Oil Giant Accused of Diverting $1 Billion Compensation Claim for Nigerian Communities

The Executive Director of Oil Spill Victims Vanguard (OSPIVV), Harrison Jalla, has filed a lawsuit against Shell Trading and Shipping Company Limited (STATSCO) and its partners, accusing them of diverting a $1 billion insurance indemnity pollution claim intended for victims and communities in the Niger Delta affected by the 2011 Bonga Oil Spill.

According to Jalla, the alleged $1 billion insurance claim was meant to compensate communities that suffered severe pollution during the Bonga Oil Spill, which is considered one of the worst environmental disasters in the Niger Delta. The spill occurred during the loading of crude oil by the vessel MT Nothia, owned by STATSCO and Shell Exploration and Production Company (SNEPCO).

However, since 2011, STATSCO and its partners, including Britannia Steamship Insurance Association Limited, have allegedly diverted the compensation without informing Nigerian regulatory authorities or the impacted victims. The affected communities were left out of the compensation process despite the widespread environmental damage caused by the spill.

The negligence during the loading of MT Nothia resulted in catastrophic pollution, yet the rightful beneficiaries of the insurance claim have been denied justice for over a decade. The suit seeks to recover the diverted insurance funds for the victims.

The legal battle is expected to be a landmark case, holding international oil companies accountable for their actions in Nigeria’s oil-rich region. Jalla emphasizes that the Bonga oil spill had devastating effects on the livelihood and environment of the Niger Delta communities and that the suit is not just about compensation, but about holding these corporations accountable for their actions.

Furthermore, Jalla claims that the insurance claim in question had been concealed from key Nigerian agencies, including the National Oil Spill Detection and Response Agency (NOSDRA) and the Nigerian Maritime Administration and Safety Agency (NIMASA), further complicating efforts to secure justice for the victims.

The suit against Shell and Britannia Steamship Insurance Association Limited was filed by OSPIVV in April 2022, and its outcome is likely to have far-reaching implications for the affected communities and the oil industry as a whole.