A Dutch appeal court has decided that supermajor Shell is responsible for environmental damage caused by oil leaks in the Niger Delta and must pay compensation to affected Nigerian farmers.
The court also ordered the Anglo-Dutch giant to install appropriate equipment to prevent future damage to oilfield infrastructure.
The case was launched by four Nigerian farmers in 2008, who alleged that widespread pollution on their land was caused by leaks from oil infrastructure due to a lack of repair and maintenance activities.
Shell had argued that illegal bunkering operations caused the leaks, but the Court of Appeal in The Hague found the oil company had not proven “beyond reasonable doubt” that this was the case.
“This makes Shell Nigeria responsible for the damage caused by the leaks” in the villages of Goi and Oruma, the court said, adding that the amount of compensation would be “determined at a later stage".
Shell 'violated duty of care' - FoE
The farmers’ 13-year legal case was backed by the environmental groups Friends of the Earth International through its Dutch branch, known as Milieudefensie.
FoE said the court ruled in favour of the farmers “on most points,” highlighting that Shell Nigeria, in particular, “is liable for oil pollution at three locations in the Niger Delta”, while parent company Royal Dutch Shell “also violated its duty of care".
FoE said three of the four Nigerian plaintiffs and their fellow villagers must now be compensated for the damage caused and Shell must ensure that there is a leakage detection system in the pipelines in Nigeria.
“It is the first time that a court has held a Dutch transnational corporation accountable for its duty of care abroad,” said FoE.
The campaign group said the lawsuit centres on oil leaks in three villages that have rendered fields and fish ponds unusable, while the spilled oil has never been “thoroughly cleaned up and new oil is still leaking out regularly".
Eric Dooh from Goi, one of the four Nigerian farmers, said: “Finally, there is some justice for the Nigerian people suffering the consequences of Shell’s oil. It is a bittersweet victory, since two of the plaintiffs, including my father, did not live to see the end of this trial. But this verdict brings hope for the future of the people in the Niger Delta.”
Channa Samkalden, lawyer for the farmers and FoE Netherlands, said that, “after years of litigation, there is finally justice for many of my clients,” with only the case in Ikot Ada Udo still ongoing.
“Not only is Shell liable for the oil spill and my clients will get what they are entitled to, this case also shows that European companies must behave responsibly abroad.”
Tougher legislation call
Donald Pols, director of FoE Netherlands, added that the compensation decision is “enormous” and should serve as “a warning for all Dutch transnational corporations involved in injustice worldwide".
On the back of the court’s findings, FoE Netherlands and its parent organisation are calling for ambitious European Union and international legislation to hold businesses accountable for harms they do overseas.
Jill McArdle, corporate justice campaigner for FoE Europe, said: “No victim should have to wait 13 years for justice. We need better EU laws now to hold European companies liable for what happens in their supply chain.”
In a statement emailed to Upstream, a spokesperson for Shell Petroleum Development Company of Nigeria Limited (SPDC) said: “We continue to believe that the spills in Oruma and Goi were the result of sabotage. We are therefore disappointed that this court has made a different finding on the cause of these spills and in its finding that SPDC is liable.”
“Sabotage, crude oil theft and illegal refining are a major challenge in the Niger Delta,” said the statement.
SPDC said that, in 2019, around 95% of spill incidents from its operations in the delta were due to criminal acts, adding that “regardless of cause, we clean up and remediate, as we have done with the spills in this case".
“SPDC also works with a range of stakeholders to find solutions to these complex issues. Like all Shell-operated ventures globally, we are committed to operating safely and protecting the local environment.”