As the UK Supreme Court considers a case against Royal Dutch Shell by two Niger Delta communities, Linus Unah looks at a long history of failure to properly regulate Nigeria’s oil sector
On 23 June, the UK Supreme Court heard an appeal by the Ogale and Bille communities of the Niger Delta against Royal Dutch Shell (RDS), reopening the possibility that the oil multinational could be found responsible in the English courts for pollution caused by the pipelines of its Nigerian subsidiary.
After decades of operating in the Nigerian oil industry, the Anglo-Dutch major is no stranger to legal challenges stemming from its alleged impact on the environment. For decades, communities in the Niger Delta have alleged oil spills and the contamination of water bodies, groundwater, agricultural land, mangroves and fish habitats.
In 2016, the Ogale and Bille communities began legal action in the UK with law firm Leigh Day. The communities alleged systematic and ongoing oil pollution because of Shell’s operations. The Ogale community is a rural community of about 40,000 people situated in Ogoniland in the Niger Delta, while the Bille community in is populated by nearly 13,000 residents.
The communities took their case to the English courts on the basis that RDS, which is headquartered in London, is legally responsible for the environmental failures of the Shell Petroleum Development Company of Nigeria (SPDC). According to Leigh Day, such cases can take up to 20 years to resolve in the Nigerian courts.
SPDC is the operator of a joint venture agreement involving the government-owned Nigerian National Petroleum Corporation, which holds 55%, Shell 30%, Total Exploration and Production Nigeria Limited 10% and Nigerian Agip Oil Company limited 5%, according to the SPDC website. It has more than 6,000km of pipelines and flowlines, 87 flowstations, 8 gas plants and more than 1,000 producing wells and employs more than 4,500 people.
In January 2017, the UK High Court ruled that RDS was not responsible for the harm because it was merely a holding company which did not exercise any control over SPDC. That decision was appealed and, while the judges agreed that the High Court judgment was flawed, the Court of Appeal held by majority in February 2018 that there was insufficient evidence of “operational control” by RDS to hold it liable.
However, in April 2019, the UK’s Supreme Court found that a Zambian community could sue London-headquartered global metals and mining company Vedanta Resources for the actions of its Zambian subsidiary, Konkola Copper Mines, over alleged toxic emissions. This created a precedent that allowed a further appeal by the Ogale and Bille communities to be pursued in the Supreme Court.
“The ruling in the Vedanta case clarified the law in this area and we hope the Supreme Court will agree that our clients should be able to hold Royal Dutch Shell to account in the English courts for the devastating damage Shell has caused to their communities over many years,” Daniel Leader, solicitor at law firm Leigh Day, said in a statement.
The 23 June hearing was livestreamed as judges listened to submissions from lawyers representing both sides. SPDC has argued that the case should be heard in Nigeria. The court’s ruling is expected before the end of this year or early next year, a court spokeswoman told Reuters.
“We have always been adamant that the only hope for the people of Ogale to get justice for decades of pollution visited upon us by the acts of Royal Dutch Shell is through the Courts of the United Kingdom,” His Royal Highness King Okpabi, Paramount Ruler of the Ogale Community, said in a statement.
Lack of community engagement
The ongoing case mirrors a larger problem in the relationship between oil-producing communities in the Niger Delta and oil exploration companies. SPDC blames crude oil theft, illegal refining, and sabotage of oil pipelines for the oil spills. Militant groups have attacked facilities, disrupting production and causing significant revenue losses. The impact on the wider Nigerian economy, which is heavily reliant on oil, has been dire. Nigeria lost $38.5bn to oil theft between 2009 and 2018, according to the Nigeria Extractive Industries Initiative.
SPDC attributed nearly 90% of oil spills on the SPDC facilities in 2017 to “illegal activities” but admitted that spills also occur due to “operational reasons”.
But campaigners say a lack of proper community engagement is detrimental to oil firms’ operations in the delta.
A broad range of environmental legislation and guidelines have been adopted and updated over the past four decades to reduce oil spills and pollution. Several government agencies have been appointed to regulate the sector, the most recent of which is the National Oil Spill Detection and Response Agency (NOSDRA) set up in 2006.
The act establishing NOSDRA mandates companies to report an oil spill within 24 hours or face a fine of N500,000 ($1,290) for each day of failing to notify authorities. Delays with commencing clean-up of the affected site can attract an additional fine of N1m. NOSDRA reports that hundreds of court cases are filed yearly over oil spills and pollution, but the wheels of justice grind slowly for communities seeking justice.
Erabanabari Kobah, an environmental scientist and campaigner in the Niger Delta, says that oil companies take advantage of weak institutions and lack of strict enforcement to operate with “negligence”.
He blames cosy relationships between oil companies and government officials and says this has affected enforcement and allowed a lack of accountability and transparency to flourish.
“The level of recklessness is appalling… The more we extract oil, the more the environment gets into trouble, the more the means of livelihood is taken away from the people,” he says.
The Stakeholder Democracy Network (SDN), a local nonprofit supporting communities affected by oil spills and pollution, has argued that when government agencies regulating the oil industry are heavily reliant on production for revenue there can be a reluctance to enforce environmental restrictions.
“If the regulators, or indeed the [petroleum] ministry, are dependent on oil for revenue in any way, situations may arise where the regulators may be reluctant to enforce ‘best practice’ because enforcement may reduce its own income,” the SDN wrote in a report.
The government’s response to the crisis came on the back of a 2011 United Nations Environment Programme (UNEP) report that recommended an initial fund of $1bn to commence the clean-up of affected sites which it said could take up to 30 years to be fully recovered.
In 2012, Nigeria’s federal authorities established the Hydrocarbon Pollution Remediation Project (HYPREP) to implement the UN’s recommendations. In 2017, the project was rebranded and placed under the environment ministry. The SPDC joint venture provided $10m to enable HYPREP to begin the clean-up process.
In late June this year, Isa Wasa, HYPREP’s head of community engagement, said clean-up has started in some 21 sites and is due to be completed this year. Wasa also said the project has provided livelihood training and equipment, fixed water projects, conducted health interventions, and created jobs for young people in the region.
However, a recent report published by Amnesty International and other groups cited a November 2019 UNEP report that said “HYPREP is not designed, nor structured, to implement a project as complex and sizable as the Ogoniland clean-up.”
The report, No Clean Up, No Justice, which was published in late June, found that the 21 sites undergoing clean-up represent only 11% of the total affected area identified by UNEP.
“The efforts that have been made have been too little, too weak and have not resulted in effective clean up,” the report alleges.
Last year, Premium Times, a local online newspaper, found that nearly all the 16 firms contracted to start the initial phase of the clean-up lacked experience in remediation of oil spills.