RIO DE JANEIRO – Brazilian mining giant Vale signed an agreement on Thursday to pay $ 7 billion in compensation to the state of Minas Gerais, two years after one of its dams collapsed, killing 270 people and causing massive environmental damage. Eleven people are still missing.
Although the amount to be paid was less than what the state government initially demanded, government officials still called it the largest settlement in Brazilian history.
The dam’s breach destroyed nearly 300 acres of native forest and polluted 200 miles of the local Paraopeba River, rendering it unusable as a water supply for the state. Traces of the toxic sludge coming out of the dam were found in the São Francisco River, which supplies water to five different states.
The dam, built to hold waste from a nearby iron ore mine, collapsed in the town of Brumadinho on January 25, 2019, burying homes, hotels, rivers and the company’s facilities under a wave of mud. Within days, it became clear that the company had been warned several times that the structure was unsafe, internal documents showed.
A report issued by Tüv Süd, a German company hired by Vale to inspect the dam in 2018, before the collapse, vouched for the safety of the dam, even though it found blocked drain lines and cracks. Separately, interviews with workers and relatives of victims revealed that the company had been warned by its own staff that the dam was leaking.
In 2020, prosecutors investigating the case found evidence that security reports had been prepared for at least 10 of Vale’s dams and later charged 16 officials from Vale and the German company, including Fabio Schvartsman, who was Vale’s CEO at the time. .
A report by an independent committee hired by Vale confirmed that the company had been aware of the safety concerns at Brumadinho Dam since 2003 and had received multiple reports over the years – especially in 2015 after a similar dam was partially owned by Vale, leaving 19 dead.
The disaster not only destroyed parts of the communities around the dam, but also the jobs on which Brumadinho’s 40,000 residents depended. Since the disaster, many residents of Brumadinho have been living off money transfers from Vale as compensation for the tragedy.
The deal includes the continuation of the money transfer program for another four years, restoring the environment in protected areas that were damaged, as well as projects to be defined by the affected communities.
Luiz Eduardo Osório, director of institutional relations and sustainability at Vale, celebrated the deal at a ceremony on Thursday. “This is the result of months of open dialogue between representatives of Vale and members of the government,” he said, noting that the company “had heard the wishes of the people of Minas Gerais.”
Yet many in Brumadinho were dissatisfied with the results of the negotiations and said they felt excluded from the process. About 150 people protested at the doors of the state court where the deal was signed Thursday, saying it excludes victims of the tragedy. “Vale and the state are making an unfair deal,” read a sign.
Jarbas Soares Júnior, the state’s chief prosecutor, stressed that the deal will not affect other proceedings against Vale and his executives, including allegations of corruption and murder. Last year, a state judge agreed to hear a case in which 16 people were charged.
Mr Soares Júnior said the deal was the best they could reach, in order to avoid a lengthy lawsuit in Brazil’s famously slow legal system.
“This deal shows that preventive measures that are carried out with care are a better option for companies,” he said.
Relatives of victims said they were not comforted by the settlement announcement.
Flávia Coelho, 34, said it was a day of mourning, not celebration. It has been two years since she buried her father, Olavo, who died at the dam days after warning his superiors that disaster was imminent.
“He has spent 40 years working honestly with a criminal company,” she said in an audio message. “Let them not forget our deal, which is not for billions, but for justice and honor for the workers who perished.”
Manuela Andreoni reported from Rio de Janeiro and Letícia Casado from Brasília.