This research is solely a product of LIDs and was not conducted by the - PDF document

*This research is solely a product of L
*This research is solely a product of LIDs and was not conducted by the Resource Centre. Shell Lawsuit (Re Oil Spills & Bodo Community in Nigeria) Abstract In 2008, over 15,000 members of the Bodo community in Nigeria suffered a wide range of harms including environmental damage, health concerns, and threats to fishing activities because of two oil spills. Shell Petroleum admitted liability, but disputed the full extent of the harm and attributed the pipeline damage to illegal bunkering. In 2015, Shell settled the dispute for £55 million after a suit was filed against the company in the UK High Court. Table of Key Facts Case name The Bodo Community and Others v. Shell Petroleum Company of Nigeria Ltd [2014] EWHC 1973 (TCC) Date 2008 - Present Jurisdiction United Kingdom (England and Wales High Court) Plaintiffs The Bodo Community and other representative claimants with the support of Leigh Day, local and international NGOs Defendants Shell Petroleum Company of Nigeria Limited Decision Shell could be held liable for the preventable damage caused by oil spillage attributed to illegal bunkering of its pipelines, if it neglected to take reasonable steps to protect the pipelines. Prior procedures Shell made a settlement offer of £4,000 to the Bodo Community which they rejected. Subsequent procedures 1. Out of Court Settlement between Shell Nigeria and the Bodo Community of £55 million 2. Bodo Mediation Initiative (BMI) - a multi-stakeholder cleanup process Background Information Bodo town is located in the oil rich Niger Delta region of Nigeria. The coastal community mainly engages in subsistence fishing and agriculture. It has been reported that the spills caused enormous environmental degradation including pollution, and affected the means of livelihood of the community. Although Shell admitted liability for the spills, it disputed the volume, extent, and impact caused. For instance, it claimed that only 4,000 barrels were spilled,1 yet according to oil spill experts, it is probable that an estimated volume of over 280,000 barrels flowed into the creek, rivers, mangrove forests, and land in the area.2 Experts opine that the spillage “caused the largest loss of mangrove habitat by oil pollution in history.”3 Initially, Shell offered the entire community a £4,000 settlement, which they rejected on grounds of inadequacy in comp

arison to the severity of damage.4 In
arison to the severity of damage.4 In 2011, Leigh Day, a law firm in United Kingdom (UK), on the invitation of one of the claimants, begun representing the Bodo community.5 Leigh Day and Shell engaged in unsuccessful negotiations for adequate compensation and a clean-up of the Bodo area. Consequently, in 2012, the Bodo community, represented by Leigh Day, instituted a suit against Shell in the UK High Court. In 2013, Shell made another settlement offer but it was rejected again by the community on the grounds of inadequacy.6 In January 2015, Shell accepted responsibility and agreed to pay compensation of £55 million to the community in an out of court settlement. The community jointly received £20 million while £35 million was divided amongst the claimants, who received £2,200 each.7 Shell also pledged to commit to the Bodo Meditation Initiative (BMI), a clean-up operation, which was initiated by the Dutch Government in April 2013.8 In exchange, the community agreed to put their legal claim on hold in the UK High Court while reserving the right to reinstate the suit in the event that the clean-up was inadequately conducted.9 Timeline of Key Events 1 Leigh Day, “The Bodo Community v Shell Claim” available at https://www.leighday.co.uk/International/Further-insights/Detailed-case-studies/The-Bodo-community-shell-claim. 2 John Vidal, “Shell Oil Spills in the Niger Delta: Nowhere and No One Has Escaped” available at https://www.theguardian.com/environment/2011/aug/03/shell-oil-spills-niger-delta-bodo and Jesse Winter, “How a Poor Nigerian Town got Shell to Pay for Major Oil Spills” Ottawa Citizen, January 8, 2016 available at https://ottawacitizen.com/news/world/beating-big-oil-how-a-poor-nigerian-town-got-shell-to-shell-out-for-major-oil-spills. 3 Ibid. 4 Leigh Day, “Shell Agrees £55m Compensation Deal for Niger Delta Community” available at https://www.leighday.co.uk/News/2015/January-2015/Shell-agrees-55m-compensation-deal-for-Nigeria-Del. 5 Leigh Day, supra note 2. 6 Id. 7 Leigh Day, supra note 4. 8 Bodo Mediation Initiative (BMI), “Bodo Mediation Initiative: Final Project Report” January 2016 at p. 5 accessed at http://www.stakeholderdemocracy.org/wp-content/uploads/2016/06/Merged-Bodo-Mediation-End-Reportd.pdf. 9 Leigh Day, supra note 4. Date Key Ev

