Breaking: Oil giant Shell may face fresh wave of oil spill claims

18 Jun 2012 admin

In this summary of the historic first hearing in Bodo v Shell, Platform reveals that a growing wave of oil spill claims could be on the horizon, exposing the oil giant to major financial liabilities.

Shell showed little sign of remorse at its first appearance before a UK court after causing “devastating” oil spills in Nigeria. Central to the case is the extent and impact of the pollution from two major spills in the town of Bodo, Rivers State, Nigeria. The claimants, represented by Leigh Day & Co and Matrix Chambers, allege that some 500,000 barrels of oil spilled into the creeks and land in the fishing village of Bodo, destroying the livelihoods of tens of thousands of people and affecting an area of mangroves and waterways equivalent in size to the amount of coastline affected by BP’s Deepwater Horizon disaster.

So far, so bad. But no lawsuit against a corporate defendant would be complete without hours of wrangling over legal technicalities. Bodo v Shell has proved no exception, despite being a relatively straightforward case. Shell has admitted liability, but has refused to pay adequate compensation to the victims of the spill.

Late last Thursday Shell raised two further issues: jurisdiction and the effect of ongoing proceedings in Nigeria.

On jurisdiction, Shell’s disregard for the victims of oil spills in the Niger Delta was on display, with the company arguing that the Bodo community lacked the status to bring a claim in the courts. According to Shell's lawyer, “the Bodo community doesn't legally exist… It's like beginning an action on behalf of a mangrove". Naturally, the claimants disagree.

This was not the first time that Shell has shown contempt for the people of Bodo since it caused the spills. In May 2009, the compensation Shell offered to Bodo consisted of bags of rice, sugar and beans and other relief materials, plus a sum of £3,500. For a town of around 49,000 people, this was wholly inadequate by any stretch of the imagination.

On the second point, the court did not deal directly with the issue of the ongoing proceedings in Nigeria; what happens to those claims will need to be decided later on.

So the upshot of Shell’s arguments was to delay the granting of a Group Litigation Order to the Bodo community. Over three years after Bodo was devastated by Shell’s pollution, the community of Bodo will have to wait longer before they know exactly who in the community can go ahead and sue. As Bodo resident, Patrick Naagbanton put it, “we won’t be holding our breath.”

However, there may be a sizeable glimmer of hope on the horizon. The claimants allege that “the creeks belonging to the neighbouring communities of Lewe, Bomu, Goi, Mogho, Kpor and Gbe were all impacted” by Shell’s two spills in Bodo. In court it was revealed that the communities surrounding Bodo are seeking to bring fresh claims which are expected to form part of the main litigation. This could expand the size of the claim, already estimated at $410 million, many times over. With Shell already anxious to see “costs kept to an absolute minimum”, the Bodo case represents a growing financial liability of considerable proportions.

The case continues. For court documents, click here.


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