Shock Court Ruling for Shell-Exxon's Dutch JV

Shell-Exxon joint venture NAM, the largest gas producer in the Netherlands, has expressed "surprise" at a April 20 ruling from a Dutch court, reopening the issue of whether it may be criminally prosecuted for damage to property caused by earthquakes above its Groningen gasfield.

It comes as a shock to NAM, which had hoped that rulings to enforce certain compensation payments and to cap Groningen field production had drawn a line under how far the company could be judicially pursued. The field must not produce more than 24bn m³/yr in the 12 months starting October 2016, less than half its output of a few years ago.

The Arnhem-Leeuwarden court however ruled April 20 that an earlier public prosecutor's decision not to launch a criminal investigation into life-threatening damage to buildings was flawed. "Such an investigation must now first be carried out, after which it can be finally assessed whether prosecution must take place," the court said in an accompanying statement.

The court has now ordered the public prosecutor "pursuant to Article 181 of the criminal code" to conduct a further investigation into whether destruction or damage to property by NAM in the province of Groningen between January 1993 and April 14 2015 may have been life-threatening.

The court said it made its ruling, following a complaint made by several individuals and local activist group Groninger Bodem Beweging, adding that under Article 12 of the criminal code "a direct stakeholder can complain to the court of law about the prosecution's decision not to institute prosecution."

(Credit: Nam)

GBB's lawyer, Gerard Spong, welcomed the verdict to call for a judicial investigation into NAM adding that, were a prosecution to be mounted and lead to a conviction, then a sentence of up to 15 years imprisonment could be imposed on individuals found guilty.

NAM said it took note of the court's ruling on the Article 12 procedure but was nonetheless "surprised" by the verdict, as the public prosecutor and other court rulings had found there was no reason for prosecution. It said that the recommendation of a further investigation, however, "does not automatically mean that NAM will also be prosecuted." It said it would fully cooperate with any such investigation.

Since the Dutch state meteorological and seismic agency KNMI ruled that earthquakes above the Groningen gasfield were induced by gas production, NAM has no longer contested the quakes were the result of its activities but has always contested it was criminally at fault. The largest quake was a 3.6 magnitude one in the village of Huizinge in mid-August 2013 – not major by global standards, but relatively shallow and therefore damaging to houses. 

Mark Smedley