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Nigerian fishermen reject Shell's $50 million; court rules company can be liable for oil theft

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LAGOS, Nigeria - Thousands of Nigerian fishermen have rejected an offer of $50 million from Royal Dutch Shell for "some of the largest oil spills in history," their British lawyers said Friday after winning a landmark court ruling.

Shell already accepts responsibility for paying compensation and cleaning up spills caused by its own failures. But the London High Court decided that Shell can be held legally liable for spills caused by oil thefts, if it fails to provide reasonable protection for its pipeline infrastructure.

The court case involves one of Nigeria's worst environmental disasters. Amnesty International called it "a shot across the bows for Shell" and said the ruling "paves the way for Shell to finally be held accountable for devastating oil pollution in the Niger Delta."

Shell played down the judgment, saying in a statement that it was favourable in limiting litigation to "an assessment of actual damages sustained" in spills.

The oil company, Nigeria's biggest petroleum producer, claimed that the court found Nigerian law "does not hold pipeline operators responsible for damage caused by oil theft."

But Judge Robert Akenhead of the London Technological and Construction Court ruled Shell is responsible for taking reasonable steps to protect its infrastructure, including installing leak detection systems, surveillance equipment and anti-tamper equipment. Shell does not have such equipment in its Nigerian fields, though they are considered mandatory in oilfields in the developed world.

It is the first time Shell has had its environmental record in Nigeria on trial by a British court. The thousands of compensation cases in often corrupt Nigerian courts drag on for years and often end with victims being paid a pittance. Until now, Shell has paid compensation only for spills caused by equipment failure.

Oil thefts in Nigeria have reached an industrial scale, with some $35 million worth stolen daily, according to figures this week from the country's national conference.

Shell has a woeful record of cleaning up spills in Nigeria. It has yet to clean up the 2008 and 2009 spills that triggered the court case, saying the Bodo community has refused to give it access.

Mutiu Sunmonu, managing director of Shell Nigeria, said the company has accepted responsibility for the "deeply regrettable" spills and urged the fishermen to accept Shell's "sensible and fair compensation offers."

Martyn Day of London law firm Leigh Day said Shell's offer of 30 million pounds (more than $50 million) amounted to about 1,000 pounds ($1,700) for each of 30,000 people who lost their livelihoods. He called it laughable.

Bodo Creek is one of Nigeria's worst environmental disasters, with some experts saying it caused the largest loss of mangrove habitat ever caused by an oil spill.

Shell documents say the leak started Oct. 5, 2008 and a total of 1,640 barrels of oil was spilled. Government and community documents say the leak started Aug. 28, and industry experts estimate up to 4,320 barrels of oil was flooding Bodo each day for at least 72 days.

Amnesty International has accused Shell of manipulating oil spill investigations and wrongly reporting the cause and volume of oil spills devastating the Niger Delta, and of making false claims about cleanup measures.

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