AllAfrica.com: $1.5bn Compensation: Shell to Sue Senate: "SHELL Petroleum Development Company (SPDC) Nigeria Limited may take the National Assembly to court if the Senate forces it to pay $1.5 billion compensation to Ijaw communities for alleged environmental degradation." (ShellNews.net)
Daily Champion (Lagos)
By Sopuruchi Onwuka
Posted 1 September, 2004
SHELL Petroleum Development Company (SPDC) Nigeria Limited may take the National Assembly to court if the Senate forces it to pay $1.5 billion compensation to Ijaw communities for alleged environmental degradation.
The Senate had last week, adopted the recommendation of an advisory body that the multinational firm should pay for the environmental impact of its decades of oil exploration and production in the Niger Delta.
Shell operates Nigeria's biggest exploration and production joint venture with the Nigerian National Petroleum Corporation (NNPC) as the principal partner representing government's 55 per cent interest.
Shell holds 30 per cent in the joint venture while other multinationals, Total and Agip, hold 10 per cent and five per cents respectively.
Senate's resolution did not, however, specify whether the compensation would be paid by the operator or the joint venture.
Shell said it had not been notified of the resolution, but Daily Champion gathered weekend that the oil giant and its joint venture partners have mobilised their lawyers to determine the validity and consequently the enforceability of the order.
A Shell official who spoke informally to Daily Champion on telephone, said the resolution was not an Act of the National Assembly and therefore, unenforceable.
He said the Senate did not bother to determine whether the claims of environmental degradation were genuine or not "before adopting an armchair decision" by an advisory council.
The official said the National Assembly might be inadvertently setting "a dangerous precedence" in the already overheated Nigerian operating environment.
"Such spills as contained in the communities' claims never occurred; all cases of spills in our operations are notified the appropriate industry regulators including the DPR and NAPIMS who supervise remediation activities in line with best industry practices," the source explained.
Shell had been the butt of adverse campaigns by activists in the Niger Delta who constantly claimed that oil production has impacted negatively in their environment.
Such protests and agitations usually target financial compensation.
Shell dominates Nigeria's on-shore oil production operations making it easily targeted by the restive elements in the area.
Other multinational operators have most of their installations in the shallow and deep offshore, making them less vulnerable to community hostilities and blackmail.
Chevron, another oil multinational recently denied claims by Ilaje community of Ondo State that spills from the facilities impacted negatively on the environment.