Court Okays Suit Against Shell in the U.K

LONDON—Two Nigerian communities can sue Royal Dutch Shell PLC’s Nigerian unit in the U.K. over oil spills in the West African country, a London court ruled Wednesday, testing whether energy companies can be held liable in their home country for events elsewhere.

The lawsuits, filed with the London High Court, are the latest international litigation to face Shell for environmental damage stemming from its Nigerian operations. The Anglo-Dutch company reached a £55 million ($77.4 million) settlement in a similar U.K. lawsuit brought by the Niger Delta-based Bodo community in January 2015. It also is being sued in the Netherlands in a separate case over Nigerian oil spills.

The firm’s local subsidiary, Shell Petroleum Development Company of Nigeria Limited, or SPDC, has been plagued by frequent spills that environmental groups and nongovernmental organizations say have destroyed Niger Delta fishing grounds and polluted water systems. According to figures published by Shell, oil spills from its operations in Nigeria amounted to around 48,000 tons between 2008 and 2014.

Shell says the spills are primarily caused by oil thieves who sabotage pipelines. The company says it cleans up any environmental damage regardless of the cause.

A spokesperson for SPDC said in an email Wednesday that the cases should be tried in Nigeria and that it would challenge the jurisdiction of English courts.

“We believe that allegations concerning Nigerian plaintiffs in dispute with a Nigerian company, over issues which took place within Nigeria, should be heard in Nigeria,” the email said.

The communities’ lawyers said they are suing in the U.K. because the oil spills have persisted for decades in Nigeria without being addressed.

“The Nigerian courts can’t deal with these cases,” said Daniel Leader, a partner at law firm Leigh Day, which is representing the communities. “This would clearly be a very important precedent because it would mean that Shell could be held to account, not only in Nigeria, but also in the jurisdiction of the parent company for its environmental record.”

This isn’t the first time African communities have looked to international courts in environmental cases. In the Netherlands, a Dutch appeals court ruled in December that four Nigerian farmers and Friends of the Earth Netherlands could sue Shell there in relation to separate oil spills.

Shell has operated in Nigeria for nearly 80 years and SPDC produces around 39% of Nigeria’s oil, pumping it through a web of pipelines in the oil-rich Niger Delta.

The new cases against Shell in London relate to the Ogale and Bille communities in the Niger Delta.

The Ogale community alleges that it has been subject to repeated oil spills since at least 1989 that have destroyed farming and fishing in the area and left the community without clean drinking water. The community is located in an area known as Ogoniland where Shell was forced to abandon production in 1993 because of community protests, but a 2011 UN investigation found the area remained seriously polluted.

“We hope at last this case will force Shell clean up,” Ogale’s ruler Emere Godwin Bebe Okpabi said in a press release issued by Leigh Day.

In Bille, the community’s lawyers say oil leaks from a Shell pipeline have damaged thousands of hectares of mangrove and destroyed the fishing grounds they rely on for their livelihood.

The SPDC statement Wednesday said both Bille and Ogale are in areas heavily affected by oil theft and pipeline sabotage and that its access to Ogale has been limited by violence and threats to staff in the area. The company said it is also working with the Nigerian government and other stakeholders to address the recommendations made in the 2011 UN report.

Idris Musa, the director for oil field assessment at Nigeria’s National Oil Spill Detection and Response Agency, declined to comment on the case.

A spokesman for Nigeria’s state oil company, the Nigerian National Petroleum Co. wasn’t immediately able to comment.

—Benoit Faucon contributed to this article.

– WallStreetJournal

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