Amnesty criticizes Shell's reporting of Nigerian oil spills

Reuters News
Posted: Nov 06, 2013 7:09 PM

By Joe Brock

ABUJA (Reuters) - Amnesty International called into question Royal Dutch Shell's accounting in Nigeria for oil spill amounts and causes, saying the oil major was seeking to avoid compensation payments and damage to its reputation.

The Anglo-Dutch oil major responded in a statement that it "firmly rejects unsubstantiated assertions that they have exaggerated the impact of crude oil theft and sabotage to distract attention from operational performance".

There are hundreds of leaks every year from pipelines that pass through the creeks and swamplands of the Niger Delta, damaging the environment and cutting into profits of oil companies including Shell and Italy's Eni.

Widespread oil theft, sabotage and pipeline operational failures are cited as the main reasons for leaks, but the official cause of a leak is often disputed between oil companies and local communities.

Shell says most of its oil spills are caused by sabotage and theft and that it cleans up the damage whatever the cause. Amnesty International said in a report on Thursday that evidence suggested this might not be true.

"Shell is being disingenuous about the devastation caused by its Niger Delta operations. This new evidence shows that Shell's claims about the oil spills cannot be trusted," said Audrey Gaughran, Amnesty's director of global issues.

The watchdog said it saw reports of spills that stated the reason as sabotage without any further explanation and also examples in which Shell had calculated the size of a spill behind closed doors.

Amnesty also said it worked with U.S. pipeline specialist Accufacts, which found that some pictures on Shell's website showed that spills categorized as being caused by sabotage, were more likely due to corrosion of ageing pipelines.

Accufacts also questioned the methodology used by Shell in calculating the cause and size of spills.

Shells said that since 2011 it has published spill investigations including photographs on its website, the only oil major operating in Nigeria to do so.

"We seek to bring greater transparency and independent oversight to the issue of oil spills, and will continue to find ways to enhance this," the statement said.


Amnesty acknowledged that Shell had improved its transparency over oil spills since 2011 and that the Nigerian government needed to improve the capacity of its regulators.

The decision over the cause of an oil spill can have serious financial and reputational consequences for oil firms.

Shell is locked in a legal dispute with thousands of villagers in Nigeria's Bodo community over damage caused by two spills in 2008, for which the company has taken responsibility.

The two sides dispute the size of the oil spill and the damage caused. The community rejected a compensation offer of 7.5 billion naira ($47 million) in September.

Shell and U.S. oil firms Chevron and ConocoPhillips are selling assets in the Niger Delta, partly due to the damage caused by oil theft and spills.

When an oil spill occurs in Nigeria, there is a Joint Inspection Visit (JIV) to determine the size and cause, which includes representatives from the oil company and the National Oil Spill Detection and Response Agency (NOSDRA).

Amnesty's report said, based on interviews, that in many cases NOSDRA has little involvement in determining the cause and size in the JIV because of a lack of capacity and funding, leaving Shell to be "judge and jury".

"This is a system that is wide open to abuse - and abuse happens. There is no one to challenge the oil companies and almost no way to independently verify what they say. In effect it's, 'Trust us - we're big oil,'" Gaughran said.

The Niger Delta has for years been plagued by a range of problems including environmental degradation, kidnappings, oil theft, armed rebellions, and conflict between communities over clean-up contracts or compensation deals. ($1 = 158.4 Nigerian naira)

(Editing by Jane Baird)