2nd Mar 2016 12:09
LONDON (Alliance News) - Royal Dutch Shell PLC faces further legal action concerning its Nigerian subsidiary after a UK-based law firm launched two new claims against the company related to repeated oil spills from its pipelines in the Niger Delta.
Shell has conceded there are ongoing issues within Nigeria, including third-party theft and sabotage, but believes any legal action should be heard in Nigeria and not in the UK.
UK-based law firm Leigh Day said Tuesday that two new claims against Shell and its Nigerian subsidiary, Shell Petroleum Development Co of Nigeria Ltd, have been issued in the High Court in London on behalf of residents of the Ogale Community in Ogoniland and the Bille Kingdom.
Leigh Day has previously taken legal action against Shell and its subsidiary over oil spills in Nigeria, resulting in Shell agreeing to pay a compensation package worth GBP55.0 million last year to the local community and 15,600 Nigerian fishermen who suffered as a result of oil pollution.
According to Amnesty International, GBP20.0 million was paid to the local community whilst the other GBP35.0 million was split between the Nigerian fishermen, averaging around GBP2,200 each.
Leigh Day said that, although Shell has paid that previous compensation, still "hundreds of Niger Delta communities remain blighted by oil pollution", leading Leigh Day to issue two fresh environmental claims in the London High Court on behalf of the Ogale and Billie Kingdon communities.
The communities allege they have suffered from "repeated large scale oil spills from [Shell's] pipelines in the Niger Delta," the law firm said.
Leigh Day said the first court hearing will take place on Wednesday at the Technology and Construction Court.
Shell was the first company to discover a commercial oilfield in the country back in 1956 and has been present ever since. However the company has previously faced security issues in the country, stating only last month that production in 2015 was affected by "security impacts in Nigeria".
Importantly, Shell has not produced anything from Ogoniland, where the Ogale community resides, since 1993. The Nigerian subsidiary claims access to that area is limited due to "a rise in violence, threats to staff and attacks on facilities."
On Tuesday, a spokesperson for the Nigerian subsidiary conceded there are various issues concerning its operations, but believes any legal action should be heard within Nigerian courts, and not within the UK.
"Both Bille and Ogale are areas heavily impacted by crude oil theft, pipeline sabotage and illegal refining which remain the main sources of pollution across the Niger Delta," said Shell.
"The Bille and Ogale communities have chosen to bring these claims in the UK instead of in Nigeria, whose laws govern our operations. It is our intention to contest the jurisdiction of the English court over these claims. We believe that allegations concerning Nigerian plaintiffs in dispute with a Nigerian company, over issues which took place within Nigeria, should be heard in Nigeria," the company added.
Shell Petroleum Development Co operates projects with a series of partners concentrated in the Niger Delta and adjoining shallow offshore areas where it operates in an oil mining lease area of around 31,000 square kilometres.
Shell is continuing to expand in the country, recently starting production from the
Bonga Phase 3 project, which is capable of producing up to 50,000 barrels per day on its own.
The subsidiary also operates over 6,000 kilometres of pipelines and flowlines within the country, 87 flowstations, 8 gas plants and more than 1,000 producing wells.
The subsidiary works with the Nigerian National Petroleum Corp, the state-owned oil company, under a joint venture agreement, which also includes French firm Total SA and a private Nigerian company. Shell has a 30% stake in the joint venture agreement.
The joint venture is currently capable of producing up to 1.0 million barrels of oil per day, according to Shell. In 2014, Shell's share of production from Nigeria was 300,000 barrels of oil equivalent per day, which was around 13% higher than in 2013.
Shell produces around 3.2 million barrels of oil equivalent per day - meaning Nigeria accounts for around 9% of its overall production.
One of the communities being represented by Leigh Day is located in Ogale, which has a population of around 40,000 people which relies on crop farming and the Ogale Stream.
"Ogale has been subjected to repeated oil spillages across much of the community since at least 1989. At one spill site at Okuluebu, it is estimated that there were 87,500 barrels of oil remaining at the site when the United Nations Environment Programme conducted investigations in 2010," Leigh Day charged in its statement Wednesday.
"The Ogale pipelines and Infrastructure are several decades old and in a poor state of repair making the area vulnerable to oil spills which have caused, and continue to cause, long-term contamination of the land, swamps, groundwater and waterways in the community," Leigh Day added.
Leigh Day added that a 2011 report published by the United Nations Environmental Programme that oil spills in Ogoniland happen "with alarming regularity" and that "it is a fair assumption that most members of the current Ogoniland community have lived with chronic oil pollution throughout their lives".
"At the time, Shell stated it accepted the findings and the recommendations of the UNEP Report. However, four years later, Shell has failed to comply with the recommendations of the UNEP Report and to clean up the sites polluted by their oil," the law firm said.
"Lawyers for the Ogale Community say that they continue to live with chronic levels of land and water pollution," Leigh Day added. "The community are now claiming for compensation and seeking to get Shell to clean up the damage caused by their oil."
Shell's Nigerian subsidiary said Tuesday that Ogoniland is also undergoing work following the UNEP's environmental assessment, which includes Shell conducting work to satisfy reccmendations issued by the UNEP report.
"In mid-2015 [the joint venture], along with the government, UNEP and representatives of the Ogoni community, agreed to an 18-month roadmap to fast-track the environmental clean-up and re-mediation of Ogoniland which includes a governance framework," said Shell.
"These steps have been widely lauded across civil society in Nigeria and have been welcomed by members of the Ogoni community itself. Asking the English court to intervene and order re-mediation activity covering the same ground as the UNEP implementation plan is a direct challenge to the internal political acts and decisions of the Nigerian State, and its sovereign right to determine, within its own territory, the appropriate future path for the Ogoni community," it added.
The other community being represented by Leigh Day sits within the Billie Kingdom, which is made up of a number of island towns and fishing settlements that are surrounded entirely by water, boasting a population of around 13,000 residents.
Leigh Day claims Shell's oil pipeline known as the Nembe Creek Trunkline has "destroyed" the livlihood of the community, which relies on fishing as a way of life.
"The key issue in the claim will be whether Shell can be liable for failing to protect their pipelines from damage caused by third parties," said the law firm. "This claim seeks to confirm the findings of this judgement and if successful will mark a significant expansion in Shell?s liability for their activities in Nigeria."
Shell 'A' shares were trading down 0.8% to 1,632.00 pence per share on Wednesday whilst Shell 'B' shares were down 0.8% to 1,625.0 pence.
By Joshua Warner; [email protected]; @JoshAlliance
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