The fact that thousands of Nigerians can now sue Royal Dutch Shell Plc in London over environmental damage in Africa’s biggest oil-producing country is an avoidable headache that will add to a long list of other existential risks facing Nigeria business.
Although Shell, for its part, continues to say that the spills were the result of sabotage, which has been frequent in Nigeria’s Niger Delta region, however, the federal government’s casual attitude towards insecurity in the region has also heightened incidents of criminality, kidnapping and sabotage as well as onshore and offshore piracy.
Called “the world’s piracy hotspot” by the International Maritime Bureau, the Gulf of Guinea off the coast of the Niger Delta has accounted for 21 piracy attacks in the first quarter of 2020, mostly in Nigerian waters, and over 90percent of global kidnappings in 2019.
For most analysts, oil spillage in the region is widely believed to be closely linked to unrest in the Niger Delta, where local armed groups find their operational base.
Data published by the Foundation for Partnership Initiatives in the Niger Delta (PIND), a Chevron-funded Nigerian NGO, show a worsening security trend and warns of a significant rise in tensions in the Niger Delta, with deaths from violent incidents having reportedly doubled compared to 2018.
According to the report, current incidents were mostly linked to criminality, including piracy and kidnappings, as well as to political violence surrounding the country’s 2019 general elections.
“In our view, we expect more local efforts on the part of the Federal Government to ensure there are no spillages, or at least it is reduced to the barest minimum as continued spilling and compensation does not help the development of the region,” said CSL Stockbrokers Limited, Lagos (CSLS) is a wholly-owned subsidiary of FCMB Group Plc.
For Shell and other International Oil Companies (IOC) operating in Nigeria’s niger delta, issues concerning insecurities are now existential risks for doing business.
After reversing two earlier rulings, a UK Supreme Court ruled that oil-polluted Nigerian communities can sue Shell in English courts. The decision could pave the way for similar claims from the developing world against British companies.
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The ruling is the second legal setback for Shell, headquartered in The Hague, in recent weeks after a Dutch court ordered the company’s Nigerian subsidiary to pay compensation for spills that occurred more than 13 years ago. The prospect of more lawsuits in Europe comes at a bad time for the company as it outlines its plans to transition to cleaner energy.
To avoid being sued another polluted community, Royal Dutch Shell Plc launched arbitration proceedings against the Nigerian government over a long-running community dispute concerning Oil Mining Lease (OML) 11
The oil major’s Netherlands-registered holding company and a Nigerian unit filed a case at the World Bank’s International Centre for Settlement of Investment Disputes on Feb. 10, according to the Washington-based organization’s website.
Shell brought its claim against Africa’s biggest crude producer under the bilateral investment treaty between the governments of the Netherlands and Nigeria, it said.
As of 2020, Shell joint venture asset’s in Nigeria includes, 340 producing oil wells; 56 producing gas wells; a network of approximately 4,000 kilometres of oil and gas pipelines and flowlines; 10 gas plants; two major oil export terminals; one power plant and one shallow-water Floating Production Storage and Offloading (FPSO).
Shell is also fighting charges, alongside Italy’s Eni, of grand corruption when they bought the OML245 oil block, one of Africa’s biggest, for a bargain price a decade ago.
