Dutch Court to Decide on Shell Lawsuits

THE WALL STREET JOURNAL

JANUARY 9, 2010

By SPENCER SWARTZ

LONDON — A Dutch civil court in The Hague is expected to decide Wednesday whether to hear two lawsuits accusing Royal Dutch Shell PLC of failing to properly maintain pipelines.

According to the suits, Shell’s lax maintenance led to spills in late 2005 that eventually ruined some Nigerian fishing areas and farmland.

Last month, the same Dutch court ruled that a similar case against Shell will go to trial starting Feb. 10. The three cases against Shell seek unspecified financial damages and were filed by the U.K. advocacy group, Friends of the Earth, on behalf of Nigerian farmers.

Friends of the Earth thinks the lawsuits have a better chance of succeeding in the Netherlands because of delays in Nigeria’s legal system, said Geert Ritsema, a spokesman for the group.

The suits mark the first time that oil spills in Nigeria have brought Shell before a European court, according to the Anglo-Dutch company. Shell says the cases are without merit because the oil spills happened after Nigerian militants blew up its pipelines.

“Shell has maintained the spills in all three cases were caused by sabotage,” said Shell spokesman Rainer Winzenried. “Our cleanups of the areas in dispute were approved and certified by the relevant Nigerian authorities.”

Mr. Ritsema said he thinks there is enough evidence to show that the Shell oil pipeline spills weren’t the result of sabotage and that Shell took too long to clean up the oil.

Sporadic militant attacks on infrastructure and abduction of foreign workers for ransom have been part of Nigeria’s oil industry for many years, but escalated starting in late 2005 as militants tried to force the Nigerian government and foreign companies to address poverty in the delta region.

The financial compensation being sought is unknown.

The actions also could invite similar suits in other parts of Europe, said Sebastian Spio-Garbrah, West Africa analyst at Eurasia Group.

An official with another major oil company with Nigerian operations said the firm “is watching the cases closely.” Chevron Corp. of California and Eni SpA of Italy are other big oil companies with sizable operations in Nigeria, the world’s eighth-largest oil exporter.

In a different case, two employees of Sparrow Offshore Services, an Aberdeen, Scotland-based oil-services company, sued their employer for not doing enough to protect them when they worked in Nigeria in 2006.

A full hearing on the case, filed in December in a Scottish court, isn’t scheduled until late this year, according to attorney Lisa Gregory of Balfour & Manson LLP, which is representing the two men.

Sparrow didn’t respond to requests to comment.

Write to Spencer Swartz at [email protected]

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