Court orders Shell Nigeria to pay out over oil leak

Published on 31/01/2013 01:11

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 yesterday, the Hague Civil Court rejected most of the case brought by Nigerian farmers and environmental pressure group Friends of the Earth against Shell, saying the leaking pipelines were caused by saboteurs, not Shell negligence.

However, in one case, the judges ordered 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,” 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.”

The group maintains 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.