Oil giant Shell’s Nigerian subsidiary is responsible for oil pipeline leaks in the Niger Delta, a Dutch appeals court has ruled.
It was ordered to pay unspecified damages to farmers who have long complained of the poisoning of fish ponds and farmland.
The decision – in a long-running legal dispute between Royal Dutch Shell (commonly known as Shell) and Nigerian farmers – could pave the way for more cases against the Anglo-Dutch energy company.
It follows a landmark case brought by farmers – supported by environmental campaigners from Friends of the Earth in the Netherlands and Nigeria – against Shell in 2013 in a lower court.
Then, the Dutch Hague Civil Court rejected complaints by four farmers and backed Shell’s argument that the spills were caused by sabotage and not poor maintenance of its facilities.
But the court did order subsidiary Shell Nigeria to compensate one of the farmers for breach of duty of care by making it too easy for saboteurs to open an oil pipe.
The lawsuit was seen by activists as a test for holding multinational companies responsible for alleged offences at foreign subsidiaries.
It was originally filed in 2008 in the Netherlands – where Shell has its global headquarters – seeking reparations for lost income from contaminated land and waterways in the Niger Delta region.
Both sides launched appeals in 2013, taking eight years, as the complainants sought to also hold Shell responsible for the spills, while the oil giant said neither it nor subsidiary SPDC (The Shell Petroleum Development Company of Nigeria) were responsible.
The appeals court said on Friday that Shell had not proven “beyond reasonable doubt” that the oil spills had been caused by sabotage, rather than bad maintenance.
“This makes Shell Nigeria responsible for the damage caused by the leaks,” the court said, adding that the amount of compensation to be paid would be established at a later date.
In one case, the Hague Court of Appeal ruled that sabotage was to blame.
Shell was also told it must install a leak detection system on the Oruma pipeline, which caused one of the spills.
The spills concerned were between 2004 and 2007, but pollution from leaking oil pipelines remains a major problem in the Niger Delta.
Friends of the Earth’s Netherlands head, Donald Pols, said: “This is fantastic news for the environment and people living in developing countries. It means people in developing countries can take on the multinationals who do them harm.”
The latest ruling can be appealed in the Dutch Supreme Court.
SPDC expressed disappointment with the verdict, saying in a statement that it continued to believe that sabotage caused the spills in the villages of Oruma and Goi.
“Sabotage, crude oil theft and illegal refining are a major challenge in the Niger Delta,” the company said.
“Indeed, in 2019 around 95% of spill incidents from our operations there were due to such criminal acts. Regardless of cause, we clean up and remediate, as we have done with the spills in this case.”
It added: “Like all Shell-operated ventures globally, we are committed to operating safely and protecting the local environment.”
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