Brazil Plans to Charge Vale Over Deadly Mine Collapse

Date : 04/10/2019 @ 8:16PM
Source : Dow Jones News
Stock : Cia Vale Rio Doce (VALE3)
Quote : 54.51  -0.99 (-1.78%) @ 5:36PM

Brazil Plans to Charge Vale Over Deadly Mine Collapse

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By Luciana Magalhaes and Samantha Pearson 

BELO HORIZONTE, Brazil -- Prosecutors plan to file criminal charges against Vale SA and employees of the mining giant over the deadly collapse of a mine-waste dam in January, the lead investigator told The Wall Street Journal.

José Adércio Leite Sampaio, the prosecutor heading the probe, said investigators have gathered enough evidence to affirm that Vale employees directly involved in the operation of the mine knew the dam was unsafe. He didn't name the individuals.

About 300 people died near the town of Brumadinho in southeastern Brazil on Jan. 25 when the dam collapsed, ranking as the world's deadliest mining disaster of its type in more than 50 years.

"At this point, we know that the operational side knew [that the dam was at risk of collapse], but did Vale's directors know?" Mr. Sampaio said in an interview.

Prosecutors are preparing to file charges for crimes related to the disaster, which could include murder, manslaughter, environmental damage and false representation, he said.

Over the next two to three months, prosecutors expect to determine if senior Vale officials, who were based at the regional office as well as the miner's headquarters in Rio de Janeiro, also knew the dam was at risk of collapse, he said.

Meanwhile, prosecutors are preparing possible criminal charges of false representation against employees of TÜV SÜD, the German inspection firm that certified Vale's dam near Brumadinho as safe four months before it collapsed. Mr. Sampaio said individuals at Vale also could be charged with that crime.

An investigation in February by the Journal found TÜV SÜD and Vale employees knew for months of dangerous conditions at the dam on the outskirts of the town of Brumadinho. Yet TÜV SÜD employees certified the dam as safe, expressing worry about losing contracts with Vale, a major client, the investigation found.

When prosecutors conclude their probe they will file the criminal charges to a judge, who will hear from the workers' defense teams before ruling. If found guilty, the defendants can appeal the decision to higher courts -- a process that can take years in Brazil.

TÜV SÜD and Vale said they are cooperating with the authorities and carrying out their own separate investigations into the dam's collapse. A lawyer representing TÜV SÜD employees said he would only comment if he is officially notified of the charges.

Vale said it trusted TÜV SÜD to audit the dam correctly.

Mr. Sampaio said evidence gathered in the probe -- including witness interviews, messages, internal documents and minutes from meetings -- show that Vale carries a larger share of the blame for the Jan. 25 collapse. "Comparatively, the culpability of Vale is far larger than that of TÜV SÜD, both from the point of view of criminal and civil law," Mr. Sampaio said.

Prosecutors previously told the Journal that both companies could be held liable under Brazil's anticorruption civil law since Vale submitted TÜV SÜD's safety certificates to government regulators as proof the dam was stable.

The collapse of Vale's dam near Brumadinho, which obliterated the mine's busy lunchroom and a nearby hotel, came about three years after another dam jointly owned by Vale and BHP Group collapsed less than 100 miles away in the town of Mariana, killing 19 people. Both dams were so-called upstream dams -- the most widespread and cheapest method to store tailings, or mine waste, and the most prone to failure, industry experts said.

Vale said last week that its safety inspectors had refused to guarantee the stability of at least 18 of its other dams and dikes in Brazil, as a crisis of confidence in the miner's structures deepens following the Jan. 25 dam collapse.

Prosecutors are also investigating high-risk dams belonging to other miners in the country as part of an investigation into more than 100 structures, authorities told the Journal in March.

Andressa de Oliveira Lanchotti, a state prosecutor involved in the probe, said in an interview that she isn't convinced another dam won't collapse in Brazil's southeastern mining state of Minas Gerais.

"Until the whole system is changed, with stricter rules introduced and a greater control of this high-risk business, and this is put into practice, there is no way to guarantee that more dams won't collapse," she said.

After the 2015 tragedy in Mariana, Vale's management vowed to take every possible precaution to make sure none of its other dams would fail in the future, adopting the company slogan "Mariana, never again."

Mr. Sampaio said one of the most disheartening findings of the investigation into the Brumadinho disaster is the similarities with what authorities found during the probe into the 2015 disaster.

"Imagine this investigation has 10 chapters," he said. "Right now, we're on chapter three and the first three chapters are almost an exact copy of what happened in Mariana -- measures that could have been adopted and weren't, actions taken by the company that were not in keeping with adequate safety standards."

Write to Luciana Magalhaes at Luciana.Magalhaes@wsj.com and Samantha Pearson at samantha.pearson@wsj.com

 

(END) Dow Jones Newswires

April 10, 2019 16:01 ET (20:01 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.


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