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UPDATE 1-BHP labels $6.3 bln UK case over Brazil dam failure pointless

Wed, 22nd Jul 2020 16:49

* Record group action against BHP kicks off in Manchester

* Claimants to lay out arguments on Monday

* BHP says claim overlaps almost entirely with Brazil class
action

* Judgment on jurisdiction not expected before September
(Adds fresh quotes, details)

By Kirstin Ridley and Zandi Shabalala

LONDON, July 22 (Reuters) - Anglo-Australian miner BHP
dismissed as pointless and wasteful a 5 billion pound ($6.3
billion) English lawsuit by 200,000 Brazilian people and groups
over the 2015 collapse of a dam that triggered Brazil's worst
environmental disaster.

Kicking off an eight-day hearing in Manchester, northern
England, BHP on Wednesday called for the
record group action to be struck out or suspended, alleging it
duplicated Brazilian proceedings and victims were already
receiving redress.

"...the attempt to export and duplicate the work being done
in Brazil, including the litigation, to England, is pointless
and wasteful," BHP said in legal documents.

The claimants are due to lay out their arguments on Monday
in the latest jurisdictional battle to establish whether
London-listed multinationals can face trial in England over the
actions of their foreign divisions.

Charles Gibson, a lawyer for BHP, told the court Brazil had
a sophisticated and fair justice system that provided access to
timely justice. "One has to be quite cautious before casting
stones at other systems of justice," he said.

The judge is expected to reserve judgment until around
September. If shown the green light, further trials could
determine liability and quantify damages.

The collapse of the Fundao dam, which stored mining waste
and is owned by the Samarco joint venture between BHP and
Brazilian iron ore mining giant Vale, killed 19 and
poured roughly 40 million cubic metres of mining waste into
communities, the Rio Doce river and Atlantic Ocean, 650 km away.

Claimants allege BHP, the world's largest miner by market
value, ignored safety warnings as the dam's capacity was
repeatedly increased by raising its height - and disregarded
cracks that were early signs of rupture.

Many claimants are seeking compensation for physical and
psychological injury, property damage, moving costs, loss of
earnings, loss of water supply and lost fishing income.

BHP says the Renova Foundation, a redress scheme established
in 2016 by its Brazilian division, Samarco and Vale, has spent
around 1.3 billion pounds on projects such as monthly financial
aid to about 130 indigenous Krenak families, rebuilding three
villages and establishing alternative water supply systems.

It also alleges almost 100,000 of the claimants have already
received payments from Renova and only 58 of the individuals,
businesses, municipalities, churches, utility companies and
indigenous people bringing the claim in England are not part of
Brazilian class actions.

Claimants allege it is wrong to suggest victims are entitled
to full redress in Brazil because Renova lacks independence and
its compensation scheme is slow, bureaucratic, inadequate and
has not properly involved victims in decision-making.

They allege BHP is responsible for the dam's collapse,
liable for its "catastrophic consequences" under Brazilian law
but that victims have no prospect of proper compensation in
Brazil within any reasonable timeframe.

Samarco, Vale and BHP Brasil face a raft of lawsuits in
Brazil over the disaster, including a 155 billion reais ($29
billion) class action filed by federal prosecutors which, BHP
alleges, overlaps "almost entirely" with the English case.

The Brazilian class action has been suspended, although the
parties aim to negotiate a settlement by around August 2022.

($1 = 0.7942 pounds)

($1 = 5.3288 reais)
(Reporting by Kirstin Ridley; editing by Barbara Lewis)

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