Disaster
On 5 November 2015 the Fundão Dam near the city of Mariana in Southeast Brazil collapsed,
unleashing 60 million cubic meters of iron ore waste and mud (called tailings), the
by-products of iron ore mining operations in the area.
19 people were killed in the aftermath, and the incident has been described as “the
worst environmental disaster in Brazilian history”. Around 600 people lost their homes.
A report commissioned by the company operating the dam, Samarco, published in August
2016, said the collapse of the tailings dam was caused by drainage and design flaws,
but it “did not assign blame or highlight specific errors in corporate or regulatory
practice”.
Samarco is a joint venture between two of the largest mining companies in the world:
Vale a Brazilian company, and BHP Billiton an Anglo-Australian company listed on the
London Stock Exchange, now known as BHP Group Ltd.
Ecological damage
The disaster produced serious ecological damage. Immediately after the dam collapse
an article by the Wilson Center reports that there were mass die-offs among fish,
and “once the mud reached the open ocean, a total of 29,000 fish carcasses were collected
and recorded by the Federal Police”. The death of the fish also resulted in hundreds
of birds dying from starvation.
In addition to the loss of native fauna, the Wilson Center article explains “80 percent
of the native vegetation located near the tributaries and main channel of the Doce
River was destroyed, leaving the river with only 13 percent of the Atlantic forest’s
original vegetation”.
In November 2021, Reuters reported that a study undertaken by a company contracted
by Brazilian prosecutors to measure the costs of the disaster estimated the “socio-environmental”
damage as between 37.6 billion reais ($6.73 billion) and 60.6 billion reais ($10.85
billion).
There may be further long-term effects, Professor of biology at FAESA University in
Brazil, Thiago Gaudio, has stated that the full environmental impact of the 2015 disaster
in Mariana is still unknown, saying: “the toxic mud continues in the soil and water
for many years. It is still unknown the disaster’s dimensions and future problems”.
Compensation and Brazil legal action
In October 2016, Brazilian federal prosecutors filed charges of qualified homicide
against 21 people, including top executives of BHP Billiton, Vale and Samarco, for
the 19 deaths resulting from the dam collapse. However, in July 2017 the federal court
suspended the criminal case.
Within four weeks of the dam collapse legal proceedings were launched in Brazil. In
2016 these concluded with a settlement called the Transaction and Conduct Adjustment
Agreement (TTAC), under which Samarco, BHP Brasil and Vale agreed to create the Renova
foundation, to provide around 20 billion Brazilian reals (around £3.28 billion in
today’s prices) in compensation for individuals and some small businesses, and to
meet the costs of mitigating the environmental consequences.
According to a BHP spokesperson, by the end of 2022 “about $5.6bn (£4.7bn) will have
been spent in Brazil on fixing the damage, including compensation programmes”.
The TTAC was later annulled by an appellate court in Brazil, as the compensation was
seen to be insufficient, and replaced with a second agreement, although payments under
the TTAC and the Renova foundation have continued. Legal proceedings are currently
paused while negotiations take place over the size of the settlements under that second
agreement, and the various Renova programs are evaluated and monitored.
Other legal claims by individuals, and various group litigations are also ongoing
in Brazil.
UK Legal action
The disaster is now subject to legal action in the UK courts. Over 200,000 individuals
affected by the disaster, as well as 530 businesses, 15 churches and faith-based institutions,
25 municipalities, and five utility companies, initiated legal action against BHP
and Vale in London. They are seeking compensation for losses caused by the destruction
of the dam. In March 2023, around 500,000 further claimants were added to the legal
action, taking the total number to more than 700,000.
BHP has challenged the legal action, arguing among other things, that the legal claims
should be brought in Brazil. In November 2020 the UK High Court ruled that the legal
case should be dismissed, due in part to the fact there was ongoing litigation in
Brazil, with many of the same claimants seeking identical remedies in each jurisdiction,
and so the “risk of inconsistent judgments would be acute”, and the proceedings would
be “a clear abuse of process” (an abuse of process is grounds for a court to strike
out a valid claim).
