A Dutch court has ruled that a subsidiary of international oil giant Royal Dutch Shell should be held responsible for a pipeline leak poisoning farmland in Nigeria, as it had failed to take adequate measures to prevent sabotage. In its ruling Wednesday the Hague Civil Court rejected most of the case brought by Nigerian farmers and environmental pressure group Friends of the Earth against Shell, saying pipeline leaks were caused by saboteurs, not Shell negligence.
However, in one case, the judges ordered a subsidiary, Shell Nigeria, to compensate a farmer for breach of duty of care by making it too easy for saboteurs to open an oil well head that leaked on to his land.
It was believed to be the first time a Dutch court has held a multinational's foreign subsidiary liable for environmental damage and ordered it to pay damages. Pressure groups welcomed the judges' decision, saying the ruling opens the door for similar pollution cases against multinationals. Shell hailed the judgment as a victory.
"We are very pleased by the ruling of the court today," said Allard Castelain of Shell. "It's clear that both the parent company, Royal Dutch Shell, as well as the local venture ... has been proven right." The Dutch arm of Friends of the Earth, which represented the Nigerian farmers, welcomed the compensation order for one village, but said it was "stunned" by its defeats in other villages.
The group said the ruling could have implications beyond Nigeria's oil fields.
"The verdict also offers hope to other victims of environmental pollution caused by multinationals," said Geert Ritsema of Friends of the Earth.
The group has always maintained that much of the damage in the Niger Delta can be traced to what it calls poor maintenance of Shell's infrastructure, rather than sabotage, an argument the court rejected.
Lawyers representing another Nigerian community, Bodo, in a legal battle with Shell in British courts cautiously welcomed the Dutch ruling.
"Over many years Shell has denied any responsibility for these types of spills resulting from 'bunkering' or sabotage," lawyer Martyn Day said in a statement.
He called the Dutch court's ruling a major step forward "as it makes Shell aware in no uncertain terms that they have a responsibility to ensure that all steps are taken to ensure the illegal sabotage does not occur."
The level of damages in the Dutch case will be established at a later hearing, but that could be held up as Friends of the Earth said it plans to appeal.
Only one of the Nigerian plaintiffs, Eric Barizaadooh, was in court Wednesday and his claim was rejected by the court, but he said he was happy for the village that won compensation.
Plaintiff Eric Dooh waits for the start of the court case of Nigerian farmers against Shell, in The Hague, Netherlands, Wednesday Jan. 30, 2013. Dutch judges are ruling in a landmark civil action by Nigerian farmers who want to hold oil giant Shell liable for poisoning their fish ponds and farmlands with leaking pipelines. The decision being announced Wednesday could set a legal precedent for holding multinationals responsible for their actions overseas. Lawyers for the four Nigerians from the oil-rich Niger delta argue Shell makes key policy decisions at its Hague headquarters, so the Dutch court has jurisdiction. Photo: Peter Dejong
"For my colleagues who succeeded, that is victory," Barizaadooh said outside court. "Shell is brought to book. I believe this is a revolutionary case."
Shell's local subsidiary is the top foreign oil producer in the Niger Delta, an oil-rich region of mangroves and swamps about the size of Portugal. Its production forms the backbone of crude production in Nigeria, a top supplier to the gasoline-thirsty U.S.
Shell, which discovered and started the country's oil well in the late 1950s, has been heavily criticized by activists and local communities over oil spills and close ties to government security forces. Some Shell pipelines that crisscross the delta are decades old and can fail, causing massive pollution.
The company has begun an effort to improve its standing with local communities in the last decade by building clinics, roads and even natural gas power plants. It blames most spills now on thieves who tap into crude oil pipelines to steal oil.
"The complexity lies in the fact that the theft and the sabotage is part of an organized crime ... that siphons away a billion dollars a month" from Nigeria, Castelain said.
"This is organized crime," he added. In London, the company's share price closed down 0.1 percent to 23.62 pounds.
Nigerian farmers took their battle to make Shell clean up oil damage that destroyed their land to a Dutch court Thursday in a case that could set a precedent for global environmental responsibility.
The four Nigerian farmers, backed by lobby group Friends of the Earth, have brought the Anglo-Dutch oil giant into court thousands of miles (kilometres) from their homes with a civil suit that could open the door for hundreds of similar cases.
"Shell knew for a long time that the pipeline was damaged but didn't do anything: they could have stopped the leaks," lawyer Channa Samkalden told the court, accusing Shell of having "violated its legal obligations".
