MAC: Mines and Communities

BHP Billiton AGM met by global calls for justice and accountability

Published by MAC on 2016-10-25
Source: WSJ, The Telegraph, Guardian, Huck, NI (2016-10-25)

While Brazil charges company reps with homicide over Samarco dam collapse

The following is a sample of the widespread coverage around the recent BHP Annual General Meeting, particularly those parts focussed on visitors from Brazil, Colombia and Indonesia who came to the meeting to raise their specific concerns. 

A video depicting activities around the London AGM, notably a colourful protest can be viewed here: https://www.facebook.com/londonminingnetwork/videos/10154450855605491/

There is also an interview with representatives from Brazil on BBC World Service, which can be accessed here: https://drive.google.com/file/d/0B3HNMnHk82HoQkZIVF9NNm5YNkE/view

There are more activities planned around the Samarco disaster on the forthcoming anniversary of the disaster on 5th November.

It is worth noting given the coverage of the Aberfan anniversary (see: The mistake that cost Aberfan its children) that within the AGM, BHP's CEO Andrew Mackenzie said he was struck by the parallels between Samarco and the events at Aberfan 50 years ago: the loss of 116 children and 28 adults to a flow of liquefied coal waste in a Welsh valley. It brought home to him the distance the mining industry has to travel.

Previous article on MAC: Back to tragedy: more news of the BHP Billiton/Vale tailings dam collapse in Brazil

Victims of Brazil’s worst environmental disaster bring their call for justice to London demanding accountability

http://www.huckmagazine.com/perspectives/activism-2/victims-brazils-worst-environmental-bring-call-justice-london/

by Alex King

20 October 2016

Brazilians affected by the fatal Samarco dam disaster in 2015 share their stories of lives destroyed and present community demands for reparations to mining corporation BHP Billiton’s London AGM.

When the Fundao dam collapsed in Brazil’s Minas Gerais region in November last year, nobody could predict how disastrous its effects would be.

As a tidal wave of sludgy mining waste from the Samarco mining operation swept through the region, it devastated all that sat in its path, killing fish and aquatic life the length of the River Doce, until it hit the sea more than 600km away. At least 19 people were killed, 700 left homeless, and vast swathes of agricultural land and river polluted.

In June 2016, a Brazilian federal police investigation concluded the company knew the dam was at risk, was not properly monitored, and recommended charging against eight people.

A year after the disaster, the local community is still asking for answers from Samarco – a joint venture between the largest mining corporation in the world, BHP Billiton, and the Brazilian firm Vale.

Brazilians affected by the disaster arrived in London today to demand accountability from BHP Billiton at their Annual General Meeting, asking for communities to be given a real say in the reconstruction efforts.

“After the dam broke, we were forced out of our house by the wave of mud. Luckily, a friend from Mariana (the nearby city) had called to warn us what was coming, otherwise nobody in the village would have know. The noise was incredible. The mud was knocking down tress, bridges and houses.

“We were absolutely terrified. I had to grab my parents from their house across the street and carry my three-year-old son, who had pneumonia at the time. By the time I got everyone together, the mud was already at my front door so we had to take the back door to escape to higher ground.

“We spent the first night at a neighbour’s house, higher up the mountainside. The next day, at dawn, we woke up to the horror of seeing everything destroyed and covered by mud. My son was shocked didn’t stop crying, seeing everything he had ever known covered by mud. He was really afraid and spent a lot of time fearing that something like that would happen again.

“We’re still living in temporary accommodation in another rural town nearby. All the people who thought they were free living in the countryside are now living in towns and they feel imprisoned. We get help from some of the social movements and the public prosecutor intervened to ensure that we receive payments equal to the minimum salary, but I’m skeptical about the recovery process. There is still so much mining waste where it was and another dam whose state we don’t know. Our village, Paracatu, is completely destroyed and the way things are going, I don’t think we will ever be able to return.”

“Our social movement has been working with people affected by dams in the area for a while, mainly the huge Belo Horizonte project, but were also active in the area of the Samarco disaster before it occurred.

“The morning after the disaster we were in Mariana, the main city in the affected region, to have meetings and coordinate relief for people’s immediate needs. In the aftermath, they needed housing, clothes and wanted to know what was going happen to the people affected.

