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Shell agrees Nigeria oil spill deal

Shell has agreed a multi-million pound payout to thousands of people in Nigeria hit by "devastating" oil spills.

The oil giant says a £55 million settlement has been reached with the Bodo community of fishermen and farmers in the Niger Delta following "two highly regrettable operational spills in 2008".

Lawyers representing 15,600 claimants due to receive over £2,000 each say the agreement is the first of its kind.

They believe it is also one of the largest payouts to an entire community following devastating environmental damage and say the case should act as "a template for Shell in future cases in Nigeria and in the other countries in which it operates".

The settlement was announced by Shell's Nigerian subsidiary, the Shell Development Company of Nigeria (SPDC), and ends a three-year legal battle in London which was due to culminate in a trial later this year.

An SPDC statement said the £55m included an individual payment to each claimant who accepted the agreement in compensation for losses arising from the spills.

Those personal payouts total £35m, and the remaining £20m will be paid "for the benefit of the Bodo community generally".

Mutiu Sunmonu, managing director of SPDC, said: "From the outset, we've accepted responsibility for the two deeply regrettable operational spills in Bodo.

"We've always wanted to compensate the community fairly and we are pleased to have reached agreement."

But Bodo lawyers said it was "deeply disappointing that Shell took six years to take this case seriously and to recognise the true extent of the damage these spills caused".

Shell suggested earlier settlement efforts failed because compensation claims had been grossly exaggerated.

The SPDC says clean-up work was delayed by "divisions within the community", but would now begin soon.

It also says parts of Bodo where oil spills occurred are suffering from the "scourge" of oil theft, illegal refining and sabotage.

Mr Sunmonu called for action by the Nigerian government and bodies like the United Nations to solve the problem and prevent future spills.

He said: "We urge all those with influence, including Bodo community leaders and NGO groups, to support this effort."

Today's settlement was welcomed by London-based law firm Leigh Day which acted for the Bodo community.

Leigh Day said in a statement that the settlement package compensated "15,600 Nigerian fishermen and their community after it was devastated by two massive oil spills in the Niger Delta in 2008 and 2009".

Each member of the community affected will receive "approximately 600,000 Nigerian naira (£2,200) paid into their individual bank accounts over the next few weeks".

The lawyers say the minimum wage in Nigeria is 18,000 Nigerian naira a month, and 70% of the population live below the poverty line.

They state: "The total cost of the compensation package agreed with Shell is £55m, being split £35m for the individuals and £20m for the community, and is thought to be one of the largest payouts to an entire community following environmental damage.

"It is the first time that compensation has been paid following an oil spill in Nigeria to the thousands of individuals who have suffered loss."

Martyn Day, from Leigh Day, said: "We came to a provisional agreement with Shell just before Christmas. I immediately then travelled out with a team of 20 to meet with our clients to see if they were happy with the deal.

"We were able to see 15,400 of them (98%) in eight days.

"In the week before Christmas, I personally met with around 800 clients and I don't think I have ever seen a happier bunch of people. Every single one of the clients we met has said yes to the deal."

But Mr Day added: "Whilst we are delighted for our clients, and pleased that Shell has done the decent thing, I have to say that it is deeply disappointing that Shell took six years to take this case seriously and to recognise the true extent of the damage these spills caused to the environment and to the those who rely on it for their livelihood.

"We hope that in future Shell will properly consider claims such as these from the outset and that this method of compensation, with each affected individual being compensated, will act as a template for Shell in future cases in Nigeria and in the other countries in which it operates."

Chief Sylvester Kogbara, chairman of the Bodo Council of Chiefs and Elders, said: "For now, the Bodo community is very happy that this case has been finally laid to rest.

"The hope is that this will forge a good relationship with Shell for the future, not only with the Bodo people but with all the Niger Delta communities that have been impacted in the same way as us."

Chief Kogbara said his community hoped that Shell "will take their host communities seriously now" and follow the recommendations of the UN Environment Programme (UNEP) for the clean-up of the whole of Ogoniland, an area polluted for decades by the oil industry.

Leigh Day described Bodo as a fishing town set in the midst of 90 sq km of mangroves swamps and channels, "the perfect breeding ground for fish and shellfish".

The surrounding rural coastal settlement consists of 31,000 people in 35 villages, the majority of whom are subsistence fishermen and farmers.

Leigh Day says experts confirmed that the oil spills destroyed thousands of hectares of mangrove - "the largest man-made disaster of this sort ever seen".

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