June 04th, 2012 | Caixin Lawsuits Push Court to Its Legal Limit
A case in Guangdong Province involving a mining giant, broken dams and shattered lives shows just how hard it is to implement the rule of law
On September 21, 2010, heavy rain caused a tailings pond dam at a tin mine in Xinyi County, in the southern province of Guangdong, to break.
Then, a dam at a hydroelectric plant 4 kilometers downstream of the tailings pond also broke. The accidents resulted in 22 deaths and damage to hundreds of homes in several villages.
The local government and residents who suffered injuries and losses sought compensation from the mining company whose tailings dam broke, Zijin Mining Group Co. Ltd. Initially, they chose the usual method for doing so.
On October 9, 2010, the local government sued Zijin Mining in Xinyi Prefectural Court for 19.5 million yuan, a fraction of the amount residents wanted. Xinyi officials told the media their efforts were intended to freeze Zijin’s assets to prevent it from transferring them.
Xinyi officials admitted in the media that damage caused by the accidents far exceeded 19.5 million yuan. However, this figure was used because the court could only hear cases with claims of less than 20 million yuan.
In November 2010, the local government negotiated with Zijin Mining, demanding China’s largest producer of gold pay compensation of 100 million yuan before the end of December.
However, on December 21, 2010, the Xinyi government changed course due to the prompting of the Guangdong government. Officials in Xinyi were asked it to try a new approach: resolve the issue in court.
Pursuing the matter through the judiciary won the approval of environmental lawyers who wanted the case handled by the rule of law so a precedent could be set. Lawyers said the old way of handling such conflicts – which involved negotiations for compensation, the pretense of a court case and punishments by government agencies such as warnings, fines and stopping production – failed to assign blame for accidents. Another problem with the old way was that victims tended to receive much less money than they had sought.
Initially, at least, the provincial government’s intervention worked. The Xinyi government sued Zijin Mining and encouraged villagers and companies that suffered injuries and losses to do the same. By January 2012, there were 2,502 government and private damage claims in the Xinyi court. The claims sought 417 million yuan.
However, legal experts say the sheer number of individual cases is too large for the court to handle. The cases could be consolidated into class-action suits, but doing this would cause the amount sought for each case to exceed the court’s 20 million yuan limit.
The situation has left the case dead in the water, leaving unanswered the question of who is responsible for the events of that rainy September night in 2010.
A Guangdong government report found that although the tailings dam break was the result of a natural disaster, it said Zijin was ultimately to blame. The mining firm had broken laws and regulations, the report said, such as when it illegally raised the height of drains on the tailings pond dam to allow it to hold more water.
However, Li Honghu, a lawyer at Guangdong Junhou Law Firm, which is representing Zijin Mining, said in court that the accident was caused by the Shihuadi hydroelectric dam breaking. Li also cited landslides, heavy rain and flooding.
Zijin Mining argues that the Shihuadi dam had quality problems. Its builders violated design requirements by increasing the height of the dam from 33 to 38 meters, which Zijin says made it seriously unstable. Zijin Mining asked the court to hire a third party to reexamine the dam, but the court has not approved the request.
At present, the Xinyi court is not close to apportioning blame. Villagers have not been able to confront Zijin in court, and their involvement in the legal proceedings has consisted of filling out forms that show the value of their homes.
With the support of the local government, villagers have signed their names to and put their fingerprints on lawsuit documents, but they have not seen their own legal representatives and have little knowledge of the case’s progress. When interviewed, many villagers repeated the same phrase: “The government and the company are squabbling and talking.”
A source close to the court said that so far 1,957 cases were heard over 20 days, using a total of 7,200 minutes, or an average of nearly 3.7 minutes for each case. There is simply too much information for the court to handle, lawyers involved in the litigation say.
It has been more than 20 months since the disaster, but the case has stalled. By April 18, most of the cases had had a first-instance trial, but a final judgment was nowhere in sight.
Several Xinyi officials said the dispute may still be resolved through negotiations, and the government of Shanghang County in Fujian Province – a Zijin shareholder – had established a working group to negotiate with the Xinyi government.
Xia Jun, a lawyer with Zhongzi Law Office in Beijing, said the Xinyi government had good intentions and was determined to use the rule of law to resolve the case, but it lacked experience and preparation.
Another legal professional said that even though the Xinyi government had taken the case to court, it was still trying to handle the issue through old methods, meaning the case could not set a precedent for handling disputes involving big companies, local residents and environmental damage.
By staff reporter Fu Yanyan