“After their immediate needs were taken care of, we started working to organise people to make a political response. We’re concerned that local people don’t have enough say in the reconstruction process. We’re in London to pressure BHP to involve the communities in the process and make sure they are consulted at every stage.”

“You can’t imagine the destruction. The tidal wave of mud was 18 metres high and carried up to 40m cubic meters of mining waste through the region, destroying all the flora and fauna. Maria and others were 70km away and they couldn’t understand how it could affect them, but the mud arrived at their homes in just four hours. Just imagine the speed.

“Rural people were taken to the cities, housed in gyms at first, then put into hotels after a few days, before the local attorney said company had to rent properties for them. These are people who have spent their whole lives in the countryside and are now forced to live in the cities, so there’s huge psychological distress that continues to this day.

“The criteria for who is and who isn’t affected by the disaster, and who deserves support, came from the company itself. So, you perpetrate a disaster and now you’re the ones who are going to decide who was affected by it? The affected person has to prove that they have lost income or their home, for example, and the form is long and confusing. The process recognises those who own property, but the people who were working in the area are struggling to get compensation.

“Affected communities are not being consulted sufficiently over the reconstruction efforts. They are have no decision-making power in Fundacion Renova, the body set up by the company to manage the reconstruction. We’re now involved in a struggle against the new dyke they want to build that will cover the first village struck, Bento Rodrigues. Scholars suggest it won’t be sufficient to hold back the waste, which is still leaking and contaminating the river. We’re protest against this logic: you commit a crime, you control the crime scene and you manage the process afterwards. When you commit a crime, you’re not supposed to say what happens to your victim. You have to be sentenced and pay for what you did.”


Brazilians hit by fatal dam disaster to protest at BHP Billiton AGM

World’s largest mining firm to be presented with demands of local communities affected by collapse of Samarco dam last November

Rob Davies

https://www.theguardian.com/business/2016/oct/20/brazilians-hit-fatal-dam-disaster-protest-bhp-billiton-agm-mining-collapse-fundao-dam

20 October 2016

Brazilians affected by the collapse of BHP Billiton’s Samarco dam are to stage a protest almost a year on from the fatal disaster at the company’s annual meeting in London.

The world’s largest mining firm will be presented on Thursday with a list of demands from representatives of the local community in Minas Gerais region, as well as from people affected by projects in Colombia and Indonesia.

The Fundao dam owned by Samarco – a joint venture between BHP and the Brazilian firm Vale – collapsed on 5 November last year, releasing a deluge of mining waste that left at least 19 people dead, 700 others homeless, rivers polluted and homes destroyed.
Brazil's dam disaster one year on – in pictures
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Protesters, including a Franciscan monk and a farmer from Minas Gerais, will stage a re-enactment of the disaster before presenting a list of demands calling on BHP to do more to make up for the damage.

The demands include a call for BHP to expand its compensation scheme to cover families who were not originally included but were directly or indirectly affected by the disaster.

Campaigners also want BHP to acknowledge responsibility for a miscarriage that would increase the death toll to 20.

“Currently, the company decides who is and who is not affected, while denying the indirect costs of the disaster,” said the London Mining Network, one of the campaign groups organising the protest.

Protesters are to gather outside the firm’s annual meeting at the QEII conference centre in London and will call on BHP to remove mud from the river Doce and cancel its plans to build another dam in the same area.

They will also denounce the Renova Foundation, which was set up by Vale and BHP to co-ordinate damage repair. Protesters say the foundation lacks legitimacy because it does not involve local communities enough.

“We have seen whole communities destroyed by BHP Billiton and Vale’s operations,” said Fra Rodrigo de Castro Amédée Péret. “They have lost everything without receiving any real compensation.”

The protest will also include representatives of communities complaining about the impact of mining projects in Colombia and Indonesia.

People who live near Colombia’s Cerrejón mine – which provides large amounts of the coal burned in the UK – say their lives have been blighted by noise and air pollution, as well as forced evictions and diversion of local water supplies.

Colombian activist Luz Ángela Uriana Epiayú said: “I remember Cerrejón [owed by BHP Billiton] came to La Guajira promising the world, but they never actually sat down and spoke to us.

