Shell, villagers agree to $83.5 million for huge oil spilll | The Japan Times

Shell, villagers agree to $83.5 million for huge oil spilll | The Japan Times.

Over 15,600 Ogoni farmers and fishermen whose lives were devastated by two large Shell oil spills in 2008 are celebrating the $83.5 million settlement they will receive from Shell as compensation. The settlement, split among individuals and the community as a whole, avoids Shell having to defend a potentially embarrassing London high court case which was due to start shortly. It is thought to be the largest payout to any African community following environmental damage and the first time that compensation for an oil spill has been paid directly to affected individuals rather than to local chiefs.

In the past, compensation from companies has been paid to chiefs, with the understanding that he would use it for community projects.  However, there is little to no oversight after the compensation is paid out, leaving room for chiefs to skim off the top.  In fact, chiefs have had an incentive to actually encourage collective action against oil companies, since resistance measures could cause companies to pay out financial compensation that chiefs would then control. Conversely, during protests the chief will go to a private negotiation with company officials to “settle peace,” as Nigerians call it.  The company may pay the chief what they term “community compensation” to settle the matter, with both parties understanding that the chief is being paid to send the protesters home.  Whether collective action succeeds as it did in this most recent case, or whether is fails when chiefs put an end to it, the chiefs benefit. Hopefully, pay outs directly to community members like Shell is now doing will help ensure compensation goes where it should, into the pockets of local citizens.

Ikebere protesters

3 responses to “Shell, villagers agree to $83.5 million for huge oil spilll | The Japan Times

  1. Pingback: Deltan Women’s Trust in Courts | Niger Delta Politics

  2. I was following this story closely because the Bodo people live in Ogoniland, Rivers State, and I passed through their community to do interviews. This settlement is special for a few reasons, besides just being the largest ever. It was settled out of court, like all but one other, but it is the first one in which the company is responsible for directly depositing the money (a little over $3000 per adult) into individuals’ bank accounts, or writing checks with individual names on them. About 2/3 of the $83 million will go to individuals and 1/3 will go towards “community development,” and this latter amount is where chiefs would be able to skim off the top (although the international attention on the case may keep chiefs on the up and up). The major concern for the individuals is that some don’t know how to use banks and live far from a major one that Shell would be able to direct deposit into. Secondly, although my Nigerian friends were lamenting that the Bodos settled for only 80% of what they originally asked for, I was impressed that the $83 million is actually twice what Shell originally offered, which I think says a lot about the lobbying efforts on the Bodo side. I don’t what a normal range of negotiation in settlements in this instance would be, but I would guess that the amount the Bodos secured is fairly impressive in this context.


  3. From my Ogoni interpreter, who emailed me about the decision: “15,600 individuals are beneficiaries. Over half of that number are not benefiting from the payout though, they’re from the same community because, they failed to come out to register their names and to be counted when the local census was done. They thought it would not work out that Shell has been deceiving them since and this would not be an exception.

    Besides, between the time that the census was done and now, over 500 persons have died in Bodo before the payment came now. Hence, their acceptance of the payout without need for further legal battle.

    It’s a big deal in the Niger Delta, as other communities can now sue Shell and get paid drawing from the Bodo Community decision.”


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