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Shell offers $51 million to settle Nigerian oil spills claim, but will pay much more

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By John Donovan

The London law firm Leigh Day has rightly rejected a £30 million pounds ($51 million) offer from Shell to settle a compensation claim from 15,000 residents of the Bodo community in Gokana Local Government Area of Rivers State, Nigeria. 

The offer emerged from a London court hearing on Friday 20 June 2014.

The following outspoken comment was attributed to a senior Shell executive.

The Managing Director of the Shell Petroleum Development Company of Nigeria Limited (SPDC), Mr. Mutiu Sunmonu yesterday called on the affected community to direct their UK lawyers to stop wasting more time pursuing enormously exaggerated claims, saying the company wants to compensate fairly and quickly those who have been genuinely affected and also clean up all the affected areas.

As someone who has negotiated seven “out of court” settlements with Shell, I have considerable experience in seeing through aggressive BS uttered by arrogant Shell executives, such as Mr. Sunmonu. 

Shell issued an aggressive press statement about me and my late father nearly 20 years ago in which they rubbished our then high court actions in every conceivable way, to the extent of alleging that we were trying to blackmail Shell into settling false claims. Despite all of the bluster, Shell settled all of the claims mentioned in the press statement and all other subsequent court actions we brought against the company, including two libel actions.

I am also in possession of Shell internal correspondence indicating that Shell has already decided it will never bring legal action against me (because of concern over the amount of Shell toxic “internal laundry” in my files). 

There is no way that Shell will allow the pending trial scheduled for March 2015, expected to last for three months, to proceed to an eventual verdict. The damage to Shell’s already tarnished reputation if the case dragged out over several months would be on a par with what happened in the notorious McLibel case; a reputational disaster.   

I correctly predicated that Shell would settle the Wiwa v. Shell case in the US courts in 2009 on exactly the same grounds.

Fear over potential damage to Shell’s reputation.

Shell paid $15.5 million to settle that case and will pay much more than it is currently offering to settle the current case for the same reasons – to avoid   toxic dirty laundry being aired in open court. 

Shell offers 30 mln stg to settle Nigeria oil spills: Reuters Saturday 21 June 2014

Finally, Shell Offers $51m Compensation to Bodo Community for Oil Spills: THISDAYLIVE: 21 June 2014

Nigeria Fishermen Reject Shell’s $50 Million: Huffington Post 20 June 2014

Extract

It is the first time Shell has had its environmental record in Nigeria on trial by a British court. The thousands of compensation cases in often corrupt Nigerian courts drag on for years and often end with victims being paid a pittance. Until now, Shell has paid compensation only for spills caused by equipment failure.

Nigeria: Shell could face fresh compensation claims after landmark environmental ruling: Amnesty International 20 June 2014

Extract

A landmark UK court ruling paves the way for Shell to finally be held accountable for devastating oil pollution in the Niger Delta, Amnesty International said today.
“Today’s ruling is a shot across the bows for Shell” said Audrey Gaughran, Amnesty International’s Director of Global Issues.

“The court’s message is clear – if you don’t take adequate measures to protect your pipelines from tampering, you could be liable for the damages caused.”

In a judgment delivered by Mr Justice Akenhead, the London Technological and Construction Court found that short of providing policing or military defence of its pipelines, Shell was responsible for taking reasonable steps to protect them. This would include measures such as installing leak detection systems, surveillance equipment and anti-tamper equipment.

The ruling has opened the door for Nigerian claimants to demand compensation if oil leaks were a result of sabotage or theft – if the sabotage or theft was due to “neglect on the part of the [licence] holder or his agents, servants or workmen to protect, maintain or repair any work structure or thing.”

Yet within minutes of the judgment being delivered, Shell fired off a press release claiming “senior English judge rules in favour of Shell’s Nigerian subsidiary”.

“Shell’s representation of the facts in this case continues to beggar belief,” said Audrey Gaughran.

FULL ARTICLE

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