However, the claimants appealed this decision and in July 2022 the Court of Appeal
ruled that the case should be heard, arguing that even if the claims might become
unmanageable this did not make it an abuse, and the claims were not “clearly and obviously
pointless and wasteful”. In June 2023 the Supreme Court refused BHP permission to
appeal that decision, deciding that the application did not raise “an arguable point
of law”.
In May 2023, BHP requested that the hearings for the case be delayed until mid-2025
to give the company more time to prepare and allow Vale to participate in the case;
the hearings were originally scheduled for April 2024. The High Court decided that
the first stage trial date be revised to October 2024. This decision also stated that
Vale has issued an application challenging the jurisdiction of the UK courts, and
the hearing for this case is expected to be heard in July 2023.
A Westminster Hall debate on the Mariana Dam disaster is scheduled for Thursday 22
June 2023, from 1:30pm. The debate will be led by Jim Shannon MP.
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htmlsummary
<h3>Disaster</h3>
<p>On 5 November 2015 the Fund&atilde;o Dam near the city of Mariana in
Southeast Brazil collapsed, unleashing 60 million cubic meters of iron ore waste and
mud (called tailings), the by-products of iron ore mining operations in the area.</p>
<p>19 people were killed in the aftermath, and the incident has <a href="https://www.bbc.co.uk/news/world-latin-america-36230578">been
described as</a> &ldquo;the worst environmental disaster in Brazilian history&rdquo;.
Around 600 people <a href="https://webdoc.france24.com/brazil-dam-mining-disaster-mariana/">lost
their homes.</a></p>
<p>A report commissioned by the company operating the dam, Samarco, published
in August 2016, said the <a href="https://www.reuters.com/article/us-brazil-mining-samarco-idUSKCN114259">collapse
of the tailings dam was caused by drainage and design flaws</a>, but it &ldquo;did
not assign blame or highlight specific errors in corporate or regulatory practice&rdquo;.</p>
<p>Samarco is a joint venture between two of the largest mining companies in
the world: Vale a Brazilian company, and BHP Billiton an Anglo-Australian company
listed on the London Stock Exchange, now known as BHP Group Ltd.</p>
<h3>Ecological damage</h3>
<p>The disaster produced serious ecological damage. Immediately after the dam
collapse an <a href="https://www.wilsoncenter.org/blog-post/challenges-linger-three-years-after-fatal-dam-collapse-mariana">article
by the Wilson Center reports</a> that there were mass die-offs among fish, and
&ldquo;once the mud reached the open ocean, a total of 29,000 fish carcasses were
collected and recorded by the Federal Police&rdquo;. The death of the fish also
resulted in hundreds of birds dying from starvation.</p>
<p>In addition to the loss of native fauna, the Wilson Center <a href="https://www.wilsoncenter.org/blog-post/challenges-linger-three-years-after-fatal-dam-collapse-mariana">article
explains</a> &ldquo;80 percent of the native vegetation located near the
tributaries and main channel of the Doce River was destroyed, leaving the river with
only 13 percent of the Atlantic forest&rsquo;s original vegetation&rdquo;.</p>
<p>In November 2021, <a href="https://www.reuters.com/world/americas/socio-environmental-damage-brazils-samarco-dam-disaster-high-67-bln-study-says-2021-11-03/">Reuters
reported</a> that a study undertaken by a company contracted by Brazilian prosecutors
to measure the costs of the disaster estimated the &ldquo;socio-environmental&rdquo;
damage as between 37.6 billion reais ($6.73 billion) and 60.6 billion reais ($10.85
billion).</p>
<p>There may be further long-term effects, Professor of biology at FAESA University
in Brazil, Thiago Gaudio, <a href="https://www.internationalaffairs.org.au/australianoutlook/brazil-dam-disaster/">has
stated that the full environmental impact of the 2015 disaster in Mariana is still
unknown</a>, saying: &ldquo;the toxic mud continues in the soil and water
for many years. It is still unknown the disaster&rsquo;s dimensions and future
problems&rdquo;.</p>
<h3>Compensation and Brazil legal action</h3>
<p>In October 2016, Brazilian federal prosecutors <a href="https://www.reuters.com/article/us-brazil-samarco-miner-charges-idUSKCN12K2FE">filed
charges of qualified homicide against 21 people</a>, including top executives
of BHP Billiton, Vale and Samarco, for the 19 deaths resulting from the dam collapse.
