Brazil prosecutors accuse BHP, Vale of colluding to reduce payouts to disaster victims

The mix of reddish mud, water and debris from the Samarco disaster reached the Atlantic Ocean in a matter of days. (Screenshot from PigMine 7, via YouTube)

Brazilian federal prosecutors have accused mining giants BHP and Vale of colluding with a lawyer to reduce compensation for victims of a fatal dam collapse and interfere with a landmark lawsuit against BHP in the UK.

A mining waste dam burst in 2015 at BHP and Vale’s Samarco joint venture in the town of Mariana, releasing a torrent of sludge that killed 19 people. The collapse is also considered the country’s worst-ever environmental disaster, contaminating a river for hundreds of miles to the ocean.

In a 91-page document attached to court filings on Thursday, prosecutors in Minas Gerais state criticized a judge who accepted compensation limits for nine plaintiffs and then extended the limits to all victims in Baixo Guandu, Espirito Santo state, affected by the sludge flowing down river from the disaster. Details of the decision are under seal.

“Moral damages” claims were limited to 10,000 reais ($1,780).

The decision would end liabilities for BHP, Vale and Samarco for victims who accept the compensation, prosecutors said

Baixo Guandu has about 31,000 residents, according to Brazil’s statistics agency IBGE.

Vale and BHP did not immediately respond to requests for comment.

The prosecutors said the judge ruled under seal in the case, without the proper participation of the prosecution office, despite requests for access.

The decision would end liabilities for BHP, Vale and Samarco for victims who accept the compensation, the prosecutors said. Victims who received payouts under the decision would have no chance to claim further compensation outside the country.

BHP is also the subject of a $6.3 billion lawsuit in the United Kingdom brought by 200,000 Brazilian people and groups. BHP has called the lawsuit “pointless and wasteful.”

The prosecutors’ appeal is the latest in a series of ongoing lawsuits against Vale and BHP over the mining disaster, which have made the companies set aside multi-billion dollar provisions.

($1 = 5.6180 reais)

(By Sabrina Valle and Jake Spring; Editing by Cynthia Osterman)


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