“Now, at night, we barely sleep. The constant hum of the huge machines from the mine doesn’t let us. The air we breathe is polluted.

“The pollution also contaminates our water. This in turn generates health problems and illnesses, affecting our children. These are the consequences we face for having the Cerrejón mine for a neighbour.”

Arie Rompas, of Friends of the Earth in Indonesia, has travelled to London to highlight BHP’s recent sale of the IndoMet coal project in the country’s Central Kalimantan region.

He claims BHP has avoided responsibility for a waste spill and further damage caused by the mine by selling its 75% stake in the project.

“BHP paid criminally low compensation for the lands they have taken and now they are polluting our rivers and attempting to walk away from the mess they have made. They must be held accountable for all this.”

A spokesperson for BHP said: “The AGM is an opportunity for shareholders to ask us about a wide range of issues and we look forward to answering their questions.”

Regarding Samarco, the spokesperson said: “While considerable work remains over the long term, progress is being made in the response effort.

“While we cannot bring back the lives that were lost, we continue to focus on ensuring that the families and communities affected by the tragedy are supported.

“BHP Billiton Brasil is working with Vale and Samarco to rebuild and restore the environment and communities and ensure compensation where restoration is impossible.”


Life in the shadow of the world’s biggest mining company

By Liam Barrington-Bush

https://newint.org/blog/2016/10/20/life-in-the-shadow-of-the-worlds-biggest-mining-company/

20 October 2016

Brazilians come to London to hold UK mining giant BHP Billiton to account, one year after deadly Samarco dam disaster.

Is BHP Billiton worthy of a London Stock Exchange listing? Those who have experienced the company first hand say how they think the mining giant stacks up as a neighbour in Brazil, Colombia and Indonesia. Liam Barrington-Bush reports.

The London Stock Exchange presents itself as a financial home to responsible corporations, setting a high-bar for entry and expecting top form from those who land a listing in Paternoster Square. But the reality of making London your financial base doesn’t always seem to equate to the best-behaviour mark that the LSX claims.

The world’s biggest mining company – BHP Billiton – has found itself under scrutiny in country after country, being implicated in forced community displacements in Colombia, insufficient clean-up efforts in the aftermath of a tailings dam breach which killed 20 people in Brazil; and water contamination in Indonesia. Representatives from the local struggles against the company’s operations have come to London to protest the mining giant’s Annual General Meeting. This is what some of them had to say about life next door to the London-listed company’s various operations:

Rodrigo de Castro Amédée Péret is a Brazilian Franciscan brother working with communities affected by mining. For more than 30 years, he has been involved in the struggle for agrarian reform in Brazil. He is a member of the Churches and Mining Latin America Network board, coordinator of Franciscan Solidarity and Ecology Action and a member of Franciscans International, a NGO at the UN.

    ‘The Fundão dam breach in Minas Gerais in November 2015 led to the destruction of all forms of life and means of survival in the region. The mud covered everything, resulting in 20 deaths (including that of an unborn child after the mother miscarried after being injured by the flood) and unmeasurable destruction to the environment.

    It also destroyed biodiversity, caused the sedimentation of the river and the destruction of many precious water sources, which now find themselves submerged in mud. Not only this, but the plants and vegetation along the river bed were also lost.

    We have seen whole communities levelled, where the people have lost everything, without receiving sufficient compensation. Instead of reparations for the victims of the destruction, we have seen Samarco act in their own corporate interests and capture those of governments, who seem to exist to do the bidding of transnational corporations.

    What all this has made clear, is the eminent risk of mining. We know BHP employs a high-risk type of tailings dam. We know that their methods cannot be sustainable. In Minas Gerais it is irrefutable today that mining kills.’

Luz Ángela Uriana Epiayú is a Colombian human rights defender, artisan and mother of six living in the Wayúu indigenous reservation of ‘Provincial’ in the La Guajira region. She lives with her family two kilometres from Cerrejón, the largest open-pit coal mine of Latin America and one of the biggest suppliers of UK-burnt coal. Cerrejón is co-owned by London trio BHP Billiton, Anglo American and Glencore.

    ‘Since I began to understand the difference between right and wrong I have not known a single positive memory about Cerrejón. I remember the company came to our community promising us the world, but they never actually sat down and spoke to us.

