Finally, Shell offers $51m compensation to Bodo community for oil spills

Shell+Logo21 June 2014, Lagos – Royal Dutch Shell has offered $51million in compensation for two oil spills that occurred in Bodo community in Gokana Local Government Area of Rivers State in 2008 after a London court yesterday rejected a larger claim; Reuters quoted sources involved in the case as saying.

Also yesterday, the Nigerian Liquefied and Natural Gas (NLNG) Company said it had no disagreements with the Niger Delta Development Company (NDDC) over a three percent levy as contribution to the development of the region.

Shell’s Corporate Media Relations Manager, Mr. Precious Okolobo said in a statement that the President of the Technological and Construction Court, Justice Akenhead, in his ruling yesterday 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.
“This decision limits the scope of the litigation to an assessment of actual damages sustained as a result of the operational spills.  The Judge dismissed the attempts of the community’s UK legal representatives to add a range of additional claims over and above the compensation due under the clear Nigerian statutory regime,” he said.
Okolobo further stated that the Judge found that the Oil Pipelines Act does not hold pipeline operators responsible for damage caused by oil theft.
He said the judge identified rare, “theoretical” but “difficult to prove” exceptions, for example in the event a pipeline operator knew the time and location of a planned attack by criminals and decided not to inform the police.
He also submitted that the judge also accepted that no compensation is payable for oil spilled as a result of illegal oil refining.

“The Judge further recognised the significant jurisdictional problems that arise when claims relating to Nigerian land are brought in England rather than in the Nigerian courts that have jurisdiction in relation to such land.  These issues will need to be addressed during the main trial next year,” Okolobo added.

The Managing Director of the Shell Petroleum Development Company of Nigeria Limited (SPDC), Mr. Mutiu Sunmonu yesterday 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 yesterday 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.
Shell’s offer from September 2013 to settle the case for 30 million pounds remained on the table, sources involved in the case said.
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.
NLNG dispels reports of disagreement with NDDC…
Meanwhile, the Nigerian Liquefied and Natural Gas (NLNG) Company has said it has no disagreements with the Niger Delta Development Company (NDDC) over a three percent levy as contribution for the development of the region.
The Managing Director of the NLNG, Mr. Babs Omotowa fielding questions from newsmen at the signing of a Memorandum of Agreement with six universities in Abuja yesterday said a Court Order had shown that the levy does not apply to the NLNG.
He added that the company had already shown its commitment to the development of the region by embarking on and completing several projects that border on the welfare of the people.
“Truth is the NDDC itself has never complained, but a few individuals came to our premises in Bonny to complain. We showed a copy of the Court Order to the group that came, and they were satisfied. There is no disagreement between us and the NDDC.
“What is important is that with or without the three percent, we are stakeholders in the development of the Niger Delta. Our records speak for themselves: in Bonny alone, we have provided 24 hours electricity, water, road networks and others,” Omotowa added.
The NLNG also signed MoAs with Vice Chancellors of six universities to provide N2 billion for the construction and equipment of modern engineering laboratories.
The benefiting institutions are the University of Ilorin, University of Maiduguri, Ahmadu Bello University-Zaria, University of Nigeria-Nsukka, University of Port Harcourt and University of Ibadan.
Omotowa disclosed that each institution from each geo-political zone was chosen based on its ranking by the National Universities Commission and the World’s University Ranking list.
He added that the NLNG would periodically monitor the projects as milestones are achieved, to determine the continued disbursement of the funds in phases.
“The board of the NLNG would decide if we would extend this to other universities…the universities were only asked to provide land; there was no counterpart funding required.
“Implementation is structured according to the universities technical needs and specification. Comparative advantages and peculiarities of each university were considered in the implementation strategy and we believe this is the best and most efficient model of project delivery,” Omotowa added.
– This Day
About the Author