Brazil and Espirito Santo Reject Vale and BHP's $25B Mariana Dam Disaster Proposal

Brazil's federal government and the state of Espirito Santo have rejected a proposal by mining companies Vale and BHP to pay 127 billion reais (US$25 billion) in compensation for the devastating 2015 Mariana tailings dam collapse. The disaster killed 19 people and unleashed nearly 40 million cubic meters of toxic mud and mining waste into rivers in the region.

The rejection of this proposal highlights the ongoing struggle for accountability and justice in the wake of environmental disasters, and the need for corporations to take responsibility for their actions. The outcome of this case will set a precedent for future environmental disasters and the compensation of affected communities.

The Attorney General's Office (AGU) stated that the offer from Samarco Mineração, a joint venture between Vale and BHP, "does not represent an advance" from their previous proposal in December 2023 and contains "inadmissible conditions." The companies reportedly offered to assume fewer obligations than had already been negotiated, such as removing less mining waste from the Doce River.

Representatives of the victims have also rejected the mining firms' offer. José Eduardo Cardozo, a former Brazilian justice minister now representing those affected, called the proposal "deeply disappointing" and said it "disregards requests for full compensation from those affected by the Mariana disaster."

In 2016, the companies had agreed with the Minas Gerais state government and prosecutors on compensation of 24.4 billion reais. However, opposition to that deal grew after Vale agreed to pay 37.7 billion reais for a second catastrophic dam collapse in the state in 2019 that killed around 300 people. The current talks involve more parties, including 49 municipalities and thousands of affected individuals.

Why this matters: The latest 127 billion reais proposal includes 37 billion reais already allocated for reparations, 72 billion reais to be paid to various government entities in coming years, and 18 billion reais to be paid out by Samarco and the Renova Foundation, an entity created by the companies to manage the compensation efforts.

Meanwhile, a parallel legal case brought by law firm Pogust Goodhead on behalf of 700,000 people affected is seeking around 230 billion reais in compensation through proceedings in a London court. Cardozo indicated that the UK legal procedures are likely to continue despite the mining companies' latest rejected offer in Brazil.

The Brazilian government's rejection of Vale and BHP's 127 billion reais proposal underscores the ongoing challenges in securing adequate reparations for one of the country's worst environmental disasters nearly a decade later. With victims' representatives also deeming the offer insufficient and parallel international legal proceedings underway, the mining firms still face significant hurdles in resolving the aftermath of the tragic 2015 Marianadam collapse.

Key Takeaways

• Brazil rejects Vale and BHP's $25bn compensation offer for 2015 Mariana dam disaster.
• The offer was deemed insufficient and contained "inadmissible conditions."
• Victims' representatives also rejected the proposal, calling it "deeply disappointing."
• A parallel legal case in a London court seeks $230bn in compensation for 700,000 affected people.
• The outcome of this case will set a precedent for future environmental disasters and compensation.