Brazil files largest civil suit in its history over mine tailings dam failure

May 4, 2016

Federal prosecutors in Brazil have filed the largest civil lawsuit in the country’s history, $155 billion real (US$44 billion), against iron miner Samarco and its owners Vale and BHP Billiton for the damages from the collapse of the tailings dam in November 2015 that left 19 people dead and polluted a major river.

Federal prosecutors in Minas Gerais, where the companies’ joint mining venture Samarco is based, and neighboring Espírito Santo state, said on May 4 that the value of the damages claim was based on the clean-up costs of the comparable BP oil spill in the Gulf of Mexico in 2010, The Financial Times reported.

“Preliminary studies show the human, economic and socio-environmental impacts of the collapse of the dam are, at least, equivalent to those verified in the Gulf of Mexico,” prosecutors said in a statement.

“It does not seem credible, neither technically normorally, that the value of the human, cultural and physical environment in Brazil should be worth less than in other countries.”

The suit comes as a blow to Brazil’s Vale and Anglo-Australian miner BHP, which settled a R$20 billion (US$6.2 billion) lawsuit with the federal and state governments in March over the collapse of the Samarco’s that left more than 700 homeless.

Brazil’s independent prosecutors criticized the government for “selling out” and vowed to seek more compensation, dashing investors hopes that it would be the final settlement from the accident.

In their 359-page suit, prosecutors demanded that Vale, BHP and Samarco deposit an initial sum of R$7.7 billion (US$2.2 billion) into an independently managed fund within the next 30 days. A judge must now decide whether to proceed with the case.

While Brazil’s prosecutors have a history of seeking vast compensation payments for environmental disasters, as they did against Chevron following its 2011 oil spill off the coast of Rio de Janeiro, such cases are normally settled for much lower amounts.

Separately, Brazilian police have charged the former chief executive of Samarco and six others with homicide over the collapse of Samarco’s dam. They have said they may file further criminal charges after the conclusion of their investigation.


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