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    Shell Faces UK Action over Nigeria Oil Spills


The ruling, which makes the parent company responsible for the actions of its subsidiary, could have implications for other multi-nationals.

by: William Powell

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Natural Gas & LNG News, Top Stories, Corporate, Litigation, Exploration & Production, News By Country, Nigeria

Shell Faces UK Action over Nigeria Oil Spills

Anglo-Dutch major Shell is facing demands for compensation in London for leaks from its Nigerian oil pipelines, whatever their cause, following a landmark judgement February 12 by the UK supreme court that it had jurisdiction in the matter. 

Law firm Leigh Day, representing the claimants, said the ruling "determines that there is a good arguable case that Royal Dutch Shell is legally responsible for the systemic pollution of the Ogale and Bille communities and that their case can proceed in the English courts."

Shell – operator and 30% shareholder of Shell Petroleum Development Company (SPDC) – said it was  disappointed by the UK court's decision that overturned the Court of Appeal's decision.

The Court of Appeal had said it was for the Nigerian courts to decide the case – a decision that Leigh Day said was "an extremely narrow view."

The ruling also makes it "much harder for multi-nationals to obstruct road-blocks around jurisdiction and makes the evidential burden lighter," said Leigh Day in a webcast. Claimants cannot "magic up" documents vital to their case if there is no right of disclosure, and without jurisdiction, they cannot get disclosure. It would have taken decades and a lot of money to have the case heard in Nigeria, the law firm said.

Shell said: "Regardless of the cause of a spill, SPDC cleans up and remediates. It also works hard to prevent these sabotage spills, by using technology, increasing surveillance and by promoting alternative livelihoods for those who might damage pipes and equipment. Unfortunately, such criminal acts remain the main sources of pollution across the Niger Delta today.”

Leigh Day said many of the spills were due to poorly maintained pipelines; that Shell is responsible for clearing up oil regardless of the cause, including third-party tampering; and third, that Shell is under a legal obligation to protect its pipeline in areas where there is a high risk of tampering. It had failed, and a Dutch court had ordered Shell to install a leak-detection system. "Shell has been grossly negligent," Leigh Day said. "The communities are just seeking the enforcement of Nigerian law," it said, 

It is not yet clear whether SPDC will be joined to the case against the parent company. But Leigh Day said there was extremely strong evidence that the Anglo-Dutch major advises Shell Nigeria with regard to almost all its activities. "Either way we are confident the claimants would prevail," it said.

Leigh Day said that the claimants' case is that not all of the oil spills in these cases are caused by third parties and many are said to be caused by old, out-dated pipelines and infrastructure which have not been properly maintained. It cited a  UN report from 2011: "The control and maintenance of oilfield infrastructure in Ogoniland is clearly inadequate. Industry best practice and SPDC's own documented procedures have not been applied and as a result, local communities are vulnerable to the dangers posed by unsafe oilfield installations. The oil facilities themselves are vulnerable to accidental or deliberate tampering."