A Matter of Law

Fri, Apr 5, 2013

By publisher

3 MIN READ

Shell Petroleum Development Company insists that the demand by NOSDRA and NIMASA to pay fines totalling $11.5 million for various environmental damages are not covered by law

|  By Anayo Ezugwu  |  Apr. 15, 2013 @ 01:00 GMT

AMIDST the current brouhaha over the oil spillage at the Bonga field by Shell Petroleum and Development Company, SPDC, the company is insisting that the proposed fines by regulatory authorities have no legal basis. The Nigerian Maritime Administration and Safety Agency, NIMASA, and the National Oil Spill Detection and Response Agency, NOSDRA, are demanding that Shell Nigeria Exploration and Production Company, SNEPCo, the exploratory arm of SPDC, pay $11.5 billion as compensation for the damage caused by the oil spill.

A breakdown of the figure showed that NOSDRA wants Shell to pay $5 billion as fine for environmental damage caused from a 40,000 barrel spill on December 2011 at the Bonga offshore rig while NIMASA also sought $6.5 billion as compensation for 100 communities, it claimed were affected onshore by the oil spill. The spill was one of the biggest in the history of Africa’s largest energy industry.

NIMASA had threatened that it would apply and implement relevant provisions of the International Maritime Organisation, IMO, conventions ratified and domesticated by Nigeria on Shell for polluting the sea where the Bonga field is situated. The maritime regulatory agency noted that the spillage has polluted three communities that were 150 kilometres from Shell’s Bonga facility. The spillage, according to NIMASA, has resulted to emergency, dubbing the occurrence as ‘tier three oil spill,’ which requires both international and national responses.

However, Precious Okolobo, Shell spokesman, told Realnews that there was no legal basis for the proposed compensations by two government agencies. “We do not believe there is any basis in law for such a fine. Neither do we believe that SNEPCo has committed any infraction of the Nigerian law to warrant such a fine. SNEPCo responded to this incident with professionalism and acted with the consent of the necessary authorities at all times to prevent environmental impact as a result of the incident,” he said.

Although Shell took responsibility for the oil spill, but it insisted that the onshore damage resulted from a different spill a few days later, which it said was not its fault, even though it noted that it had cleaned up areas affected by both spills.

It would be recalled that on December 20, 2011, a Bonga oil facility managed by Shell through one of its subsidiaries, had an oil spillage. The Bonga facility, 120 kilometres off the Nigerian coast, produces 200,000 barrels of oil per day.

— Apr. 15, 2013 @ 01:00 GMT