Brumadinho victims complain about value of compensation
Exactly two years after the collapse of the dam in Brumadinho, Minas Gerais state, Southeast Brazil, the amounts declared by mining giant Vale as payment to shareholders add up to $3.63 billion. In the same period, according to data published by the company itself, $686.9 million was paid in compensation and emergency allowances for those affected by the disaster. The difference has been mentioned by the victims demanding more commitment to repairing the damage caused by the incident.
Dividends were paid to shareholders on two occasions: late 2019 and October 2020.
The remuneration of executives has also been dispensed in goodly amounts. Vale distributed $3.54 million in performance awards for directors. This value, approved in a meeting held in April 2020, refers back to 2019, when the tragedy happened. Among the beneficiaries are people who occupied direction posts when the dam breached.
At the time, Vale stated that the values were split among the executives that were not facing investigation, and argued that the directors met their sustainability and damage compensation goals over the course of the year. Minority partners and the National Economic and Social Development Bank (BNDES) voted against the decision, but were defeated by shareholders with 60 percent of shores, among them Bradesco, one of the country’s biggest private banks, and Previ, a pension fund for Banco do Brasil workers.
“These are extremely high amounts going to shareholders. It’s disrespectful with those deprived of their lives. I’m not only talking about the victims whose right to live was taken from them. Families who lost their beloved ones lost the energy to do anything. It’s a constant nightmare,” said civil engineer Josiane Melo, head of the Association of Relatives and Victims of Those Affected by the Collapse of the Córrego do Feijão Mine (AVABRUM). She lost her sister Eliane Melo, who was five months pregnant.
The mining company says it is committed to damage reparation. “Committed to fairly and quickly compensating all of those impacted, the company has paid over [$370 million] in compensation. In all, 8.7 thousand people have signed compensation agreements with Vale, 1.6 thousand of them through labor courts, 7.1 people in civil compensation deals,” a note reads.
Since the tragedy—which took place after a dam at the Córrego do Feijão mine collapsed, on January 25, 2019—259 bodies have been rescued. A total of 11 people remain missing and firefighters are still searching. The torrent of sludge also destroyed local communities, devastated vegetation, and polluted river Paraopeba, which feeds part of the metropolitan region of the state capital, Belo Horizonte.
Compensation for deaths
To compensate family members of the workers killed, an agreement was signed between Vale and the Labor Prosecution Service in July 2019. Over 90 percent of the bodies rescued were workers at the Córrego do Feijão mine: 123 were Vale employees, and 117 worked for outsourced firms. “We don’t see it as a good agreement. We were never consulted and we had no options. They said it was either this or going to court,” Josiane Melo said.
Under the agreement, parents, spouses or partners, and children of the victims were each to receive $92.82 thousand as moral damage. Siblings would receive $27.84 thousand each. In addition, as material damage, Vale should pay a monthly pension to relatives who financially depended on the victim. The deal stipulates that the dependents of each deceased should receive no less than $141.51 thousand, even when the calculation falls short of this amount.
The values are below the estimates found in an internal study conducted by the company itself, seized by Minas Gerais prosecutors during investigations on the tragedy. The survey fixed compensation at nearly R$10 million ($1.8 million) per person deceased. “Of course a life doesn’t have a price. Even R$10 million is seen as little compared to a life that’s been lost. But we’ve seen good compensation for those who had material damage. Plots and country houses were devastated after the dam breach and were fairly well appraised. Meanwhile, those who lost a sibling or a child weren’t even heard to settle a value for the compensation,” Melo declared.
Court rulings
Not all families accepted the values, and some decided to resort to prosecution. Vale has been convicted in some cases, although some rulings have been the object of appeals both from the mining company and from the relatives requesting an increase in the compensation.
Compensation for surviving workers has also been discussed in court. Negotiations between the company and six trade unions led to deals made effective in May last year. Up to $46.41 thousand should be paid for moral and material damage to each one of the employees, be them of Vale itself or of an outsourced firm working at the Córrego do Feijão mine. The highest value is to go to those working on sight when the dam collapsed.
Josiane Melo, also a Vale employee, recounts that a large number of co-workers had difficulties coping with the trauma. “Many of the surviving workers chose to quit Vale. And it’s difficult to find your way back into the labor market. First because we’re in the middle of a pandemic, second because these people have received or are receiving psychiatric treatment. Their resumes are blemished because they worked at the Córrego do Feijão mine and no one wants to hire them as a result of the stigma. Employers are not interested in workers with psychiatric problems.”
Recovery
Despite the financial impact witnessed in the months following the tragedy, Vale minimized 2019 losses with a good performance in the second half-year. The company close out the year with losses adding up to $1.23 billion. In 2020, considering report already published for the three first quarters, accumulated net profits total $4.06 billion. With just the report for the last quarter yet to come out, Vale is near its performance from 2018, the year prior to the tragedy, when profits stood at $4.75 billion.
