Historic Settlement with Brazilian Government
BHP and Vale have agreed to pay nearly $30 billion (£23 billion) to Brazil’s government. The payment addresses the 2015 Mariana dam disaster, Brazil’s most severe environmental catastrophe.
The settlement was signed on Friday, with Brazilian President Luis Inacio Lula da Silva present at the ceremony. The agreement resolves disputes over compensation for the extensive social, economic, and environmental damage caused by the disaster.
Impact of the Disaster and Company Response
The dam’s collapse released toxic waste and mud, overwhelming towns, rivers, and forests. The disaster killed 19 people, left hundreds homeless, and severely polluted a major river. The tragedy sparked public outrage and led to a global reckoning for the mining giants.
President Lula stressed the importance of corporate accountability, stating, “It would have cost them less to prevent the disaster.”
The dam’s operator, Samarco, was a joint venture between BHP and Vale. Following the incident, both companies created a foundation to support those affected. The foundation has since financed billions in repair work, including building a replacement town for one that was destroyed.
Despite these efforts, many community members argue they have yet to receive adequate compensation. Some residents feel the recovery process remains slow, nearly nine years after the tragedy.
Legal Action in the UK and the Netherlands
Over 620,000 people have sued BHP in the UK, where the company was headquartered at the time. This trial, which began earlier this week, seeks $47 billion in damages. The first phase will establish BHP’s liability as a parent company. Simultaneously, about 70,000 claimants are pursuing a separate legal case against Vale in the Netherlands.
BHP and Vale have denied responsibility for these international lawsuits, calling them “unnecessary” and duplicative of efforts in Brazil. Some residents from Mariana joined the UK lawsuit, frustrated by Brazil’s slow legal processes. Critics speculate that international scrutiny influenced the companies to agree to the latest settlement.
In 2016, BHP and Vale initially pledged $3.5 billion (adjusted for inflation) in compensation. However, protracted negotiations resumed in 2021, given the sluggish pace of Brazil’s legal system.
Breakdown of the $30 Billion Agreement
The new agreement covers past and future obligations to support victims and restore affected communities. The companies will pay 100 billion reais ($17.5 billion; £13.5 billion) to local authorities over 20 years. An additional 32 billion reais will be used for victim compensation, resettlement, and environmental repairs. The remaining 38 billion reais accounts for amounts the companies claim to have already paid as compensation.
This settlement marks a significant milestone in efforts to address the consequences of Brazil’s worst environmental disaster. However, debates continue over whether the financial commitments will truly deliver justice for affected communities.