Action charges $43 bn for damages caused by mining company in Brazil

The Public Prosecution Office (MPF) revealed this Tuesday (May 3) the content of a civil action on the total amount to be paid in repair of social, environmental, and economic damages caused by the collapse of the Samarco mining company tailings dam in November 2015 in Mariana, in Minas Gerais state. The tragedy caused the death of 19 people, the destruction of the native vegetation, and polluted the basin of Rio Doce river. Prosecutors estimate the losses at $43 billion.

Prosecutors expressed themselves again against the judicial approval of an agreement between the mining companies, the federal government and the governments of the states of Minas Gerais and Espírito Santo which provides for an investment of approximately $5.63 billion to be paid over 20 years, an amount very below the $43 billion requested in the action.

According to prosecutor José Adércio Sampaio, to calculate these figures they have decided to compare it with an emblematic case: the explosion of a British Petroleum oil platform in 2010, in the Gulf of Mexico, USA. In the case, 11 people died and about 4.9 million barrels of oil leaked to the sea. "We conclude that Mariana tragedy exerted human, economic and environmental impacts, which are at least equivalent to those observed in the Gulf of Mexico," said Sampaio. Last year, British Petroleum, on a report posted on their website, recognized the damage mounting to $43.8 billion.

Prosecutors reiterate that this is an estimated value, which should be better defined based on diagnosis given by independent experts. "We will need diagnosis of at least two hydrologic years to definitely establish the amount of losses. Therefore, the action makes an estimate," Sampaio pointed out.

The damage costs would be paid by Samarco mining company and by Vale and BHP Billiton shareholders, without distinction. "The three of them are responsible for it," said prosecutor Jorge Munhós. According to the lawsuit, the mining companies would deposit the resources to a private fund and would not manage it. The action also demands an initial and immediate contribution of $7.7 billion for measures to be taken in the next 12 months.

The Government is also named as jointly liable for the damage and could be sued to financially afford the losses. The federal government, the governments of Minas Gerais and Espírito Santo, and their surveillance authorities are considered defendants in the suit. "An event of this magnitude shows that the inspection failed in issuing environmental licenses and in inspecting the dams," Munhós noted.

In addition to the $43 billion, the lawsuit demands the payment of 10% of the amount claimed for collective moral damages caused to the Brazilian society and to the country's image in the world. Another 10% are requested in compensation for the period that the population will be unable to use the environment, whether for fishing, leisure or economic activities.

Other proposed measures are the restoration of the riparian forest surrounding the basin of Rio Doce river and at least 10 000 river sources, in addition to sewage works at the affected municipalities. Even in towns where there was no sewage system before the tragedy, works would be carried out.

The MPF also calls for the suspension of the of Samarco, Vale and BHP distribution of profits and dividends, and of benefits granted to them by the federal government. "The Brazilian environmental legislation is emphatic. The federal government will grant no benefit to polluting companies. This is true for tax incentives, interest rebates, among others," said prosecutor Eduardo Aguiar.

The criminal investigation is also moving forward and, according to the MPF, is also at an advanced stage. According to prosecutor Eduardo de Oliveira, "such a tragedy is the result of a chain of events." Crimes of murder, forgery, pollution and flooding are being investigated.

When contacted to comment on the lawsuit filed by the MPF, Samarco company reported that it has not been notified yet. As of the publication of this article, Vale had not contacted back.

Translated by Amarílis Anchieta