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Nigerian senators threaten Shell

Date Class
1st Dec 2004 Questionable Business Practice
Nigeria's senate is to consider sanctions against a unit of Dutch and UK oil company Shell for failing to pay a $1.5bn (775m) pollution penalty.

The firm had been told to make the payment by 23 November for alleged environmental damage caused by oil spillage in the Niger Delta region. The Senate is now to examine recommendations for penalties.

A letter from Shell rejected the compensation order, describing it as "flawed", Senator John Brambaifa said. The payment resolution was issued by the senate in August, but does not have force of law. It was approved following a petition by residents of the oil-rich state of Bayesla.

The Shell unit, Shell Petroleum Development Corporation, is a joint venture with the Nigerian National Petroleum Corporation, Agip, and Elf. Shell has said in the past that it had "strongly contested" the pollution claims and that it was important to note an earlier resolution from Nigeria's House of Representatives did not endorse the penalty.

Mr Brambaifa, who chair the Senate committee on the Niger Delta, accused the firm of "effrontery", and said it was challenging Nigeria's sovereignty. He added that his committee would recommend measures against Shell's Nigerian subsidiary in the next couple of weeks.

He said the committee was also investigating Shell's activities in Nigeria in the past four decades, and its impact on the Niger Delta.




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