BHP-Vale JV Excused From Paying $6.3 Billion Legal GuaranteeBy
Judge nixes request to make companies and people pay guarantee
Brazil prosecutors pursuing criminal charges for Samarco spill
A Brazilian judge denied a request by prosecutors for companies and individuals facing criminal charges related to a dam spill to pay financial guarantees, according to court documents obtained by Bloomberg.
The stalled Samarco Mineracao SA joint venture and its owners BHP Billiton Ltd. and Vale SA won’t have to pay a 20 billion-real ($6.3 billion) guarantee while the case is being tried and final damages calculated, the documents show. The judge also ruled that the individuals aren’t required to pay any financial guarantees or be subjected to travel restrictions such as passport seizure.
Federal prosecutors filed criminal charges including homicide against 21 people linked to the operators and owners of the iron-ore mine, while also accusing defendants of a series of environmental crimes. A November 2015 tailings dam collapse killed as many as 19 people and polluted waterways in two states. Among the accused individuals are Vale’s head of iron ore, Peter Poppinga, and Samarco chief executive officer at the time of the incident, Ricardo Vescovi. The case could go before a jury.
Vale, BHP, Samarco and the prosecutor’s office all declined to comment while Poppinga and Vescovi didn’t respond to requests for comment. The court didn’t immediately provide comment.
BHP, Vale and Samarco have previously rejected the charges in written statements. Samarco said it “had no previous knowledge of the structural risks" that led to the Fundao dam’s failure. Vale said at the time that it never participated in an operational capacity at Samarco while BHP said it would "fully support each of the affected individuals” in their defense.
Melbourne-based BHP declined 0.3 percent to A$25.10 in Sydney trading Tuesday.
Before the judge’s determination dated July 14, prosecutors wanted the three companies to pay the $6.3 billion guarantee even though cleanup and reparation work are already under way. The individuals charged have been subject to international travel restrictions that involved having their passports held by Brazilian authorities. Prosecutors also wanted each of the accused to pay as much as $1.5 million as a guarantee, according to court documents.
Federal Judge Jacques de Queiroz Ferreira denied the requests, writing that the financial guarantees belong to the civil case rather than the criminal one. He also wrote that the defendants haven’t displayed any intent to obstruct justice making it unnecessary to secure their passports, the court documents show.
The Samarco tailings dam failure unleashed billions of gallons of sludge into the Rio Doce valley. Besides the fatalities, hundreds were left homeless and thousands are still out of work. Brazil’s government has called the spill the country’s worst ever environmental disaster.
Prosecutors allege the accused were aware of the dam’s questionable integrity and ignored the signs in favor or increasing production instead of suspending operations temporarily.