The report came after Shell agreed not to oppose a move by one delta community to have their pollution claims heard by a British court, potentially opening itself up to bigger financial damages.
Daniel Leader, a lawyer for the Bodo people, told msnbc.com that the case was the first of its kind because it would be heard in Britain, where payouts can be higher and cases tend to get wider media coverage.
"What is highly significant is that Shell have agreed to do this through the jurisdiction of English courts," he said.
The United Nations Environment Program analyzed the damage oil pollution has done in Ogoniland, a region in the oil-rich creeks, swamps and waterways of the Niger Delta, the heartland of Africa's largest oil and gas industry.
Shell and the Nigerian state-oil firm own most of the oil infrastructure in Ogoniland, although Shell in 1993 was forced out by communities that said it caused pollution that destroyed their fishing environment.
Shell stopped pumping oil from Ogoniland after a campaign, led by writer and activist Ken Saro-Wiwa, who was later hanged by the Nigerian military government, provoking international outrage.
"The environmental restoration of Ogoniland could prove to be the world's most wide-ranging and long term oil cleanup exercise ever undertaken if contaminated drinking water, land, creeks and important ecosystems such as mangroves are to be brought back to full, productive health," the UNEP report stated.
"Control and maintenance of oilfield infrastructure in Ogoniland has been and remains inadequate: the Shell Petroleum Development Company's own procedures have not been applied, creating public health and safety issues."
The UNEP report said 10 out of the 15 investigated sites which SPDC said had been completely remediated still had pollution exceeding the SPDC and government remediation values.
Shell says most oil spills in the Niger Delta are caused by oil theft and sabotage attacks but says it cleans up whatever the cause.
Cyber hackers: Uncle Sam wants you! Sad truth behind the London riot The veggies on the bus go 'eat, eat, eat' Mystery million-dollar Romney donor revealed What the downgrade means for typical Americans It's A Snap! Vote for your favorite travel photo Graffiti isn't just for highway underpasses anymore"Oil spills in the Niger Delta are a tragedy, and SPDC takes them very seriously," SPDC Managing Director Mutiu Sunmonu said in a statement on its website. "Concerted effort is needed on the part of the Nigerian government, working with oil companies and others, to end the blight of illegal refining and oil theft in the Niger Delta. This is the major cause of the environmental damage."
UNEP said Ogoniland communities are exposed to hydrocarbons every day as thick black oil floats around the creeks, while the impact on vegetation and fishing areas has been "disastrous."
In one community, drinking water was contaminated with benzene, a substance known to cause cancer, at levels over 900 times above the World Health Organization guidelines. The site was close to a pipeline owned by Nigeria's state-oil firm NNPC, the report said.
"We will undertake any cleanup. It doesn't mean we are culpable. Pipeline vandalism, by the very communities who are affected, is the major issue," a NNPC spokesman said.
The U.N. also found one area where an oil spill 40 years ago hadn't been cleaned.
"The Ogoni people live with this pollution every minute of every day, 365 days a year," the report said. "Since average life expectancy in Nigeria is less than 50 years, it is a fair assumption that most members of the current Ogoniland community have lived with chronic oil pollution throughout their lives."
The report also said that children born in Ogoniland are affected by the oil pollution daily, "as the odor of hydrocarbons pervades the air day in, day out."
Some environmentalists say as much as 550 million gallons of oil have poured into the Niger River Delta during 50 years of production — at a rate roughly comparable to one Exxon Valdez disaster per year. Even today, oil laps up in brackish delta creeks in Ogoniland, creating a black ring around the coastlines.
Shell helped fund the U.N. investigation, leading to criticism by some environmentalists that the report wouldn't take on the oil giant many demonize in the region. The report said damage can be caused by failing oil pipelines, as well as by thieves who tap into the lines to steal crude oil — a worsening problem in Ogoniland. The report said U.N. officials saw such theft during the day and suggested there could be "collusion" with government officials.
