BHP Billiton mentioned ‘outrage factor’ of dam failure years earlier than catastrophe | USAEMALL.com

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Senior managers at mining group BHP Billiton instructed employees to review the “outrage factor” of a tailing dam failing, years before just such an event at one of its joint ventures triggered an environmental disaster, the High Court in London has been told.

Executives at the company made the request in 2011, four years before a dam that held waste materials burst at an iron-ore mine in Brazil unleashing a sludge wave that killed 19 people, according to internal correspondence cited in a lawsuit brought on behalf of victims.

Employees were asked following a group management committee meeting to “review the likely outrage factor of a tailing dam failure” and to “compare the attention given to BP’s spill in the Gulf of Mexico”, a reference to the deadly Deepwater Horizon explosion the year before.

Internal BHP correspondence cited in the court proceedings includes Sir Andrew Mackenzie, who was at the time an executive at the mining group and subsequently became its chief executive. He now chairs energy company Shell.

BHP, formerly known as BHP Billiton, is facing a multibillion pound claim brought on behalf of about 620,000 alleged victims of the 2015 disaster near the town of Mariana. The company had a non-operating stake in the dam that burst, which it co-owned with the Brazilian mining company Vale through their Samarco joint venture.

The correspondence — which discussed the generic risk of a tailing dam failure and not the Mariana site in particular — was cited on Thursday during a cross examination of Peter Beaven, BHP’s former chief financial officer.

He was asked by Alain Choo Choy KC, representing the claimants, whether the existence of an “outrage factor” meant senior managers were “generally sensitive of the risk of a tailing dam failure”.

Beaven replied that “it didn’t need an email from Andrew [Mackenzie]” for managers to be aware of such risks.

He told the court in his witness statement that Samarco was “not discussed in any level of detail” by the group management committee when he served on it, but that it had a record as a “reliable and safe operator”.

Beaven added that when he “saw footage of the collapse on the news, I was very surprised that such a tragic incident had happened”.

BHP argues that Samarco was an independent entity, with a separate management team that made its own decisions.

Vale and BHP have reached an agreement with authorities in Brazil, finalised this month, to pay R$170bn ($28.4bn) in reparations, including sums already paid. BHP has described the London proceedings as unnecessary and not in the interests of victims.

Pogust Goodhead, the UK law firm bringing the case in London, said the sums to be paid to victims under the Brazil settlement were inadequate.

The first round of the case, which began last month, is scheduled to last until March. If BHP is found liable, a subsequent trial will take place to determine damages.

Additional reporting by Malcolm Moore in London