UK judge blocks Brazil lawsuit against BHP

Kirstin Ridley
·2-min read

A 5.0 billion pound ($A9.0 billion) English lawsuit against Anglo-Australian mining giant BHP has been struck out in a blow to a 200,000-strong Brazilian claimant group seeking damages after a devastating dam failure in 2015.

A High Court judge in Manchester, northwestern England, 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.

PGMB's managing director Tom Goodhead, who is representing the claimants, called the judgment "fundamentally flawed" and pledged 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.

BHP, the world's largest miner by market value, clashed with claimants during an eight-day jurisdiction hearing in July in the latest battle to establish whether multinationals can be held liable for the conduct of subsidiaries abroad.

The judge's decision comes about 18 months after the United Kingdom's Supreme Court ruled that nearly 2000 Zambian villagers could sue miner Vedanta in England for alleged pollution in Africa because substantial justice was not obtainable in Zambia.

The collapse of the Fundao tailings 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 sent a torrent of red mud into communities and the Doce river that reached the Atlantic Ocean, 650km away.

The Fundao dam disaster in Brazil's "iron quadrangle" in southeastern Minas Gerais state ranks as the country's worst environmental disaster.

Claimants allege senior BHP executives sat on Samarco's board, that BHP representatives knew and approved of plans to repeatedly ramp up the dam's capacity by raising its height, 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 $US1.7 billion ($A2.3 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 Krenak families, rebuilding villages and establishing new water supply systems.

The miner says it is committed to "doing the right thing" and called for the case to be struck out or put on hold, arguing it duplicated proceedings in Brazil and that victims were receiving, or would receive, full redress.