The R$ 170 billion agreement between the mining companies Vale, BHP and Samarco with federal and state authorities for repair and compensation for the dam collapse in Mariana (MG) could end more than a hundred actions in the Brazilian courts and has the potential to dehydrate processes abroad, three sources close to the discussions said.
The agreement, which includes payments already made by the companies, new resources and definition of obligations still borne by the mining companies, was practically closed last week and, according to sources, could be signed this week, shortly before the rupture completes nine years, in November 5th.
“The agreement ends a war of expert reports on points such as the water quality of the Doce River and puts an end to a series of debates about (due) amounts,” said one of the sources, on condition of anonymity.
READ MORE: BHP tries to avoid responsibility for Mariana, say lawyers in London
According to the agreement, the mining companies will pay R$100 billion, over 20 years, for authorities to carry out a series of projects and measures that repair and compensate for the collapse of the dam, which left 19 people dead and caused a huge environmental disaster.
Among the definitions, the creation of an income transfer program is planned, which provides monthly assistance to affected fishermen and farmers, for up to four years, in the initial value of 1.5 minimum wages and 1 salary in the last 12 months, according to a presentation by the Attorney General of the Union (AGU), seen by Reuters.
It is also planned to create funds that will manage the application of resources linked to health, the environment and dealing with the consequences of mud floods.
The companies will still have R$32 billion in obligations to fulfill, including individual compensation initiatives, resettlement and environmental recovery.
The total amount also considers that a total of R$38 billion has already been committed by mining companies since the rupture in 2015.
The agreement, however, does not eliminate the possibility of the emergence of new actions related to damages that are still unknown today, whose connection with the rupture could be proven at some point in the future, considered one of the sources.
The expectation is that the collective agreement will eliminate more than a hundred public civil actions (ACPs), such as the R$ 155 billion action filed by the Federal Public Ministry in 2016. However, some ACPs may not be extinguished, as well as other types of actions, such as those related to environmental fines.
One of the sources said that the number of ACPs to be terminated upon signing the agreement could reach 181, but another source stated that the number is much lower — although the survey has not yet been completed by the AGU.
Individual actions will not be immediately terminated in the agreement, because the public authorities cannot act on the individual’s decision. In this way, the settlement will establish a new compensation and compensation system that was designed with the collaboration of public defenders and prosecutors to provide compensation to eligible people in the affected regions.
The mining companies’ expectation is that individual requests will be fully met in 2025, according to two sources familiar with the discussions.
Individuals and small businesses who agree to opt into the settlement, BHP reported last week, will be compensated R$30,000 per person, and eligible individuals for water-related damages will be compensated R$13,000 per person.
The two sources also stated that the Renova Foundation, created in the past to manage reparation actions, will be extinguished and will transfer all its remaining obligations to Samarco within six months.
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According to information from Vale, Renova has already compensated approximately 430,000 people, including indigenous peoples and traditional communities, having allocated more than R$17 billion for compensation and emergency financial assistance for those affected.
The expectation is that the signing of the agreement will be attended by several authorities, including President Luiz Inácio Lula da Silva and the president of the Federal Supreme Court (STF), Luís Roberto Barroso.
In a note to Reuters, BHP’s global head of Legal, Governance and External Relations, Caroline Cox, stated that the current content of the agreement focuses on the needs and well-being of affected people, including indigenous and traditional communities, and the environment.
“The current terms will provide the programs and funding needed to do what is right for Brazil and its people,” Cox said, adding that BHP remains “absolutely committed to finalizing the agreement to ensure full and final redress and compensation in Brazil ”.
Vale and Samarco reaffirmed, in different positions sent to Reuters, their commitment to full reparation for the damage caused.
The collapse of the Samarco iron ore processing tailings dam — a joint venture between Vale and BHP — released a wave of giant mud that left 19 dead, hundreds homeless and hit communities, forests and rivers, including the Doce River along its entire length to the sea in Espírito Santo.
Trial abroad
With the agreement, the mining companies hope that there will be a dehydration of collective actions filed in London and the Netherlands, according to sources interviewed by Reuters.
“The main argument that the British used in their action, when they initiated the action against BHP, is that in Brazil there is no resolution of this type of problem and that is why they needed to do it in England. This agreement proves exactly the opposite and therefore weakens England’s claim significantly,” the first source told Reuters.
“It’s a wrong premise. In Brazil, we do have Justice, we do have resolution.”
In London, the Pogust Goodhead office, which represents around 620,000 claimants, estimates that compensation for victims could reach 36 billion pounds, or R$230 billion.
The court case, one of the biggest in English legal history, entered a decisive stage on Monday, with the start of a 12-week trial to determine whether BHP is responsible.
One of the sources considered, however, that the trial abroad puts pressure on companies in Brazil, which ended up accepting a much higher amount than they were willing to pay at the beginning. The first proposal from the mining companies was R$42 billion in new money, compared to the current R$100 billion.
Lawyer Ana Carolina Salomão, partner at the firm Pogust Goodhead, stated that “there is no possibility” of the agreement in Brazil emptying the trial in England.
“The objective of the English action goes beyond financial compensation. The action seeks to hold one of the largest corporations in the world accountable for its negligence and send the message that crimes like Mariana’s will not go unpunished,” said Salomão.
The lawyer also said that BHP is being pressured by the process in the United Kingdom and that the English action exists precisely because mining companies have spent years refusing to offer adequate compensation and continue to resist.
(By Marta Nogueira, in Rio de Janeiro, and Lisandra Paraguassu and Ricardo Brito, in Brasília)
