Brazil sues BHP, Vale for $A7 billion

Brazil has filed a lawsuit against iron ore miner Samarco and its co-owners, Australia's BHP Billiton and Brazil's Vale for $A7.18 billion.

Homes in ruins following

BHP Billiton and Vale have set up an emergency fund to help those affected by the Brazil dam burst. (AAP) Source: AAP

Brazil's President Dilma Rousseff has promised to punish Australia's BHP Billiton and Vale over the damage caused when a tailings dam burst earlier this month, creating an environmental disaster in her country.

In a speech to the climate change summit in Paris she blamed the disaster on the "irresponsible action of a company".

"We are severely punishing those responsible for this tragedy," she said.
Federal and state governments in Brazil on Monday filed a lawsuit against iron ore miner Samarco and its co-owners BHP Billiton and Vale for $US5.2 billion ($A7.19 billion) for the damage caused.

While they are going to court, Brazilian authorities are looking for a settlement similar to the $US20.8 billion agreement reached by the US government with oil firm BP Plc following the 2010 Deepwater Horizon spill in the Gulf of Mexico.
However, in a civil lawsuit brought by business owners and others, a judge in 2014 ruled that BP was primarily responsible for the spill and had to pay up to $US18 billion in penalties on top of the previous payments made.

The November 5 damburst in Minas Gerais, Brazil's main mining state, unleashed 60 million cubic metres of mud and mine waste that demolished a nearby village, killed at least 13 people and polluted a major river valley, killing fish and reaching the Atlantic Ocean.

The lawsuit filed in federal court in Brasilia required Samarco to take immediate action to contain and reduce the environmental impact of the damburst, the chief prosecutor of the coastal state of Esprito Santo, Rodrigo Vieira, said.

The lawsuit seeks at least 20 billion reais that would be administered by a private fund over 10 years to pay for the recovery from the environmental disaster and its social impact on communities near the mine and along the Rio Doce river basin.

Samarco would be required to set up the fund to be managed independently by non-governmental groups, such as a committee of inhabitants of the river basin and Instituto Terra, a local environmental nonprofit started by world renowned photographer Sebastian Salgado.
"If Samarco does not have the financial resources to cover payments over 10 years, Vale and BHP will be held responsible for providing their shares," Vieira told Reuters by telephone.

Vale and BHP announced on Friday that they would create a fund with Samarco to help in the clean-up of the Rio Doce and its tributaries affected by the disaster. They did not detail the size of the recovery fund.

Samarco has already been fined 250 million reais by Brazil's environmental agency, Ibama, for the disaster, which covered the flood plain in mud for 80km. Drinking water supplies for a quarter of a million people had to be closed off.

Brazil hopes to sit down with the miners and settle out of court, Vieira said.

"The big oil spill in the Gulf of Mexico is a good precedent of how to agree on funds for environmental and socioeconomic recovery," he said.

"That's our goal."


Share

3 min read

Published

Updated

Source: AAP



Share this with family and friends


Get SBS News daily and direct to your Inbox

Sign up now for the latest news from Australia and around the world direct to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Download our apps
SBS News
SBS Audio
SBS On Demand

Listen to our podcasts
An overview of the day's top stories from SBS News
Interviews and feature reports from SBS News
Your daily ten minute finance and business news wrap with SBS Finance Editor Ricardo Gonçalves.
A daily five minute news wrap for English learners and people with disability
Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS
SBS World News

SBS World News

Take a global view with Australia's most comprehensive world news service
Watch the latest news videos from Australia and across the world