The case, the first time that a Dutch company is being sued in the Netherlands for alleged damage in another country, relates to oil pollution from 2005 and was initially filed in 2008.
The farmers want Royal Dutch Shell to clean up the mess, repair and maintain defective pipelines to prevent further damage and pay out compensation.
In a landmark ruling, the Dutch judiciary in 2009 declared itself competent to try the case despite protests from Shell that its Nigerian subsidiary was solely legally responsible for any damage.
"I'm here because of the oil leakage that happened in my community in the Shell facilities and destroyed my 47 fish ponds"," Friday Alfred Akpan, from the village of Ikot Ada Udo, told AFP before heading into court.
Nigerian farmers Chief Fidelis A. Oguru-Oruma (left) and Eric Dooh in court in The Hague (AFP/ANP, Robin Utrecht)
"The destruction of the fish ponds caused serious damage to me in person and my family because I make use of that fish to take care of myself and my children."
Oil pollution has ravaged swathes of the Niger Delta in the world's eighth largest oil producer, which exports more than two million barrels a day.
Shell is the biggest producer in the west African country, where it has been drilling for over 50 years.
"We believe that the claims are unsubstantiated," Allard Castelein, Shell's Vice President Environment, told AFP at the court.
"The spills that happened in the years between 2004 and 2007 all happened as the consequence of illegal theft and sabotage."
"We say there was a spill, it wasn't our fault, we cleaned up nevertheless and that's what happened," Castelein said.
Environmental groups accuse Shell of double standards and treating spills in Nigeria differently from pollution in Europe or North America.
But Castelein fended off the accusations, saying: "We do have the same standards in Europe and Nigeria."
Shell's lawyer Jan de Bie Leuveling Tjeenk said: "Friends of the Earth believe that this trial will provide a solution to this problem but this is not the case."
Friends of the Earth however said the scale of Nigeria's oil pollution was twice that of the five million barrels dumped in the Gulf of Mexico after the explosion on BP's Deepwater Horizon rig in 2010, in the biggest ever marine spill. Shell disputes the Nigerian figure and puts it much lower.
The UN's environmental agency last year released a landmark report, saying decades of oil pollution in the Niger Delta's Ogoniland region may require the world's biggest ever clean-up and could take up to 30 years.
Jonathan Verschuuren, an environmental law expert at the Netherlands' Tilburg University, said that a win for the farmers would set a precedent.
"If they win the case then it will be an important step that multinationals can more easily be made answerable for the damage they do in developing countries," Verschuuren told AFP.
"Until now it's been very tricky because it's difficult to bring cases against these companies in developing countries themselves, because the legislation is often not advanced or properly applied," he said.
Environmentalists want the Netherlands, and other Western nations, to pass laws forcing companies to enforce the same environmental responsibility standards abroad as at home.
Judges said they hoped to hand down a ruling next January 30.
The justices said they would hear an appeal by a group of Nigerians who argue they should be allowed to proceed with their lawsuit accusing the oil company of aiding the Nigerian government in human rights violations between 1992 and 1995.
The plaintiffs, families of seven Nigerians who were executed by a former military government for protesting Shell's exploration and development, sought to hold the company liable under a 1789 U.S. law called the Alien Tort Statute.
A U.S. appeals court in New York dismissed the lawsuit on the grounds that corporations cannot be held liable in this country for violations of international human rights law.
Attorneys for the plaintiffs appealed to the Supreme Court, arguing that review was necessary because appeals courts around the nation have issued conflicting rulings on the issue of corporate liability under the more than 200-year-old law.
The Supreme Court is expected to hear arguments in the Shell case early next year, with a decision likely by June.
Attorneys for the plaintiffs said the case raised a host of issues of national and international importance.
The Alien Tort Statute states that U.S. courts shall have jurisdiction over any civil lawsuit "by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."
'ONLY OPPORTUNITY' TO DETER UNLAWFUL CONDUCT
"For the victims of human rights violations, such cases often provide the only opportunity to obtain any remedy for their suffering and to deter future unlawful conduct," attorney Paul Hoffman said in the appeal.
He said the ruling created blanket immunity for companies engaged or complicit in universally condemned human rights violations, including torture and executions.
In the Shell case, the lawsuit accused the company of violations related to the 1995 hangings of the activist Ken Saro-Wiwa and eight other protesters by Nigeria's then-military government.
Shell has denied the allegations that it was involved in human rights abuses in Nigeria.
Shell's attorney, Rowan Wilson, told the Supreme Court that the appeals court had been correct in dismissing the lawsuit and that further review of the case was unwarranted.
