Shell to pay £55million (N15.2billion) compensation to Niger Delta community for oil spills

Shell Petroleum Development Company (SPDC) has finally agreed to pay £55 million in compensation for what it described as the two regrettable oil spills that occurred in Bodo community in Gokana Local Government Area of Rivers State in 2008, an indication that the community rejected the £30 million ($51 million) allegedly offered initially by the oil giant.

Shell’s Corporate Media Relations Manager, Mr. Precious Okolobo, said in a statement yesterday that the £55 million settlement agreement provides for an individual payment to each claimant, who accepts the settlement agreement in compensation for losses arising from the spills, amounting to £35 million.

According to him, the remaining £20 million payment would be made for the benefit of the Bodo community generally.

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 in compensation for the spilling of 500,000 barrels of oil.

The London High Court had in June 2014 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.

The court delivered the judgment on preliminary issues raised in the legal action brought against Shell.

The ‘preliminary issues hearing’, which took place last April 2014, 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's offer from September 2013 to settle the case for £30 million had remained on the table.

Speaking on the £55 million settlement agreement, the Managing Director of SPDC, Mr. Mutiu Sunmonu, noted that from the outset, his company accepted responsibility for the two deeply regrettable operational spills in Bodo.

“We have always wanted to compensate the community fairly and we are pleased to have reached 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 agreed to with the community,” Sunmonu explained.

“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,” he added.

Sunmonu said SPDC had made efforts to raise awareness on the issue with the government of Nigeria, international bodies like the United Nations, the media, civil society and international non-governmental organisations (NGOs).

According to him, Shell would continue to play an active role in the search for solutions.

Credit: Ejiofor Alike/ThisDay