Tuesday, July 17, 2012

Nigerian government fines oil firm $5 billion for oil spill

The Shell Nigeria Exploration and Production Company, SNEPCO, has been fined U.S.$5 billion over the massive oil spill that occurred at its Bonga oil field on December 20, 2011.

This was disclosed yesterday by the Director General, National Oil Spill Detection and Response Agency, NOSDRA, Dr. Peter Idabor, when he appeared before the House of Representatives Committee on Environment.

The committee's public hearing was meant to provide key actors in the Bonga oil spill an opportunity to brief the committee on the claims of affected communities.

Oil spill in the river

Idabor said the sum was an "administrative penalty" considering the large quantity of crude oil discharged into the environment by Shell and the impact of the incident on the water and aquatic life.

According to Idabor, the penalty was also consistent with what was obtainable in other oil producing countries such as Venezuela, Brazil and the United States of America.

He explained that this penalty was not the same as compensation since compensation could only be demanded from a polluting company after a proper post impact assessment has been conducted and scientific evidence of impact established.

Idabor disclosed that NOSDRA, Shell and other relevant stakeholders have concluded plans to conduct the post impact assessment on the spill as soon as approval for funding is secured from National Petroleum Investment Management Services.

Shell disagrees with fine

However, Shell has contested the fine, saying it has done nothing wrong to deserve the fine. In a quick response to Vanguard enquiries, a spokesman for Shell, Mr Tony Okonedo, said: "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 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."

In the heat of the controversies over the spill, especially with regard to third party spill which was cited in several other parts of the Niger Delta, Shell claimed it had sent samples of the spill to laboratories abroad for tests to confirm its liabilities. But till date, nothing was heard of the result of the tests.

Reason for fine

The NOSDRA boss explaining the reason for the $5 billion fine noted that "although adequate containment measures were put in place to combat the Bonga oil spill, it, however, posed a serious environmental threat to the offshore environment."

He said: "The spilled 40,000 barrels impacted approximately on 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 effects on aquatic lives while surviving aquatic species around the spill site would migrate to a farther distance to situate new habitat thereby forcing coastal communities to move deeper into the sea to carry out fishing activities."

Chairman, House Committee on Environment, Hon. Uche Ekwunife had at the opening of the interactive session expressed displeasure that seven months after the spill, there were doubts if Shell carried out a thorough clean-up programme as the oil firm was said to have hurriedly resumed operations on the facility.

She further stated that there were also indications that Shell had refused to accept full responsibility for the incident and had rebuffed claims from communities affected by the spill.

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