Lawyers acting for victims of Brazil’s worst environmental disaster have said they will pursue their claim in the UK despite the announcement of a $31bn (£23.9bn) settlement between the Anglo-Australian mining company at the centre of the scandal and the Brazilian authorities.
After three years of negotiations, Mike Henry, BHP’s chief executive, announced on Friday that a “milestone” deal would ensure compensation for all those affected by the catastrophic collapse of the Fundão dam in 2015.
Nineteen people were killed when the dam, near Mariana in south-east Brazil, collapsed on 5 November 2015, releasing an avalanche of toxic waste that overwhelmed the small community of Bento Rodrigues within minutes. It went on to spill into the neighbouring municipalities of Mariana, Barra Longa, Rio Doce and Santa Cruz do Escalvado.
BHP described Friday’s settlement as “full and final” but lawyers acting for largest group action in English legal history – including 620,000 individuals, 46 Brazilian municipalities, 2,000 businesses and 65 faith-based institutions – said they would continue to seek up to £36bn from BHP in a high court trial that started on Monday.
Tom Goodhead, global managing partner and chief executive at Pogust Goodhead, likened the deal in Brazil, and the company’s past offers of compensation, to the widely criticised response of the Post Office to the Horizon scandal.
He said: “The deal with the Brazilian authorities only serves to highlight exactly why the proceedings in the English courts are so critical.
“The victims have not been consulted on the deal and parts of the reparations will be spread over 20 years. It is therefore simply a first step in an ongoing battle for justice and adequate compensation for Brazil’s worst environmental disaster.
“Our legal case will publicly hold BHP to account and set a precedent; making it more difficult for multinational corporations more broadly to neglect their responsibility to the communities in which they operate.
“We must remember that in the immediate aftermath, BHP made insulting offers as low as $200 to people who had their lives destroyed in the disaster. This approach mirrors that of the Post Office scandal in the UK, where victims were offered negligible amounts of compensation after waiting for many years.”
BHP claimed in its opening submissions in the first week of the 12-week high court trial that the company, a joint shareholder in the dam with the Brazilian mining company Vale, was not liable for the damage and that the municipalities taking their case to the UK high court were not capable of suing in the English courts.
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In a statement issued on Friday, the company said it was nevertheless doing “what’s right by the Brazilian people, communities, organisations, and environments affected by the dam failure” by agreeing to the $31bn settlement.
Under the terms of the deal, funds will be paid in instalments over the next two decades to “the public authorities, the relevant municipalities and Indigenous peoples and traditional communities”.
Goodhead said: “BHP must also be upfront with its investors and shareholders of the extent to which its liabilities in this disaster stretch well beyond this deal struck with the Brazilian authorities and of their very real exposure to further significant material and reputational risk.
“The English courts have been clear: the trial in England can proceed regardless of events in Brazil despite BHP’s repeated attempts to deny our claimants this rightful avenue to justice. We remain committed to ensuring that victims receive fair and full compensation for the losses suffered.”