Shell to pay £55m over Niger Delta oil spills after 3-year London legal battle

Oil giant, Shell, has agreed a compensation package of £55 million to compensate 15,600 fishermen and their community after it was devastated by two massive oil spills in the Niger Delta in 2008 and 2009.

Tuesday’s announcement follows a three-year legal battle by the Nigerians’ lawyers, London based law firm Leigh Day, in the High Court in London following the spills which devastated the environment surrounding the community of Bodo in Gokana Local Government Area of Rivers State.

Each member of the community impacted by the oil spill will each receive approximately N600,000 (£2,200) paid into their individual bank accounts over the next few weeks.

The total cost of the compensation package agreed with Shell is £55 million being split £35 million for the individuals and £20 million for the community and is thought to be one of the largest payouts to an entire community following environmental damage. It is the first time that compensation has been paid following an oil spill in Nigeria to the thousands of individuals who have suffered loss.

Experts have confirmed that the spills destroyed thousands of hectares of mangrove, which is the largest man-made disaster of this sort ever seen. In the aftermath of the spills Shell originally offered £4,000 compensation to the entire Bodo community before the villagers sought legal representation from lawyers in London, where Shell has its headquarters.

In a separate process, Shell has also pledged to clean up the Bodo creek. These efforts have been led by Bert Ronhaar, the former Dutch ambassador to Nigeria, who acted as mediator with the community and Shell to ensure that the creek is cleaned to international standards. It is planned that the clean-up of the creek will commence over the next two to three months.

Bodo is a fishing town. It sits in the midst of 90sq km of mangroves swamps and channels, which are the perfect breeding ground for fish and shellfish. It is a rural coastal settlement consisting of 31,000 people who live in 35 villages. The majority of its inhabitants are subsistence fishermen and farmers.

Shell says it was informed of the first leak in early October 2008. The community says by this date oil had already been pumping into the creek for approximately six weeks. Even then it took Shell over a month to repair the weld defect in the pipeline.

The second spill occurred in December 2008 and was also the result of equipment failure. It was not capped until February 2009 during which time even greater damage was inflicted upon the creek as crude oil pumped into the rivers and creeks per day over a period of two months.

The Trans-Niger Pipeline has suffered an incidence of operational oil spills between 2006 and 2010 at a rate 133 times greater than the European average.

In 2011, Shell admitted liability for the spills but continued to dispute the amount of oil spilled and the extent of the damage caused.

Leigh Day began legal action at the High Court in March 2012 after talks broke down over compensation and a clean-up package for the community.

Tuesday’s announcement that a settlement has been reached comes ahead of a full trial, which had been planned for early 2015.

The lawyer representing the claimants, Martyn Day from Leigh Day, said: “We came to a provisional agreement with Shell just before Christmas. I immediately then travelled out with a team of 20 to meet with our clients to see if they were happy with the deal. We were able to see 15,400 of them (98%) in 8 days.