Senate panel recommends murder indictments and new laws in response to tailings dam collapse in Brazil

July 3, 2019

A Brazilian Senate committee probing the deadly collapse of a tailings dam at a mine owned by Vale in late January has recommended that Vale SA’s chief financial officer and its former chief executive be indicted for murder.

Reuters reported that the committee is also seeking the indictment of Vale and dam stability auditor TÜV SÜD for environmental damages and corporate responsibility for actions of their employees in the late-January disaster that killed nearly 250 people. The committee is also recommending three laws that would require congressional approval, including banning all tailings dam, increasing the tax rate on mining companies and expanding the list of environmental crimes.

The 400-page report recommended that a total of 15 individuals, including the two executives, be indicted for murder, wrongful bodily injury, environmental damages and pollution.

Fabio Schvartsman stepped down as Vale’s CEO under pressure from prosecutors in March. Luciano Siani, also targeted by the committee, continues to serve as CFO.

The committee’s initial report recommended manslaughter charges but at a hearing it approved an amendment to upgrade the charges to murder and add a 15th individual to its list for recommended indictments.

Vale, a formerly state-owned Brazilian “national champion” which is a leading exporter and employer, said it “respectfully disagrees” with the indictment recommendations.

A “forensic, technical and scientific conclusion about the causes of the dam burst” should be arrived at before holding certain people responsible, the company asserted in a statement.

TÜV SÜD said it was cooperating in full but declined to comment further, citing ongoing investigations.

“Vale’s tragedy is a series of tragedies,” the committee said in its report. “The immeasurable human loss; the countless dead animals; the environment destroyed for years, perhaps decades; the dreams and heritage of a lifetime buried by the carelessness, neglect, greed, usury, irresponsibility, indifference and sloppiness of a company that used to be a role model.”

Brazil must take action to ensure that “never again” will such a disaster occur, it said, recommending three laws that would require congressional approval.

One proposed law would outlaw all tailings dams for mining and industrial waste, a move that would go far beyond a ban instituted in February on the specific type of “upstream” dam that ruptured. It would allow for 10 years to decommission the hundreds of existing tailings dams around the country, a costly move for miners.

A separate bill would hike taxes calculated on mineral production, with a tax of up to 40 percent on more profitable or larger scale mines.
The investment banking unit of Brazil’s Bradesco said such a tax is unlikely to be implemented given that comparable taxes in Australia and Mexico are up to 7.5 percent. But the bank said the rate is likely to rise for Brazilian miners from the current 3.5 percent.

A third proposed law would expand the list of environmental crimes.

Vale has argued that it followed all the required safety measures.

While authorities have yet to conclude the cause of the rupture, a Minas Gerais state official and other experts suspect liquefaction, in which solid materials such as sand lose strength and become more like liquid.

That was the same cause of a 2015 rupture of another upstream Vale dam that killed 19.





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