04 Aug 2025 Will President Lula veto the ‘Devastation Bill’ taking into account environmental and social disasters as the one unleashed by Mariana and Brumadinho dam collapses?
Mariana Dam collapse is the Largest Environmental disaster in Brazil, and the largest environmental class action in the world. On November 5, 2015, the Mariana Dam Collapse entered Brazilian history as the largest mining-waste disaster in history, affecting 50 municipalities. On the occasion, 45 million m³ of mining waste was released, culminating in the death of 19 people and the displacement of 600 residents. Among the victims, 5 were local residents of which two children of 5 and 7 years old and the remaining 14 were one employee from Samarco in the role of Administrative Service Technician and 13 contractor employees, of which 7 from Integral Engenharia Ltda, 2 from Manserv Montagem e Manutenção S.A., 2 from Geocontrole Br Sondagens S.A., and 1 from Vix Logistica S.A.
In terms of environmental impacts, the toxic pollutants entered the flow of Rio Doce and were carried to the Atlantic Ocean, affecting 1.2 million people in the region without water supply1. Vale and BHP, each holding 50% of Samarco (the joint venture operating the dam), are under ongoing investigation and are subject to extensive litigation and government sanctions under both Brazilian and English jurisdiction.
Board members were aware of the problems with the dam structure since 2009. In 2011, an independent Tailing Review Board panel recommended to the board that Samarco improve the dam and communicate an emergency plan to nearby villages. Notwithstanding the plans to expand the mine’s output and thus increase waste volume, no specific intervention was made. In 2013 two external inspectors and a Samarco employee observed further leaks. Despite further leaks observed by external inspectors, the consultants Vogbr Recursos Hidricos & Geotecnica Ltda. issued a report declaring the dam stable.
The 2015 Fundão dam collapse led to a complex web of liabilities and investor concerns for Samarco and its parent companies, Vale and BHP. Samarco’s losses, including cleanup costs and asset write-offs, directly affected its financial health, reducing Vale’s investment in the venture to zero under the equity method of accounting (as claimed in the companies’ annual report). Initially, Vale and BHP avoided recognizing direct liabilities on their own balance sheets, but legal actions, particularly civil and criminal proceedings in Brazil and class actions in the UK, have increasingly challenged this separation. Institutional investors, including pension funds and asset managers, have pursued legal remedies abroad, arguing that parent companies should be held financially accountable.
Civil and Criminal Proceedings in Brazil
The legal action started in November 2016. Prosecutors filed charges of manslaughter and environmental damage against 21 employees and directors from Samarco1, including Samarco’s CEO Ricardo Vescovi and Operations Chief Kleber Terra2. 11 members of Samarco’s Board of Directors, all appointed by BHP or Vale, were also included in the charge. Individuals charged include BHP’s former nominees to the Samarco board Jimmy Wilson, Margaret Beck, Jeff Zweig and Marcus Randolph as well as Vale’s former nominees, José Carlos Martins, Hélio Moreira Cabral, Pedro Rodrigues, etc. Prosecutors launched a civil action in 2017 against Samarco, seeking 155 billion reais3 (about US$ 48 billion). In addition, a preliminary deal of $680m to guarantee recuperation work was signed by prosecutors and the companies involved4. Samarco has also started paying in 2017 about R$6.4 mln (US$1.9 mln) in fines requested by the Minas Gerais Government5, which corresponds to 1% of the total fines of R$557 million (about US$ 170 mln)6. In the following years, multiple negotiation rounds took place between the companies, federal and state prosecutors, and affected communities, amid delays in reparations and criticism over the pace of recovery efforts. These tensions culminated in a new round of legal pressure that led, on October 21, 2024, to a final agreement: the court decided that the companies were not liable for criminal offenses, and Samarco, Vale and BHP committed to paying 31.7bn reais (about US$ 6 bn) for repair and compensation actions for the damages caused to people, communities, and the environment. Still, 31 out of 46 municipalities didn’t sign the agreement, looking forward to more significant compensation in the English Court7.
Action in the UK
Filed in the Liverpool High Court in November 2018 on behalf of more than 240,000 Brazilian victims, the group claim against BHP has since grown to over 700,000 plaintiffs seeking about £36,000 per plaintiff, amounting to about total £36 billion in damages. After the High Court struck the case out in November 2020 and the Court of Appeal initially upheld that decision in March 2021, the appellate court reversed course in July 2021 and, a year later, confirmed that English courts have jurisdiction because redress in Brazil appeared inadequate. The court rejected BHP’s bid to delay the proceedings in May 2023, leading to the opening of the first phase of the trial in London on 21 October 2024. The litigation is ongoing, with BHP and Vale agreeing in July 2024 to share any eventual UK liability8 (BHRRC, 2023). The litigation is currently ongoing, and the English Court must decide on the Responsibility Assessment, defining if BHP and Vale are liable for the damages. Should the court hold the companies responsible, it will proceed to its final stage, which involves defining compensation. The court will proceed to its final stage, which involves defining compensation. The process shall reach a conclusion in H2 2025, 10 years after the disaster.
