From Vedanta to Mariana: ESG litigation against UK parent companies

01/07/26

The success of the 600,000 claimants in Municipio de Mariana v BHP Group [2025] EWHC 3001 (TCC) could have significant implications for all UK corporates with overseas subsidiaries. ESG group litigation has moved from being a risk to a reality.

In 2015 the collapse of the Fundão Dam in Brazil resulted in the release of huge amounts of iron ore tailings which killed 19 people and caused widespread environmental devastation to the surrounding areas.  The dam had been operated by a joint venture company, Samarco Mineração SA, which was jointly owned by Vale SA and a subsidiary within the BHP group, BHP Brasil Ltd.  The claim was brought against BHP Australia, as the ultimate parent of BHP Brasil, and BHP Group (UK) Limited, which at the time of the collapse operated as a single economic entity under a dual listing structure. Following a lengthy trial in 2024 and 2025 Mrs Justice O’Farrell held both entities (BHP) liable under Brazilian law and the Court of Appeal has recently refused permission to appeal against that finding of liability.

It remains to be seen what the Court decides in relation to quantum, but on any view the finding that a UK parent company was liable in respect of environmental harm caused by an overseas subsidiary is very significant.

The risk of such a finding under English law principles has been growing for some time. In Vedanta Resources plc v Lungowe [2019] UKSC 20 a copper mine owned by Konkola Copper Mines Plc had allegedly caused a considerable amount of pollution, and the affected Zambian villagers brought a claim against the UK parent, Vedanta Resources plc.  The Supreme Court held that a UK parent could potentially be held liable for harm caused by a subsidiary’s operations where it had exercised such a degree of control over the subsidiary that it had itself assumed a duty of care towards the claimants. The Supreme Court made clear that such a parental duty is not a novel concept and that its existence depends on the facts.  One of the key factual points which the Supreme Court considered arguably supported such a direct duty of care was that Vedanta had established group-wide environmental and sustainability policies. 

Importantly, however, Vedanta was concerned with a jurisdiction challenge so no substantive finding of liability was made.  In Okpabi v Royal Dutch Shell [2021] UKSC 3 the Supreme Court considered another ESG case brought against a UK parent. It emphasised that the relevant question is whether the UK parent had assumed responsibility over the specific subsidiary operations that caused the relevant harm, and it highlighted the importance of internal corporate documents as evidence of parental involvement.  Once again, however, this was in the context of a jurisdiction challenge, meaning that there was no finding of liability.

Since Vedanta and Okpabi, a number of ESG cases have been commenced against UK parents, such as Limbu v Dyson Technology Ltd (a claim by workers about exploitative and abusive living and working conditions in Malaysia, now settled) and Catarina Oliveira Da Silva v Brazil Iron Ltd  (a claim by residents of communities in Brazil allegedly impacted by unlawful pollution from the Fazenda Mocó iron ore mine).  In both cases, jurisdiction challenges failed including because of the availability of litigation funding in England.

In this context, the judgment of Mrs Justice O’Farrell is a landmark because of the substantive finding of liability.  Although the case was decided under Brazilian law, some of the reasoning as to why BHP was liable is instructive as to how an English court might approach a Vedanta-type question about parental liability in the future.  In this regard, the key factual findings included that BHP had (1) controlled Samarco, (2) assumed responsibility for risk assessment, management and control of the tailings dam, and (3) participated in the tailings dam operations.

Now that permission to appeal has been refused, UK corporates with international operations should study the findings in Mariana carefully.  The pipeline of mass ESG litigation is growing and questions of liability may turn in large part on internal corporate documents which are likely to be discloseable.  Consideration should therefore be given to auditing group-wide ESG policies and ensuring that governance documents are consistent with actual decision-making structures. 

Paradoxically, sophisticated and centralised ESG governance may reduce operational risk but at the same time increase litigation risk by evidencing parental control over the activities of foreign subsidiaries.