    When I was a child, they gave us toys. Now I am thirty years old and those toys were the last benefits the company brought to my life.

    At night, we don’t sleep, as the constant hum of the huge machines don’t let us. We cannot live in any sort of peace. But beyond the noise pollution, the mine contaminates the environment. The air we breathe is polluted.

    This in turn generates health problems and illnesses in our communities. There are many sick children and adults, too, including my two-year-old son. Their illnesses are due to the pollution caused by the mine, which also contaminates the water. So between the water they contaminate and the water they take for their operations, there is hardly any drinking water available for us in the already drought-prone region.

    And these realities are made much worse by the lack of basic healthcare in the area. These are the consequences we face with having Cerrejón – and BHP Billiton – as neighbours.’

Arie Rompas is an environmental activist and executive director of WALHI Central Kalimantan. WALHI is a grassroots organization that works on environmental and human rights issues and is a member of Friends of the Earth (FOE) International. He has been working since 2003, advocating and strengthening communities to fight for the rights deprived of them by transnational investment and government policy.

    ‘I came to London to tell people that BHP Billiton is leaving a terrible legacy at the IndoMet coal project which the company has been developing in Central Kalimantan, Indonesia. My family come from the precise area where the company is mining and I have seen the impacts with my own eyes.

    They are destroying what is left of the forest where the indigenous Dayak Murung people live and upon which they rely for their livelihoods and cultural traditions. The company paid criminally-low levels of compensation for the lands they have taken away and now they are polluting our rivers. They must be held accountable for all this.’


Sorry BHP, but a closed door hardly shouts 'transparency'

Jon Yeomans

http://www.telegraph.co.uk/business/2016/10/21/sorry-bhp-but-a-closed-door-hardly-shouts-transparency/

21 October 2016

Probably the most extraordinary moment of BHP Billiton’s annual general meeting came when the senior management team performed a tap dance for shareholders. Then there was the fist fight that broke out over canapés. And the announcement that the company wants 50pc of its workforce to be female by 2025.

Clearly I’m making that up. But those things could have happened – I can’t be sure. You see the first hour of the AGM was a closed-door Q&A session for investors to quiz chief executive Andrew Mackenzie and his colleagues; a sort of pre-AGM AGM, to which the press was not invited. Later, during the main session, Mackenzie answered a question about the Samarco clean-up operation in Brazil by saying: “We had a bit of a debate about this in the information session earlier, but I won’t repeat everything I said.” Well, that’s a shame; I suppose we’ll never know, will we? “Transparency is our middle name,” he said later, apparently without irony.

BHP’s experiment with a closed-door session was ill-judged, and probably won’t be repeated. This, after all, was a year in which it had to account for the Samarco disaster in Brazil, when a burst dam run at a joint venture 50pc owned by BHP killed 19 people in a flood. The miner also suffered its biggest pre-tax loss since its formation in 2001. Clearly the company had questions to answer – and those answers needed to be heard.

The decision was especially unfortunate because BHP has been, for the most part, very open about the Samarco accident, expressing its remorse and jumping quickly into action to help the victims and shore up bridges and roads in the local area. Mackenzie, a serious, considered Scot, has drawn plaudits for his handling of a dire situation, and was thanked by one shareholder for foregoing his bonus this year.

The very speed of BHP’s response to Samarco is now drawing scrutiny, however. Chairman Jac Nasser admitted: “We could have spent a year thinking about the perfect way of doing this, but we wanted to get in quickly.” Opening the floor of the main session to questions, the former Ford CEO tackled a series of interventions from victims of the disaster, wanting to know when their compensation would be paid.

“All of us are suffering losses in our incomes and there are some local producers who have not received anything,” said Maria do Carmo D’Angelo, a dairy farmer from a town 70km downstream from the Fundão dam. “Why are there so many situations where people have not received compensation?” She spoke of a pregnant woman who lost her baby in the aftermath of the flood.

Rodrigo Peret, a Franciscan friar, took the company to task for its failure to appoint local representatives to the board of the foundation that will lead the clean-up. “The community doesn’t just want to be consulted, they want to participate,” he said. Peret shot down Nasser’s suggestion that an advisory board would have input: “Having a dialogue is not making decisions.”

