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.