Anglo-Australian mining giant BHP has been accused of “cynically and stubbornly trying to avoid” Brazil's worst environmental disaster at the start of the largest class action lawsuit in English legal history.
Lawyers representing more than 620,000 people have launched compensation claims of up to £36 billion at the High Court in London. At least 19 people died when a dam containing toxic waste from an iron mine exploded near the city of Mariana in southeastern Brazil.
In his opening submission, Alain Choi Choi KC, on behalf of the claimants, suggested that “profound flaws” in the compensation process in Brazil led to the case being opened in the UK. accused BHP of devoting “very significant resources to putting obstacles in the way of the claimants' English claims”.
A “gap” has emerged between what BHP considers “acceptable” compensation for the disaster and what victims are “morally and legally” entitled to.
“This is about BHP not facing its responsibilities, but instead cynically and stubbornly trying to avoid them,” the plaintiffs' lawyer said in court papers. “While that is BHP's choice, the company cannot now rightly be said to be 'doing the right thing' to those affected by the disaster.”
An initial submission to Judge O'Farrell continued: “There is certainly no injustice to those seeking to keep BHP in London in circumstances where potential avenues of relief in Brazil are not effective.”
On November 5, 2015, about 50 cubic meters of toxic waste were released when the Fundão dam broke.
The avalanche hit the small community of Bento Rodríguez within minutes, killing 19 people, including a seven-year-old boy. Destruction of bridges, roads, homes, factories and other business premises, as well as farmland, wildlife and historic churches with priceless artifacts.
The dam was managed by Samarco, a Brazilian company in which BHP and Brazilian mining company Vale were joint partners.
In the wake of the collapse, BHP, together with Vale and Samarco, created the Renova Foundation to compensate individuals and some small businesses for losses and damages, as well as to mitigate environmental impacts.
Several aggrieved parties filed individual lawsuits in Brazilian courts, but the larger class action lawsuit was halted after settlement negotiations began.
BHP and Vale proposed raising their offer in the Brazilian case from $5 billion to $30 billion ahead of the High Court hearing, but that was rejected by London-based law firm Pogust Goodhead, which is preparing the case. A “serious attempt” to evade accountability.
In an initial submission, plaintiffs' lawyers argued that BHP knew the risks were high when it increased production at the iron ore mine.
“The risk matrix shared with BHP in 2009 considered the failure of Germano and Fundo. [dams] 'It could cause 100 deaths (Bento Rodríguez district),' the complainants alleged.
“A BHP presentation in November 2012 suggested that a dam breach could reach the community 'within 10 minutes' and the absence of a relocation plan in Bento Rodríguez (in the wake of the planned new dam) is a matter of progress”.
In its defence, BHP rejects claims of liability as a shareholder and denies any knowledge that the dam's stability was compromised or that its senior staff “recognised issues that contributed to the collapse”.
He writes: “Samarko directors appointed by BHP Brazil were not informed that the safety of the dam was being compromised. In fact, they were repeatedly assured by engineers and experts, including independent experts, that the management of the dam was “well controlled.”
The plaintiffs' legal action is funded by US alternative asset manager Gramercy. The claimants include more than 620,000 people, 2,000 businesses, 46 municipalities and 65 religious organizations.
BHP says in its defense brief that “lawyers and financiers” are entitled to “take up to 30% of the plaintiffs' compensation as legal fees.”
Outside the court, Gelvana Aparecida Rodríguez da Silva, 37, whose seven-year-old son Thiago drowned in the disaster, said: “The last nine years have been very difficult, but I have to be strong. I hope justice is done here. In Brazil, it is impossible.
The trial is expected to last 12 weeks, but if BHP is found liable, a second round of hearings will be necessary to resolve the scale of payment.