Nasser and Mackenzie generally played a straight bat, handling the floor carefully, and with due respect to the victims. Compensation was still to be worked out, Mackenzie said: “It’s a complex process.” Efforts to move on from item one – Samarco – stalled a few times. Questions about BHP’s operation in Indonesia began to fray nerves. “I remember your question from previous AGMs,” Mackenzie told one inquisitor. A Colombian woman, in tears, spoke of the harm her child had allegedly suffered from pollution at the Cerrejón coal mine. And Nasser crossed swords with a regular tormentor, eventually shutting him down: “Put the microphone down, it’s the end of your question.”

The chairman, at least, won’t have to deal with too much more of this; he’s off next year now that the Samarco response is “in place”. “The AGM ’s the one forum where retail shareholders and NGOs can communicate with the sector… it makes us a better company,” he said after the event. “Whenever you join a board, you should have a timeframe in mind,” he added. “Nine to 10 years is a proper time.” Could a woman succeed him? “Why not?”

Oh yes, that’s right – it was no fever dream, nor just a publicity stunt to generate some nice headlines ahead of a difficult AGM. The world’s largest mining company (by revenue) really does want to achieve gender equality in its workforce in the next nine years. “The 50pc target is going to be tough but it’s probably easier the higher you go,” said Nasser, suggesting that it should be achievable at board level. “You have to work at the entry level – make sure the school leavers are attracted to this industry.”

BHP points out that half of its graduate intake is already female. “We have to deal with the inevitable unconscious bias that develops in an organisation,” Mackenzie added, but wouldn’t be drawn on the finer detail of how such positive discrimination could be managed in a way that doesn’t put men’s – and women’s – noses out of joint.

Across the road, in a neighbouring Methodist hall, Do Carmo D’Angelo reflected on her journey to London to receive answers from BHP. “I expected something more concrete,” she said. “The impression I got was that not much will change. I don’t think I made an impression.”

Box - In numbers | Samarco disaster

- 19 people killed
- 32 million cubic metres of water unleashed in one day
- 280 miles - length of River Doce contaminated with mud
- £39bn compensation claim lodged by prosecutors
- 700 people left homeless


After Samarco delay, BHP's 'Jac the knife' to step down

By Barbara Lewis

http://uk.reuters.com/article/uk-bhp-billiton-resignation-idUKKCN12K1C4?il=0

21 October 2016

LONDON - BHP Billiton Chairman Jac Nasser, one of the most powerful figures in the mining industry, will retire at next year's shareholder meeting, telling investors on Thursday that after a decade on the board, it was time to step down.

The former Ford Motor Co chief, nicknamed Jac the knife after extensive cost-cutting efforts there, said he had intended to leave BHP last year, but agreed to stay on to provide stability as the world's biggest miner responded to the deadly Samarco dam disaster in Brazil.

Now that the "basic structure of the Samarco response is in place," Nasser said in a speech at this year's Annual General Meeting, he would not seek re-election. He will carry on leading the board in the interim, while a replacement is found.

Brazilian prosecutors on Thursday charged 21 people with "qualified homicide" for their roles in the disaster, including the former chief executive of Samarco.

Nasser's move marks a generational shift in the mining industry, which over the past decade has seen an unprecedented boom, frenzied M&A and draconian cost cuts.

Rio Tinto, the world's second-largest miner, is also expected to replace its chairman, South African Jan du Plessis, in the coming months.

"(Nasser) was ready to go but then Samarco happened ... so it's not coming as a surprise," said Macquarie Bank mining analyst Hayden Bairstow.

Both miners could look within their ranks or outside for a successor. Both will also consider an appointment that would diversify traditionally male-heavy boards.

BHP's Chief Executive Andrew Mackenzie, in a separate speech, said the company had set a 2025 goal of achieving "gender balance at all levels of the organisation".

The target is higher than that set by the Australian Institute of Directors, which is calling for 30 percent female representation on boards by 2018.

BHP's 12-person board has three women members: Anita Frew, Carolyn Hewson and Shriti Vadera.

Frew is chairman designate of Croda International Plc, the speciality chemicals group, and deputy chairman of Lloyds Banking Group Plc.

Hewson is a former investment banker and an executive director of Schroders Australia Ltd. Shriti is chairman of Santander UK.

