The shareholders of Royal Dutch Shell could be waking up to a multi-billion dollar headache this morning, after a University of Essex report concluded that the FTSE-listed company is responsible for cleaning up the mess it has made of the Niger Delta. The findings are the results of nearly two years of research.
The Niger Delta, an area roughly the size of Scotland, used to be a picturesque wetland. It is home to 31 million people, but over the past six decades, many of the villagers there have seen their livelihoods devastated by oil pollution.
Commercial oil production began in the region in 1958 after the discovery of crude oil at Oloibiri by Shell British Petroleum (now Royal Dutch Shell). Today, the oil industry is highly visible in the area. Royal Dutch Shell’s subsidiary Shell Nigeria alone operates over more than 31,000 square kilometres. Over that period there have been thousands and thousands of oil spills. Between 1976 and 2001 the United Nations Development Programme recorded 6,800 spills.
Earlier this year, Amnesty International exposed [PDF] the real picture of Shell Nigeria’s legacy at the site of one of the worst spills – in Bodo, Ogoniland, in 2008. Shell’s official investigation claims only 1,640 barrels of oil were spilt. But based on an independent assessment carried out by the US firm Accufacts, Amnesty International found that the total amount spilt is, at a bare minimum, some 103,000 barrels – a massive 63 times Shell’s estimate – and could be as high as 311,000 barrels. But it appears Shell failed to learn their lesson and, since 2008, there have been two further major spills in Bodo, including one in June this year which reportedly took Shell at least ten days to fix.
The spills have hit those at the bottom hardest. Reliant on fishing and agriculture, they have seen their livelihoods destroyed and have been pushed deeper and deeper into poverty. Fish, which remains the staple of villagers’ diets, have been contaminated, the air has a stench of oil, and the water is stained black from the pollution. Last year, the United Nations Environment Programme published a report based on two years of in-depth scientific research. One of the most serious facts to come to light was the scale of contamination of drinking water, which had exposed communities to serious health risks.
And today’s report highlights a shifting legal environment in which Royal Dutch Shell can expect to face an increase in lawsuits as a consequence.
Historically, Shell has tried to hide from the consequences of its actions. When confronted with the serious problems in its Niger Delta operations, it focused on defending its corporate image. It has consistently failed to own up to its responsibilities, hiding behind a complex legal structure, and operating to lower standards in the Niger Delta than elsewhere, because it thinks it can get away with it. Very rarely has it admitted liability.
That argument is now over. The University of Essex report concludes that the responsibility not only for the maintenance of the pipelines, but also for pipelines’ protection, for spill clean-up and for the pollution lies squarely with the oil companies. And that the parent company, Royal Dutch Shell, can be held liable for its subsidiaries’ failure to operate to acceptable standards.
Shell can no longer shrug off its legal and financial liabilities with effective PR. The day of reckoning for the company’s cavalier attitude towards addressing its environmental and human rights impacts is approaching. The time to pay up has arrived. And Amnesty International believes the final bill could run into many billions of pounds.
Hakeem Kae-Kazim is an award-wnning Nigerian-born Hollywood actor known for his roles in Hotel Rwanda, Black Gold and 2012’s Black November, a film about Nigeria’s oil industry.
Follow him on Twitter: @hakeemkaekazim