The company logo adorns the side of the BHP global headquarters in Melbourne. The Australian multinational producer of metallurgical coal, iron ore, nickel, copper and potash is facing a complex legal landscape stemming from the disastrous collapse of the Samarco dam in Brazil back in 2015. Picture: William WEST / AFP
Fresh allegations and ongoing negotiations have thrust BHP into the spotlight once again as it grapples with a complex legal landscape stemming from the disastrous collapse of the Samarco dam in Brazil back in 2015.
The dam, operated by Samarco which is jointly-owned by BHP and Vale SA, gave way, unleashing a wave of toxic sludge that tragically claimed the lives of 19 individuals, displaced thousands, and wreaked havoc on the surrounding environment.
BHP, in addition to demands for settlement in Brazil, is facing litigation over the collapse of the dam in London, which is complicating its attempts to finalise these agreements.
As discussions unfold over settlements for the affected communities, the court proceedings have revealed a stark divergence between BHP’s proposed compensation and the sums that local groups believe they deserve.
Lawyers representing these communities have accused BHP of attempting to evade accountability, highlighting a significant “chasm” in their expectations for reparations.
In court documents submitted in London on Monday, lawyers for affected communities said BHP was trying to avoid responsibility for the catastrophe.
“There is a chasm between what BHP regards as acceptable and the compensation to which the claimants consider themselves legally and morally entitled,” they argued in court papers.
Communities, government organisations and businesses affected by the disaster are claiming settlement and compensation from the two companies.
BHP said Monday that it and Vale were negotiating a settlement proposal that would provide a total financial value of approximately $31.7 billion (R557bn) on a 100% basis to be delivered to the people, communities and environment impacted by the dam failure. These negotiations were, however, related to claims in Brazil.
“Negotiations between the parties are ongoing and no final agreement has been reached on the settlement amount or terms. Any settlement is subject to finalisation of the terms and conditions of a final settlement agreement,” said the company.
The proposed settlement involves a multifaceted approach, incorporating past expenses and projected future costs.
This includes $7.9bn already spent on remediation and compensation since 2016, and an additional $18bn dedicated to payments over a period of 20 years to public authorities, local municipalities, and indigenous and traditional communities affected by the catastrophe.
At the moment, BHP and Vale were continuing to negotiate a full and final settlement of the Framework Agreement obligations, the Federal Public Prosecution Office civil claim and other claims by the Public Authorities relating to Samarco dam failure.
Other proposed settlements include performance obligations for an estimated financial value of approximately $5.8bn to be carried out by Samarco. This will be used to provide direct benefits to the people, communities and environment affected by the dam failure.
“The obligations to perform will include the establishment of a new compensation and indemnification system, commitment to remove a certain amount of tailings from the Doce River subject to a licensing process, ongoing monitoring for potential environmental contamination in certain areas of the Doce River and the transition of the Renova Foundation's remaining programs to Samarco,” it said.
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