However, in July 2017 <a href="https://www.business-humanrights.org/en/latest-news/bhp-vale-lawsuit-re-dam-collapse-in-brazil/">the
federal court suspended the criminal case</a>.</p>
<p>Within four weeks of the dam collapse legal proceedings were launched in
Brazil. In 2016 these <a href="https://www.bailii.org/ew/cases/EWHC/TCC/2020/2930.html">concluded
with a settlement</a> called the Transaction and Conduct Adjustment Agreement
(TTAC), under which Samarco, BHP Brasil and Vale agreed to create the Renova foundation,
to provide around 20 billion Brazilian reals (around &pound;3.28 billion in today&rsquo;s
prices) in compensation for individuals and some small businesses, and to meet the
costs of mitigating the environmental consequences.</p>
<p><a href="https://www.theguardian.com/environment/2022/jul/08/uk-court-of-appeal-case-victims-brazil-mariana-dam-collapse-aoe">According
to a BHP spokesperson</a>, by the end of 2022 &ldquo;about $5.6bn (&pound;4.7bn)
will have been spent in Brazil on fixing the damage, including compensation programmes&rdquo;.</p>
<p>The TTAC was <a href="https://www.bailii.org/ew/cases/EWHC/TCC/2020/2930.html">later
annulled by an appellate court in Brazil</a>, as the compensation was seen to
be insufficient, and replaced with a second agreement, although payments under the
TTAC and the Renova foundation have continued. Legal proceedings are currently paused
while negotiations take place over the size of the settlements under that second agreement,
and the various Renova programs are evaluated and monitored.</p>
<p>Other legal claims by individuals, and various group litigations are also
ongoing in Brazil.</p>
<h3>UK Legal action</h3>
<p>The disaster is now subject to legal action in the UK courts. Over 200,000
individuals affected by the disaster, as well as 530 businesses, 15 churches and faith-based
institutions, 25 municipalities, and five utility companies, initiated legal action
against BHP and Vale in London. They are seeking compensation for losses caused by
the destruction of the dam. In March 2023, around <a href="https://www.reuters.com/world/americas/miner-bhp-potentially-faces-44-bln-bill-brazil-dam-case-2023-03-15/">500,000
further claimants were added to the legal action</a>, taking the total number
to more than 700,000.</p>
<p>BHP has challenged the legal action, arguing among other things, that the
legal claims should be brought in Brazil. In November 2020 the UK High Court <a
href="https://www.bailii.org/ew/cases/EWHC/TCC/2020/2930.html">ruled that the legal
case should be dismissed</a>, due in part to the fact there was ongoing litigation
in Brazil, with many of the same claimants seeking identical remedies in each jurisdiction,
and so the &ldquo;risk of inconsistent judgments would be acute&rdquo;, and
the proceedings would be &ldquo;a clear abuse of process&rdquo; (an abuse
of process is grounds for a court to strike out a valid claim).</p>
<p>However, the claimants appealed this decision and in July 2022 the Court
of Appeal <a href="https://www.bailii.org/ew/cases/EWCA/Civ/2022/951.html">ruled
that the case should be heard</a>, arguing that even if the claims might become
unmanageable this did not make it an abuse, and the claims were not &ldquo;clearly
and obviously pointless and wasteful&rdquo;. In June 2023 the Supreme Court <a
href="https://www.legalfutures.co.uk/latest-news/supreme-court-will-not-hear-appeal-on-largest-ever-group-action">refused
BHP permission to appeal that decision</a>, deciding that the application did
not raise &ldquo;an arguable point of law&rdquo;.</p>
<p>In May 2023, BHP <a href="https://www.reuters.com/sustainability/london-court-rejects-bhps-14-month-delay-request-brazil-dam-case-2023-05-12/">requested
that the hearings for the case be delayed until mid-2025</a> to give the company
more time to prepare and allow Vale to participate in the case; the hearings were
originally scheduled for April 2024. The High Court <a href="https://www.bailii.org/ew/cases/EWHC/TCC/2023/1134.html">decided
that the first stage trial date be revised to October 2024</a>. This decision
also stated that Vale has issued an application challenging the jurisdiction of the
UK courts, and the hearing for this case is expected to be heard in July 2023.</p>
