Vast Brazil lawsuit in UK against BHP over 2015 dam failure hits buffers


FILE PHOTO: Men take out a bag from a house flooded with mud after a dam owned by Vale SA and BHP Billiton Ltd burst, in Barra Longa


By Kirstin Ridley
Wed., March 24, 2021

LONDON (Reuters) -A 200,000-strong Brazilian claimant group said on Wednesday it had failed to resurrect a 5.0 billion pound ($6.9 billion) English lawsuit against Anglo-Australian mining giant BHP over a devastating 2015 dam failure.

The Court of Appeal agreed with a lower court that the vast group action was an abuse of process, that claimants were already able to seek redress in Brazil and that the case would be "irredeemably unmanageable" if allowed to proceed.

Tom Goodhead, the PGMBM lawyer representing the claimants, said it was "a sad day for the English justice system" after senior judges agreed that the claim, relating to Brazil's worst environmental disaster, should be struck out.

The collapse of the Fundao dam, owned by the Samarco venture between BHP and Brazilian iron ore mining giant Vale, killed 19 and sent a flood of mining waste into communities, the Doce river and the Atlantic Ocean, 650 km (400 miles) away.

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

The UK Supreme Court in 2019 allowed Zambian villagers to sue miner Vedanta in England for alleged pollution in Africa and in February permitted Nigerian farmers and fishermen to pursue Royal Dutch Shell over oil spills in the Niger Delta.

But the English claim against BHP was first struck out in November after a High Court judge ruled that allowing it to proceed here would be like "trying to build a house of cards in a wind tunnel".

Goodhead said he was surprised and disappointed by the Court of Appeal decision, which sent "a poor message about corporate responsibility and legal consequences for wrongdoing".

"We are committed to supporting the victims of this tragedy. We will now take stock and assess our options as to how justice can best be achieved," he said.

BHP welcomed the decision, which it said reinforced its view that the proceedings duplicated existing and ongoing remediation efforts and legal proceedings in Brazil. It said it remained fully committed to doing "the right thing" for victims.

BHP says it and Vale each poured about $1.7 billion 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 said Renova has spent nearly 12 billion reais ($2.17 billion) across the projects to date.

A United Nations expert report, published in September, said the disaster decimated the livelihoods of more than three million people, leaving locals exposed to dust and heavy metals in mud, that information about toxicity was inadequate and that all reparation projects were behind schedule.

In October, Brazilian federal prosecutors filed a lawsuit against BHP and Vale, alleging compensation packages were too low and forced victims to waive rights in other legal proceedings.

Renova has insisted that projects such as water quality monitoring and environmental repairs are on track, while the miners reject allegations they are not complying with obligations and of wrongdoing.

($1 = 0.7284 pounds)

($1 = 5.5210 reais)

(Reporting by Kirstin Ridley; Editing by Edmund Blair)