ent Late 2008 – early 2009 The
ent Late 2008 – early 2009 The Trans-Niger pipeline ruptures twice leading to oil spillage in the Bodo area. 2010 Shell offers £4,000 compensation to Bodo community, which it rejects. 2011 Leigh Day, a UK law firm, takes on the case and begins negotiations with Shell on behalf of the Bodo Community. March 2012 The Bodo community, with the support of Leigh Day instituted a suit against Shell in the UK High Court. September 2013 Shell makes another settlement offer which the community rejects again. June 2014 Preliminary ruling from the UK High Court that Shell could be held liable for neglect for the preventable damage caused by oil spillage if it failed to take reasonable steps to protect the pipelines. January 2015 Out of court settlement between Shell and the community in which Shell agrees to pay compensation of £55 million and undertake a clean-up process. June 2017 Shell files a suit in an attempt to strike out the community’s option of reinstituting litigation on the ground that some community members were obstructing the clean-up process. May 2018 The UK High Court upholds the right of the Bodo community to reinstate the suit for the period of one year, until July 2019, without conditions, if the cleanup process was not executed to an effective standard. Impact This case presents a unique non-standard remedy and innovative way of achieving “access to remedy” in business and human rights cases, which remains a challenge for various communities. The importance of strategic litigation in contributing to this victory cannot be overstated. Lt is “the first time that compensation has been paid following an oil spill in bigeria to the thousands of individuals who suffered the loss” and is “one of the largest payouts to an entire community following environmental damage.”10 The wide range between the original settlement offer made by Shell of £4,000 and the final compensation of £55 million demonstrates that strategic litigation increased the leverage of the Bodo community to demand and consequently receive adequate compensation from Shell. The imminent threat of an unfavorable judgment pressured Shell to take full responsibility for the damage suffered by the community. Coupled with compensation, the Bodo community successfully secured a significant remedy with the cleanup process. The uniqueness of the remedy is buttressed by

the wide scope of stakeholders who are
the wide scope of stakeholders who are involved in the operation and monitoring of the Bodo Mediation Initiative (BMI) clean-up process, including the Bodo community, Shell, the State and Federal Governments of Nigeria, and the Dutch government, acting through its embassy in Nigeria, the United Nations Environmental Programme (UNEP) and Non-Governmental Organizations (NGOs).11 This increases the pressure and accountability placed on Shell to uphold their role in the clean-up process. It is noteworthy that the Bodo community is playing an active role in implementation of the remedy. Participation of the community is central to the success of the BMI because they are the direct beneficiaries of the project. Their buy-in is important for the sustainability of the project in the long run. According to BMI reports, the community had the opportunity to appoint representatives who received training to equip them with knowledge and skills for the mediation process with other stakeholders including Shell and government agencies. There is notable impact on attitudes and behavior of the stakeholders resulting from this unique remedy. The community is recognized as a central partner in the implementation of the clean-up, as opposed to a passive beneficiary. Exchanging information between business and community partners is critical in facilitating a harmonious relationship between the State, business actors and host communities. This case also demonstrates the importance of coalition building and working with NGOs, Nigerian and UK lawyers, and journalists in home states of Multinational Corporations (MNCs). At different stages of the case, advocacy by both local and international NGOs and media highly publicized the case, which exerted further pressure on Shell to admit liability and amplified the community demands.12 During the pendency of the suit, NGOs such as Amnesty International closely documented the case and engaged in advocacy to raise awareness about the impact of the oil spillage on the Bodo community.13 Such concerted efforts are demonstrably effective in tilting the bargaining power in favor of affected communities in business and human rights cases. Further Information 10 Leigh Day, supra note 4. 11 Business Insider, “Shell to Start Cleaning up 2008 Oil Spills in April, says Official” Reuters, March 24, 2017 available at https://www.businessinsider.com/r-shell-to-sta

rt-cleaning-up-2008-nigeria-oi
rt-cleaning-up-2008-nigeria-oil-spills-in-april-says-official-2017-3. 12 Leigh Day, supra note 4. 13 Leigh Day, supra note 2. • Business & Human Rights Resource Centre, Shell lawsuit (re oil spills & Bodo community in Nigeria) https://www.business-humanrights.org/en/shell-lawsuit-re-oil-spills-bodo-community-in-nigeria • The Bodo Community and Others v. Shell Petroleum Company of Nigeria Ltd [2014] https://www.bailii.org/ew/cases/EWHC/TCC/2014/1973.html • Leigh Day, The Bodo Community v Shell Claim https://www.leighday.co.uk/International/Further-insights/Detailed-case-studies/The-Bodo-community-shell-claim • Leigh Day, Shell Agrees £55m Compensation Deal for Niger Delta Community https://www.leighday.co.uk/News/2015/January-2015/Shell-agrees-55m-compensation-deal-for-Nigeria-Del • Leigh Day, Shell fails in High Court bid to halt Nigerian Community’s legal fight over clean-up https://www.leighday.co.uk/News/News-2018/May-2018/Shell-fails-in-High-Court-bid-to-halt-Nigerian-Com • Sudeep Chakravarti, Shell and the Liability Debate https://www.livemint.com • Jesse Winters, How a Poor Nigerian Town got Shell to Pay for Major Oil Spills, January 8, 2016 available at https://ottawacitizen.com/news/world/beating-big-oil-how-a-poor-nigerian-town-got-shell-to-shell-out-for-major-oil-spills • Business Insider, Shell to Start Cleaning up 2008 Oil Spills in April, says Official https://www.businessinsider.com/r-shell-to-start-cleaning-up-2008-nigeria-oil-spills-in-april-says-official-2017-3 • Bodo Mediation Initiative (BMI), Bodo Mediation Initiative: Final Project Report http://www.stakeholderdemocracy.org/wp-content/uploads/2016/06/Merged-Bodo-Mediation-End-Reportd.pdf • Global Resources Limited (Giolee), Final Report on the Free Phase Oil Removal Project at Bodo, Submitted to Project Directorate and Ogoni Restoration Project Department, SPDC https://www.giolee.com/wp-content/uploads/2018/05/Final-Comprehensive-Bodo-Free-Phase-Report.pdf • Amnesty International, Nigeria: Amnesty Activists Uncover Serious Negligence by Oil Giants Shell and Eni https://www.amnestyusa.org/reports/nigeria-amnesty-activists-uncover-serious-negligence-by-oil-giants-shell-and-en