In tribunal, BHP claims that it was a shareholder in mine and dam operator Samarco9. Peter Beaven (former CFO of BHP from 2014 to 2021) affirmed the Samarco operation was not discussed in detail and argued that Samarco was an independent entity10. On the other hand, evidence during the investigation supports the argument that the companies had previous warning signs before the tragedy. In 2011, after the attention given to BP’s spill in the Gulf of Mexico, BHP senior managers instructed employees to review the likely “outrage factor” of a tailing dam failing. The evidence was found in internal BHP correspondence and included Andrew Mackenzie, an executive at the time and subsequently CEO11. In January of 2016, leaked documents revealed Samarco had conducted a worst-case risk assessment about the dam’s risks, accurately predicting the potential impact of such a disaster 6 months before12 the dam collapse. The revelation pointed out that the risk was known and no action was taken to mitigate it, growing controversy over the investigation.
Despite different settlement efforts, legal claims against Vale and BHP have escalated across jurisdictions. Vale has been accused of seeking to financially compensate or “buy out” municipalities to prevent them from participating in larger class actions, as evidenced by revelations involving the municipality of Brumadinho in Vale Form 20-F 2021. In Australia, BHP is the target of a shareholder class action over the Samarco dam collapse, which was initiated by investors who sustained damages and were granted permission by the courts to proceed13 14. In the United States, a securities fraud class action was brought on behalf of foreign investors who owned Vale ADRs, alleging that the firm misled markets about its safety measures prior to the Mariana tragedy15.
Reparations by Samarco and Vale and Greenwashing claims
Less than 3 years after Mariana dam disaster, on 25th January 2019, a similar event occurred under Vale’s administration, the Brumadinho dam collapse. The collapse killed 270 people, most of them being Vale’s employees, caused immeasurable environmental and social harm. Both disasters highlight a significant deficiency in stability risk prevention and detection, health & safety planning, disaster prevention and attention to the local communities, particularly at Vale.
In 2022, US SEC charged Vale with misleading Investors due to false and misleading disclosures about dam safety through selective disclosures and the omission of important factors. SEC noted that, since 2016, Vale manipulated safety audits and obtained fraudulent stability certificates, and the Brumadinho disaster led to a loss of more than $4 billion in Vale’s market capitalization. Vale agreed to pay $55.9m to settle the charges16.
Noteworthy, it is the fact that the ESG Ratings of both Vale and BHP were good based on their Sustainability Reports, only the controversies score was negative. This is because the aggregative score for each ESG dimension allows companies to downplay the true impact of major events.
One of the actions taken by the companies involved after the incident was the creation of The Renova Foundation, established in 2016 because of a legal agreement called the Transaction and Conduct Adjustment Term (TTAC). It spent over Reais 38 billion (about US$ 7 bn) on 42 socio-environmental and community activities, which included reforesting 800+ hectares, restoring 113 tributaries, rebuilding settlements, and improving water quality in the Doce River. However, it faced growing scrutiny for inefficiency, including conflicts of interest, a lack of independence, delays, bureaucracy, and an overwhelming focus on communication and dialogue. With a board dominated by mining companies, Renova’s PIM program forced victims to accept settlement and forfeit future legal resources, prioritizing companies’ self-interest over real compensation and justice. Prosecutors in Minas Gerais accused Renova of being controlled by the same firms responsible, demanding its abolition and R$10 billion in moral damages for its lack of autonomy. In October 2024, a new Mariana reparation agreement formalized Renova’s dissolution, contributing R$100 billion to the fund and establishing a new governance body to oversee remaining activities. From October 2024 to October 2025, the Supreme Court oversaw a 12-month transition of all remaining programs from Renova to Samarco or public bodies.
In summary, Mariana collapse has become a test case for cross-border accountability, as hundreds of thousands of Brazilians pursue claims in the United Kingdom against BHP and others, a move permitted after U.K. courts accepted jurisdiction and proceedings began in London in October 2024. This external litigation both underscores perceived gaps in Brazil’s domestic redress mechanisms and helps open legal precedent for transnational remedies when multinational parents are implicated in harms abroad17. Read alongside the debate over Brazil’s so-called “PL da Devastação”18 (a label used by critics for bills that would weaken environmental safeguards), the case illustrates a stark fork in the road: either strengthen internal protections and enforcement or expect victims to keep looking to foreign courts to secure comprehensive reparations and deterrence.