The U.S. Securities and Exchange Commission today charged Vale, Brazil’s biggest mining company and a global leader in iron ore production, with “making false and misleading claims about the safety of its dams prior to the January 2019 collapse of its Brumadinho dam.” The SEC filed a Wells notice informing Vale of investigations in October 2021.
On January 25, 2019, a tailings dam owned by Vale collapsed outside the southeastern Brazilian town of Brumadinho, releasing a deluge of toxic sludge that destroyed surrounding villages and killed 270 people, among them employees of Vale’s Córrego do Feijão iron ore mine.
The SEC complaint says the company manipulated multiple dam safety audits dating back to 2016, thanks to “fraudulent stability certificates” and a strategy to “regularly mislead local governments, communities, and investors” through its environmental, social, and governance (ESG) disclosures.
The catastrophic failure came just four months after the dam was certified as safe by German industrial auditor TÜV SÜD. The firm is now facing legal action in its home country for “significant damages.” A group of almost 1,200 people affected by the disaster alleges that TÜV SÜD was responsible for erroneously certifying the safety of the dam due to fears of losing Vale as a client.
“Many investors rely on ESG disclosures like those contained in Vale’s annual Sustainability Reports and other public filings to make informed investment decisions,”...
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