UK court gives Brazilians affected by Samarco dam disaster chance to revive $9.5bn BHP suit
BHP has suffered a setback in its efforts to see off a £5bn claim class action over the 2015 Samarco dam disaster.
BHP has suffered a setback in its efforts to see off a £5bn ($9.4bn) class action claim over the 2015 Samarco dam disaster, after a UK court on Tuesday allowed an appeal against an earlier decision dismissing the claim.
BHP had thought the issue was buried after a March ruling by a High Court judge that there were no grounds to appeal against the November dismissal of the claim as “unmanageable” as it would be too difficult to hear in parallel with similar action in other jurisdictions, including in Brazil.
But the Court of Appeal reversed that decision this week, saying an appeal had a “real prospect of success”.
The suit, initially brought in 2019, argued that the mining giant bears “strict liability” under Brazilian environmental law for damages inflicted on the 200,000 claimants affected by the Samarco tailings dam failure, irrespective of whether BHP can be proved to have known of flaws in the dam wall.
The lawsuit repeated earlier claims, in the US and Brazilian courts, that BHP was aware of the risk the tailings dam was flawed from its first construction, and knew it was deteriorating in the lead-up to 2015’s deadly collapse.
But it also argued that Brazilian law does not require Samarco’s victims to prove BHP was negligent in failing to prevent the disaster.
The collapse of the Fundao tailings dam caused a mudslide that killed 19 people, destroyed nearby villages and devastated the Rio Doce river basin, the second-largest river system in Brazil.
BHP has denied the claims throughout, and previously successfully argued in court that the UK was not a valid jurisdiction to hear the claims.
A spokesman on Wednesday said the Court of Appeal’s decision did not overturn the decision of the UK High Court to strike out the suit, it merely allowed an avenue to appeal that ruling.
“BHP’s position remains that the proceedings do not belong in the UK,” he said. “Issues brought by the claimants are already covered by the work of the Renova Foundation, by existing decisions of the Brazilian courts or are the subject of ongoing legal proceedings in Brazil.
“BHP will not be distracted from our commitment to do the right thing for the victims of the Fundao dam failure. We will continue to support the extensive ongoing remediation and compensation efforts of the Renova Foundation in Brazil.”
The UK court decision on Samarco comes as Rio Tinto’s regulatory woes deepened, amid reports it is facing an investigation from the UK Financial Conduct Authority over claims – first raised by a former employee involved in a legal dispute with the company – that Rio knew the expansion of its Oyu Tolgoi mine faced cost and timing blowouts months before it told the market of the problems.
Former Rio chief executive Jean-Sebastien Jacques announced the blowouts in July 2019, and the company has consistently denied it breached its disclosure obligations in relation to the Oyu Tolgoi project, amid a messy dispute with minority investors in its junior partner in the project, Turquoise Hill Resources.
The latest probe adds to Rio’s growing list of problems with regulators across the globe.
Rio – along with former chief executive Tom Albanese, and former chief financial officer Guy Elliott – are still facing charges brought by ASIC in 2018 over allegations the company mislead markets in its 2011 annual report over the takeover of Riversdale Mining.
It faces similar charges in the US over the massive writedown of Riversdale assets, and is still the subject of a probe by regulators across the globe over dubious payments made to a consultant in relation to its Simandou deposit in Guinea.
BHP shares fell 1.7 per cent to $52.47 against a 0.7 per cent fall in the S&P/ASX 200 Index.
More Coverage
