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