Brazilian mining company Vale, one of the world’s largest iron ore producers, agreed to pay USD 55.9 million to the U.S. Securities and Exchange Commission in order to settle a lawsuit in which regulators accused Vale of “making false and misleading claims about the safety of its dams prior to the January 2019 collapse of its Brumadinho dam.”
Critics denounced the agreement as a slap on the wrist for a company implicated in the two worst mining disasters in Brazil’s history. Last year, Vale reported USD 16.7 billion in net profits. “It’s a disproportionately low amount that discourages companies from being transparent,” says Natalie Unterstell, a climate policy expert and president of policy think tank Talanoa. “I’m curious to know what criteria the SEC used, or lack thereof.”
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.
In its lawsuit, the SEC had claimed that 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.
“By allegedly manipulating those disclosures, Vale compounded the social and environmental harm caused by the Brumadinho dam’s tragic collapse and undermined investors’ ability to evaluate the risks posed by Vale’s securities,” said Gurbir S. Grewal, director of the SEC’s enforcement...
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