Court of Appeal in The Hague rules the multinational’s Nigerian subsidiary Shell must payout over oil spills.
A Dutch court has ordered the Nigerian subsidiary of Shell to pay compensation over oil spills in Nigeria’s Niger Delta, a ruling which could pave the way for more cases against multinational oil firms.
The Court of Appeal in The Hague ruled that the Nigerian arm of the British-Dutch company must issue payouts over a long-running civil case involving four Nigerian farmers who were seeking compensation, and a clean-up, from the company over pollution caused by leaking oil pipelines.
It held Shell’s Nigerian subsidiary liable for two leaks that spewed oil over an area of a total of about 60 football pitches in two villages, saying that it could not be established “beyond a reasonable doubt” that saboteurs were to blame.
The Hague appeals court ruled that sabotage was to blame for an oil leak in another village however, it said that the issue of whether Shell can be held liable “remains open” and the case will be continued as the court wants clarification about the extent of the pollution and whether it still has to be cleaned up.
Under Nigerian law, which was applied in the Dutch civil case, the company is not liable if the leaks were the result of sabotage.
“Shell Nigeria is sentenced to compensate farmers for damages,” the court said in its ruling, which can be appealed via the Dutch Supreme Court.
The amount of compensation will be established at a later date. The court did not specify how many of the four farmers would receive compensation.
The court did not hold Shell’s parent company, which is headquartered in the Netherlands, directly responsible.
However, it ruled that Shell’s parent company and its Nigerian subsidiary must fit a leak-detection system to a pipeline that caused one of the spills.
Although only Shell’s Nigerian subsidiary was found responsible, the decision could pave the way for more environmental cases against the company.
The verdict would be greeted with “relief and joy” by farmers in Nigeria and could “open the floodgates” for many other similar cases,A analyst said.
“Hundreds of people have queued up to sue shell for contaminating the Niger Delta,” analyst said, citing cases brought against Shell in the UK and the Netherlands.