Royal Dutch Shell’s Nigerian unit has agreed to pay a community in the West African country more than $110 million to resolve a dispute over an oil spill more than 50 years ago.
The Anglo-Dutch energy group will pay $110.9 million in compensation to the Ejama-Ebubu people to put an end to a legal case that began in 1991, Lucius Nwosu, the community’s lawyer, told Bloomberg. He said that Shell had disclosed the agreement to a court in Abuja, Nigeria’s capital, yesterday.
The payment “is for full and final satisfaction” of a court judgment against the company 11 years ago, a spokesman for Shell’s Nigerian subsidiary said.
The origin of the community’s dispute against Shell dates back to a rupture in one of the company’s pipelines in 1970. Shell maintains that the environmental damage was caused by “third parties” during a civil war that was raging at the time. The company said that while the joint venture that Shell operates “does not accept responsibility or liability for these spills, the affected sites in the Ebubu community were fully remediated”.
In 2010, a federal court ordered Shell to pay damages to the community. The oil major unsuccessfully challenged the decision on numerous occasions, including most recently at the Supreme Court in November.
In February, Shell initiated arbitration proceedings against the Nigerian government at the World Bank’s International Centre for Settlement of Investment Disputes after its attempts to overturn the ruling failed. Shell did not say if it would withdraw the claim.