Lula criticizes privatization of large companies in Brazil

Brazilian President Luiz Inácio Lula da Silva criticized the privatization of large companies in the country, making direct reference to Eletrobras and Vale. Both could be operating side by side with Petrobras as drivers of the nation’s economy, he argued.

These and other critical remarks about mining giant Vale were made during a ceremony Wednesday (Jun. 19) to formally swear in Magda Chambriard as president of Petrobras. She has been in office since the end of May.

Eletrobras was privatized in 2022 under Jair Bolsonaro’s government. At the time, new shares were issued, bringing the federal government’s stake down to less than 50 percent. Vale was sold in 1997, when the government led by Fernando Henrique Cardoso negotiated shares with a group of private companies and pension funds.

“We could be better off. We could have Eletrobras on our side, which used to be the biggest energy company in our country. We could have Vale on our side, if it hadn’t been privatized and sold off to different funds. And there’s no owner for you to talk to,” President Lula pointed out.

He criticized the mining company’s conduct in the reparation proceedings related to the tragedies it caused in recent years in Minas Gerais state. In 2015, a dam owned by Samarco—a joint venture between Vale and BHP Billiton—burst in Mariana town, leaving 19 dead and causing damage in municipalities throughout the Doce river basin. In 2019, the city of Brumadinho witnessed Brazil’s biggest labor accident. The collapse of a Vale dam, in addition to the environmental impact, claimed 272 lives, most of them employees of the mining company itself or of outsourced contractors.

The topic was raised by President Lula in the midst of talks to renegotiate the reparations agreement for the 2015 tragedy. The model implemented—which includes the creation of the Renova Foundation to manage reparation measures—is considered unsuccessful not only by the federal government, but also by the state governments of Minas Gerais and Espírito Santo, the Prosecution Service, and organizations representing those affected. Over eight years on, the Brazilian Judiciary is dealing with more than 85 thousand lawsuits, including public civil actions, class actions, and individual claims.

“When I say there’s no owner to talk to, it’s because no compensation has been paid to the people since the Mariana and Brumadinho dam disasters. They’re still waiting for houses and compensation for the damage. A solid corporation needs to have someone in charge so things can work properly. My mother used to say that dogs with too many owners starve to death, because everyone thinks someone else gave them food, and in the end nobody did. So a company with no single person in charge often doesn’t fulfill its social role,” the president stated.

When contacted by Agência Brasil, Vale said it would not comment on President Lula’s statement. According to data from the mining company, BRL 37 billion was earmarked for reparation and compensation efforts linked to the tragedy in Mariana. Of this amount, BRL 14.29 billion has been allocated for compensation and BRL 2.82 billion for emergency aid. Regarding the disaster in Brumadinho, Vale claims that, since 2019, 16,394 people affected have signed civil and labor compensation deals, adding up to BRL 3.7 billion.