BHP (NYSE: BHP; LSE: BHP; ASX: BHP) faces a potential US$47-billion payout in damages over the 2015 Mariana Dam disaster in Brazil, believed to be the country’s most catastrophic environmental incident, as a lawsuit against the miner kicked off on Monday in London’s High Court.
The trial, expected to last up to 12 weeks, will determine whether BHP is legally responsible for the collapse of the Fundão tailings dam in Minas Gerais, Brazil. The structural failure caused a massive flood that claimed 19 lives, destroyed villages and severely polluted water sources for local communities. The dam was owned by Samarco, a joint venture between BHP and Brazilian mining giant Vale (NYSE: VALE).
The case has been winding its way through the English judicial system for six years, with various judges holding conflicting opinions on whether the case can proceed. In 2022, appeal judges cleared the path for a full trial to take place.
The plaintiffs in the case include more than 600,000 Brazilian citizens, 46 municipalities and 2,000 businesses, all challenging BHP’s role in the disaster. Lawyers from U.K.-based firm Pogust Goodhead, which is representing the victims, argued on Monday that BHP has been attempting to evade its responsibility.
The world’s largest mining company is disputing liability, arguing that the London lawsuit duplicates legal proceedings and reparation programs in Brazil, and should be dismissed.
It also claims that nearly US$8 billion has already been paid to those affected through the Renova Foundation, with around US$1.7 billion going to claimants in the English case.
BHP’s lawyers stated in court that no law or contract imposes a duty of safety on the parent company of a non-controlling shareholder or the other parent company in the same group. They also argued the miner did not breach any safety duty, nor did its actions cause the collapse.
BHP further described parts of the lawsuit as “implausible or exaggerated.”
Settlement in Brazil
This trial comes shortly after BHP and Vale announced they were in talks with Brazilian authorities regarding a potential settlement of US$31.7 billion to compensate for the damage caused to people, communities, and the environment.
Pogust Goodhead said that the settlement talks in Brazil will not affect the U.K. case.
“The timing of these negotiations only highlights how the companies responsible for Brazil’s largest environmental disaster are doing everything possible to prevent the victims from obtaining justice. It reflects the same shameful conduct they have displayed over the past nine years,” the firm said in a statement.
The multi-week hearing, the largest group litigation in English legal history, will also examine whether Brazilian municipalities can bring legal action, the effect of any agreements made by English claimants with BHP, and whether the claims were filed too late.
BHP and Vale agreed in July to equally share the cost of any damages related to proceedings in the U.K.
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