London (Platts)--11Oct2012/716 am EDT/1116 GMT

A legal case against Shell is set to begin Thursday in a Dutch court with the Anglo-Dutch major facing charges of causing environmental pollution in Nigeria.

The case has been brought by environmentalist group Friends of the Earth Netherlands together with four Nigerian plaintiffs.

They accuse Shell's Nigerian unit SPDC, and a number of holding companies including Shell, of failing to clean up pollution caused by three leaks at three locations in the period 2004-07.

The case is the first brought against Shell relating to pollution in Nigeria in a Dutch court.

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"Today, October 11, the first session will be held in the substantive proceedings of a unique civil legal suit: Milieudefensie [Friends of the Earth Netherlands] and four Nigerian farmers versus Shell, based on years of oil pollution in three villages in the Niger Delta," the environmentalist group said in a statement.

"This case could have major legal consequences internationally," it added.

It will be the first time that a Dutch company has been brought before a court in the Netherlands to answer for environmental damage caused abroad, it said.

"It is also the first time that the headquarters of a multinational concern on the European continent has been summoned to appear in court for environmental or human rights violations in a developing country," it said.

A verdict is expected in late 2012 or early 2013.

"Conservative estimates indicate that the total damage caused in Nigeria by oil pollution amounts to tens of billions of euros," Friends of the Earth Netherlands said.

SHELL DEFENSE

Shell, in its defense, says that the three spills were caused by sabotage -- locals stealing oil from the pipelines -- and that the company has cleaned up all of the leaked oil.

"SPDC maintains that it is not liable to pay compensation in relation to the spills," a Shell spokesman told Platts Thursday. "SPDC has cleaned up the pollution at the three locations [and] this has been certified by the relevant Nigerian authorities."

"Under Nigerian law oil companies/operators are not liable to pay compensation for damage caused by sabotage spills," he added.

SPDC, the spokesman said, is committed to cleaning up all spills from its facilities whether resulting from sabotage or from operational causes where communities grant access to do so.

"The real tragedy of the Niger Delta is the widespread and continual criminal activity, including sabotage, theft and illegal refining, that causes the vast majority of oil spills. It is this criminality which all organizations with an interest in Nigeria's future should focus their efforts on highlighting and addressing," he said.

OIL THEFT

Shell has been vocal in pointing out the extent of oil theft in the country, saying some 150,000 b/d of production in Nigeria is being lost to the activity, a number backed up by independent analysis.

"The United Nations Office on Drugs and Crime estimates that over 150,000 b/d of oil are stolen in the Niger Delta -- that cannot be ignored," the Shell spokesman said.

"All sources of ongoing contamination, including activities such as crude theft and illegal refining, must be brought to an end in order to reach a long-lasting solution. SPDC does not see how these court cases contribute to help solve the wider problem."

Friends of the Earth Netherlands, though, said the case would bring more attention of the international community to the oil pollution caused by international companies in Nigeria.

"If the Dutch court indeed holds Shell responsible for not (properly) cleaning up oil pollution in Nigeria, that could lead to more transnational legal cases," the group said.

"Victims of violations of environmental standards and human rights perpetrated by Western multinationals would then be expected to more often seek satisfaction through a civil court in the Netherlands and possibly in other EU counties as well. In Nigeria alone there are hundreds of thousands, if not millions of people who are victims of oil pollution, caused by multinational oil companies."

--Stuart Elliott, stuart_elliott@platts.com
--Edited by Maurice Geller, maurice_geller@platts.com

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