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BHP labels class action in UK over Brazil dam failure ‘pointless’

Charles Gibson, a lawyer for BHP, told the court Brazil had a sophisticated and fair justice system that provided access to timely justice. “One has to be quite cautious before casting stones at other systems of justice,” he said.

The judge is expected to reserve judgment until around September. If shown the green light, further trials could determine liability and quantify damages.

Swallows guard the entrance wall to a mud-enveloped childcare centre in Paracatu de Baixo, Minas Gerais, Brazil, three years after the Samarco dam burst.

Swallows guard the entrance wall to a mud-enveloped childcare centre in Paracatu de Baixo, Minas Gerais, Brazil, three years after the Samarco dam burst.Credit:Lucas de Godoy

The collapse of the Fundao dam, which stored mining waste and is owned by the Samarco joint-venture between BHP and Brazilian iron ore mining giant Vale, killed 19 and poured roughly 50 million cubic metres of mining waste into communities, the Rio Doce river and Atlantic Ocean, 650 km away.

Claimants allege BHP, the world’s largest miner by market value, ignored safety warnings as the dam’s capacity was repeatedly increased by raising its height – and disregarded cracks that were early signs of rupture.

Many claimants are seeking compensation for physical and psychological injury, property damage, moving costs, loss of earnings, loss of water supply and lost fishing income.

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BHP says the Renova Foundation, a redress scheme established in 2016 by its Brazilian division, Samarco and Vale, has spent around £1.3 billion on projects such as monthly emergency financial aid to about 130 indigenous Krenak families, rebuilding three villages and establishing alternative water supply systems.

It also alleges almost 100,000 of the claimants have already received payments from Renova and only 58 of the individuals, businesses, municipalities, churches, utility companies and indigenous people bringing the claim in England are not part of Brazilian class actions.

Claimants allege it is wrong to suggest victims are entitled to full redress in Brazil because Renova lacks independence and its compensation scheme is slow, bureaucratic, inadequate and has not properly involved victims in decision-making.

They allege BHP is responsible for the dam’s collapse, liable for its “catastrophic consequences” under Brazilian law but that victims have no prospect of proper compensation in Brazil within any reasonable timeframe.

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Samarco, Vale and BHP Brasil face a raft of lawsuits in Brazil over the disaster, including a 155billion real ($42 billion) class action filed by federal prosecutors which, BHP alleges, overlaps “almost entirely” with the English case.

The Brazilian class action has been suspended, although the parties aim to negotiate a settlement by around August 2022.

Reuters

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