On Jan. 21, former executives of Brazilian mining company Vale SA and German certification firm TUV SUD were charged with homicide and environmental crimes for misconduct that led to the catastrophic collapse of a dam above one of its mines. The charges are justly severe, but they will not absolve Vale from its duty to those affected by its crimes.
The greed and dishonesty of Vale SA destroyed a Brazilian town, and, one year later, the mining company plans to abandon it.
Brazil’s Vale owes the residents of Brumadinho more. It ought to invest in helping the town recover — an effort that will be long-term and not just financial.
On Jan. 21, Brazilian state prosecutors charged former Vale CEO Fabio Schvartsman and 15 other employees with homicide for the deaths of the 270 caused by a dam collapse on Jan. 25. 2019. A waste damn at the Corrego de Feijao iron ore mine six miles east of Brumadinho caved in, sending 11 million cubic meters of toxic sludge careening into mining buildings, houses, and farms below.
Traveling as fast as 50 miles per hour, the mudslide was practically inescapable, and it killed at least 270 people.
In a matter of seconds, the torrent transformed the site into a mass grave. The remains of 11 victims have not yet been recovered.
Investigators found that Vale executives were aware of the dam’s weakness, but declined to make necessary repairs. German certifications firm TUV SUD inspected the dam’s safety in 2018 and found erosion, wash-out, water build-up, and cracks.
“Everything suggests [the dam] won’t pass,” wrote a senior engineering inspector at TUV SUD, according to the Wall Street Journal.
But TUV SUD was under pressure from Vale to certify the dam. If Dam 1 did not pass the safety inspection, Vale would have had to cease operations at Corrego de Feijao, which at the time produced more than $1 million worth of iron ore daily.
Refusing to certify Vale’s dam would have jeopardized TUV SUD’s partnership with the mining giant. The Brazilian government does not closely supervise relationships between mine owners and inspectors, and TUV SUD’s officers feared Vale would have retaliated by canceling business with TUV SUD had it given its operations an unfavorable review. At the time, TUV SUD had contracts for safety audits at 30 other Vale dams.
Despite finding it unsound, and therefore unsafe, TUV SUD signed off on Dam 1’s safety inspection on Sept. 26, 2018.
If Vale was concerned with the safety of its operations, it would have wanted TUV SUD to provide an honest assessment of its facilities. That Vale coerced TUV SUD into giving it a falsely favorable review shows that Vale was not interested in protecting its employees, but only in continuing its lucrative enterprise.
On Jan. 9, 2019, Schvartsman, CFO Luciano Siani Pires, and other top officers received an email from an anonymous source warning that the company’s dams were “at their limit,” as reported by the Wall Street Journal. The source also wrote that Vale’s operations were under-funded and under-staffed, and that its equipment was deteriorating.
Instead of investigating the conditions of the company’s facilities, Schvartsman sought the identity of the sender, dismissing him as a cantankerous employee and saying he wanted to “look at [the email’s author] eye to eye.”
Two weeks later, Dam 1 collapsed.
Vale neglected the safety of those affected by its operations. Its corruption killed 270 people.
The company can never atone for its wrongdoing, but it must do everything in its power to help Brumadinho heal from the tragedy.
Since the collapse, Vale has attempted to compensate residents of Brumadinho financially. It gave $25,000 to each victim’s family — $200,000 if they agreed to settle out of court. The company gave $13,000 to those residing near the mine and $4,000 to affected farmers and businesses.
Vale promised to pay the wages of Corrego de Feijao workers for three years and gave 100,000 men, women, and children in the area $250 a month — the equivalent of a full-time minimum wage — through December 2019.
Vale’s payout is expected to total $107 million, but the payments are not a thorough or long-term solution, and some resent them.
A Brumadinho resident told the Wall Street Journal that the cash is “just hush money.”
Still grieving, many in Brumadinho have difficulty saving for a future that seems hopeless, and make purchases to soothe their sense of loss.
Vale is right to try to compensate those affected by the collapse, but it should not believe money alone will atone. Brumadinho residents’ anguish will long outlast the cash payments.
Vale’s decision to leave Brumadinho will cost the area more than the cash payments cover. Corrego de Feijao provided 600 or more reliable jobs and contributed about one fifth of the town’s tax revenue. Brumadinho’s mayor fears the mine’s absence will decrease the town’s budget enough that he will need to cut health care, education, and other services.
Cash payments don’t provide the fulfillment of a job, and they don’t provide the foundation for a prosperous economy. Vale should help residents of Brumadinho become self-sufficient and find a new sense of purpose. The company ought to grant small-business loans and provide entrepreneur coaching and skills training to those affected by the tragedy and sponsor competent counselors to help them work through their grief.
Closing Corrego de Feijao makes good business sense for Vale: The mine contributed only 2% of the company’s total iron ore production, and would cost millions of dollars to repair. But the residents of Brumadinho will not bounce back as quickly.
It would be disrespectful for the company to resume operations on the site.
But because Vale is largely to blame for Dam 1’s collapse, the company is responsible for Brumadinho’s recovery.
Madeleine Miller is a senior studying international business.