Brazilian Prosecutors Charge Samarco, BHP, Vale Execs Over Dam Disaster

Construction of a new dam wall and water decant tower at the Samarco site. (Photo: BHP Billiton)
On October 20, Brazil’s Ministerio Público Federal filed a series of charges, including qualified homicide, against 21 former and current executives of Samarco Mineração, BHP Billiton and Vale in connection with the failure of Samarco’s Fundão tailings dam on November 5, 2015, which resulted in the deaths of 19 people. Additional charges were filed against the companies as well as some individuals, including charges of serious bodily injury and flood, landslide and environmental crimes.

Samarco is a joint-venture company owned 50/50 by BHP and Vale. Most of the individuals charged served varying lengths of time on the Samarco board in the years leading up to the dam failure. The prosecutors charge that these board members were aware of potential problems regarding the stability of the dam and they did not act on that knowledge, making them criminally liable.

In a statement releaed by Samarco, it said, “Samarco refutes the charges made by the Federal Public Prosecution Service, which failed to take into account the defense and other statements made by Samarco throughout the investigations initiated immediately after the collapse of the Fundão dam, which prove that the company had no prior knowledge of risks to its structure.

“The Fundão dam was inspected regularly, not only by the authorities but also by independent international consultants. Any and all measures suggested and implemented with regard to the management of the structure followed best engineering and safety practices.

“The stability of the Fundão dam was attested to by the consultant Vogbr. Safety has always been a priority in Samarco’s management strategy, and the company reiterates that it never reduced its investments in safety.”

The BHP statement said, “BHP Billiton Brasil rejects outright the charges against the company and the affected individuals. We will defend the charges against the company, and fully support each of the affected individuals in their defense of the charges against them.”

Vale said it “vehemently repudiates” the charges.

A judge must accept the charges before the case goes to trial. If that happens, the ensuring legal process could extend over a period of months or, possibly, years.

The charges of criminal liability are only the latest fallout from ongoing issues related to the Fundão dam failure. In March, Samarco, BHP and Vale agreed to pay an estimated $6.37 billion over 15 years to fund restoration of the environment and communities affected by the tailings dam failure; however, the federal prosecutors’ office has challenged the agreement as inadequate, claiming that payments of as much at $65 billion for damages are justified.

The Samarco mine has been shut down since the Fundão dam failure, with no assurance as to when, or if, production will be restarted.

BHP recorded an exceptional loss of $2.2 billion after taxes related to the Fundão dam failure in its financial results for its fiscal year ending June 30.

As featured in Womp 2016 Vol 11 -