Africa, Business

Two years too late, Shell takes blame for Nigerian oil spill

By Simon Allison 4 August 2011

Saying sorry can be expensive. For Shell, having been forced to admit responsibility for one of the world’s largest oil spills, flowers & chocolates won’t be enough. The affected communities want more than R2.5 billion in compensation. And they’ll probably get it. But it’s not the money that’ll worry Shell, it’s the precedent – the oil giant’s messed with plenty more people in the Niger Delta, and they might come looking for justice too. By SIMON ALLISON.

Large corporations aren’t good at apologising. It’s taken Shell three years to acknowledge they were responsible for two massive oil leaks in their pipelines, which pumped hundreds of thousands of barrels of the black stuff into the swamps and lagoons of Nigeria’s delta area.

Shell’s official statement was terse and to the point: “SPDC accepts responsibility under the Oil Pipelines Act for the two oil spills both of which were due to equipment failure. SPDC acknowledges that it is liable to pay compensation – to those who are entitled to receive such compensation.”

Compensation and clean-up, will run into the hundreds of millions of pounds. It’s a life-changing victory for the Niger Delta communities which forced Shell’s hand by suing the Anglo-Dutch multinational where it is most vulnerable – at home. A class-action suit brought in the UK meant Shell could no longer dodge its responsibilities.

The suit was filed on behalf of 69,000 affected Nigerians around the Bodo area, the centre of the spill. The spill devastated the creeks and inlets which provide food, energy and livelihood for the people there. Shell’s initial response was poor. When the pipe first sprung a leak in September 2008 spewing nearly 2,000 barrels of oil a day into the area, it took the company until November to fix it. When it sprung another leak in December, it took until February 2009 to repair.

Its secondary response was even worse. All the while denying responsibility and avoiding cleaning up its mess, it offered the affected communities the frankly insulting compensation of a total of R35,000, 50 bags of rice, 50 bags of beans, a few cartons of sugar and some tomatoes and groundnut oil. Duly insulted, the communities stepped up the pressure by engaging the English law firm of Leigh Day and Co., which is making this area of law something of a specialty after successfully suing Trafigura, another oil giant, on behalf of residents of Abidjan in Côte d’Ivoire after a Trafigura-leased ship dumped toxic waste in the Abidjan port.

“This [the Nigeria spill] is one of the most devastating oil spills the world has ever seen and yet it had gone almost unnoticed until we received instructions to bring about a claim against Shell in this country,” Leigh Day and Co. said in a statement. The situation’s in stark contrast to last year’s Deepwater Horizon spill in the Gulf of Mexico where BP was forced by a firestorm of international condemnation to plug the leak and mitigate the disaster in whatever way it could.

Although the court in England still needs to determine just how much compensation to award, it’s going to be a lot. Shell probably won’t worry too much about a few hundred million when their second quarter profits this year were nearly £5 billion. But they will worry about the precedent set. Now that UK jurisdiction has been established for the company’s offences in Nigeria there might be a lot more people looking for redress. “The news that Shell has accepted liability in Britain will be greeted with joy in the delta. The British courts may now be inundated with legitimate complaints,” said Patrick Naagbanton, coordinator for the Centre of Environment and Human Rights in Port Harcourt.

Spillage and leaks have characterised much of the involvement of Shell and the other big oil beasts in the Niger Delta. There have been more than 7,000 oil spills in the country since 1989 and very little by way of repercussions thanks to Nigeria’s lazy regulatory system and poor enforcement. Shell has historically blamed the spills on sabotage and interference from thieves and militants; an explanation rubbished by rights groups such as Amnesty International, which argues that the mechanism used to come up with Shell’s statistics is grievously skewed in the company’s favour.

But militants certainly have sabotaged their fair share of pipes. The activity of the oil companies has spawned vigorous local opposition. In 1995 Ken Saro-Wiwa was executed along with eight fellow activists after being convicted of incitement to murder, a charge many believe was trumped up to silence his vocal – and increasingly effective – criticism. Recent opposition in the delta has been spearheaded by the militia group Movement for the Emancipation of the Niger Delta, which has been behind a number of attacks on oil installations.

The United Nations Environmental Programme is due to release a comprehensive report on Thursday assessing the extent of the damage caused by oil spills in the delta and, crucially, assigning blame. The report is expected to reveal damage far worse than expected, with oil having seeped into the region’s water table. As for blame and responsibility – well, Shell paid for the whole report, and dogs rarely bite the hand that feeds them. DM

Read more:

  • Shell accepts liability for two oil spills in Nigeria in the Guardian;
  • Ogoniland oil spills: Shell payout could top N62 billion in Nigeria’s Business Day;
  • Oil in Nigeria: a history of spills, fines and fights for rights in the Guardian.

Photo: Smoke and flames billow from a burning oil pipeline in Andoni, Rivers State, Nigeria, December 20, 2005. REUTERS/Stringer.


Support DAILY MAVERICK & get FREE UBER vouchers every month

An increasingly rare commodity, quality independent journalism costs money, though not nearly as much as its absence can cost global community. No country can live and prosper without truth - that's why it matters.

Every Daily Maverick article and every Scorpio exposé is proof of our dedication to this unshakeable mission. Investing in our news media is by far the most effective investment into South Africa's future.

You can support Independent and Investigative journalism by joining Maverick Insider. If you contribute R150 or more per month you will receive R100 back in UBER vouchers. EVERY MONTH until October 2019.

So, if you'd like to help and do something meaningful for yourself and your country, then sign up to become a Maverick Insider. Together we can Defend Truth.

Inquiry: Day Two

PIC announces ‘blatant’ violations in R4.3-billion investment in Survé-controlled Ayo Technology

By Greg Nicolson

Eton College once provided free education to poor boys. Now it quite literally does the opposite.