In a significant development, BHP has announced an agreement with Vale regarding group action proceedings in the United Kingdom related to the Fundão Dam failure in Brazil. The Fundão Dam, operated by Samarco, a joint venture between BHP Billiton Brasil, a subsidiary of BHP, and Vale, suffered a catastrophic failure in 2015, leading to extensive legal repercussions.
BHP, alongside BHP Group Limited and BHP Group (UK) Limited, faces a group action claim in the English High Court brought by over 600,000 claimants seeking damages linked to the Fundão Dam collapse (the English Proceedings). Despite contesting liability, BHP intends to vigorously defend itself in these proceedings, deeming them redundant due to parallel efforts by the Renova Foundation and ongoing legal actions in Brazil.
A new claim was initiated in March 2024 against Vale and Samarco's Dutch subsidiary in the Netherlands on behalf of approximately 78,000 Brazilian claimants (the Netherlands Proceedings). Notably, BHP is not named as a defendant in these proceedings.
Under the newly announced agreement, BHP, BHP Brasil, and Vale have committed to sharing equally the potential financial obligations arising from the English Proceedings, Netherlands Proceedings, and other relevant Brazilian legal actions. This financial arrangement underscores BHP's and Vale's equal responsibility, without implying admission of liability in these proceedings. Importantly, this agreement reaffirms the terms established in the 2016 Framework Agreement, mandating BHP Brasil and Vale to jointly fund the Renova Foundation for compensating those affected by the Fundão Dam disaster, should Samarco be unable to meet its obligations.
Previously, BHP had filed a contribution claim against Vale in December 2022, arguing that if BHP were found liable in the English Proceedings, Vale should share in any financial liabilities. However, with the new agreement in place, BHP has decided to withdraw this contribution claim against Vale, considering it redundant in light of the agreed-upon terms.
Throughout these legal proceedings, BHP Brasil remains steadfast in its commitment to supporting local remediation efforts in Brazil through the Renova Foundation. To date, these efforts have disbursed approximately $3.5 billion in compensation and direct financial aid to around 430,000 individuals affected by the dam failure up to May 2024.
The agreement marks a pivotal step in managing the complex legal aftermath of the Fundão Dam incident, ensuring equitable financial responsibilities between BHP and Vale while reinforcing their commitment to supporting affected communities in Brazil. As these proceedings evolve, BHP continues to uphold its corporate responsibility by actively participating in remediation efforts and legal proceedings aimed at addressing the impacts of the Fundão Dam failure comprehensively.
