Shell offers £55m compensation for Bodo spills

Shell Petroleum Development Company (SPDC) has agreed to compensate residents of Bodo community in Gokana local government area of Rivers state with £55 million for two oil spills that affected them in 2008.

Represented by law firm, Leigh Day, over 15,000 residents of the community had in 2011 appealed to a London high court for more than $510 million in compensation for the spilling of 500,000 barrels of oil.

But when matter came up for hearing in June 2014, the court rejected the claimants’ attempts to expand the scope of the compensation.

The judge had ruled that the pipeline operator could not be held responsible for damage caused by oil theft.

However, the oil company reached an out-of-court-settlement with the community, promising to pay a compensation of $51 million but Bodo residents turned down the offer, insisting on continuing with the trial, which had been adjourned to May 2015, in Nigeria.

The authorities of Shell had appealed to them, claiming responsibilities for the spill, which led to a paralysis of economic activities for the inhabitants of the community.

“From the outset, we’ve accepted responsibility for the two deeply-regrettable operational spills in Bodo,” Mutiu Sunmonu, managing director of the Shell Petroleum Development Company in Nigeria Ltd (SPDC), said in a statement.

“We hope the community will now direct their UK legal representatives to stop wasting even more time pursuing enormously exaggerated claims and consider sensible and fair compensation offers.”

However, in a statement signed by Precious Okolobo, SPDC’s media relations manager, the oil company revealed that it had reached an agreement providing for an individual payment to each claimant.

Martyn Day, senior partner at Leigh Day, also corroborated Okolobo’s account, saying, £35 million would be shared evenly between 15,600 Bodo individuals and the remaining £20 million set aside in a trust fund for projects such as health clinics and schools.

“Each of the individuals will each receive about £2,200, equivalent to a little more than N600,000 in the first such case to pay compensation directly to individual community members,” Day said.

Previous similar claims have tended to go through the government, resulting in a disbursement to community chiefs, who were then expected to distribute the money.

“It’s very unusual to have thousands benefit,” Day said. “The money will go directly to their bank accounts and this will hopefully be a model for future claims.”