Shell asked to pay $5B fine for Bonga oil spill

The Federal Government has asked Shell Nigeria Exploration and Production Company (SNEPCo) to pay $5 billion for the oil spill that occurred in its Bonga oil field in December last year. But the Managing Director of SNEPCo, Chike Onyejekwe, said the company was not thinking about compensation for affected communities, saying the spill did not reach the shoreline before it was contained.

The disclosures were made this week at a meeting organised by the House of Representatives Committee on Environment aimed to ascertain progress report on the Bonga oil spill of 28 December 2011. Chairman of the Committee, Uche Ekwenife said going by reports and complaints from affected communities, it was clear that no clean-up had been carried out by Shell, and that there was a need to have a knowledge of efforts taken so far by the Government and the oil company. Ekwenife pointed out that there were indications that Shell had refused to accept full responsibility for the incident and had rebutted the claims from communities allegedly impacted by the spill.

In his presentation, the Director-General, National Oil Spill Detection and Response Agency (NOSDRA), Mr Peter Idabor, said Shell was sanctioned for the large quantity of crude oil discharged into the environment and the impact on economic and environment of the affected communities. He said the fine was for 'administrative penalty,' adding that it is consistent with similar fines for similar pollution events in other oil producing countries such as Venezuela, Brazil and the United States of America. Though he explained that the penalty should not be taken as compensation, "because compensation is only demanded from a polluter company after a proper post impact assessment has been conducted and scientific evidence of impact established". According to the Director-General of NOSDRA, Shell and other stakeholders plan to conduct the Post Impact Assessment (PIA) on the spill as soon as approval for funding was secured from National Petroleum Investment Management Services. He said: "Although adequate containment measures were put in place to combat the Bonga oil spill, it however posed a serious environmental threat to the offshore environments. "The spilled 40,000 barrels impacted approximately 950 square kilometres of water surface; affected great number of sensitive environmental resources across the impacted area and has direct social impact on the livelihood of people in the riverine areas whose primary occupation is fishing. "It also potentially caused a number of physiological and hispathological effects on aquatic lives while surviving aquatic species around the spill site would migrate to a farther distance to new habitats thereby forcing coastal communities to move deeper into the sea to carry out fishing activities".

However, Onyejekwe said the status of the spill could not be known until about the end of the year. While claiming that over 325 claims have been received from different communities over the spill, Onyejekwe said his organisation was not thinking about compensating the communities for now. He said the oil spill did not hit the shoreline of the communities and as such would not compensate for the Bonga oil spill.

Shell's spokesman Tony Okonedo said: "We do not believe there is any basis in law for such a fine. Neither do we believe the SNEPCo has committed any infraction of Nigerian law to warrant such a fine." He said the firm handled the incident with utmost care and acted with the consent of the necessary authorities to prevent the environmental impact.