Asked whether the new chairman might be a chairwoman, Nasser said "why not?", but added gender balance would take time.

Growing up in suburban Melbourne, Australia, Nasser, 68, said he had never expected to lead global companies.

He joined the BHP board as a non-executive director in 2006 and was named chairman in August 2009.

At BHP, Nasser rode the China-led commodities boom and its bust, which the company had weathered better than peers, he said. BHP still lost $6.4 billion (5.22 billion pounds) in the last financial year.

"We kept a solid A credit rating through the valley of the commodity price death," he said.

His last year has been what he described as "one of the most challenging periods" in BHP's history, largely because of the Samarco dam burst in which 19 people died. Samarco is a 50/50 joint venture between BHP and Brazil's Vale.

Nasser displayed a softer side last year at the Australian annual meeting in Perth when he vowed to "find out what went wrong" at Samarco, as Mackenzie teared up by his side.

Brazilians impacted by what Brazil says is its worst environmental disaster were among those who staged a protest outside Thursday's AGM in central London.

(Additional reporting by Mamidipudi Soumithri in Bengaluru and James Regan in Sydney; Editing by David Evans and Richard Pullin)


Brazil Charges 21 People With Homicide in Samarco Mining Dam Collapse

Current and former officials from Vale SA and BHP Billiton and joint venture Samarco Mineração named.

Paul Kiernan

http://www.wsj.com/articles/brazil-charges-21-people-with-homicide-in-samarco-mining-dam-collapse-1476986373

20 October 2016

BELO HORIZONTE, Brazil—Brazilian federal prosecutors filed homicide charges Thursday against 21 people in connection with a catastrophic collapse of a mining dam last year that killed 19 people.

Those charged include current and former top executives of mining giants Vale SA and BHP Billiton Ltd. and their joint venture, Samarco Mineração SA. Among them are former Samarco Chief Executive Ricardo Vescovi, Vale’s current iron-ore director Peter Poppinga, and eight Vale and BHP representatives at Samarco.

The charges mark the end of a nearly yearlong criminal investigation into the Nov. 5, 2015, failure of Samarco’s Fundão tailings dam in southeast Brazil.

Believed to be the biggest disaster of its kind anywhere, the incident released a torrent of sludge that washed away villages, displaced hundreds of people and traveled more than 400 miles through southeast Brazil’s Rio Doce basin before reaching the Atlantic Ocean. Almost a year later, the river is still tainted a rusty red from sediment, its washed-out banks visible from the cruising altitude of commercial airliners.

Additional charges against the 21 individuals include the crimes of causing a flood, landslide and grave bodily harm. Vale, BHP and Samarco were also charged with 12 different kinds of environmental crimes. Employees of a consulting firm that performed periodic checkups on Fundão were charged with presenting false stability reports.

In an emailed statement, Samarco said it “refutes” the charges and said the prosecutors ignored defense statements that it presented over the course of the investigation, “which prove that the company had no prior knowledge of the risks to its structure.”

“Safety was always a priority in the management strategy of Samarco, which reiterates that it never reduced investments in this area,” the company added.

BHP Billiton said it “rejects outright the charges against the company and the affected individuals. We will defend the charges against the company, and fully support each of the affected individuals in their defense of the charges against them.”

Vale reaffirmed its “deep respect and total solidarity” with the disaster’s victims but said it “vehemently repudiates” the charges filed Thursday. It added that its representatives on Samarco’s board confirmed that they “were never informed by Samarco’s technical or leadership team of any irregularities that could have represented real or untreated risks to the dam, nor by any consultancy responsible for monitoring the structure.”

The individual defendants couldn’t be reached.

If convicted of “qualified homicide,” the individuals could face sentences of between 12 and 30 years in prison, prosecutors said, adding that Brazil has extradition agreements with most or all of the countries from which the suspects hail.

“[The victims] were killed by the violent passage of the tailings mud, they had their bodies thrown against other objects, such as pieces of wood, they had their bodies mutilated and...dispersed across an area of 110 kilometers,” federal prosecutor Eduardo Santos de Oliveira said at a press conference. “The motivation of the homicides was the excessive greed of the companies—Samarco, here charged, as well as its shareholders—in the name of profit.”

