Município De Mariana v BHP Group (UK) Limited & Anor

Under Brazilian environmental law, strict liability applies to a person or entity directly or indirectly responsible for a polluting activity where that activity caused environmental damage. Responsibility is assessed through a broad, fact-sensitive multifactorial approach, including control, participation, risk creation, financing and benefit. A factual causal link is required, but the applicable test is equivalence of conditions rather than direct and immediate causation. Direct and indirect polluters may be jointly and severally liable, and private indirect polluters cannot require prior enforcement against the direct polluter.

A controlling shareholder may also incur fault-based liability where its own conduct, including assumption of responsibility for risk, creates a relevant legal duty. The court held that BHP were liable under both the Environmental Law and Article 186 of the Civil Code.

This was a first-stage trial concerning claims by more than 600,000 Brazilian claimants arising from the collapse of the Fundão tailings dam in Brazil on 5 November 2015. The defendants were BHP Group (UK) Limited and BHP Group Limited, associated with Samarco, the owner and operator of the dam.

The court determined liability, limitation and prescription, waivers and releases, and the capacity of Brazilian municipalities to sue in England. It also decided whether BHP were strictly liable as polluters under Articles 3(IV) and 14(1) of the Environmental Law, liable under Article 186 of the Civil Code, or liable as controlling shareholders under Articles 116 and 117 of the Corporate Law.

1. Cause and foreseeability. The collapse resulted from liquefaction of contractive, saturated sand tailings. Lateral extrusion of slimes reduced confinement of the sands and triggered failure. The Setback, inadequate drainage, encroachment of slimes and failure to maintain the 200-metre beach materially contributed to the risk. The risk of collapse was foreseeable by 2014. A proper stability analysis using undrained strength parameters would have shown inadequate Factors of Safety.
2. Environmental liability. Articles 3(IV) and 14(1) of the Environmental Law establish a special strict-liability regime based on the full-risk theory. A polluter is a person or entity directly or indirectly responsible for the polluting activity. Responsibility is assessed factually and may include control, participation, risk creation, financing and economic benefit. There is no essential requirement for breach of a specific safety duty. The causal test is equivalence of conditions, or conditio sine qua non, and a contributory cause is sufficient. Full-risk liability excludes reliance on force majeure, third-party acts and similar civil-liability exclusions.
3. BHP and Vale exercised effective control over Samarco through the shareholders’ agreement, board and committee structures, risk systems, audits, funding and project approvals. BHP were therefore directly and/or indirectly responsible for the polluting activity and were strictly liable under Articles 3(IV) and 14(1). Private indirect polluters may be sued and enforced against without prior proceedings against the direct polluter, subject to recourse between co-polluters.
4. Fault liability. Article 186 of the Civil Code permits liability for an omission where a pre-existing legal duty arises from legislation, contract, convention, creation or contribution to risk, or assumption of responsibility. Fault was assessed objectively. BHP’s control, risk-management functions and participation created a duty to avoid negligent or imprudent harm. BHP breached that duty by tolerating inadequate drainage, slimes encroachment, deficient risk assessments and continued raising of the dam. BHP were therefore also liable under Article 186. Articles 116 and 117 of the Corporate Law did not create autonomous duties to third parties.
5. Other issues. The alternative claim under Article 927 of the Civil Code did not arise because the Environmental Law was the applicable special regime. The claims were not statute-barred. Article 200 of the Civil Code suspended prescription during the related criminal investigation and proceedings. Article 27 of the Consumer Defence Code provided a five-year period, and the municipalities and utilities also benefited from a five-year period under the 1932 Decree. Settlement agreements were governed by the Civil Code and required construction according to their terms. The municipalities had capacity and standing to sue in England.

This was a first-instance determination of liability and related first-stage issues. The judgment directed that consequential matters, including second-stage case management, costs and any applications for permission to appeal, be dealt with at a later hearing.