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Shell to pay $83 million as compensation for Nigeria oil spills
Oil major, Royal Dutch Shell, has agreed to pay compensation to thousands of residents of the Bodo community in Nigeria’s crude-rich Niger River delta region for two “highly regrettable” oil spills in 2008.
Shell will pay a total of US$83.3 million with “an individual payment to each claimant who accepts the settlement agreement in compensation for losses arising from the spills,” the oil company said in a statement. The settlement follows a 3-year legal tussle between Shell and 15,600 Nigerians from Ogoniland, mostly fishermen, in court.
“From the outset, we have accepted responsibility for the two deeply regrettable operational spills in Bodo,” Mutiu Sunmonu, managing director of Shell’s Nigerian unit, said in the statement. “We have always wanted to compensate the community fairly and we are pleased to have reached agreement.”
The compensation is split US$53 million for individuals and US$30 million for the benefit of the entire community. Earlier attempts to come to a settlement failed due to “grossly exaggerated” claims which exceeded US$453 million at one stage, Shell said.
Shell said it would soon begin work to clean up the spill sites after the agreement was reached.
Hundreds of spills occur every year in Nigeria, Africa’s top oil producer and largest economy, damaging the environment and destroying the livelihood of fishing and farming communities in the delta region. Pipeline ruptures can be caused by corrosion, poor maintenance and equipment failure.
Shell, the biggest oil producer in Nigeria, has faced criticism from locals who say it pollutes the environment. In 2009, the company agreed to pay US$15.5 million to settle U.S. lawsuits brought by Nigerians representing the delta’s Ogoniland area. It denied wrongdoing as part of the settlement.
“While the pay-out is a long awaited victory for the thousands of people who lost their livelihoods in Bodo, it should not have taken 6 years to get anything close to fair compensation,” Audrey Gaughran, director of global issues at Amnesty International, said in an e-mailed statement. “If Shell had not been forced to disclose this information as part of the legal action, the people of Bodo would have been completely swindled.”
