Mining companies move to stop cities from filing lawsuits abroad

Brazil’s Mining Institute, Ibram, which represents the country’s largest mining companies, has filed a lawsuit with the Supreme Court to prevent municipalities from filing lawsuits in foreign courts. The organization claims it is unconstitutional for federate entities to get involved in litigation abroad.

The move marks the beginning of a major legal battle. Two days later, the Public Consortium for the Defense and Revitalization of the Doce River (Coridoce) asked to join the lawsuit. It comprises the mayors of the municipalities involved in a lawsuit underway in the UK which discusses compensation for the damage caused by the collapse of the Samarco dam. In the incident, which took place in the town of Mariana, Minas Gerais state, in November 2015, a torrent of mining tailings was unleashed, claiming 19 lives and impacting hundreds of towns along the Doce river basin.

Dissatisfied with the progress of the case in Brazil, some 700 thousand affected people and 46 municipalities—not to mention companies and religious institutions—have filed a lawsuit in British courts seeking to hold BHP Billiton responsible. The London-based Anglo-Australian mining company is one of Samarco’s shareholders. Brazilian multinational corporation Vale, another partner, was later brought into the lawsuit. Hearings scheduled for October this year will determine the responsibility of the two companies.

According to a statement released by Ibram, the motion brought before the Supreme Court serves to protect Brazilian sovereignty. The association claims that, without the scrutiny of Brazilian courts, the transparency of legal actions initiated abroad is compromised. In addition, it argues that the participation of prosecutors in cases involving federate entities is mandatory, which would be unfeasible in cases considered outside the country.

“Lawsuits filed abroad by municipalities fall outside the control of the public administration and do not comply with constitutional principles and the organization of the Brazilian state. Because they do not come under the scrutiny of the Brazilian Judiciary and are dealt with in a foreign jurisdiction, the transparency of the proceedings and the participation of the Prosecution Service, which are fundamental to defending the Brazilian legal order and preserving social peace, are undermined,” the text reads.

The institute goes on to state that litigation outside the country is having an adverse effect on the mining sector, adding that it is the exclusive competence of the federal government to deal with international matters and that municipalities are not allowed to deal directly with foreign jurisdictions. “Thus, any motion taken abroad by municipalities must have the consent of the federal government,” the association concludes saying.

The law firm Pogust Goodhead, which represents those affected and municipalities in the lawsuit filed in the UK, also released a statement, in which lawyer Tom Goodhead classifies Ibram’s motion as an “apparently orchestrated move” and a “smokescreen” to divert attention from the socio-environmental crime committed in the Doce river basin.

He also mentions lawsuits in other countries. Seven municipalities affected by the 2015 tragedy have sued Vale and Samarco subsidiaries based in the Netherlands. In another case, the municipality of Brumadinho, also in Minas Gerais, joins a lawsuit in Germany against Tüv Süd, the consultancy that signed the stability report for the Vale dam that collapsed in 2019. A total of 272 people died in the incident, including the babies of two victims who were pregnant. “It is no coincidence that the mining companies we sue abroad are associated with Ibram,” he stated.