Potential penalties for Vale, BHP and Samarco range from payment of fines and funding of charitable programs to partial or total suspension of their activities. Prosecutors added that they requested damage payments for the victims, the amount of which remains to be determined.

A judge must accept the charges for a trial, which would take place before a jury, to begin.

In a report released in August, the companies presented a report on the factors that contributed to Fundão’s failure.

All three firms have apologized for the disaster and committed to a full remediation of the damage. But Brazilian courts rejected a March settlement signed by the companies and the government. Prosecutors are seeking to replace it with a civil lawsuit filed in May in which they sought 155 billion reais ($49 billion) in damages and compared the Samarco disaster to BP’s Deepwater Horizon oil spill in the Gulf of Mexico.

The prosecutors’ case hinges what they say is evidence that Samarco and its shareholders were aware of chronic structural problems at Fundão dating back to April 2009. They say Samarco’s board—made up of Vale and BHP officials—was informed of flaws in the dam but responded by pressuring the company to extract more iron ore.

Samarco’s board was also allegedly informed of the likely consequences of a dam failure, prosecutors said. Company risk managers allegedly had estimated as recently as 2015, according to prosecutors, that a collapse of Fundão could kill 20 people, stop Samarco’s operations for two years and deal a substantial blow to the mining companies’ reputations.

Surviving residents of the devastated community of Bento Rodrigues reported after the accident that they received no official warning from Samarco in the crucial minutes after the dam gave way.

“There were internal committees, operational committees, dam committees, in which the issues were discussed, and on those committees there were representatives of Vale and BHP,” prosecutor José Adércio Leite Sampaio said. “Based on the minutes, on what was debated in those minutes, on the documents that were presented at those meetings, we identified the list of people on the charge sheet.”


BHP rejects criminal charges in relation to Samarco out of hand

BHP Billiton statement

21 October 2016

BHP Billiton notes the statement by the Ministerio Público Federal of Brazil (Federal Prosecutors Office) that it has filed criminal charges before the Federal Courts of Ponte Nova, Minas Gerais, against BHP Billiton Brasil Ltda. (BHP Billiton Brasil) and certain employees and former employees of BHP Billiton (Affected Individuals).

We are yet to receive formal notification of these proceedings. BHP Billiton Brasil rejects outright the charges against the company and the Affected Individuals. We will defend the charges against the company, and fully support each of the Affected Individuals in their defence of the charges against them.


BHP Billiton to take $1.3bn hit from Samarco dam disaster

Jon Yeomans

http://www.telegraph.co.uk/business/2016/07/28/bhp-billiton-to-take-13bn-hit-from-samarco-dam-disaster/

28 July 2016

Australian mining giant BHP Billiton has set aside up to $1.3bn (£1bn) to cover costs arising from the fatal accident at an iron ore mine in Brazil last year.

The FTSE 100 company said it would record a provision of between $1.1bn and $1.3bn in its accounts for the Samarco disaster last November, when the collapse of dam unleashed a tidal wave of wastewater into a river valley, flattening two towns and killing 19 people.

It is the first time BHP itself has put a number on the financial cost of the disaster. The $1.3bn charge will cover its funding commitments under a “framework agreement” it struck with the Brazilian government earlier this year, in conjunction with mining giant Vale, its partner in the Samarco joint venture.

However the future of this agreement remains uncertain after the settlement was suspended by a court earlier this month. Brazil has seen a change of government since the deal was made and the Federal Prosecutors' Office – an independent arm of the judiciary – has claimed that the amount agreed is insufficient to cover the damage wrought by the disaster. It is seeking $33bn in compensation from BHP, Vale and Samarco – a sum based on the amout BP had to pay after the Deepwater Horizon oil spill in 2010.

BHP maintains that the framework agreement is the most “effective” plan to compensate for the dam failure.

"The recognition of the provision demonstrates our support for the long-term recovery of the communities and environment affected by the Samarco tragedy and the belief we have that the agreement is the most appropriate mechanism to do this,” said Andrew Mackenzie, chief executive.

Operations at Samarco - which employed 5,000 people - are unlikely to restart this year.

BHP’s shares in London rose 1pc in morning trade, having earlier closed up half a percent in Sydney. The company reports its full-year results on August 16.

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