BHP hit with record $7b claim in UK over deadly dam collapse
London: BHP Billiton has been hit with the biggest damages claim in British legal history, in a $US5 billion ($7.2 billion) group action lawsuit over the 2015 Fundão dam collapse in Brazil.
The full claim was served on the Anglo-Australian miner in a Liverpool court on Tuesday.
The suit is on behalf of 235,000 Brazilian claimants including municipal governments, utility companies, indigenous tribes and the Catholic Church, law firm SPG Law said in a statement.
The dam was operated by Samarco, a joint-venture between BHP Billiton Brasil and Vale.
The claimants accuse the company of being “woefully negligent”, having known the iron ore tailings dam was deteriorating for years prior to its collapse.
The resulting mudslide killed 19 people – five community members and 14 dam workers – flooded three villages and affected more.
Contaminated water washed downstream as far as the Atlantic Ocean, 600 kilometres away.
“BHP knew of the risks surrounding the Fundão dam,” SPG Law partner Tom Goodhead said. “The repeated warnings and recommendations of dam safety experts were acted upon too slowly, or sidestepped entirely.
“Driven by concern for declining revenues amidst the falling market price of iron ore, the company took risks, increased production and turned a blind eye to dangers that ultimately claimed lives and destroyed communities.
“BHP was woefully negligent in its duty of care and the damages sought are entirely commensurate with the devastation the company has wrought upon the people of Minas Gerais, Espirito Santo and Brazil.”
The claimants accuse BHP of being aware of escalating safety concerns surrounding the dam’s integrity, but failing to act on repeated warnings from independent experts and dam safety advisers.
They also say the miner consistently increased iron ore output, putting extra strain on the dam, and “put pursuit of profit over human and environmental risk”.
In a brief statement, BHP confirmed it had been served with the claim and said “we intend to defend these proceedings”.
In last year’s annual report, BHP said it was “committed to doing the right thing for the people and the environment in the Rio Doce region” and pointed to a private foundation it had established to work to restore the environment and rebuild devastated communities. In 2018, the foundation’s budget was 2.19 billion Brazilian reals ($800 million).
The foundation is distributing payments to locals, to fishermen who can no longer fish in contaminated waters in the area, and people who were left without water supply or suffered other losses.
The foundation was set up as settlement for a 20 billion Brazilian reals civil claim against BHP. The company was still working to negotiate a 155 billion Brazilian reals claim from federal prosecutors in Brazil for social, environmental and economic damage.
In October 2018, Brazilian prosecutors announced they had reached a final compensation deal with Samarco, Vale and BHP, including compensation payments for relatives of the dead and for those who lost their properties.
The deal meant the companies could resume operations in the area. BHP said in its annual report it had commissioned new dam safety reviews and appointed a global tailings expert and funded research into early warning technologies.
BHP is also facing a class-action lawsuit from shareholders in Australia over the dam failure, over claims it failed to disclose the risk of the dam’s failure to the stock market and misled investors.
Although the disaster ranks as Brazil’s worst environmental catastrophe, the collapse of a Vale-operated tailings dam in the town of Brumadinho in January 2019 left a higher death toll, estimated at 300 people.