Nigeria: Villagers Reject Shell's Greek Gift as Compensation in Port Harcourt

The dispute over two oil spills in 2008 that caused excessive damage in which Shell says progress has been made on spill cleanup plans came to an end at the court but not a logical one. The villagers rejected an offer of compensation from Royal Dutch Shell for damage done to their livelihoods by oil spills from pipelines operated by the company, their lawyers said.

Aljazeera's Yvonne Ndege visited a community and the extent of the damage shown was almost beyond redemption. A man's whole fish pond was destroyed with his massive investments. He lamented that he who was always giving to many in his community and locality suddenly became a beggar. He said the precarious situation he found himself was now worsened by the actions of Shell which claimed it had embarked on a  cleanup which was at best a kangaroo act.

The failure to reach a settlement means Shell and around 15,000 members of the Bodo fishing communities in southeastern Nigeria remain locked in litigation. Their lawyers said they will now go back to a British court to request a trial timetable. The legal action is being closely watched by the oil industry and by environmentalists for precedents that could have an impact on other big pollution claims against majors.

"We haven't reached agreement on compensation, which is disappointing," a spokesman for Shell's Nigeria unit said. "Nonetheless, we're pleased to have made progress in relation to cleanup," he added, saying measures had been put in place to get remediation work done as soon as possible. A source close to Shell and another source involved in the negotiations told Reuters the company offered total compensation of 7.5 billion naira ($46.3 million).

Leigh Day, the British law firm representing the villagers, said the compensation offer amounted to approximately 1,100 pounds ($1,700) per individual impacted, without giving the number of people it says were affected. "The whole week has been deeply disappointing," said Martyn Day of the London-based law firm, who has been in talks with Shell since Monday in Nigeria's oil hub Port Harcourt. "The settlement figures are totally derisory and insulting to these villagers," he added.

The Nigerians launched a suit against Shell at the High Court in London in March 2012, seeking millions of dollars in compensation for two oil spills in 2008, but both sides agreed to try and settle in compensation talks in Port Harcourt. Shell accepts responsibility for the Bodo spills but the two sides disagree about the volume spilt and the number of local people who lost their livelihoods as a result.

Citing independent experts, Leigh Day says up to 600,000 barrels of crude were spilt, which would make it one of the worst in history. Shell in its bid to cover-up, citing a report by a joint investigative team puts the volume spilt in the two original incidents at just 4,100 barrels. Shell accepts that a significantly higher volume of oil was spilt later but says this was due to other factors including sabotage.

It has complained that its clean-up teams were at times denied access to sites by local groups. Recently, Shell went against any punitive measures like death sentence as mulled by the Nigerian Senate for oil thieves and saboteurs. It also claimed neither it nor its workers have been involved in oil theft. The Anglo-Dutch oil giant has been a major play player in Nigeria with its daily crude production not known by the Nigerian government because the government has no capacity and capability to verify.

Whatever Shell declares is what the government would accept. Corruption continues to be the bane of the oil industry while kidnapping, oil theft, pipelines vandalisation and all sort of criminal activities are ubiquitous in the Niger-Delta.