9.2.6 Clean-up claim against Shell

The Ijaws, one of the ethnic groups inhabiting the Niger Delta have been campaigning since 2000 for compensation for environmental degradation. With the support of the NGOs Friends of the Earth and Environmental Rights Action, they filed a legal claim for environmental damages against SPDC. The Federal High Court sitting in Port Harcourt rendered judgments on 24 February 2006 ordering the SPDC joint venture to pay US$1.5 billion (corresponding Shell share: US$450 million) in damages as compensation to communities in Bayelsa

State for degrading their creeks and spoiling crops and fishing.1 SPDC has disputed the judgment, stating that most spills are caused by saboteurs trying to steal oil for sale by criminal syndicates on the world market. SPDC also argued that the parliamentary committee that had made the original order in 2000 did not have the power to require payment.2

The dispute was presented to the Lower House of Representatives in 2003 and reviewed by an independent legal advisory panel set up by the Lower House, resulting in the decision that SPDC had to pay compensation. This was approved by the National Assembly in 200 . When the case was subsequently presented to the Federal High Court, Judge Okechukwu Okeke ruled that since both sides had agreed to submit their dispute to the National Assembly, the order was binding on both sides. The Court denied a request from SPDC to postpone the payment and set a deadline to pay the fine. Nonetheless, SPDC appealed the judgment and refused to pay the fine until judgment had been reached by the appellate court. SPDC issued a press statement declaring that it "believes that the appeal has strong grounds as independent expert advice demonstrates that there is no evidence to support the underlying claims. SPDC remains strongly committed to dialogue with the Ijaw People and all its other stakeholders."3

This news triggered a series of attacks on oil installations and kidnappings of foreign oil workers by Ijaw militants who want the oil wealth to benefit the local community. Ijaw leader Ngo Nac-Eteli declared: "if Shell wanted to buy time by taking the case to the appellate court, the company would not be allowed to operate on Ijaw land until the case was settled."

Apart from the appeal, Shell maintains that paying would not help resolve the existing problems: money tends to 'disappear'. In view of the high scores of Nigeria in the Transparency International's Corruption Perception Index4 and a history of disappearing oil revenues at all levels of governance, this point has some merit.