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Court Cases Involving SPDC

Shell's oil extraction activities have been challenged in Court by various Nigerian communities. These communities sought to use the state and its judicial instruments to demand justice from the Shell corporation. Many communities have reported being disappointed by the legal process due to lengthy delays and the Court's perceived favoritism for the oil company.

Ejama-Ebubu Court Case

In 1970, an oil spill occurred at one of Shell's oil extraction facilities located in the Ejama-Ebubu community. The exact cause for the oil spill is disputed with some claiming that the spill was caused by a bomb exploding during the Nigeria-Biafra civil war. Others reject this claim, and instead believe Shell's equipment is responsible for the spill. Although the cause for the spill is disputed, it is agreed that roughly two million barrels of crude oil was spilled, affecting 631 acres, or 255 hectares, of surrounding land. Additionally, it is known that the spilt oil caught fire and burned for weeks. Chief Isaac Osaro Agbara, Oneh-eh Eta Ejaman XI, Emere Nkunna I of Eleme explained the fire by stating, "One early morning, there was a blow-out. Everywhere was dark, but there was fire at the same time. People were running helter-skelter....The fire burnt sand into coal tar. Most of our people had to flee the community to neighbouring towns and villages." In 2011, forty-one years after the spill, researchers have reported still being able to see oil when looking down into deep crevices and have found that eight centimeters of refined oil floats on groundwater in the region. The spilt oil is also said to have negative health consequences for members of the community, such as, causing respiratory problems because toxic gases are released. According to community members, SPDC had promised to clean up the affected land, but oil pollution remained. The long-lasting environmental impacts, the health consequences of the oil spill, and the unfulfilled promises to take action ultimately led the Ejama-Ebubu community to file a lawsuit against SPDC in 2001.

Court Proceedings

Thirty years after the spill, in 2001, the Ejama-Ebubu community filed a lawsuit against Shell at the Federal High Court in Port Harcourt. The community asked the Court to require that Shell provide remedies in three ways. First, the Ejama-Ebubu community sought N5.4 billion in special damages. These special damages include direct value lost due to the oil spill, such as the cost of renewable crops, loss of income, health problems, and desecration of shrines. Second, the community sought N10 billion in general damages caused by the oil spill. These general damages were claimed due to general inconveniences caused by the oil spill such as polluted underground water, acid rain, and other difficulties faced by the community, like deprivation of education. Lastly, the community asked that Shell de-pollute the affected area and restore the environment to its pre-polluted state.

Although the lawsuit was initiated in 2001, a decision was not issued until July 5, 2010 by Justice Ibrahim Buba. The community's counsel, Emmanuel Asido Esq., explained that the case had been heard by two other judges before being presented to Justice Buba, resulting in a significant time delay. Justice Buba ruled in favor of the community, requiring Shell to pay N15.4 billion in damages and restore the Ejama-Ebubu land to its pre-polluted state. Justice Buba also decided that the Ejama-Ebubu community was granted a 25% interest charge on the N15.4 billion.

Following this ruling, SPDC appealed the judgement in 2010 and asked that any payment be suspended until after the appeal process. The Court agreed that payment could be postponed, but required that SPDC's bank, First Bank Plc, become a guarantor of the funds payable to the Ejama-Ebubu community. The Bank agreed to become Shell's guarantor and volunteered to "guarantee to pay to the respondents [the community] the judgment sums only if the aforesaid appeal to the Court of Appeal fails and the appellants [SPDC] become liable in law to pay the judgment sums therein." These judgement sums included the initial N15.4 billion as well as interest.

In 2013, the Ejama-Ebubu community filed an objection to Shell's appeal because the oil company had not paid the correct filing fees. The Court upheld the community's objection and rejected SPDC's appeal. In response to this objection, SPDC appealed to the Supreme Court of Nigeria.

