Brazilian court clears BHP in Samarco dam collapse criminal case

A court acquitted BHP, Vale and their iron ore joint venture Samarco as well as 22 former directors, executives and technicians in a case about criminal responsibility for the disaster that killed 19 people.

A file image of where a dam burst in the village of Bento Rodrigues, in Mariana, the southeastern Brazilian state of Minas Gerais on November 6, 2015. Picture: Douglas Magno / AFP

A court in Brazil has cleared BHP of responsibility in a criminal case over the Samarco dam collapse which killed 19 people and caused widespread damage to towns and the environment.

The court acquitted BHP, Vale and their iron ore joint venture Samarco as well as 22 former directors, executives and technicians in a ruling on Thursday in Brazil.

The companies and individuals had faced criminal and environmental charges since 2016, but the Regional Federal Court of the 6th Region concluded there was insufficient evidence to establish any causal link between them and the failure of the Fundao tailings dam.

“The documents, reports, and witness testimonies examined did not identify specific individual actions that directly and decisively contributed to the dam’s collapse,” the court said.

The Brazilian Federal Prosecutor’s Office is understood to be reviewing the ruling and considering an appeal.

BHP and the Brazilian government last month settled on a $45bn compensation scheme over the 2015 dam collapse. The settlement was finalised after years of negotiations just before the start of what has been touted as a $70bn class action against BHP in the English High Court.

The ruling in the criminal case is not expected to derail the class action trial involving more than 600,000 claimants in the UK, which BHP is defending. However, it may strengthen BHP’s defence to claims of environmental liability.

In addition to the companies, the 22 individuals hit with criminal charges back in Brazil in 2016 included eight with links to BHP.

They included current Liontown Resources managing director Tony Ottaviano, who had become a director of Samarco Mineracao just three months before the dam collapse. Others who had faced charges after stints on the board included former WA iron ore boss Jimmy Wilson, Jeffery Zweig and one-time Boart Longyear chairman Marcus Randolph.

Former iron ore division vice-president of finance Margaret Beck and senior Brazilian employees Andre Cardoso, Sergio Fernandes and Guilherme Ferreira also faced charges.

In a statement on Friday, BHP said it would consider the decision by the Federal Court once it has been served with the judgment to assess implications and any next steps.

“As shareholders in Samarco, BHP Brasil and Vale have always been fully committed to supporting the extensive ongoing remediation and compensation efforts in Brazil,” the mining giant said.

“BHP Brasil will continue to focus on supporting the long-term recovery of the communities and environment affected by the dam failure.”

The ruling in the criminal case comes as class action law firm Pogust Goodhead rewriting contracts with claimants in the UK case and urges them not to sign up to the compensation scheme set up by BHP and the Brazilian government.

The terms of the agreement between BHP, Vale and the Brazilian government stipulate those who opt to receive compensation in Brazil are ineligible to participate in Pogust Goodhead’s class action.