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Dutch Court Ruling May Expose Oil Firms to New Suits

05 Feb 2013

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There are concerns that oil companies operating in the Niger Delta may face new law suits from their host communities over pollution in the event that Shell Petroleum Development Company (SPDC) pays compensation to the Nigerian farmer, who obtained a judgement from a Dutch Court against the parent company, THISDAY has gathered.

Sources from multinational companies operating in Nigeria told THISDAY that payment of compensation to the farmer would not only expose the companies to new law suits, but also encourage the communities to vandalise the pipelines and cause more pollution.

An official of one the companies alleged that the communities are not really concerned about the impact of pollution, but a desire to collect compensation by any means possible.

“Once you start paying such compensation, there will be more pipeline breaks and more court cases. We have been educating the communities that the money they collect cannot compensate for the damage they cause in their environment but they won’t listen.

“Even when we are still searching for crude oil, we use to cut lines in the bush for seismic studies. But by the time the line checkers come back in the afternoon to lay cables, the communities will mount something saying it is their shrine.

“They will say that we should pay compensation for disturbing their ancestors from their sleep. So, their concern is all about money,” one oil company official, who preferred not to be named, said.

Another official of one of the companies also stated that the Dutch judgement was “advisory” and not “binding” on Shell, adding that if the oil giant is forced to pay, the Nigerian government, through the Nigerian National Petroleum Corporation (NNPC), will pay 55 per cent of the fines, while Shell will account for only 30 per cent.

“Both sides are claiming victory because the court also agreed that majority of the pollution was caused by sabotage. Why do you think Shell will spill oil instead of pumping it into export terminals?
“Why do you think Shell will spend money to produce oil and waste it? Even in cases of pollution caused by operational failure, the communities do not allow the companies to clean up because they want the oil to cause damage, so that they will collect compensation.

“The communities are their own worst enemies. They don’t know that the money is not enough to mitigate the permanent damage done to their farmlands, rivers, fishponds and other sources of livelihood.

“For instance, Benzene, which is a component of crude oil, is very toxic in water,” he explained.

On the issue of support being received by the affected communities from international organisations such as Friends of the Earth, another official of the international oil companies (IOCs) said the international bodies believe the agitation by the communities was genuine because of the visible damage done to their environment.

According to him, Friends of the Earth and other sympathetic organisations believe that like in the Gulf of Mexico, North Sea and the Persian Gulf, pollution in the Niger Delta is caused by the operational activities of oil companies.

“They don’t know that the communities are the cause of the problems. In Europe or America, nobody will go and break a pipeline to spill oil but this is not the situation in the Gulf of Guinea,” he said.

The District Court of The Hague recently rejected four out of five allegations against Shell over oil pollution in the Niger Delta but ruled that the oil major was responsible for one case of pollution and ordered it to pay compensation to the affected farmer, a 52-year-old Friday Akpan from Akwa Ibom State.

The court ruled that the four oil spills at Oruma, Goi and Ikot Ada Udo between 2004 and 2007 which have been the subject of litigation, were caused by sabotage.
However, only in the case of Ikot Ada Udo did the court rule that SPDC could have prevented the sabotage by plugging the well at an early stage.

Tags: Business, Nigeria, Featured, Dutch Court Ruling, oil firms, New Suits

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