In 2016, the Supreme Court of Nigeria overturned the Court of Appeal's decision to reject the appeal. Justice Ibrahim Muhammad of the Supreme Court decided that Shell was allowed to appeal the initial 2010 judgement and ruled that the Court of Appeals must hear the case. The following year, in 2017, the Court of Appeals at Port Harcourt ruled that SPDC needed to pay the Ejama-Ebubu community the damages plus interest. Accounting for the interest since the 2010 judgement of N15.4 billion, the oil company was now required to pay N122 billion. Since First Bank Plc's had accepted the responsibility as guarantor of payment if the appeal failed, the bank was then liable to pay N122 billion to the Ejama-Ebubu community. However, as of January 2019, Shell sought to continue the appeals process, and many people expect a continuation of the complex legal proceedings.

Iwherekhan Court Case

In the Iwherekhan community, a Shell facility located only 500 meters away from the village is dedicated to gas flaring. According to Shell, it is common that when oil is brought to the Earth's surface, gas is produced as well. This gas is seen as an unwanted by-product and consequently, burned off in a process known as gas flaring. Many subsistence farm lands are located near the gas flaring station, and local community members have argued that the flaring activities contribute to environmental and health problems. In 2005, a Iwherekhan community member filed a lawsuit against SPDC in an attempt to shut down the gas flaring facility.

Gas Flare in the Niger Delta

Court Proceedings

In July 2005, Mr. Jonah Gbemre, an Iwherekhan community member, filed a lawsuit against Shell to try and end gas flaring. Gbemre and the community argued that the extraction of oil and the technique of gas flaring results in a polluted environment and unhealthy living space. One activist in the region stated, "My community, Iwhrekan, is one out of the many of such host communities that have suffered from decades of gas flaring by IOCs [International Oil Company]. The million tons of carbon dioxide and methane released into the atmosphere every year, as a result of gas flaring, have obviously polluted the air we breathe in this part of the world." On November 14, 2005, the Federal High Court in Nigeria ruled in favor of the Iwherekhan community and declared that gas flaring was illegal. Furthermore, the Court determined that gas flaring constituted a violation of the Iwherekhan community member's right to life and dignity.

SPDC appealed the ruling, and despite the Court's order to stop gas flaring activities, it was reported that Shell continued to operate the gas flaring station in the Iwherekhan community. In response to SPDC's continued activities, on December 16, 2005, Mr. Gbemre and the Iwherekhan community filed contempt of court documents. However, SPDC argued that it was not in contempt of Court since the oil company was still appealing the ruling. In April 2006, the Nigerian Supreme Court ordered that the oil company end all flaring by April 2007. However, as of 2015, gas flaring in the Iwherekhan community has continued, even though Shell announced that between 2002 and 2015 the volume of gas burned through gas flaring in Nigeria has been reduced by 85%.

Bodo Community Settlement Case

In 2008, two oil spills occurred in the Bodo community. An investigation team was sent to determine the cause of the oil spill. Upon learning that operational failures of the pipelines caused the oil spills, Shell accepted responsibility. SPDC stated that the spills "were deeply regrettable operational accidents, and as in all cases of operational spills SPDC acknowledged responsibility to pay compensation as required by Nigerian law." The oil company and the community were reportedly "in and out of" negotiations from 2009-2015, until finally an agreement suitable to both sides was crafted.

Settlement Negotiations

Two oil spills in the Bodo community negatively impacted the region's farmland and fisheries, harming the livelihood of the Bodo community members. SPDC initially responded to the oil spills in 2009 by offering food supplies to affected community members. This offer was rejected by Bodo chiefs, and SPDC then offered twice as much in food supplies. In 2011, members of the Bodo community brought claims against SPDC for environmental pollution. The environment pollution was significant for the Bodo community because the oil spilled into Bodo Creek, an important water supply for the community members who were mostly subsistence farmers and fishers. Following this lawsuit, Shell and the Bodo community more actively engaged in negotiation efforts, but the process was continuously interrupted by competing interests. The community argued that Shell was not offering enough compensation, while SPDC argued that the expectation of the community was too high and disproportionate to Nigerian standards. Finally, in 2015, Shell announced a £55 million settlement agreement. The oil company stated "we have now reached a settlement agreeable to ourselves and the community."