Shell to pay N45bn compensation to Niger Delta community to end oil spill case

Shell Nigeria has agreed to pay agreed to pay Ejama Ebubu, a community in Tai Eleme Local Government Area of Rivers State more than N45 billion to resolve a long-running dispute over an oil spill that occurred more than 50 years ago.

The compensation is to put an end to a long-running legal case that began in 1991.

In 2010, a High Court sitting in Asaba, Delta State, ordered Shell Petroleum Development Company (SPDC) to pay the people of Ejama Ebubu S100 million, worth around 16.7billion then.

The court, presided over by Justice Ibrahim Buba, also ordered the oil giants to de-pollute the land and swamps to their states before the spill took place. Shell appealed the case.

The spill which destroyed the only stream serving the community, as well as fish ponds, and farm lands, occured in 1970. Before the community went to court, the people had waited for 31 years for Shell to fulfil the promises it made after the spill occurred in 1970.

Read also: Oil spill from Shell’s Niger Delta facilities lowest in 10yrs

Shell approached a court in Abuja, Nigeria’s capital, on Wednesday to discuss modalities to pay the compensation.

The payment “is for full and final satisfaction” of a court judgment issued against the company 11 years ago, a spokesman for Shell’s Nigerian subsidiary told Bloomberg.

Shell had maintained that the environmental damage was caused by “third parties” during a civil war that was raging at the time. While the joint venture that Shell operates “does not accept responsibility or liability for these spills, the affected sites in the Ebubu community were fully remediated,” the company said.

In 2010, a federal court ordered Shell to pay 17 billion naira to the community. The oil major unsuccessfully challenged the decision on multiple occasions, including most recently at the Supreme Court in November. In March 2020, a judge in a related court case said that, with interest accrued, Shell’s debt stood at nearly 183 billion naira by January 2019 – a valuation the company vehemently contested.

In February, Shell initiated arbitration proceedings against the Nigerian government at the World Bank’s International Centre for Settlement of Investment Disputes following its unsuccessful attempts to overturn the 2010 ruling. Shell didn’t say in its statement if it will withdraw the claim.

If all goes well, Shell is expected to pay the agreed sum within 21 days.