Shell to Pay $16M to Nigerian Farmers Over Oil Damage

Shell, a global energy and petrochemical group, agreed to pay out sixteen million dollars (£13 million) to four Nigerian farmers and their villages as compensation for damages allegedly caused by oil spills from the company’s pipelines.

This comes after negotiations between Shell and Friends of the Earth, an international environmental campaign group. In 2021, a Dutch court ruled that the Nigerian branch of Shell was responsible for the oil spill damages that occurred between the years 2004 to 2007.

According to a joint statement by both parties involved in negotiations, compensation will be given based on “no admission of liability,” and a clause explicitly specifies that nothing in the agreement amounts to an admission of guilt.

From 2005 until early this year, Shell’s headquarters were in The Hague, Netherlands. Campaigners hailed the 2021 court decision, as it was the first time a multinational was deemed legally responsible for the actions of a subsidiary.

“We appreciate this compensation; we can build up our community again,” Eric Dooh, the son of one of the farmers who launched the case in 2008 alongside the Dutch branch of Friends of the Earth, said. “We can start to re-invest in our living environment.”

For years, the Nigerian oil industry has been linked to numerous environmental damages which have also harmed oil-hosting communities themselves. Prior to the court ruling, Shell had argued that the leaks from its pipelines were a result of sabotage.

Shell’s oil damage—an achievement for environmentalists

According to reports by the BBC, although compensation is not much—given the circumstances and extent of damages—this legal development is considered a milestone for the environmental protection of rural communities in general and especially for those across the region of the Niger Delta.

Nevertheless, oil pollution continues to impact the health and livelihoods of many in the communities of Oruma, Goi, and Ikot Ada Udo who are to receive reparations.

The four farmers who initiated the case—Barizaa Dooh, Elder Friday Alfred Akpan, Chief Fidelis A. Oguru, and Alali Efanga—said the leaks from underground oil pipelines had cost them their livelihoods by contaminating land and waterways. Dooh and Efanga passed away before a court decision on the matter was reached, so their sons pursued the case on their behalf.

In last year’s court ruling, Shell was ordered to also set up an early leak detection system in the affected area. This is in addition to the monetary compensation it is required to pay out. A joint statement by Shell and Friends of the Earth indicated that the detection system has now been installed.