Shell Ordered to Pay Compensation Over Nigerian Oil Spills
January 29 2021 - 01:39PM
Dow Jones News
By Sarah McFarlane
LONDON -- Royal Dutch Shell PLC's Nigerian subsidiary has been
ordered by a Dutch court to pay compensation for oil spills in two
villages, a ruling that some lawyers say could encourage further
cases against multinationals for pollution abroad.
The ruling against the energy giant is the latest step in a
yearslong legal tussle over the case, which was first lodged in
2008 by four Nigerian farmers and Friends of the Earth Netherlands.
They had accused Shell and its Nigerian subsidiary of polluting
fields and fish ponds through pipe leaks in the villages of Oruma
and Goi.
In its ruling Friday, the Court of Appeal in the Hague also
ordered Shell to install equipment to safeguard against future
pipeline leaks. The amount of compensation payable related to the
leaks, which occurred between 2004 and 2007, is yet to be
determined by the court.
The case establishes a "duty of care for the parent company to
play a role in the pollution abroad, in this case by having the
duty to make sure there is a leak-detection system," said Channa
Samkalden, lawyer for the Nigerian farmers and Friends of the Earth
Netherlands.
Shell argued that the leaks were caused by sabotage. In a
statement following Friday's ruling, the company said it was
"disappointed that this court has made a different finding on the
cause of these spills." Shell didn't say whether it would appeal
against the verdict.
In recent years there have been several cases in U.K. courts
related to whether claimants can take matters to a parent company's
jurisdiction. In 2019, the U.K. Supreme Court ruled that a case
concerning pollution brought by a Zambian community against Vedanta
Ltd. in relation to a copper mine could be heard by English
courts.
"It established that a parent company can be liable for the
actions of the subsidiary depending on the facts," said Martyn Day,
partner at law firm Leigh Day, which represented the Zambians.
Friday's case isn't the first legal action Shell has faced
related to pollution in Nigeria. In 2014, the company settled a
case with over 15,000 Nigerians involved in the fishing industry
who said they were affected by two oil spills, after claims were
made to the U.K. High Court. Four months before the case was due to
go to trial Shell agreed to pay 55 million British pounds,
equivalent to $76 million.
Shell is also awaiting a U.K. Supreme Court ruling in a case in
which some 42,500 Nigerians alleged the U.K. parent company has a
duty of care to individuals affected by oil leaks from pipelines
that its subsidiary operates. It isn't clear when the judgement
will be made.
Friday's verdict tells oil majors that "when things go wrong
they will be held to account and very likely held to account where
their parent company is based," said Mr. Day, adding that the
ruling could spark more such actions.
Write to Sarah McFarlane at sarah.mcfarlane@wsj.com
(END) Dow Jones Newswires
January 29, 2021 13:24 ET (18:24 GMT)
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