Royal Dutch Shell agrees to pay Nigerian community $84 million

JANUARY 7, 2015

Oil giant, Royal Dutch Shell, has agreed to pay $84 million to residents of the Bodo community in the Niger Delta, in Nigeria, who suffered during its two oil spills. Lawyers for the 15 600 Nigerian fishermen affected say their clients will receive $3 300 each for losses caused by the spills.

The remaining $30 million will be left for the community, which was also devastated by the two massive oil spills in 2008 and 2009. The spills reportedly affected thousands of hectares of mangrove in south Nigeria.

An Amnesty International report into the effects of the oil spills in Bodo said that the spills had caused headaches and eyesight problems for residents.

The price of fish, a local staple food, rose as much as tenfold and many fishermen had to find alternative ways to make a living, the report added. A separate UN study said local drinking water sources were also contaminated.

The settlement was announced by Royal Dutch Shell’s Nigerian subsidiary, SPDC.

"From the outset, we've accepted responsibility for the two deeply regrettable operational spills in Bodo," SPDC managing director, Mutiu Sunmonu said.

Shell said that both spills were caused by operational failure on its Trans Niger Pipeline, which takes oil from its fields to the export terminal at Bonny on the coast. It carries about 180,000 barrels of oil per day.

The company, however, maintains that the extent of environmental pollution in the area was caused by "the scourge of oil theft and illegal refining".

The law firm representing the Nigerian fishermen and their community, Leigh Day, described it as one of the largest payouts to an entire community after devastating 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," the firm said in a press release confirming the development.

The deal, which ends a three-year legal battle, is the first of its kind in Nigeria, it added.

Leigh Day also said that Shell had pledged to clean up the Bodo Creek over the next few months.