Brazil to File $5.3 Billion Suit Against Samarco, Owners in Dam Collapse -- Update
28 November 2015 - 8:55AM
Dow Jones News
By Paul Kiernan
RIO DE JANEIRO--Brazil's government is preparing to sue mining
giants Vale SA, BHP Billiton Ltd. and their joint venture Samarco
Mineração SA for 20 billion Brazilian reais ($5.3 billion) in
response to a catastrophic dam failure earlier this month,
officials said on Friday.
The civil suit is expected to be filed on Monday, the Attorney
General's office said in a news release. The proceeds are intended
to create a fund to help recovery efforts in the Rio Doce, a major
river that was contaminated with mud and toxic mining waste in the
wake of the Nov. 5 collapse of Samarco's dam in Minas Gerais.
"The figure, however, is preliminary and could be raised over
the judicial process, since the environmental damages of the mud's
arrival at the ocean have not yet been calculated," the Attorney
General's office said.
Brazil's Environment Ministry said it expects the revitalization
efforts in the Rio Doce basin to take at least 10 years. Officials
said the government may seek to hire workers in the communities
affected by the disaster, which is believed to have devastated
fisheries and other economic activity along the river.
The pending lawsuit represents by far the biggest government
response yet to what is widely considered one of Brazil's worst
environmental disasters. Environmental agency Ibama had previously
announced a fine of 250 million reais, while prosecutors secured a
preliminary commitment from the mining companies to create a
1-billion-real emergency fund.
Brazilian authorities have been criticized for its slow reaction
to the catastrophe that, in the eyes of many, belied politicians'
dependence on the mining industry for local job creation and tax
revenue. The mayor of Mariana, where Samarco's dam stood, said
shortly after the accident that his town depends on mining for 80%
of its revenue, making it "hostage" to the industry.
Vale, Samarco's 50% owner, is the country's top exporter and is
known to donate millions of dollars to political campaigns.
Vale and BHP Billiton have attempted to distance themselves
legally from Samarco--a limited liability company they say is
independently run--while trumpeting their contributions to recovery
efforts. The two companies said Friday they plan to create a
"volunteer and nonprofit fund" with Samarco to clean up the Rio
Doce.
Attorney General Luiz Inácio Adams said authorities are open to
the possibility of an agreement whereby the mining companies
propose initiatives themselves.
"The company has announced measures that show it is preoccupied
with recovering its image before society for the damage it caused,
which indicates there is an understanding attitude toward the
government," Mr. Adams was quoted as saying in the news release.
"If the willingness doesn't come, what we'll ask the judge to do is
to block the money by court order."
Write to Paul Kiernan at paul.kiernan@wsj.com
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(END) Dow Jones Newswires
November 27, 2015 16:39 ET (21:39 GMT)
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