Mining Giants BHP and Vale Engage in Legal Battle in London Court over Brazil Dam Catastrophe

London, 13 July 2023 – BHP Group and Vale, two mining industry behemoths, found themselves locked in a fierce legal confrontation in a London court on Wednesday. The dispute revolves around determining which company should bear the legal and financial responsibility for a potential £36 billion ($47 billion) lawsuit stemming from Brazil’s most devastating environmental calamity.

A staggering 720,000 Brazilians have filed a lawsuit against BHP, the world’s largest miner by market value, in connection with the catastrophic collapse of the Fundao Dam in 2015. The dam, owned by the Samarco joint venture operated by BHP and Brazilian iron ore producer Vale, unleashed an unprecedented environmental disaster.

BHP, vehemently refuting any liability, applied in December to have Vale included in the case and share the financial burden should they lose. However, Vale contested the jurisdiction of the London High Court to adjudicate the claim. The trial is scheduled to commence in October 2024.

Court documents submitted by Vale’s legal team stated, “BHP currently has no right to a ‘contribution’ from Vale under Brazilian law.” They further explained, “BHP can have no such right unless and until it is found liable to the claimants and makes a payment to them.”

Vale also argued that since it does not have any direct operations in Britain, London is an unsuitable venue for the case. “Has BHP satisfied the court that London is the natural forum for the dispute? The natural forum is Brazil,” emphasized Simon Salzedo KC, lawyer for Vale, during the proceedings.

BHP’s legal team contended that if the company is found liable, Vale should bear a proportional responsibility due to their equivalent ownership, control, and knowledge concerning Samarco. In a filing, the lawyers asserted, “BHP therefore seeks to have Vale share the burden of any such liability and contribute 50% or more to any payments made.”

The dam collapse resulted in the loss of 19 lives as mud and toxic mining waste cascaded into the Doce River, decimating villages, polluting water sources, and eventually reaching the Atlantic Ocean over a distance of more than 650 km (400 miles).

“Alongside their failure to provide full and fair compensation to the victims, BHP has also exposed their investors to unprecedented levels of risk in relation to the substantial compensation bill they now face,” expressed Tom Goodhead from the law firm Pogust Goodhead, which represents the claimants, in an email statement.

BHP clarified that the Renova Foundation, a redress scheme established in 2016 by Samarco and its shareholders, had implemented reparation and compensation programs that funded over $6 billion for rehousing, rehabilitation, and indemnification of those affected by the disaster.

“BHP Brasil continues to work closely with Samarco and Vale… The 2024 trial will not address individual payments or any form of indemnification,” a BHP spokesperson reassured.

The lawsuit, regarded as one of the largest in English legal history, originated in 2018. BHP’s application to the Supreme Court to terminate the case without a trial was dismissed in June, as the court determined that it “did not raise an arguable point of law.”

($1 = £0.7696)

[Image Description: A photograph captured on November 23, 2015, depicting a car precariously perched atop the wall of a home destroyed by a mudslide resulting from the burst dam of an iron ore mine in Bento Rodrigues, Brazil. (AP Photo/Leo Correa)]

Topics: London

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