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Royal Dutch Shell Admits Liability in U.K. Court for Niger Oil Spill

Corporate Counsel: August 05, 2011

Sue Reisinger

In the first Nigerian oil spill case to be brought in the United Kingdom, a subsidiary of Royal Dutch Shell plc has accepted its liability and conceded to the jurisdiction of the U.K. High Court. The lawyer representing the claimants, Martyn Day from London-based Leigh Day & Co., announced the agreement Tuesday.

In return, the parent company will be dropped from the case, which continues against the Nigerian subsidiary, Shell Petroleum Development Company ltd.

The claim was brought on behalf of some 69,000 Nigerians after two massive oil leaks in 2008 and 2009 contaminated the waterways of the Bodo fishing community in the Niger Delta. David Williams, a London spokesman for the subsidiary, said it “has always acknowledged that the two spills which affected the Bodo community, and which are the subject of this legal action, were operational. As such, [the subsidiary] will pay compensation in accordance with Nigerian law.”

He said negotiations are continuing and could take several months to conclude. The Shell legal department couldn’t discuss the ongoing case any further, Williams added.

The agreement reached in this case differs greatly from what happened to Nigerian plaintiffs in U.S. courts over claims that Shell aided in the torture and murder of dissidents. Last September, the U.S. Court of Appeals for the Second Circuit dismissed the claims, saying U.S. courts lacked jurisdiction.

In that opinion, the panel held that jurisdiction under the Alien Tort Statute applies to individuals and not to corporations.

“Customary international law has steadfastly rejected the notion of corporate liability for international crimes, and no international tribunal has ever held a corporation liable for a violation of the law of nations,” the U.S. court said. This case doesn’t change that, but at least in this tort claim, a corporation is accepting responsibility for an oil spill.

Day, a senior partner at the London law firm, said in a statement, “The Bodo people are a fishing community surrounded by water. What was the source of their livelihood now cannot sustain even the smallest of fish. The spills have caused severe poverty. . . We will be pressing Shell to provide them with adequate compensation immediately.”

The Shell spokesman said most spills in the Niger Delta are caused by sabotage or theft, particularly in the Bodo community. But he conceded that the two spills involved in the suit were due to equipment failures. The company is committed to cleaning up all spills when they occur, no matter what the cause, he added.

On Thursday, Mutiu Sunmonu, the managing director of the Shell Petroleum Development Company of Nigeria Ltd, released an open letter regarding the Niger oil spills [PDF].

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