The Alien Tort Statute allows foreigners to sue in U.S. courts over international law violations.
It has been increasingly used in the last 20 years by plaintiffs to sue corporations for alleged involvement in human rights abuses overseas. There have been a number of recent U.S. appeals court rulings on the issue.
In one case, Indonesia villagers accused Exxon Mobil Corp's security forces of murder, torture and other abuses between 1999 and 2001 while in another case Firestone tire company was accused of using child labour in Liberia.
Many of the lawsuits over the past 20 years have been unsuccessful, though there have been a handful of settlements, attorneys involved in the Shell case said.
The Supreme Court also agreed to hear another case that raised a similar issue. The court will consider whether the Torture Victim Protection Act applied only to persons or also applied to the Palestine Liberation Organization.
The case involved a lawsuit against the PLO by the widow and sons of a U.S. citizen, Azzam Rahim, a Palestinian born and raised in the West Bank, who allegedly was tortured and killed in 1995 at a prison in Jericho. The PLO has denied the allegations.
The Supreme Court cases are Esther Kiobel v. Royal Dutch Petroleum Co, No. 10-1491, and Asid Mohamad v. Jibril Rajoub, No 11-88.
(Reporting by James Vicini, Editing by Gerald E. McCormick, John Wallace, Dave Zimmerman)
Nigerian authorities were putting emergency measures in place on Thursday to prevent an oil spill from a Royal Dutch Shell facility, the biggest leak in Nigeria for more than 13 years, washing up on its densely populated coast. Tuesday's spill, which Shell said happened while a tanker was loading oil, has led to the complete shutdown of the company's 200,000 barrel per day (bpd) Bonga facility, about 120 kilometers off the coast of the West African nation. Shell's pipelines in Nigeria's onshore Niger delta have spilled several times, which it usually blames on sabotage attacks and oil theft, though it did not in this case.
"It's comparable to what happened in 1998 with the Exxon Mobil spill, in terms of the quantity that has been spilled, it's the biggest since then," Peter Idabor, director of Nigeria's National Oil Spill Detection and Response Agency (NOSDRA), told Reuters by telephone from the capital Abuja.
An oil spill on the shores of the Niger Delta swamps. Shell has said the recent oil spill is likely to be worst in a decade. Photograph: Pius Utomi Ekpei/AFP/Getty Images
Image by: HANDOUT / REUTERS
In 1998, some 40,000 barrels leaked from a ruptured Mobil pipeline off the coast of Nigeria. "We have in the region of 20,000 barrels that has been spilled into the environment ... and is clearly moving to our coastline," Idabor added. He said 210 tons of dispersants were on the way to deal with the spill and that oil booms - containers made from sheets of plastic that trap the oil to stop it reaching the shore - had been deployed. "We are a lot more prepared than we were in 1998," he said. But he added that local fishermen living along the coast had been advised to move away. "For the fishermen who are there, there is a lot of wave action. Of course, our advice would be for them to move away up to areas of water less affected."
The Anglo-Dutch oil major said "less than 40,000 barrels of oil" had leaked into the ocean in this latest spill. The flow of oil had now halted, a company spokesman said on Wednesday. Around half of the spilled oil had now dissipated due to natural dispersion and evaporation, Shell said in a statement on Thursday. Bonga accounts for around 10 percent of monthly oil flows from OPEC member Nigeria, the continent's largest exporter of crude oil, according to Reuters data.A Shell spokesman said on Thursday there is not yet any restart date for the field and that it will not resume production until after both an investigation and any necessary repairs have been completed.
"To accelerate the clean-up at sea, we are deploying vessels with dispersants to break up the oil sheen at sea. We are mobilizing airplanes that will support the vessels in this operation," Shell's country chairman in Nigeria, Mutiu Sunmonu said, after apologizing for the leak the previous day. The oil major's website has a series of photographs taken at the site, showing a rainbow-colored oil sheen on the ocean's surface. BP's Macondo well ruptured in April last year, causing nearly 5 million barrels of oil to spew into the sea in what was the worst U.S. marine oil spill.
Bonga was due to load around 161,000 bpd on five tankers in January, according to oil loading programs and its closure has boosted prices for other Nigerian crude grades. A U.N. report in August criticized Shell and the Nigerian government for contributing to 50 years of pollution in a region of the Niger Delta which it says needs the world's largest ever oil clean-up, costing an initial $1 billion and taking up to 30 years.
(Editing by James Jukwey)