Shell agrees to pay Nigerian villages €15m over oil leaks

At the end of one of the Netherlands’ longest-running civil actions, Shell has agreed to pay €15 million to three villages in the Niger Delta in southern Nigeria for the environmental devastation caused by four major pipeline oil leaks between 2004 and 2007.

Judges in The Hague ruled last year that Shell’s Nigerian subsidiary, SPDC, should compensate four farmers who took actions supported by environmental organisation, Milieudefensie, the Dutch division of Friends of the Earth, and talks since have been about the scale of that compensation.

Late last Friday, the two sides issued a joint statement announcing the settlement, which they said was “on a no-admission-of-liability basis”, settling all claims and ending any pending litigation related to the spills – which Shell has always claimed were caused by sabotage and theft of their oil.

The settlement was signed off by the appeals court after it heard expert evidence that the Shell subsidiary had installed a sophisticated new leak detection system on the KCTL pipeline – a new stretch of pipe laid to replace the major damaged section – in compliance with an earlier order.

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The four original plaintiffs have all died since the case began in 2008 and the action has been continued on their behalf by their communities in the three villages of Oruma, Goi, and Ikot Ada Udo where the pollution was concentrated and who will now benefit from the Christmas Eve deal.

The agreement sets a new international standard in that multinational corporations can now be “called to account” for the impact of their operations in overseas locations, said the director of Friends of the Earth Netherlands, Donald Pols.

“Companies will have to radically change their attitudes: they will no longer be able to damage, to ignore the human rights of those affected, and then to walk away.”

One local farmer, Barizah Dooh, told Dutch national broadcaster, NOS, that the Niger Delta communities would use the compensation to try to get back on their feet economically.

“There were many times we did not believe we would ever be compensated for what we lost or that we would ever regain our livelihoods. We thank God that now this will happen.”

Nigeria is West Africa’s largest producer of petroleum, with two million barrels a day extracted from the Niger Delta. However, the Shell case apart, leaks and spills remain a major hazard.

In 2020 and 2021, Nigeria’s National Oil Spill Detection and Response Agency recorded 822 spills which pumped the equivalent of 28,003 barrels into the environment.

As a result of that environmental degradation, the average life expectancy in the Niger Delta is now 41, 10 years less than the Nigerian national average. The regional also has “shocking” levels of infant mortality.