In a victory for environmentalists and Nigerians whose land was polluted by oil leaks, a Dutch appeals court ordered energy giant Shell’s Nigerian subsidiary on Friday to compensate two farmers for damage to their land caused by leaks in 2004 and 2005.
Friends of the Earth Netherlands director Donald Pols hailed the ruling as a victory for small communities hurt by huge companies.
“Up until this morning, Dutch multinationals could act with impunity in developing countries.. and this has changed now,” Pols said. “From this moment onwards, Dutch multinationals will be held accountable for their activities and their actions in developing countries. And that’s an enormous victory for the rights of law globally.”
The amount of compensation will be established at a later date.
The Hague Court of Appeal held Shell’s Nigerian subsidiary liable for two leaks that spewed oil over an area of a total of about 60 football pitches (soccer fields) in two villages, saying that it could not be established “beyond a reasonable doubt” that saboteurs were to blame. Under Nigerian law, which was applied in the Dutch civil case, the company is not liable if the leaks were the result of sabotage.
The Hague appeals court ruled that sabotage was to blame for an oil leak in another village; however, it said that the issue of whether Shell can be held liable “remains open” and the case will be continued as the court wants clarification about the extent of the pollution and whether it still has to be cleaned up.
The court also ruled that Dutch-based mother company Royal Dutch Shell and its Nigerian subsidiary must fit a leak-detection system to a pipeline that caused one of the spills.
The decision, which can be appealed to the Dutch Supreme Court, is the latest stage in a case that is breaking new legal ground in how far multinationals in the Netherlands can be held responsible for actions of their overseas subsidiaries.
In a written reaction, Shell Petroleum Development Company of Nigeria Limited expressed disappointment, saying it continued to believe that sabotage caused the spills in the villages of Oruma and Goi.
The Nigerian subsidiary added: “Like all Shell-operated ventures globally, we are committed to operating safely and protecting the local environment.” SOVEREIGNPH