"It was not within (the U.N.'s) scope to identify the cause of the individual spills, nor is it scientifically possible to detect the original cause of spills after an unknown time period," the report said.
It also remains difficult for companies to operate in the delta, as criminal gangs and militants still operate and take foreign workers hostage for ransom. The U.N. report noted that it had trouble accessing some areas of Ogoniland and found evidence that unknown parties had tampered with some of the U.N.'s equipment.
Asked about the proposed trust fund, a Shell spokeswoman declined to comment. The company issued a statement saying it "will study the contents carefully and will comment further once we have done so."
While Shell does not operate in Ogoniland anymore, its pipelines and other infrastructure remain and still suffer spillages and sabotage attacks.
UNEP's report is the most detailed scientific study on any area in the Niger Delta, UNEP and activist groups said. It was paid for partly by Shell after a request by the government.
The findings were undertaken over a 14-month period, surveyed 76 miles of pipeline rights of way, reviewing more than 5,000 medical records and engaging more than 23,000 people at local meetings.
"What the world did not have on the table is a peer-reviewed scientific assessment that lays out the magnitude of the issue … the depths in which oil has percolated," said UNEP spokesman Nick Nuttall. "Basically in some areas the oil has gotten down 5 meters (15 feet) into the drinking supply of tens of thousands of people."
The report recommends that three new institutions be set up to support environmental restoration, which would include a $1 billion fund, contributed to by the oil companies and government for the first five years of the cleanup.
Amnesty International, which is actively involved in Niger Delta environmental issues, said the report proved that Shell was responsible for the pollution.
"This report proves Shell has had a terrible impact in Nigeria, but has got away with denying it for decades, falsely claiming they work to best international standards," said Amnesty International Global Issues Director Audrey Gaughran.
"Shell must put its hands up, and face the fact that it has to deal with the damage it has caused. Trying to hide behind the actions of others, when Shell is the most powerful actor on the scene, simply won't wash," Gaughran added.
Earlier Thursday, it emerged that Shell had accepted that a British court had jurisdiction in villager claims for compensation for damages caused by two oil spills from pipelines controlled by SPDC, in which Shell is the lead but minority partner.
One source close to the case said the cost of cleaning up the spill and compensating those affected has been estimated by some experts as being in the region of 250 million pounds.
Shell has been reducing its focus on onshore Nigeria, selling fields, following difficulties in the delta.
In the court case filed in Britain, Shell conceded liability and agreed to proceed under the jurisdiction of the English courts last month, Leader told msnbc.com.
The two spills in 2008 and 2009 at Bodo, Ogoniland, devastated the 69,000-person community, Leader said.
"The mood music is changing — oil companies are going to have to start no longer employing a double standard for the developing world and apply the same standards for America and Europe," he told msnbc.com.
Protest groups have increasingly tried to seek compensation against western oil companies in the firms' home jurisdictions.
Ben Amunwa of the British group PLATFORM, which monitors international energy companies, said that depending on the compensation that is decided in this case, the agreement could usher in a flood of claims from communities in the region.
"The potential in this decision is that Shell could face a mountain of claims," Amunwa explained.
The British agreement follows decades of damage to the environment in Nigeria, according to rights groups.
The lawyers and rights groups have said the amount of oil in these two spillages alone was approximately 20 percent of the amount that leaked into the Gulf of Mexico following the BP disaster.
"BP did more in 6-months for the U.S. communities than Shell has done in 50 years for the Ogoniland," said Amnesty International's Gaughran.
A spokesman for Shell's Nigerian arm, the Shell Petroleum Development Company of Nigeria, said in a statement sent to msnbc.com that the firm had "always acknowledged that the two spills which affected the Bodo community, and which are the subject of this legal action, were operational."
"SPDC is committed to cleaning up all spills when they occur, no matter what the cause," he said.
Reuters and The Associated Press contributed to this report.
