MAC: Mines and Communities

Lawsuit against BHP over tailings dam disaster dismissed by British judge

Published by MAC on 2020-11-10
Source: ABC, Bloomberg

Claimants to appeal "flawed" decision over Brazil's worst ever environmental crime.

A lawsuit against Australian mining giant BHP has been struck out by a Manchester court, in a blow to a group of 200,000 Brazilians seeking justice after a devastating dam failure in 2015. Nineteen people died when millions of cubic metres of mining waste burst from a dam at BHP-Vale joint-venture iron ore mine in Minas Gerais. Tom Goodhead, a lawyer representing the claimants, called the judgment "fundamentally flawed" and vowed to appeal.

See also:

2019-05-08 BHP hit by $5 billion lawsuit over 2015 dam failure in Brazil

2019-04-12 Vedanta can no longer hide from Zambian villagers' fury

2019-01-23 Vedanta's Zambia court case: will there be justice?

British court throws out $9 billion lawsuit against BHP over 2015 Brazil dam disaster

Lawyers representing the claimants have vowed to appeal the decision.

November 10, 2020

A 5 billion pound (A$9 billion) lawsuit against Australian mining giant BHP has been struck out in a British court, in a blow to a claimant group of 200,000 Brazilians seeking damages after a devastating dam failure in 2015.    

A High Court judge in Manchester said managing the largest group claim in English legal history would be like "trying to build a house of cards in a wind tunnel" and ruled the case was an "abuse of the process of the court".

BHP welcomed the decision, which it said reinforced its view that victims should pursue claims in Brazil and that the case duplicated ongoing work and legal proceedings there.

Tom Goodhead, a lawyer at PGMBM representing the claimants, called the judgment "fundamentally flawed" and vowed to appeal.

"We will continue to fight ceaselessly, for however long it takes, in any court in the world, to ensure that BHP are held accountable for their actions," he said.

The collapse of the Fundao dam, which is owned by the Samarco joint venture between BHP and Brazilian iron ore mining giant Vale, killed 19 and sent a torrent of mining waste into communities, the Doce river, and the Atlantic Ocean, 650 kilometres away.

It was Brazil's worst environmental disaster.

Nineteen people died when millions of cubic metres of mining waste burst from a dam at BHP's joint-venture iron ore mine in Brazil. Now, Four Corners reveals evidence of problems at the mine dating back almost a decade.

The case is the latest battle to establish whether multinationals can be held liable for the conduct of subsidiaries abroad.

The ruling comes about 18 months after the UK Supreme Court ruled that nearly 2,000 Zambian villagers could sue miner Vedanta in England for alleged pollution in Africa because substantial justice was not obtainable in Zambia.

Leigh Day partner Martyn Day, who represented the Zambian villagers, said he took his hat off to the Brazilian claimants' legal team for "having the guts" to take on the vast case.

Claimants alleged senior BHP executives sat on Samarco's board, that BHP representatives approved of plans to repeatedly ramp up the dam's capacity, ignoring safety warnings, and that victims have no prospect of proper compensation in Brazil within a reasonable timeframe.

Lawyers for the claimants, who include municipalities, indigenous people, businesses and churches, also argued that under Brazilian law, liability for environmental damage could be imposed on a defendant's ultimate owner.

BHP says it and Vale each poured about $1.7 billion (A$2.3b) into the Renova Foundation, set up in 2016 by BHP's Brazilian division, Samarco and Vale to manage 42 reparation projects, including providing financial aid to indigenous families, rebuilding villages and establishing new water supply systems.

BHP Faces Biggest U.K. Class Action Over Brazil Dam Collapse

Laura Joffre


July 22, 2020

More than 200,000 Brazilians are asking British judges for the right to sue BHP Group, the world’s biggest mining company, in U.K. courts over the deadly collapse of a dam five years ago.

Residents, businesses and local governments say BHP bears ultimate responsibility for the collapse of the Fundão Dam, which killed 19 people and caused lasting environmental damage. The facility was run by a company jointly owned by a BHP unit and Vale SA.

At an eight-day hearing starting Wednesday in Manchester, U.K., judges will rule on whether British courts have jurisdiction over the case. If it goes ahead, it would be the biggest class action in U.K. history with the local groups seeking a total of 5 billion pounds ($6.33 billion).

This is the latest in a series of group claims brought in the U.K. against British companies for the actions of their foreign units in developing countries. Melbourne-based BHP’s shares are listed in both the U.K. and Australia.

In a landmark ruling last year, the U.K. Supreme Court allowed Zambian villagers to sue mining company Vedanta Resources Plc in Britiain over pollution caused by a mine, opening the door to similar claims. Last month, thousands of Nigerians sought permission to sue Royal Dutch Shell Plc in London over damage caused by oil spills in the Niger Delta.

“Until there is a change in corporate behavior, I think this type of litigation is likely to increase,” said Tom Goodhead, a lawyer representing the plaintiffs at law firm PGMBM.

But BHP said that the Manchester case duplicates legal proceedings in Brazil and shouldn’t be allowed to go ahead.

“BHP’s overarching position remains that the proceedings do not belong in the U.K.,” BHP said in a statement.

Safety warnings

The Fundão Dam was used to store iron ore tailings, a toxic waste produced during the processing of mined mineral. Its collapse destroyed entire villages, polluted rivers and devastated natural habitats.

The joint venture, Samarco, allegedly ignored safety warnings as it increased iron ore production and tailings storage at the dam, PGMBM said in court filings ahead of the hearing. BHP representatives had been informed of serious structural failings in a report two years earlier, the claimants said.

BHP said it is committed to supporting ongoing remediation and compensation through the Renova Foundation, an out-of-court compensation scheme, to which the company made a provision of $1.7 billion.

The Renova Foundation had announced it was suspending payments to thousands of victims it alleged had provided false information, but a Brazilian judge ordered the Foundation to resume aid last week.

Thousands of individual claims against Samarco are ongoing in Brazil.

An appeal is currently pending against the dismissal of a class action filed in New York on behalf of Samarco bondholders, while a separate class action by BHP investors has been filed in Australia, according to company filings. Brazilian prosecutors are also continuing to challenge the dismissal of some criminal charges in the case, BHP said in a February statement.

Other cases linked to large-scale environmental damage have taken decades to be processed in the Brazilian courts, and the claimants are hoping to obtain quicker results in the U.K. The current proceedings in the British courts don’t target Vale.

Work to reopen the joint venture in Brazil has been slowed, in part because of measures to respond to Covid-19, BHP said in a separate statement this week.


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