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Shell hit by $1.5bn oil pollution claim from Nigerian Senate

The Independent: Shell hit by $1.5bn oil pollution claim from Nigerian Senate

“Shell was linked by international campaigners to the military government of Sani Abacha, which executed a delta activist, Ken Saro-Wiwa.”

Saeed Shah

United Kingdom; Aug 26, 2004

SHELL, THE beleaguered oil giant, has been asked to pay $1.5bn (pounds 830m) compensation by Nigeria’s Senate to communities affected by oil pollution in the country.

The resolution passed by the Senate, against the company’s Nigerian joint venture, Shell Petroleum Development Corp, was to compensate the Ijaw tribe in the southern Bayelsa state. SPDC has long been accused by activists of not cleaning up oil spillages and complicity in human rights abuses.

The Senate move backed a similar resolution passed by Nigeria’s House of Representatives. However, according to a local SPDC spokesman, the resolutions would be binding “only if the law backs it” – implying that it would need the support of the government of president Olusegun Obasanjo.

According to the Senate, the money is to cover health problems, economic hardship and avoidable deaths as a direct or indirect result of oil spillages from facilities owned in the Niger delta by SPCD, which is operated and part-owned by Shell. The resolution covered events dating back to the start of the company’s operations in the region in 1956.

The compensation claim does not relate to the grievances of the Ogoni people, also of the Niger delta, the area which contains most of the oil reserves. The Ogoni are in a neighbouring state to Bayelsa and although their protests against the impact of oil production on their traditional land has received greater international attention, the Ijaw are a larger and more politically powerful group within Nigeria.

Nigeria is an important region for Shell, accounting for about 10 per cent of group production. The company’s image problem over its interests in the country last came to a head in 1995, when Shell was linked by international campaigners to the military government of Sani Abacha, which executed a delta activist, Ken Saro-Wiwa.

Although oil pollution in the Niger delta has received less international attention in recent years, two independent reports published this year have been scathing about Shell’s continuing record in the country.

A study commissioned by Shell from the consultants WAC Global Services warned that increasing criminalisation of the delta could ultimately force the Anglo-Dutch company out of the region.

Separately, the charity Christian Aid criticised the oil giant for slow and inadequate oil spill clean-ups, badly implemented education, health and infrastructure projects, and for making “stay-at-home” payments to militants to try to stop them disrupting their activities.

According to yesterday’s Senate resolution, Shell is expected to pay $1bn now and the balance of $500m in equal instalments over the next five years.

A Shell spokesman in London said the company had not been officially informed of the Senate’s move and would not be in a position to comment on it until it had completed a detailed study of the resolution.

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