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BHP stubbornly tries to evade responsibility for Brazil dam disaster, English High Court hears | Brazil
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BHP stubbornly tries to evade responsibility for Brazil dam disaster, English High Court hears | Brazil

The Anglo-Australian mining company BHP has been accused of “cynically and persistently attempting to evade responsibility for Brazil's worst environmental disaster” in the opening of the largest corporate lawsuit in English legal history.

The lawsuit seeking damages of up to £36 billion was brought by lawyers representing more than 620,000 people at the High Court in London. Nine years after a dam containing toxic waste from an iron ore mine burst, 19 people were killed near the city of Mariana in southeastern Brazil.

In his opening statement, Alain Choo Choy KC, on behalf of the plaintiffs, pointed out that the “significant shortcomings” of the reparations process in Brazil had led to the process being opened in England. He accused BHP of “devoting very significant resources to putting obstacles in the way of the plaintiffs’ English claims”.

A “gap” had emerged between the level of compensation BHP deemed “acceptable” for the disaster and the amount to which the victims were “morally and legally” entitled, the court said.

“This does not mean that BHP is shirking its responsibilities, but rather is cynically and stubbornly trying to evade them,” the plaintiffs’ attorney claimed in court papers. “Although this is BHP's decision, the company cannot now rightly claim to be a company that is 'doing the right thing' by the victims of the disaster.”

The opening statement to Judge O'Farrell continued: “It is certainly not unfair for the plaintiffs to seek to properly hold BHP to account in London in circumstances where the possible avenues of redress in Brazil have not been effective.”

When the Fundão Dam breached on November 5, 2015, approximately 50 million cubic meters of toxic waste were released.

The avalanche reached the small community of Bento Rodrigues within minutes, killing 19 people, including a seven-year-old child, and destroying bridges, roads, homes, factories and other commercial areas, as well as farmland, wildlife and historic churches containing priceless artifacts.

The dam was managed by a Brazilian company, Samarco, in which BHP and Brazilian miner Vale were joint shareholders.

After the collapse, BHP, together with Vale and Samarco, founded the Renova Foundation to compensate individuals and some small businesses for losses and damages and to mitigate the environmental impact.

Many of those injured also filed individual lawsuits in the Brazilian courts, but the largest class action lawsuit was stayed after settlement negotiations opened.

BHP and Vale had proposed increasing their offer in the Brazilian case by about $5 billion to nearly $30 billion on the eve of the Supreme Court trial, but the offer was rejected by law firm Pogust Goodhead, which is prosecuting the case London had prepared, rejected a “desperate attempt” to evade responsibility.

In an opening filing, plaintiffs' lawyers alleged that BHP knew the risks were high when it increased production at the iron ore mine.

“A risk matrix shared with BHP in 2009 estimated that the failure of the Germano and Fundão dams could result in ,100 deaths (Bento Rodrigues district),” the plaintiffs alleged.

“A BHP presentation in November 2012 further emphasized that a dam breach could reach the community “in less than 10 minutes” and that the lack of a relocation plan for Bento Rodrigues (related to a planned new dam) was a reason for improvement. “

In its defence, BHP rejects claims that it was liable as a shareholder and denies any knowledge that the dam's stability was at risk or that its senior staff “approved matters which caused the collapse”.

It said: “The Samarco directors appointed by BHP Brasil were not told that the safety of the dam was at risk. In fact, they have been repeatedly assured by engineers and experts, including independent experts, that dam management is “well controlled.”

The plaintiffs' lawsuit is funded by US alternative asset manager Gramercy. In addition to more than 620,000 private individuals, the plaintiffs include 2,000 companies, 46 municipalities and 65 church organizations.

BHP claims in its statement of defense that “attorneys and funders” will be entitled to “pay up to 30% of plaintiffs' compensation as legal fees.”

Outside court, 37-year-old Gelvana Aparecida Rodrigues da Silva, whose seven-year-old son Thiago drowned in the disaster, said: “The last nine years have been really difficult, but I have to be strong.” My hope is to find justice here. In Brazil it is hopeless.”

The trial is expected to last 12 weeks, but a second round of hearings is needed to determine the amount of payouts if BHP is found liable.

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