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BHP to fight $8.9bn lawsuit in UK court over Samarco disaster

23 Nov 2018 (Last Updated November 23rd, 2018 11:26)

BHP is reportedly preparing to fight a $8.9bn lawsuit filed in a UK court by SPG Law on behalf of Brazilian victims of a 2015 dam collapse involving the Samarco iron mine.

BHP to fight $8.9bn lawsuit in UK court over Samarco disaster
The Samarco incident in 2015 caused large-scale devastation in Bento Rodrigues. Credit: Senado Federal.

BHP is reportedly preparing to fight a $8.9bn lawsuit filed in a UK court by SPG Law on behalf of Brazilian victims of a 2015 dam collapse involving the Samarco iron mine.

SPG Law, which filed the case in a Liverpool court seeking damages for Brazil’s worst environmental disaster, represents 240,000 individuals in Brazil, 24 municipal governments, a Roman Catholic Archdiocese and the Krenak indigenous community members, Reuters reported.

The stage is set for a major legal battle as the case represents one of the biggest legal claims ever filed in a British court.

Listed on stock exchanges in Australia and the UK, BHP and its partner Vale set up the Renova Foundation in response to the disaster to manage reparations and repairs.

An unnamed BHP spokesman was quoted by the news agency as saying: “BHP will defend the action and remains committed to supporting the remediation and compensation efforts of the Renova Foundation.”

The Samarco incident killed 19 people after an iron ore tailings dam leak released a large volume of toxic sludge into the Santarém river valley, resulting in flooding that devastated the Bento Rodrigues village.

The dam collapse is regarded as a major mining failure in the country’s history and displaced hundreds of villagers while also causing water shortages in areas along the Doce River.

In August, BHP reached an agreement to settle a US class action claim over the Samarco disaster for $50m.

The company also signed a deal with Brazilian authorities in June to settle the $5.28bn civil lawsuit.

“BHP will defend the action and remains committed to supporting the remediation and compensation efforts.”

In the latest case, SPG is arguing that the £200 ($259) settlement offer two years ago by the Renova Foundation to victims who suffered water disruption was ‘inadequate’.

The law firm intends to bring the case against BHP and its subsidiaries in Brazil, the US and Panama under the provisions of Brazil’s environmental law that can fix the responsibility on companies to pay damages to victims irrespective of fault or intent.

SPG lawyer Tom Goodhead told Reuters: “The key issue at the heart of this case is whether the parent company, BHP, is liable as a matter of Brazilian law.”