Vale SA’s former chief executive
officer was charged with homicide for the massive dam collapse that killed more
than 250 people in Brazil last January.
Fabio Schvartsman is the
highest-profile executive facing criminal charges for Brazil’s worst
environmental disaster. Schvartsman, 65, led the company since May 2017 before
taking a leave in March after federal prosecutors recommended his immediate
exit. Other former employees were also accused of homicide.
Brazil’s state prosecutors
likewise charged Vale, its contractor TUV SUD, Schvartsman and 15 individuals,
most of whom worked at the mining company, with environmental crimes. The
Brumadinho disaster sent a deluge of mud down a mountainside, burying people
nearby. The incident spurred Brazil’s government to review mining operations,
especially the dams that hold mining waste in huge ponds.
Charging a CEO with homicide for
corporate actions is relatively rare, but not unheard of — the head of Union
Carbide Corp. was charged with manslaughter by Indian authorities for a 1984
gas leak that killed thousands in Bhopal (he was arrested but never faced trial
after the U.S. refused to extradite him).
The CEO of ThysssenKrupp AG’s
Italian unit was sentenced to prison after a fire at a
steel plant there killed seven workers in 2007; and the CEO of a South Korean
ferry company was charged with homicide through occupational negligence after
hundreds died when his vessel sank in 2014.
Vale’s American depositary
receipts tumbled 2.3% to $13.32 at 1:54 p.m. in New York, poised for the
biggest decline since November. In Sao Paulo trading, shares were down 2.2%.
In October, Vale said it has posted $6.3 billion in expenses related
to the rupture, which severely cut production and sent iron-ore prices on a
rollercoaster. The company lost about a fourth of its market value in the
immediate aftermath, but it has since largely recovered in Sao Paulo trading.
A report released in December
from a panel of experts commissioned by Vale blamed faulty design for the dam’s
collapse. The facility was too steep and had insufficient drainage, resulting
in high water levels that put stress on the structure, according to the report.
It was not the first collapse of
a Brazilian tailings dam. On Nov. 5, 2015, a tailings dam operated by a venture
co-owned by Vale burst near a Mariana municipality, killing 19. Prosecutors
filed charges against 21 people in 2016 as a result.
In September, Brazilian police
indicted Vale, the testing service TUV SUD and 13 employees of the two
companies for producing misleading documents about the safety of the dam that
buried the community of Brumadinho, in Minas Gerais state.
Source: mining.com