Nigerian community rejects Shell oil spill compensation offer

Members of Nigeria’s Bodo community in the oil-rich Niger Delta have rejected what their lawyers say is an insulting compensation offer from Shell for two oil spills in 2008 that devastated the fishing community’s surrounding mangroves and waters.

Sources familiar with the talks said Shell proposed a settlement of 7.5 billion naira, about $46 million. But Martyn Day, senior partner at the London-based law firm Leigh Day that represented Bodo residents in the talks, said each villager would end up with just 275,000 naira ($1,700) after subtracting a lump sum to be paid to the community.

About 13,000 fishermen lost their livelihoods because of the spills, and 31,000 inhabitants of 35 villages were affected in and around the Bodo lagoon and its associated waterways, according to Leigh Day. Independent experts estimate between 500,000 and 600,000 barrels were spilled, devastating the environment and contaminating about 30 square miles of mangroves, swamps and channels, the law firm said.

This is the latest setback in talks between the Dutch oil company and the 31,000 inhabitants of the area.  Shell acknowledged liability for the spills five years ago, but it disputes the amount spilled and the impact on the community. It offered a much-lower settlement, which was also rejected, in 2009.

“We told them in 2009 and we tell them again now, the people of Bodo are a proud and fiercely determined community,” said Chief Kogbara, a village leader.  “Our habitat and income have been destroyed by Shell oil. The claim against Shell will not resolve until they recognize this and pay us fully and fairly for what they have done."

Shell has said a joint investigation team estimated that only 4,100 barrels were spilled.  Shell blames most of the spills in the region on armed fighter attacks and thieves tapping into pipelines to steal crude oil.

The Bodo members unanimously rejected the offer from the oil giant after talks that started Monday in Port Harcourt, the London-based Leigh Day law firm said in a news release.

"Our clients know how much their claims are worth and will not be bought off cheaply," said Martyn Day, senior partner at Leigh Day. "The settlement figures ... are totally derisory and insulting to these villagers." 

Though an agreement was not reached, both Shell and Leigh Day said that talks between the community and company to start a cleanup are progressing and will continue in late September.

Local communities remain largely hostile to Shell and other oil companies because of environmental damage. Some environmentalists say as much as 550 million gallons of oil have been poured into the delta during Shell's roughly 50 years of production in Nigeria, one of the top crude oil suppliers to the United States.

The United Nations has recommended that the oil industry and Nigeria's government set up a fund, with an initial injection of $1 billion, to begin what could be a 30-year cleanup and restoration project in the region.

Al Jazeera and wire services