Firms face $59b civil suit over Brazil dam disaster

A dam rupture at the Samarco mine in Brazil last November killed as many as 19 people and caused severe environmental damage.
A dam rupture at the Samarco mine in Brazil last November killed as many as 19 people and caused severe environmental damage. PHOTO: AGENCE FRANCE-PRESSE

RIO DE JANEIRO • Brazilian prosecutors have filed a 155 billion reais (S$59 billion) civil suit against Vale, BHP Billiton and their iron ore venture over a dam rupture in November last year that killed as many as 19 people and caused severe environmental damage.

The prosecution demands that the two firms and Samarco Mineracao provide initial payment of 7.8 billion reais within 30 days, said a statement on Tuesday.

The civil suit also challenges a previous agreement the firms signed with Brazil's federal government and the Minas Gerais and Espirito Santo state governments. Samarco had been making progress at overcoming what the authorities say was Brazil's biggest environmental disaster before the suit was filed.

In March, Samarco, the Rio de Janeiro-based Vale and Melbourne- based BHP struck a deal with the Brazilian federal and state governments, committing to pay as much as 12 billion reais over 15 years.

The prosecutors allege in Tuesday's statement that state and federal agencies failed to provide the oversight necessary to avoid such a disaster. "This action is much more extensive" than the previous agreement with the governments, prosecutor Eduardo Aguiar said. "It includes not just the three companies but also the federal government, both state governments and various agencies."

The amount sought was based on costs to repair the damage caused by the 2010 Deepwater Horizon oil spill disaster in the Gulf of Mexico, according to the statement.

Tuesday's announcement comes after Samarco set a goal to partially restart later this year. Operations have been suspended since the dam burst caused a wave of mud to bury the district of Bento Rodrigues and clog the Rio Doce river in Minas Gerais state before the sludge travelled to neighbouring Espirito Santo state.

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A version of this article appeared in the print edition of The Straits Times on May 05, 2016, with the headline 'Firms face $59b civil suit over Brazil dam disaster'. Print Edition | Subscribe