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The energy giant will have to pay four Nigerian farmers compensation and start a cleanup over pollution caused by leaking oil pipelines in the Niger Delta.
An appeals court in the Netherlands on Friday ordered Royal Dutch Shell to pay compensation to Nigerian farmers over oil pollution in the Niger Delta.
The court delivered its judgment at the end of a long-running civil case. The farmers were seeking financial compensation and a clean-up by Shell for pollution caused by pipelines leaking oil into the Niger Delta.
"Shell Nigeria is sentenced to compensate farmers for damages," the court said. The bench added that parent company Royal Dutch Shell was also liable to install detection equipment that could prevent future damage on the Oruma pipeline, the site of a significant number of the spills.
The farmers' lawyer, Channa Samkalden, told DW that the ruling against Shell will likely prompt more victims to come forward.
"It's very well possible that there will be more and more oil spill victims in Nigeria who will try to seek justice in a way similar to this," Samkalden said.
Shell will also now be prompted to change its practices surrounding oil spills in Nigeria, after the court found the company didn't provide "sufficient evidence" to prove the leak was caused by sabotage.
"This means that Shell will really, from now on, have to do proper investigations and keep proper documentation when they want to make that argument," Samkalden said.
A key issue in the case is the principle of whether multinationals in the Netherlands can be held responsible for the actions of their subsidiaries abroad. While the court did not hold the parent company directly responsible, the order to install a leak detection system did indicate a degree of liability.
The decision can be appealed in the Dutch Supreme Court. However, it represents a step forward for the plaintiffs in a case that is breaking new legal ground.
The company claimed that saboteurs were responsible for leaks in underground oil pipes that have polluted the delta. Shell also argued that it should not be held legally responsible for the actions of a foreign subsidiary.
However, the court said Shell Nigeria had not proven "beyond reasonable doubt" that the multiple oil spills were the result of sabotage rather than poor maintenance.
"This makes Shell Nigeria responsible for the damage caused by the leaks", the court said. "The amount of compensation to be paid will have to be determined at a later stage."
The case was brought in 2008 by farmers complaining of lost income from contaminated land and waterways and the environmental group Friends of the Earth.