Shell Nigeria ordered to pay $1.5 billion in compensation
A very significant case is working its way through the Nigerian legal system. Yesterday, a Nigerian court ordered the giant petroleum multinational Shell to pay $1.5 billion to the Ijaw people of the country's Niger Delta region. The Ijaw have been fighting for six years to be compensated for decades of massive environmental degradation and for more of a share of the oil revenues to stay in the region.
In 2000, the country's National Assembly ordered Shell to compensate the Ijaw; Shell countered that the parliament did not have the authority to issue such an order. But a judge ruled that since both sides had agreed to go before the National Assembly, the order was binding on both sides.
Shell has promised to appeal the ruling, which is no surprise. While $1.5 billion may be a drop in the bucket to a company that made a profit of about $40 billion in the last two years alone, the multinational is surely nervous that this ruling will set a precedent that may be repeated elsewhere in Nigeria or in other countries.
If Shell ultimately is forced to pay the money, it would be one of the few times in the country's history that Nigeria's justice system has worked for the benefit of ordinary citizens.
Dire poverty is a significant problem in Nigeria, despite the fact (or some would argue, because of the fact) that the country's is one of the world's leading oil producers. Activists have been campaigning for years for oil companies operating in the Delta to be less environmentally destructive; the most famous being Ken Saro-Wiwa who was controversially executed in 1995 by the then military dictatorship. The court ruling comes in the midst of an esclating campaign of violence by militants in the Delta against oil installations.
It will be interesting to see what the reaction, if any, will come from Nigeria's president Olesegun Obasanjo (presuming he's not too preoccupied with making himself president-for-life). After all, it was only a week ago when he cited the loss of revenue from African extractive industries to foreign banks as a contributor to poverty on the continent... oil being Nigeria's top extractive industry.
posted by Brian @ Sunday, February 26, 2006
4 comments
4 Comments:
Has there been any evidence presented to this court that proves beyond a doubt that Royal Dutch Shell Ltd. and/or Shell Nigeria deliberately polluted the communities of the Ijaw people in the Niger Delta? The reason that I ask is because if the answer is YES then it should be made public (eventually) so that at least the people of Nigeria can read it.
Interesting that no other oil and gas multinational operating in the Niger Delta was named in the lawsuit or that Nigeria's own Nigerian National Petroleum Company - NNPC, a major joint partner in Shell Nigeria, was not named in this lawsuit. Why not?
I guess this court judgement may deep-six the recent deal with China's CNOOC Ltd. and today's (Feb. 27th) news of the USD$ 600 million deal between U.S. energy firm MDN and the Nigerian government's NNPC?
In other words, I doubt that European energy giant Royal Dutch Shell Ltd. will be "forced" to payout this large amount of money as compensation. A deal will be struck for a much lower sum of money, if any at all.
I will br surpised if SHELL pays fully the 1.5 bilion compensation.
Even if pollution wasn't delibrate, the court can still go ahead and order Shell to pay for "damages"...because this is a civil case, and all the court needs is "preponderance of evidence" that there was pollution because of the activities of Shell. The fact that pollution occurred in an impoverished community even makes it a more difficult case for Shell.
Preponderance of evidence??? I have to look that term up. Hmmm, here we go (Ref: Law.com):
Preponderance of the Evidence
n. the greater weight of the evidence required in a civil (non-criminal) lawsuit for the trier of fact (jury or judge without a jury) to decide in favor of one side or the other. This preponderance is based on the more convincing evidence and its probable truth or accuracy, and not on the amount of evidence. Thus, one clearly knowledgeable witness may provide a preponderance of evidence over a dozen witnesses with hazy testimony, or a signed agreement with definite terms may outweigh opinions or speculation about what the parties intended. Preponderance of the evidence is required in a civil case and is contrasted with "beyond a reasonable doubt," which is the more severe test of evidence required to convict in a criminal trial. No matter what the definition stated in various legal opinions, the meaning is somewhat subjective.
See also: evidence
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Like I said before, I doubt that Royal Dutch Shell will be forced to payup USD $1.5 billion.
I, too, would be shocked if Shell actually ended up paying the full $1.5 billion. However, the important thing, as I see it, is that the precedent be upheld. And that's precisely what concerns Shell probably more so than the actual dollar amount.
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