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2014-06-22 15:10:00

SHELL WINS NIGERIA

SHELL WINS NIGERIA

The High Court has ruled in favour of Shell on a number of pre-trial issues ahead of a court case being brought by 15,000 claimants from Nigeria's Bodo community against the oil company.

The villagers are seeking compensation for two oil spills in the Niger Delta that damaged their coastal settlement. The spills, in late 2008, were caused by failures in the Bomu-Bonny pipeline.

In 2011 Shell admitted liability for the disasters but continues to dispute the amount of oil spilled and the extent of the damage caused.

The Nigerian claimants are demanding not only compensation but urgent action by Shell to clean up the damage.

The pre-trial hearing on Friday centred around legal issues – ahead of the main trial starting in May 2015 – including whether the claimants could use the Nigerian Oil Pipelines Act, rather than common law, to claim compensation for the oil spills.

The judge's decision that the OPA applies in effect restricts aggravated and exemplary damages that would otherwise be recoverable using common law.

Another issue was whether Shell should have taken reasonable steps to protect its infrastructure given the foreseeable risk of "bunkering" – the illegal hacking into pipelines to steal oil.

Leigh Day, for the claimants, claimed that under the OPA anyone who suffered damage could seek compensation if they could show Shell was guilty of neglect in failing to "protect, maintain or repair" the pipeline.

Mr Justice Akenhead, president of the technological and construction court, ruled that the OPA did not hold pipeline operators responsible for damage caused by oil theft.

But he added that it was "conceivable" that neglect in the protection of the pipeline that proved to be the cause of preventable damage caused by bunkering "could give rise to a liability", although he ruled this would be "difficult to prove".

The Bodo community is a rural coastal settlement consisting of 31,000 people living in 35 villages. Most of its inhabitants are subsistence fishermen and farmers.

Mutiu Sunmonu, managing director of the Shell Petroleum Development Company of Nigeria, said: "From the outset, we've accepted responsibility for the two deeply regrettable operational spills in Bodo.

"We want to compensate fairly and quickly those who have been genuinely affected and to clean up all areas where oil has been spilled from our facilities, including the many parts of Bodo which have been severely impacted by oil theft, illegal refining and sabotage activities."

Martyn Day, senior partner at Leigh Day who is representing the Bodo community, said: "This is a highly significant judgment. For years, Shell has argued that they are only legally liable for oil spills which are caused by operational failure of their pipelines and that they have no liability for the devastation caused by bunkered oil.

"This judgment entirely undermines that defence and states in clear terms that Shell does have potential liability if it fails to take reasonable steps to protect its pipelines."

ft.com

 

Tags: SHELL, NIGERIA, OIL

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