A Dutch court has ordered the Nigerian subsidiary of Shell to pay compensation over oil spills in the Niger Delta, a ruling which could pave the way for more cases against multinational oil firms.

The Court of Appeal in The Hague, on Friday, ruled that the Nigerian arm of the British-Dutch company must issue payouts over a long-running civil case involving four Nigerian farmers who were seeking compensation, and a clean-up, from the company over pollution caused by leaking oil pipelines.

This is sequel to a matter instituted in the Netherlands by four fishermen from the impacted villages of Ikot Ada Udo, in Akwa Ibom State; Goi, Gokana Local Government Area in Rivers State; and Oruma, Ogbia Local Government Area in Bayelsa State.
Two separate oil spills from a Shell facility occurred in 2004 and 2008, polluting several fishing communities in the Niger Delta.
In the case, “four fishermen/farmers and Milieudefensie vs. Royal Dutch Shell and Shell Petroleum Development Company Limited”, relief sought included a declaration of Shell’s liability to the spills and destruction of fishponds being the source of income for the litigants.
It was, however, silent on the case of Ikot Ada Udo, in Akwa Ibom State, because of what it called “unclarity of the facts”.
The judgement, which was monitored virtually from Port Harcourt, has finally come after 13 years of painstaking litigation instituted by farmers in Goi community in Ogoni, Rivers State; and Oruma community in Ogbia, Bayelsa State, who took Royal Dutch Shell to court in 2008.
The farmers sought the intervention of the court after several failed attempts to bring Shell to book in Nigerian courts.
The communities also sought a declaratory judgement for clean-up and payment of compensation for loss of fishing ponds, income and livelihoods, and preventive measures to stop oil spills from Shell’s aged pipelines from destroying their farmlands and fishponds in the future.
In its judgment, the court held Shell’s Nigerian subsidiary, SPDC, liable for two leaks that spewed oil over an area of a total of about 60 football pitches in two villages, saying that it could not be established “beyond a reasonable doubt” that saboteurs were to blame.
The Hague Appeals Court ruled that sabotage was to blame for an oil leak in another village.
However, it said that the issue of whether Shell can be held liable “remains open” and the case will be continued as the court wants clarification about the extent of the pollution and whether it still has to be cleaned up.
Under Nigerian law, which was applied in the Dutch civil case, the company is not liable if the leaks were the result of sabotage.
“Shell Nigeria is sentenced to compensate farmers for damages,” the court said in its ruling, which can be appealed via the Dutch Supreme Court.
The amount of compensation will be established at a later date. The court did not specify how many of the four farmers would receive compensation.
The court did not hold Shell’s parent company, which is based in the Netherlands, directly responsible.
However, it ruled that Shell’s parent company and its Nigerian subsidiary must fit a leak-detection system to a pipeline that caused one of the spills.
An activist said the verdict would be greeted with “relief and joy” by farmers in Nigeria and could “open the floodgates” for many other similar cases.
“Hundreds of people have queued up to sue Shell for contaminating the Niger Delta,” the activist said, citing cases brought against Shell in the UK and the Netherlands.
“I spoke to an activist a short while ago who said, ‘This is just the beginning’, and a lot of analysts also believe [the ruling] will open the floodgates to so many litigations against oil production companies that have been operating in Nigeria.”
The case was initiated in 2008 by the farmers and the Friends of the Earth campaign group, who were seeking reparations for lost income from contaminated land and waterways in the Niger Delta region, the heart of the Nigerian oil industry.
The spills concerned were between 2004 and 2007, but pollution from leaking oil pipelines remains a big problem in the Niger Delta.
“Tears of joy here. After 13 years, we’ve won,” the Dutch branch of Friends of the Earth tweeted following Friday’s ruling.
The head of the NGO’s Dutch branch, Donald Pols described the court’s decision as “fantastic news for the environment and people living in developing countries.
“It means people in developing countries can take on the multinationals who do them harm,” he said.
Shell argued that saboteurs were responsible for leaks in underground oil pipes that have polluted the delta.
The company also argued that it should not be held legally responsible in the Netherlands for the actions of a foreign subsidiary, meaning Shell Nigeria.
After the ruling, Shell said it continues to believe the spills were caused by sabotage, adding it was dismayed that its Nigerian subsidy – the Shell Petroleum Development Company of Nigeria (SPDC) – was judged to be culpable.
“We are … disappointed that this court has made a different finding on the cause of these spills and in its finding that SPDC is liable,” the company said in a statement.
The Nigerian subsidiary added: “Like all Shell-operated ventures globally, we are committed to operating safely and protecting the local environment.”
Chima Williams of Friends of the Earth Nigeria ( Environmental Rights Action), says, “Today’s decisions will determine whether or not transnational companies will be obliged to respond in a swift and positive way when environmental complaints are made from their host country.
“This case has taken so long that two claimants are no longer alive. But the problems caused by the immense oil spill from Shell’s pipelines have still not been resolved after 13 years. It hurts that this can happen.
“The court judgment today has set a new standard that will give hope to ordinary citizens that no matter how powerful a company is, there will always be a day of reckoning.”
Donald Pols of Friends of the Earth Netherlands (Milieudefensie) said:
“After almost 13 years, we now know that Nigerians will finally receive justice and Shell will not succeeded in completely shirking its responsibility for the pollution. “For the inhabitants of the Niger Delta, it is crucial that their land is cleaned up and their lost crops and livelihoods are compensated by the guilty party: Shell.
“This victory has heralded the beginning of a new era in which large multinationals such as Shell can no longer go about their business lawlessly but are accountable for their entire operations, including overseas.”
Channa Samkalden, lawyer for the Nigerian farmers and Friends of the Earth Netherlands, adds:
“What we have already achieved in all these years of litigation is that Dutch companies are being held accountable for their behaviour abroad.
“The fact that Friends of the Earth Netherlands and the Nigerian claimants succeeded in this is in itself groundbreaking. It is now a matter of waiting to see how the court rules on the liability of both parent company, Shell (RDS) and the subsidiary in Nigeria (SPDC).
Shell discovered and started exploiting Nigeria’s vast oil reserves in the late 1950s and has faced heavy criticism from activists and local communities overspills and for the company’s close ties to government security forces.
Friends of the Earth, which has supported the Nigerian farmers in their legal battle, argues that leaking pipes are caused by poor maintenance and inadequate security and that Shell does not do enough to clean up spills.