Energy Law

Ejama-Ebubu Community v Shell Petroleum: 5 Decades & a $110 Million Settlement

The presence of natural resources in a country would ideally seem like the answer to all its prayers, guaranteeing instant fortune. Instead, it mostly leaves behind a trail of corruption, poverty and economic instability known as the resource curse. Unfortunately, the people of the Niger Delta – the oil-producing region in Nigeria are familiar with this.

These resources get mismanaged and squandered, leaving them with lasting environmental degradation. Although the Shell Petroleum (Shell) v Ejama-Ebubu community in Rivers State case is decades old, the issues are still relevant today. The Niger Delta still suffers pollution from leaking oil pipelines

Summary of the case

The blowout of a pipeline Shell owned during the Nigerian civil war (1967-1970) has been the source of contention between the company and the host community for about 50 years. The blowout resulted in an oil spill in the Ejama-Ebubu community (part of the Ogoni communities) in Rivers State and a ruptured pipeline for Shell. The Ejama-Ebubu community claimed that Shell’s negligence caused the rupture while Shell maintained that the damage occurred because of third parties- Biafran rebels during the war. Shell repaired damaged facilities and continued its processes after the civil war while the oil spill rendered the lands and rivers unusable. 

Journey 

1991- The Ejama-Ebubu people’s first attempt to hold Shell accountable for the incident happened in 1991. Though Shell acknowledged the occurrence of the incident, they failed to claim liability stating it was a result of “third-party” interference
2001- The case was first filed in a Federal High Court in Port-Harcourt 2001 after Nigeria transitioned to civil rule. It came 31 years after the incident. The people requested damages and for the return of the land to its original state pre-the incident
2007- The suit got delayed till 2007 due to a change of the judge 
2010- A High Court sitting in Asaba Delta ordered Shell to clean up the land and pay approximately N17 Billion to the community in Special and general damages. Dissatisfied with the judgment, Shell filed an appeal seeking to set it aside, claiming that affected sites got fully remediated
2017- Shell proceeded with a further appeal to the Supreme Court which was dismissed
2019- The community filed an order seeking enforcement of the judgment at a United Kingdom High Court while Shell’s appeal was still in court. The UK court, however, rejected this order based on an application from Shell
2020- In November 2020, the Supreme Court dismissed the application by Shell to set aside the 2010 judgment against them to pay N17 billion to the Ejama-Ebubu community for a “competent brief of argument.”
2021- In February 2021, Shell filed an arbitral claim at International Centre for the Settlement of Investment Disputes (ICSID), with the argument that they are “seeking protection of their legal rights.” They further claimed that they were never able to “fully defend themselves against the substance of the claims”.

In August 2021, Shell finally agreed to settle this judgment debt now amounting to $110 million/ N45 Billion bringing this long dispute to an end

Aftermath
This settlement is long overdue, and while it signifies hope for the people in that community, the damage to the environment has been done. Many of its members were deprived of their means of livelihood and now Shell intends to hastily divest all its assets in Nigeria. There is also the issue of the settlement being used to do what it was asked for. It is public knowledge that there are allegations of embezzlement against agencies created to cater to the welfare of the people in that region. Hopefully, there is a concrete plan to restore and improve the quality of life in that

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About Ida Gregory

Ida is a law graduate from the University of Hertfordshire, England. Her interests in energy law led her to a Masters in Oil, Gas and Renewable Energy from Robert Gordon University, Aberdeen. She is currently a student of the Nigerian Law School who intends to go into the energy Industry. In her spare time, she enjoys movies, reality tv shows and cooking