Five years have passed since the devastating collapse of the Fundão dam in Brazil, yet the repercussions for BHP, one of the joint owners of the Samarco venture with Vale, are far from over. The dam failure unleashed a cataclysmic 39.2 million cubic meters of tailings waste into the Rio Doce Basin, an environmental catastrophe that took the lives of 19 individuals. This week, BHP has been confronted with an interlocutory ruling, a pivotal development in the protracted legal fallout stemming from the calamitous event.
BHP has been at the center of a legal maelstrom following the 2015 dam breach, which generated collective moral damages in its wake. The company’s response to this week’s ruling has involved a reassessment of its financial obligations and a contemplation of a potential appeal, highlighting the high stakes involved in the ongoing legal proceedings. With billions of dollars on the line, BHP has been compelled to reevaluate its provision related to the dam collapse, encompassing a staggering $3.7 billion in its 2023 annual report.
The imbroglio has persisted as the parties embroiled in the suit remain entangled in negotiations, striving to reach a settlement of their obligations under a framework agreement formulated in 2021. Scheduled talks for the imminent future suggest that the resolution of this protracted legal ordeal is far from imminent.
The latest showdown in BHP’s legal saga arrives on the heels of a British court’s rejection of Vale’s appeal against its inclusion in a lawsuit valued at a minimum of $46 billion, implicating Vale, Samarco, and none other than BHP in the aftermath of the same dam disaster. The Court of Appeal’s dismissal of Vale’s jurisdictional challenge in the English Court sets the stage for a riveting legal drama that may well culminate in a precedent-setting verdict.
Should the claimants successfully hold BHP accountable for their losses, the path would be cleared for the Australian mining behemoth to pursue Vale for 50% or more of any damages awarded, amplifying the financial risks at play in this high-stakes litigation. This legal imbroglio, constituting the largest group litigation in English legal history and involving a staggering 700,000 victims, underscores the far-reaching and enduring ramifications of the Fundão dam disaster.
