Shell May Have to Compensate Villagers for Oil Damage from Sabotage or Theft

Home / Blog / Shell May Have to Compensate Villagers for Oil Damage from Sabotage or Theft

The Niger Delta region of Nigeria is crisscrossed by thousands of miles of pipelines that leak oil with tragic frequency, contaminating waterways, destroying wildlife, and harming the health of local communities.  But the sprawling network that makes the companies so much money is also a target for sabotage and bunkering, a widespread practice in which people illegally tap into pipelines to siphon off some of the oil for themselves.  When oil leaks and causes environmental harm as a result of bunkering, does the oil company have to pay?

Last week, a British judge gave an intriguing answer: usually no, but sometimes yes.

The issue is particularly important for Shell, the international oil giant that dominates Nigeria’s petroleum industry.  Almost every time a Shell pipeline leaks, Shell blames sabotage and bunkering and insists that it has no responsibility because criminals caused the rupture.  (According to Amnesty International, a higher percentage of Shell’s leaks may be due to the poor state of repair of its pipelines than the company admits, but that the company is able to fudge its numbers because it dominates the process of investigating and reporting on its own oil spills.)

Advocates for Niger Delta communities, on the other hand, insist that bunkering is a predictable consequence of doing business in the way that Shell does.  Shell installed pipelines for its own benefit, knowing they’d be an irresistible temptation for theft.  If Shell can’t prevent sabotage or bunkering in the first place, then it should compensate impoverished, contaminated communities when thieves cause oil spills, rather than leaving the victims with no recourse.

In Bodo Community v. Shell Petroleum Development Company of Nigeria Limited, a Nigerian community is suing Shell in the British courts over the damages caused by two massive oil spills.  Shell has already admitted liability for at least some of the claims, but it would like to avoid responsibility for the leakage that it contends was caused by oil thieves.  In last Friday’s decision on preliminary matters, the judge concludes that Nigeria’s Oil Pipelines Act requires companies to protect their pipelines.  This doesn’t mean that they have to “police” the pipeline in order to prevent “third-party interference,” but they’re on the hook if they’re negligent and fail to take ordinary precautions that would normally stop thieves from causing the damage that leads to oil spills.

To be clear: this decision doesn’t mean that companies have to pay damages every time thieves bunker oil and cause leakage.  Rather, in order to hold the company responsible, plaintiffs will have to prove that the company was guilty of neglect in its duty to care for and shield the pipeline.  They could show, for example, that Shell failed to install or maintain tamper-proof equipment, lacked sensors and valves to detect and shut off oil flow in case of a breach, ignored warnings of particular attacks or thefts, or let the pipeline get so corroded that it was easy to tap into.

What this means is that [pullquote]bunkering and sabotage are no longer Shell’s get-out-of-jail-free cards[/pullquote].  When Shell tries to hide behind bunkering to avoid paying for the contamination of community land and water, the community will have the opportunity to show that Shell should have taken basic, common-sense precautions that would have avoided the damage.  After decades of blaming others for the ecological disaster in the Niger Delta, Shell may have no one left to blame but itself.

This post was written by Jonathan Kaufman, former staff.

Photo CC BY O.F.E

More Blog Posts

February 7, 2019

10 Things Chiquita Doesn’t Want You To Know About Its Bananas
Read More

February 6, 2019

When Corporations Act Irresponsibly, People Die
Read More

January 24, 2019

Anti-Mafia Law Cannot Be Used to Restrict Free Speech of Environmental Activists, Judge Says
Read More
hobby_lobby.jpg835323_e364dcc1c6_o.jpg