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Genie Out Of The Bottle? Lawsuit That May Change The World

October 22, 2012 by Nicholas Bishop

After more than 50 years of oil production the proverbial genie may finally be out of the bottle and warranted compensation looming for the thousands, if not millions of people affected by oil pollution.

In a potentially precedent setting court case, four Nigerian farmers and Friends of the Earth Netherlands [Milieudefensie], an NGO, are suing Royal Dutch Shell, one of the largest multinationals in the world for environmental damage caused by oil spills. Shell, Nigeria’s largest producer of oil has dismissed the claims stating that domestic terrorism in the Niger delta is responsible for more than 75% of all oil spills and made repairing pipelines nearly impossible due to rampant insecurity. A ruling is expected in the case on January 30, 2013.

Contrasting Claims

Beginning in 2011 a team from the United Nations Environmental Protection Agency (UNEP) carried out a 14-month study, examining more than 200 locations and conducting detailed soil analysis at 69 contaminated sites. The report issued by UNEP details the history of oil exploration in Ogoniland, the area where the farmers are from, as “long, complex and often painful” having become “intractable” with “politics and people at loggerheads with the oil industry” and “set against a worsening situation for the communities concerned.” It continued by highlighting that there were “a significant number of locations where serious threats to human health from contaminated drinking water to concerns over the viability and productivity of ecosystems existed. In addition, pollution had gone further and penetrated deeper than many may have previously supposed.” As many as 30 years may be required for Ogoniland to fully recover from the impact of recurrent oil spills.

Citing the corruption of the Nigerian legal system as one of the main reasons for bringing the lawsuit to the Netherlands, Eric Dooh, one of the farmers suing Shell, believed that true justice would be rendered on the multinational’s home turf. Channa Samkalden, lawyer for the Nigerians said that although Shell claimed 75% of oil spills were caused by sabotage, reporting in the country was unreliable and the company had failed to exercise its duty of care to prevent attacks on oil pipelines and other threats to the local environment.
In a statement issued by Friends of the Earth it was noted that the legal suit “was the first time that the headquarters of a multinational concern on the European continent has been summoned to appear in court for environmental or human rights violations in a developing country. Conservative estimates indicate that the total damage caused in Nigeria by oil pollution amounts to tens of billions of euros.”

In Shell’s Defense

Shell claims that its Nigerian subsidiary is a separate entity not subject in its day-to-day decision making process to intervention by Dutch headquarters. Shell’s lawyer, Jan de Bie Leuveling Tjeenk emphasised that widespread criminal activity including the sabotaging of pipelines and oil theft were rife across the region.  A Shell spokesman continued in the same vein saying that, “Shell Petroleum Development Company [Shell Nigeria] maintains that it is not liable to pay compensation in relation to the spills in Goi, Ogoniland and Akwa Ibom State. SPDC has cleaned up the pollution at the three locations [and] this has been certified by the relevant Nigerian authorities. Under Nigerian law oil companies are not liable to pay compensation for damage caused by sabotage spills.” In an attempt to refute the claims made by the Nigerian farmers even further, Shell’s lawyer also asked what reasonable measures could have been taken in such an unstable region to prevent attacks on oil pipelines.  Shell Nigeria’s website claims that, “Over the past 5 years, less than 30% of spills were due to corrosion, human error or equipment failure at SPDC facilities, whilst the majority were caused by sabotage or theft.”

Unmitigated Theft?

Known as the world capital of oil theft, a type of Robin Hood scenario has seemingly emerged to take back profits from foreign companies and redistribute wealth into the hands of the poor by local militant groups who are responsible for frequent violence in the Niger Delta where a majority of Nigeria’s oil deposits are located.
In direct contrast to this theory, the sophistication of the theft has led analysts to charge that high ranking politicians and senior members of the armed forces are complicit. According to the Nigerian minister of oil, as much as $7 billion in annual revenues are lost with approximately 26,000 people involved in large and small scale oil theft. A government amnesty in 2009 aimed at providing alternative livelihoods through training programmes to oil thieves has cost Nigeria $405million in 2012 alone however 10,000 militants remain as yet untrained and jobless. Shell itself estimates about 6% of total oil production or 150,000 barrels a day are stolen.

In summation

Whether or not Shell is eventually held accountable is of less consequence than the overall impact of the lawsuit for countries in the developing world dealing with untenable environmental destruction as a result of exploration for natural resources and fossil fuels by large foreign conglomerates. As a repercussion a bevy of new court cases may follow permitting restitution claims to be paid out to local communities whose livelihoods have been largely destroyed by untold ecological disasters. In Nigeria at least, after more than 50 years of oil production the proverbial genie may finally be out of the bottle and warranted compensation looming for the thousands, if not millions of people affected by oil pollution.

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About Nicholas Bishop

Nicholas Bishop is currently a Parliamentary Monitor with the Parliamentary Monitoring Group (PMG) an NGO based in Cape Town, South Africa in cooperation with the Canadian International Development Agency (CIDA). He holds a law degree and an MA in International Relations from Osaka University and was formerly a Refugee Caseworker with Amnesty International Australia.

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