January 7, 2015

Oil spill: Shell to pay Ogoni community N16.6bn

Oil spill: Shell to pay Ogoni community N16.6bn

File Photo: Crude Oil

LAGOS — The Shell Petroleum Development Company of Nigeria Limited, SPDC, yesterday said it has agreed to pay the Bodo Community in Ogoniland, Rivers State, the sum of £55 million (about N16.6 billion) (N300 to £1) as compensation for damages caused by two oil spills in 2008.

File Photo: Crude Oil

File Photo: Crude Oil

Shell said in a statement made available to Vanguard that the bulk of the money, about £35 million will, be paid to individuals who agree on the settlement terms, while the balance of £20 million will be for the benefit of the general community.

According to Shell, “… a £55 million settlement agreement with the Bodo community in respect of the two highly regrettable operational spills in the area in 2008.

“The £55 million settlement provides for an individual payment to each claimant who accepts the settlement agreement in compensation for losses arising from the spills, amounting to up to £35 million in total.

“The remaining £20 million payment will be made for the benefit of the Bodo community generally.”


Shell should implement UNEP Report — ERA

But a spokesperson of environment rights group, Environmental Rights Action, Mr. Phillip Jakpor, in a swift reaction insisted that the amount being paid by Shell is “a gross underestimation of the damages caused by the spills.”

Rather than reeling out figures, the rights group urged Shell to “simply implement the UNEP Report on Ogoniland and allow an independent body to monitor the exercise.”

Recall that in 2011, the United Nations Environmental Programme, UNEP, recommended the setting up of a $1 billion fund to clean up contaminated land in Ogoni, on account of spills from its operations in the area.

While Shell had regretted the spills and expressed willingness to clean up the area by providing its counterpart funding, the Federal Government’s inability to take action on the matter had frustrated its efforts to clean up the area.

A spokesman for Shell, Mr. Precious Okolobo, had insisted last year that Shell “has made progress in addressing all the recommendations directed to it in that publication.”

He added: “The majority of UNEP’s recommendations require multi-stakeholder efforts coordinated by the federal government” and neither Shell nor “any other stakeholder is in a position to implement the entirety of UNEP’s recommendations unilaterally.”

As a result, some 11,000 residents of the coastal Bodo community in Ogoniland, who said their land and wetlands were spoiled after two spills in 2008, sued Shell in a United Kingdom, UK Court in 2012. But settlement talks broke down after their lawyers rejected a compensation offer made by Shell, on the grounds that it was grossly inadequate.

Judge Robert Akenhead had ruled in June last year that Nigeria’s Oil Pipelines Act, was adequate for compensating for spills, thus limiting the scope of the U.K. litigation to an assessment of actual damages caused.

Shell’s country Chair/Managing Director, SPDC, Mr. Mutiu Sunmonu, was quoted as saying in the statement, “From the outset, we’ve accepted responsibility for the two deeply regrettable operational spills in Bodo. We’ve 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.”