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Shell could face ‘tens of billions in damages’ over Nigeria spills

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Court rules Royal Dutch Shell can be held liable for oil spills at its subsidiary in Nigeria

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Screen Shot 2015-11-20 at 08.55.47By Reuters: 1:34PM GMT 18 Dec 2015

A Dutch appeals court has ruled that Royal Dutch Shell can be held liable for oil spills at its subsidiary in Nigeria, potentially opening the way for other compensation claims against the multinational.

Judges in The Hague ordered Shell to make available to the court documents that might shed light on the cause of the oil spills and whether leading managers were aware of them.

A lower Dutch court in 2013 had found that Shell’s Dutch-based parent company could not be held liable for leakages of oil at its Nigerian subsidiary.

The legal dispute dates back to 2008 when four Nigerian farmers and campaign group Friends of the Earth filed suit against the oil company in the Netherlands, where its global headquarters is based.

“Shell can be taken to court in the Netherlands for the effects of the oil spills,” the court ruling stated. “Shell is also ordered to provide access to documents that could shed more light on the cause of the leaks.”

The case will continue to be heard in March 2016.

Judge Hans van der Klooster said the court had also found that it “has jurisdiction in the case against Shell and its subsidiary in Nigeria”.

Shell’s Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Ltd (SPDC), said: “We are disappointed the Dutch court has determined it should assume international jurisdiction over SPDC.

“We believe allegations concerning Nigerian plaintiffs in dispute with a Nigerian company, over issues which took place within Nigeria, should be heard in Nigeria.”

Shell has always blamed sabotage for the leaks, which under Nigerian law would mean it is not liable to pay compensation. But the Dutch court said: “It is too early to assume that the leaks were caused by sabotage.”

In January 2013, the district court in The Hague ruled that one of the farmers in the original suit was eligible for compensation from Shell’s Nigerian division for spills on his land in the Niger Delta, the heart of the country’s oil industry.

The farmer appealed over whether the parent company should also be liable.

Friends of the Earth Netherlands director Geert Ritsema said Friday’s ruling meant the three other farmers could proceed with claims for compensation for lost income resulting from spills.

“There are 6,000km of Shell pipelines and thousands of people living along them in the Niger Delta,” he said. “Other people in Nigeria can bring cases and that could be tens of billions of euros in damages.”

In a separate case, Shell agreed in January to pay £55m in an out-of-court compensation for two oil spills in Nigeria in 2008 after agreeing a settlement with the affected community in the Delta.

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