* New law could cost oil firms tens of millions a year
* Hundreds of oil spills occur every year in Niger Delta
* Rights groups criticise regulator, oil firms over spills
By Joe Brock
ABUJA, Nov 8 (Reuters) - Nigerian legislators areconsidering a law to impose new fines on operators responsiblefor oil spills, a measure that could face major foreigncompanies with penalties running into tens of millions ofdollars a year.
There are hundreds of leaks every year from pipelines thatpass through the creeks and swamplands of the Niger Delta,damaging the environment and the profits of oil companiesincluding Royal Dutch Shell and Italy's Eni.
Many of these spills are caused by oil theft and pipelinesabotage, a crime committed daily in the Niger Delta, wherefrustrations among millions of people in poverty run high.
There have also been rarer cases of large oil spills in deepoffshore projects.
Currently oil companies are required to fund the clean-up ofeach spill and usually pay compensation to local communitiesaffected, if it was the company's fault.
The law being considered by the national assembly, seen byReuters on Friday, would impose new fines on oil firms when theyare responsible for spills and strengthen the regulator'spowers, including being able to force firms to shut operations.
Every barrel of oil spilled onshore or in coastal waterwould incur a fine of 200,000 naira ($1,300), while shallowwater spillages would be penalised 175,000 naira per barrel anddeep offshore leaks would cost 150,000 naira a barrel.
Shell's website said that in 2008 more than 50,000 barrelswere spilled due to operational issues. Under the new law, thiscould incur a fine of 10 billion naira ($63 million).
Environmental campaigners say this is an underestimate andthe real figure could be several times that.
In later years far less was spilled due to the company'serror, it says.
Oil companies would have to report oil spills within 24hours to the regulator or be fined 500,000 naira per daythereafter. They would also have to submit 0.05 percent of theiroperating budget to help fund the regulator.
"Only if polluting the environment becomes more costly thancleaning it up will the situation change for the better," saidSenator Bukola Saraki, head of the senate's environment board.
Saraki's team said they hoped a vote on the bill would beheld by the end of the year.
A Shell spokesman declined to comment on the proposed law.
Legislation is often difficult to enforce in Nigeria, wherea patronage culture and widespread corruption create loopholes,according to watchdogs including Transparency International.
Clauses in the new law say the new regulator would set thesalaries and benefits for its members itself and it would beallowed to accept gifts, including property and cash.
Amnesty International critized Shell this week, saying itmanipulated the results of oil spill investigations to avoidpaying fines or damaging its reputation. The company stronglydenied the allegations.
Amnesty also criticised the Nigerian government for nothaving a more well-equipped oil spill regulator.
