Royal Dutch Shell Agrees to $83 Million Payout for Nigerian Oil Spills

Royal Dutch Shell has agreed to pay more than $83 million to residents of a Nigerian fishing community that was devastated by two oil spills in 2008, the largest ever pretrial settlement related to an oil spill in Nigeria, a country plagued by oil-related environmental disasters.

"I spent about eight days seeing some 800 clients and I've never seen so many happy people in my life," Martyn Day, a senior partner at Leigh Day, the British law firm that represented the town, told VICE News. "The community's been pretty devastated by the oil spills. When we visited in 2011, it was like going around a World War I scene."

Each of the over 15,000 residents in the town of Bodo will receive about $3,249, adding up to about $53 million. The remaining money will go into a community fund for health clinics, education centers, and other projects.

The two spills took place along the Bomu-Bonny Trans-Niger Pipeline, which carries 120,000 barrels of oil a day through mangrove forests in the Niger Delta. Despite Nigerian law requiring the company to begin cleanup within 24 hours of a reported spill, it took Shell at least four weeks to stop the oil gushing from the pipeline — and cleanup has yet to begin.

Shell initially said that about 4,000 barrels of oil had spilled out, affecting about 74 acres of land, about a tenth of a square mile. Experts from Leigh Day put the number at 500,000 barrels, hundreds of thousands of which have yet to be cleaned up, remaining in creeks and saturating sediment across a 27,000 square mile area.

Shell did not agree with the final spill estimate, Day says — but the company didn't dispute it, either. The company had initially offered a payout of about $6,000 in total for the spills.

"I really do hope that Shell learns a lesson of how poor their system was in terms of both the assessment of damage caused by oil and the speed at which they try to resolve it," Day told VICE News. "I think if they've learned those lessons it's a good case for the people in Bodo and hopefully it will be a good case for the people of Nigeria as well."

The company operates more than 3,700 miles of pipelines in the oil-rich Delta region, with more than 1,000 productive wells. The lawsuit revealed that as early as 2002 Shell's own investigations had exposed badly maintained pipelines that were prone to leaks and spills.

Since then, there have been more than 1,000 spills along Shell's pipelines, the majority of which result in small payouts that often don't make it to the individuals affected by the damage.

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"It's not an isolated incident by any means," Joe Westby, a corporate campaigner for Amnesty International who worked on the case, told VICE News. "Shell knows full well that its infrastructure is not up to speed in the Delta, and that's one of the major causes of the environmental catastrophe which is happening in the area."

Many of the mangroves in Bodo are dead or dying, Westby said, and the rivers and creeks, which are the town's primary source of drinking water, are polluted with oil. The spills have harmed fish and shellfish populations, driving the residents to find work far from town or as manual laborers.

"From the outset, we've accepted responsibility for the two deeply regrettable operational spills in Bodo," Mutiu Sunmonu, managing director of Shell's Nigerian subsidiary, said in a statement. "We've always wanted to compensate the community fairly and we are pleased to have reached agreement."

The statement also blamed "the scourge of oil theft and illegal refining," calling such activities "the real tragedy of the Niger Delta."

In 2013, Nigerian president Goodluck Jonathan estimated that between 300,000 and 400,000 barrels of oil are stolen from pipelines every day — nearly 10 percent of the country's oil production. Such theft has caused fires, spills, and other economic and environmental issues.

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"These are major problems in the Niger Delta and they do lead to oil spills and pollution," Westby told VICE News. "However, this is a narrative which Shell has used now for many years effectively as a public relations exercise to hide or to obfuscate their own poor practices in the Delta."

In the coming weeks, Shell will make payments directly into the bank accounts Leigh Day has set up for each individual involved in the case. Cleanup, which is expected to start next month, may cost more than $100 million, Day said.

"Although this is really good news today for the Bodo community, it does really highlight what it takes for a community whose lives have been completely destroyed by pollution to get meaningful justice," Westby told VICE News. "It took a huge UK court case, which Shell fought tooth and nail."

Follow Laura Dattaro on Twitter: @ldattaro