Tata Steel slapped with €1.4 billion class action lawsuit in the Netherlands for environment, health-related damages
Two of Tata Steel’s Dutch subsidiaries are facing a class action lawsuit in the Netherlands seeking damages of around €1.4 billion ( ₹14,810 crore) for alleged environmental and health-related damages.
Tata Steel said Dutch non-profit organization Stichting Frisse Wind.nu (SFW) has initiated legal action against Tata Steel Nederland BV and Tata Steel IJmuiden BV. filing On the stock markets on Friday.
SFW claims to represent residents living near Tata Steel’s IJmuiden plant in Velsen-Noord. It alleges that emissions, including hazardous and harmful substances, from the steelmaker’s operations negatively affect public health and the quality of life in the surrounding area.
SFW is seeking compensation for “the increased susceptibility of residents to health issues, as well as the loss of enjoyment and value of homes in the area.” He argues that average house prices in the area lag behind prices in similar areas and attributes this to the activities of the steel mill.
Responding to the allegations, Tata Steel said SFW’s allegations were unfounded and that its Dutch subsidiary “has strong arguments to defend against the allegations and will vigorously defend itself against these allegations.” The company stated that SFW did not provide any supporting evidence and called the claim for compensation speculative and unfounded.
Shares of Tata Steel closed 0.50% lower on Friday, while the benchmark Sensex closed 0.43% lower.
Aditya Welekar, senior research analyst at Axis Securities, said, “1.4 billion euros is significant. However, Tata Steel has stated that it will examine the allegation and evaluate its potential ramifications. The company will defend its position legally and explore how the case will develop.” “The stock did not react sharply, indicating that the market has not taken into account an immediate material impact. At a broader level, Tata Steel is already participating in discussions around ESG and emissions and investing significantly in green initiatives.”
Third party funders
According to the steel producer’s application, the transactions will be carried out under the Dutch Collective Resolution of Claims Act (WAMCA). The case will first go through the admissibility stage, followed by the merits stage. Each phase is expected to take two to three years to complete. According to Tata Steel, negotiations regarding the actual compensation amount are not expected to be held in the near future, as the case will be heard under WAMCA.
Tata Steel highlighted that the class action was funded by third-party litigation funders. According to the statement, the class action lawsuit is being funded by Redbreast Associates NV and Omni Bridgeway SA SFW said its financiers may receive multiples of their investment or up to 25% of the damages paid.
The company said health and environmental protection remain key priorities. He also drew attention to the Green Steel Plan developed in coordination with the Dutch government.
Tata Steel signed a non-binding agreement with the Dutch government on September 29 to receive financial aid of up to €2 billion to reduce emissions at its plant in the Netherlands. According to the government, Tata Steel will need to spend a total of €4 billion to €6.5 billion to reduce emissions at its Dutch operation to comply with regulations.
The remaining funds will come from the company’s cash flows, debt and parent company Tata Steel. It has also applied for a grant of approximately €300 million from the EU Innovation Fund.
Tata Steel became the owner of both the IJmuiden mill and Port Talbot in the UK as part of its 2007 acquisition of Europe’s Corus Steel. The annual capacity of the IJmuiden facility is 7 million tons.
Other claims
Tata Steel’s Dutch operations have faced similar allegations in the past. In December 2024, he received two penalty decisions from the Dutch Environment Agency, which fined him. ₹239 crore due to non-compliance with emission thresholds.
In a separate announcement at the time, the environmental watchdog had threatened to close one of Tata Steel’s two coke and gas plants in the country if it did not comply with certain conditions within 12 months. The steelmaker then said it was “unlikely” that the orders and notifications would lead to the closure of Tata Steel’s coke and gas plants and that it planned to appeal the orders and notification to the appropriate authority in due course.
Tata Steel did not respond to the email Mintrequests comments on developments.
Life expectancy around Tata Steel’s steel mill in 2023 is 2.5 months shorter due to exposure to fine particles and nitrogen dioxide, the National Institute for Public Health and Environment (RIVM) said.
“The current level of emissions from the Tata Steel plant puts people living in the IJmond area at high risk of disease,” the RIVM said. IJmuiden is the most famous city in the IJmond region.
