ESG Enforcement Tracker

Key facts:

The High Court has handed down judgment in the liability trial of the people of the municipality of Mariana, against BHP (an Australian mining and metals corporation). Mrs Justice O’Farrell DBE found BHP strictly liable for the damage caused to the environment and third parties following the collapse of the Fundao Dam in Brazil in 2015.

The collapse of the Dam killed 19 people and destroyed hundreds of kilometres of waterways and riverside communities. It is believed approximately 40 million tons of toxic sludge, including arsenic, was released into the Doce River.

In the largest environmental group action in English legal history, over 620,000 alleged victims are seeking up to £36bn in compensation for the disaster. Proceedings were commenced in England & Wales by the Claimants in November 2018, as BHP was listed on the LSE at the relevant time in 2015.

Mrs Justice O’Farrell found that:

1. BHP had assumed ultimate responsibility for the assessment, control, mitigation and management of the Dam. The judgment held that there was no distinction between a person or entity that is directly or indirectly responsible as a polluter and therefore BHP were liable under the Brazilian Environmental Law.
2. Under Article 186 of the Brazilian Civil Code, the collapse of the Dam was caused by BHP’s negligence and the risk was foreseeable.
3. BHP were not liable under (i) a general liability regime established under Article 927 of the Brazilian Civil Code; and (ii) Corporate Law.

The quantum trial is set to being in October 2026. BHP have confirmed they intend to appeal the liability judgment.