BHP to fight billion dollar Samarco suit

Mining giant BHP has vowed to fight a mammoth lawsuit spearheaded by more than 200,000 victims of the deadly Samarco dam disaster, after the UK Court of Appeal agreed to resurrect the dispute.

For several years, 202,600 claimants, including businesses, churches and utility companies, have been chasing BHP for compensation over the collapse of two dams in south east Brazil.

The collapses released about 40 million cubic metres of iron ore tailings, flooding entire villages and killing 19 people; the worst environmental disaster in the country’s history.

The dam was owned and operated by Samarco, which is jointly owned by Brazilian miner Vale and BHP’s Brazilian subsidiary.

The cost of remediation and compensation is alleged to be about $AUD43 billion at today’s exchange rates, according to the Brazilian public prosecutor.

The disaster prompted a number of claims against several parties in Brazilian courts and initiated the creation of the Renova Foundation; through which Samarco, Vale and BHP Brazil undertake their extensive remediation and compensation work.

In 2018, the claimants filed an international lawsuit seeking compensation over the incident, claiming to have suffered physical and psychological injuries, property damage, increased living expenses, and loss of earnings.

Further, thousands of claims allege they had their water and electricity supply cut off and were unable to conduct their fishing activities.

But in May 2019, lawsuits launched six months prior were superseded by one covering all surviving claims.

The group filed an action against BHP’s UK and Australian entities with the intention of having the matter heard in the United Kingdom, which the High Court deemed an abuse of process and dismissed in 2020.

Justice Turner said pursuing the matter in England would be “irredeemably unmanageable”, particularly with the threat of irreconcilable judgments and cross-contamination between cases running parallel to it. 

He also labelled the proceedings “futile” and “wasteful”, believing the claimants would not receive any more advantageous redress in the UK than they would in Brazil.

But the victims appealed that decision.

Now, the UK Court of Appeal has overturned the judgment; agreeing the appeal should at least be heard after conceding the judge’s original approach suffered from a “number of errors”.

In a statement released shortly after the court determination, BHP said it was considering whether to appeal the judgment to the Supreme Court.

“BHP will continue to defend the UK group action, which BHP believes is unnecessary because it duplicates matters already covered by the existing and ongoing work of the Renova Foundation and legal proceedings in Brazil,” the company said.

But the mining giant reaffirmed its commitment to remediation efforts through the Renova Foundation, having provided $AUD2.6 billion in compensation and financial aid since the dam failure occurred.