A Dutch court has ordered Royal Dutch Shell Plc’s Nigerian unit to compensate for oil spills in two villages over 13 years ago. Shell Nigeria is liable for damages from pipeline leaks in the villages of Oruma and Goi, the Hague Court of Appeals said in a ruling Friday.
The amount of compensation will be decided later. The court also ordered the Nigerian unit and its Hague-headquartered parent company to build better warning systems so future leaks can be quickly detected.
The case is the first in which a company and its foreign subsidiary have been tried in the Netherlands for allegedly breaching duty of care abroad, and it could have far-reaching implications for future suits brought against oil firms.
The ruling sets a precedent for where such cases can be heard and potentially increases the number of court procedures in oil companies’ home countries, rather than those where alleged pollution is taking place. “We continue to believe that the spills in Oruma and Goi were the result of sabotage.
We are therefore disappointed that this court has made a different finding on the cause of these spills and in its finding that” Shell’s Nigeria unit is liable, Shell said in a statement. “Sabotage, crude oil theft and illegal refining are a major challenge in the Niger Delta.”