- Trafigura owes $642.5m in taxes from crude swaps, Alison-Madueke shuns House probe
Ejiofor Alike in Lagos and Damilola Oyedele in Abuja with agency reports
British lawyers wednesday brought fresh claims of damage by oil spills to a London court against Royal Dutch Shell under a renewed scrutiny of the environment record of the oil giant in Nigeria.
UK-based Daily Mail newspaper reported that a British law firm, Leigh Day, which represents the Ogale and Bille communities in the Niger Delta, filed two cases at the High Court in a bid to compel the Anglo-Dutch oil major to clean up the damage caused in the communities and also pay compensation.
The lawyers hope to convince the court that Shell is liable for failing to protect its pipelines in Bille community from damage caused by third parties, which, they said, could mark a “significant expansion” in the firm’s liability.
A 2011 report by the United Nations Environment Programme (UNEP) found that decades of oil pollution in Ogoniland region, where Ogale is located, may require the world’s biggest ever clean-up.
Leigh Day said that Shell, historically Nigeria’s largest producer, has failed to act on the report despite its promises — a claim that was also levelled last year by Amnesty International.
The lawyers argued in a press statement that the 40,000-strong Ogale community continues to live with “chronic levels” of land and water pollution, which has had a devastating impact on its farming and fishing.
In hearings expected to take place later this year, Shell will argue that the two cases should be heard in Nigeria, not in Britain, according to a spokesman for the company’s Nigerian subsidiary, SPDC.
He added that both Bille and Ogale are areas “heavily impacted” by oil theft, sabotage and illegal refining, activities which Shell has long argued are the main causes of pollution in the Niger Delta.
In Ogoniland, he said the company was acting on the UN report through an 18-month clean-up and remediation programme agreed last year with the Nigerian government and community members.
Shell agreed in January 2015 to pay more than $80 million to the Nigerian fishing community of Bodo for two serious oil spills in 2008, following a three-year legal battle brought by Leigh Day in London.
A Dutch court also ruled in December that four Nigerian farmers demanding compensation and a clean-up in four heavily-polluted Niger Delta villages could bring a case against the energy giant in the Netherlands.
UNEP estimated that $1 billion was needed for the first five years of oil clean-up for Ogoniland, where the company operated before it pulled out over two decades ago, following the crisis in the area.
Shell had insisted that its inability to stop the sources of contamination in Ogoni and other areas of operation was due to the persistent oil theft and illegal refining activities in these areas.
The company has also maintained that over 80 per cent of spills in the Niger Delta are caused by illegal refining, crude theft and other forms of sabotage and not equipment failure.
According to the company, the federal government remains the leading body to orchestrate the clean-up and unless the government and the community stop the oil theft and artisanal refining that are dangerous to the environment, it will be difficult for the restoration of the environment to be fully successful.
UNEP had recommended that government should provide security, while the Ogoni people should grant the oil operators access to impacted sites.
However, THISDAY gathered that the government and the Ogonis have not been able to provide the necessary security for any meaningful clean-up exercise to take place in some of the impacted areas.
Shell is said to have attempted to address these problems using the Global Memorandum of Understanding (GMoU)-enabled surveillance of the Trans Niger Pipeline (TNP); alternative livelihood programme; sensitisation/awareness campaign; and frequent over-flight on TNP corridor.
But high youth unemployment and poverty in Ogoniland were identified as major challenges that hampered the clean-up of the area.
This is inspite of the fact that Shell’s youth agricultural entrepreneurial scheme and alternative livelihood programme were targeted at addressing these problems.
According to Shell, land disputes, leadership tussles, community factions and litigations in Ogoniland have fuelled denial of access for remediation.
Meanwhile, the Federal Inland Revenue Service (FIRS) wednesday revealed that international oil trader, Trafigura BV, owes the federal government $642.5 million in unpaid taxes from the crude oil swaps it entered into with the Nigerian National Petroleum Corporation (NNPC).
The House of Representatives ad hoc committee investigating the oil swap deals was informed that the unpaid taxes comprised $613.7 million due in 2010, $2.7 million in 2011, $2.5 million in 2012, $2.4 million in 2013, and $2.2 million in 2014, among other estimates of the FIRS.
The oil trading firm in four years lifted 12.5 million metric tonnes of crude oil without paying taxes to the Nigerian government.
FIRS also revealed that Duke Oil Company Incorporated, a subsidiary of the NNPC, owes the government $4.7 million in taxes from the commissions it made from sub-contracting its contract to three oil trading firms – Ontario Nigeria Ltd, Aiteo Energy Resources, and Talevares Nigeria Ltd.
Trafigura’s Managing Director (West Africa), Mr. James Juslin, who was absent yesterday, had insisted at an earlier session that the firm was not required to pay taxes as it was a non-resident company.
But a director of FIRS, Mr. Olayemi Ajayi, said Trafigura was required to pay taxes to the Nigerian government.
“Resident or not, they must pay tax once income is derived from Nigeria. The law says profits shall be deemed to have been derived from Nigeria once habitually transacting business in Nigeria, even if it does not have a fixed address in Nigeria… By implication, Nigeria is a trading point,” he said.
The position of FIRS came just as the ad hoc committee headed by Hon. Zakari Mohammed (Kwara APC), announced that it would take “appropriate action” against the former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who did not heed its summons to appear wednesday.
Alison-Madueke, who is undergoing treatment in London for breast cancer and is not in possession of her travel passport that is in the custody of the National Crime Authority (NCA) in the UK, did not appear, nor did she send representation to the ad hoc committee to explain her role in the extension of the contracts awarded to Duke Oil and Trafigura for the oil swaps without formal agreements.
The former MD of the Pipelines and Product Marketing Company (PPMC), Mr. Haruna Momoh, was also absent.
“It is unfortunate that they turned down our invitation; anyone who knows them should tell them they are daring the parliament. We have taken note and we are going to take appropriate action,” Mohammed said.
The lawmaker however did not elaborate on what form of appropriate action would be taken.
One Sulaiman Momoh later told the committee that he is the younger brother to the former MD, who he said was absent due to illness. Sulaiman said he had been directed by his elder brother to represent him.
He was however rejected by the committee which said that the investigation was related to the older Momoh’s tenure at PPMC.
Mohammed said: “This is the first time this is happening, that we are having this kind of situation. Tell him we are expecting him, we hope he gets well soon, but he needs to appear. We can take the documents he sent, but he has to defend them as the author.”
Also, popular lawyer and human rights activist, Mr. Femi Falana (SAN), made a brief appearance at the hearing.