The Anglo-Australian mining company BHP has been accused of “cynically and doggedly trying to avoid” responsibility for Brazil’s worst environmental disaster at the opening of the largest group lawsuit in English legal history.
The claim for up to £36bn in compensation was opened by lawyers acting for more than 620,000 individuals at the high court in London. It comes nine years after the breach of a dam holding toxic waste from an iron ore mine killed 19 people near the town of Mariana in south-eastern Brazil.
In his opening submission, Alain Choo Choy KC, for the claimants, suggested that the “profound shortcomings” of the reparations process in Brazil had led the case to be opened in England. He accused BHP of devoting “very substantial resources to placing obstacles in the way of the claimants’ English claims”.
A “chasm” had emerged between the level of compensation that BHP regarded as “acceptable” for the disaster and the amount the victims were “morally and legally” entitled to, the court heard.
“This is not BHP facing up to its responsibilities but cynically and doggedly trying to avoid them,” the claimants’ lawyer claimed in court filings. “Although that is BHP’s choice, it cannot properly now claim to be a company ‘doing the right thing’ by the victims of the disaster.”
The opening submission to Mrs Justice O’Farrell went on: “There is certainly no injustice in the claimants seeking to hold BHP properly to account in London in circumstances where the potential routes for redress in Brazil have not been effective.”
About 50m cubic metres of toxic waste was released when the Fundão dam was breached on 5 November 2015.
The avalanche reached the small community of Bento Rodrigues within minutes, killing 19 people including a seven-year-old child and destroying bridges, roads, houses, factories and other commercial premises as well as farmland, wildlife and historic churches containing priceless artefacts.
The dam was managed by a Brazilian company, Samarco, in which BHP and Brazilian miner Vale were joint shareholders.
In the wake of the collapse, BHP, along with Vale and Samarco, established the Renova Foundation to provide compensation for individuals and some small businesses for loss and damages, as well as mitigating environmental impacts.
Many of the injured parties also brought individual claims in the Brazilian courts but the largest class action was stayed after settlement negotiations were opened.
BHP and Vale had proposed to increase their offer in the Brazilian case by about $5bn to nearly $30bn on the eve of the high court trial but it was dismissed by the law firm Pogust Goodhead, which has been preparing the case in London, as a “desperate attempt” to avoid accountability.
In an opening submission, lawyers for the claimants alleged that BHP had known the risks were high as they increased production at the iron ore mine.
“A risk matrix shared with BHP in 2009 considered that the failure of Germano and Fundão [dams] could lead to ‘100 fatalities (Bento Rodrigues district),’” the claimants alleged.
“A BHP presentation in November 2012 further highlighted that a breach of the dam could reach the community ‘in less than 10 minutes’, and that the lack of a relocation plan for Bento Rodrigues (in the context of a planned new dam) was a matter for improvement.”
In its defence, BHP rejects claims that it is liable as a shareholder and denies any knowledge that the dam’s stability was compromised or that its senior staff “approved matters which caused the collapse”.
It writes: “The BHP Brasil-appointed Samarco directors were not told that the safety of the dam was being compromised. Indeed, they were repeatedly assured by engineers and experts, including independent experts, that dam management was ‘well controlled’”.
The claimants’ legal action is being bankrolled by the US alternative asset manager Gramercy. As well as more than 620,000 individuals, the claimants include 2,000 businesses, 46 municipalities and 65 faith-based organisations.
BHP claims in its defence submission that “lawyers and funders” will be entitled to “take up to 30% of the claimants’ compensation in legal fees”.
Outside the court, Gelvana Aparecida Rodrigues da Silva, 37, whose seven-year-old son Thiago drowned in the disaster, said: “It’s been really difficult these last nine years but I have to be strong. My hope is to find justice here. In Brazil, it is hopeless.”
The trial is expected to last 12 weeks but a second round of hearings will be required to settle the size of payouts if BHP is found liable.