Value was R$90 billion; Minas Gerais government agreed to negotiate based on the offer
The proposal presented by the mining company Samarco and its shareholders Vale and BHP Billiton amid negotiations for a new agreement to repair the damage caused in the dam collapse that occurred in 2015 was rejected by the Union and the government of Espírito Santo. Two weeks ago, mining companies offered to allocate an additional R$90 billion for reparatory measures.
For the Union and the Espírito Santo government, there was a setback in relation to the previous proposal, discussed in December 2023. In a joint note released on Friday (May 3, 2024), they point out that the financial resources are still far from what is necessary. Furthermore, they indicate that the mining companies disregarded issues that had already been agreed upon and claimed “unacceptable conditions”.
“The increase in the amount offered by companies to finance the reparation measures was done in conjunction with a drastic reduction in the obligations that mining companies had already agreed to assume during negotiations”, says the text.
The note mentions that the new proposal provides for a much lower removal of waste deposited in the Doce River than what was being discussed, transfers the obligation to recover springs and degraded areas to the public authorities and ends the management of contaminated areas. Furthermore, it also mentions the release of the obligation to repair future or unknown damages that are related, for example, to the health of the populations in the affected areas.
Wanted by Brazil Agency, the Minas Gerais government adopted a different position and assessed that there had been progress in the new proposal. He expressed interest in negotiating based on it, but added that he will request adjustments from mining companies.
“Although there has been progress in technical discussions, the government of Minas Gerais understands that repairing the Mariana disaster is only possible with the adoption of measures to repair the people and municipalities affected in a quicker period of time.”, the text reads. The state government also states that it is seeking a solution that brings effective and rapid justice to those affected and that it will spare no effort to hold mining companies fully accountable.
The collapse of the Samarco dam, located in the municipality of Mariana (MG), occurred on November 5, 2015. At the time, around 39 million cubic meters of waste flowed through the Rio Doce Basin. Nineteen people died and there were impacts on the populations of dozens of municipalities up to the mouth of Espírito Santo.
In March 2016, a TTAC (Transaction and Conduct Adjustment Term) was signed, establishing a series of reparatory actions. The document deals with various issues such as individual compensation, reconstruction of destroyed communities, environmental recovery, support for rural producers, etc. All measures are conducted by the Renova Foundation, created based on the agreement. Mining companies are responsible for nominating the majority of members in the entity’s governance structure.
8 years and 6 months after the episode, there are still several unresolved problems. More than 85,000 cases are processed in the Brazilian Judiciary, including public civil actions, collective and individual actions. In search of a solution, negotiations to renegotiate the damage compensation agreement have been going on for more than 2 years.
Negotiations
The discussions are conducted at a table established at TRF6 (Federal Regional Court of the 6th Region) and mediated by federal judge Ricardo Machado Rabelo.
The Union and the Espírito Santo government have already communicated their position to the magistrate. They informed that they maintain their interest in continuing with the negotiations, as long as new proposals are close to the text aligned in December of last year, without any drastic revision of points already discussed.
At the time, the parties stated that they had reached a consensus on the main clauses, but that disagreements remained on the values. Until then, mining companies only agreed to allocate R$42 billion. The governments were requesting R$ 126 billion and had the support of the Justice institutions that also make up the table: MPF (Federal Public Ministry) and the Federal Public Defender’s Office, in addition to the public ministries and public defender offices of the 2 affected States.
When the new proposal was presented two weeks ago, the mining companies maintained that it was worth R$127 billion. There would be R$ 90 billion in new contributions – R$ 72 billion in cash and R$ 18 billion in the cost of measures to be implemented by Samarco itself – and another R$ 37 billion that would have already been invested over the last 8 years in reparative process.
This calculation is also criticized in the joint note released by the Union and the Espírito Santo government: “The renegotiation does not concern the amounts allegedly already spent by the Renova Foundation or the amount that the companies estimate to spend on the obligations to carry out which they will remain responsible for.”.
In a statement, BHP Billiton stated that it remains willing to collectively seek solutions that guarantee fair and comprehensive compensation for the affected people and the environment.
Samarco released a statement and said it remained open to dialogue in search of concluding discussions on the renegotiation. “The company believes that all parties will reach an agreement that directly benefits thousands of people, dozens of municipalities, the Union and the states of Minas Gerais and Espírito Santo”, records the text.
Negotiations have taken place in confidential meetings. The MPF claims to maintain dialogue with local communities to find solutions that accommodate them, but entities that represent those affected demand participation at the negotiation table. They also criticized the mining companies’ new proposal.
“Thousands of affected families face serious human rights violations every day. And even so, the mining company that repeatedly commits socio-environmental crimes is not in the condition of a defendant, but in the privileged position of defining values and determining how reparations should be made.”, says a note released by MAB (Movement of those Affected by Dams).
The entity presents its estimates: “A crime of the scale of what occurred in the Rio Doce Basin, whose damage affects 49 municipalities, 3 States and more than 2 million people, will require no less than R$500 billion for full socio-environmental reparation”.
Court lawsuits
The mining companies presented the new proposal about 3 months after suffering a legal defeat. Faced with the difficulties in closing a renegotiation agreement, justice institutions, led by the MPF, had been requesting since last year that part of the requests formulated in public civil actions seeking compensation be judged. The expectation was that there would be a final decision at least on certain issues, including compensation.
The request was partially fulfilled in January this year. The Federal Court ordered Samarco, Vale and BHP to pay R$47.6 billion to repair the collective moral damages caused by the dam collapse. The mining companies appeal the decision.
In addition to discussions in Brazilian courts, the case also reached the British courts. Unhappy with the reparation process in Brazil, around 700,000 people affected decided to seek justice outside the country and sued BHP Billiton, which is based in London.
Represented by Pogust Goodhead, they demand compensation for moral and material damages. Losses of property and income, increased expenses, psychological impacts, impacts resulting from displacement and lack of access to water and electricity, among other losses, are listed. The process has been ongoing since 2018 and the hearings that will assess responsibility for the tragedy are scheduled for October this year.
The Pogust Goodhead office also included claims from 46 municipalities, as well as companies and religious institutions, in the action. Faced with this scenario, the mining companies want to include in the renegotiation proposal a condition for the transfer of resources to the affected cities: the city halls should formally adhere to the new agreement, by which they would give up any legal actions they have filed.
With information from Brazil Agency.
