July 22, 2020 / 9:31 AM / 13 days ago

BHP labels English lawsuit over Brazil dam failure pointless, wasteful

LONDON, July 22 (Reuters) - Anglo-Australian miner BHP has dismissed as pointless and wasteful a 5 billion pound ($6.3 billion) English lawsuit by 200,000 Brazilian people and groups over the 2015 collapse of a dam that led to Brazil’s worst environmental disaster.

Kicking off an eight-day hearing in Manchester, northern England, BHP on Wednesday called for the record group action to be struck out or suspended, alleging it duplicated Brazilian proceedings and victims were already receiving redress.

“These applications are ... brought because the attempt to export and duplicate the work being done in Brazil, including the litigation, to England, is pointless and wasteful,” BHP said in legal documents.

“It has no proper purpose or utility and will, if allowed to continue, inflict an astonishing burden on the court ... and these parties – without any tangible benefit to the claimants.”

The hearing will establish whether the case can be tried in England, although the judge is expected to reserve judgment until around September. If successful, further trials are expected to determine liability and quantify damages.

The collapse of the Fundao tailings dam, which stored mining waste and is owned by the Samarco joint venture between BHP and Brazilian iron ore mining giant Vale, killed 19 and poured roughly 40 million cubic metres of mining waste into communities, the Rio Doce river and Atlantic Ocean, 650 km away.

Claimants allege BHP, the world’s largest miner by market value, ignored safety warnings as the dam’s capacity was repeatedly increased by raising its height - and disregarded cracks that were early signs of rupture.

Many claimants are seeking compensation for physical and psychological injury, property damage, moving costs, loss of earnings, loss of water supply and lost fishing income.

BHP said the Renova Foundation, a redress scheme set up in 2016 by its Brazilian division, Samarco and Vale, has spent more than 1.3 billion pounds on projects, such as monthly financial aid to about 130 indigenous Krenak families, rebuilding three villages and establishing alternative water supply systems.

It also alleged almost 100,000 of the claimants have already received payments from Renova and only 58 of the individuals, businesses, municipalities, churches, utility companies and indigenous people bringing the claim in England are not part of rival class actions in Brazil.

Claimants allege it is wrong to suggest victims are entitled to full redress in Brazil because Renova lacks independence and its compensation scheme is slow, bureaucratic, inadequate and has not properly involved victims in decision-making.

They allege BHP is responsible for the dam’s collapse, liable for its “catastrophic consequences” under Brazilian law but that victims have no prospect of proper compensation in Brazil within any reasonable timeframe.

Samarco, Vale and BHP Brasil face a raft of lawsuits in Brazil over the disaster, including a 155 billion reais ($29 billion) class action filed by Brazil’s federal prosecutors which, it alleges, overlaps “almost entirely” with the English case.

The Brazilian class action has been suspended, although the parties plan to negotiate a settlement by 2022 at the latest.

($1 = 0.7942 pounds)

$1 = 5.3288 reais Reporting by Kirstin Ridley; editing by Barbara Lewis

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