A local court convicted major petrochemical firm Braskem to pay financial compensation to the northeastern Brazilian state of Alagoas after its salt-mining operations caused wide-scale destruction in neighborhoods of state capital Maceió.
Abusive mining practices caused sinkholes in several parts of the city of Maceió, forcing some 60,000 people to leave their homes and destroying the livelihoods of even more. The Brazilian Report produced award-winning coverage of the scandal.
On Wednesday, the company announced that it “will evaluate and take all pertinent measures within the applicable legal terms and will keep the market informed of any relevant developments in this matter.” It also stated that it found out about the conviction via the press and that it had not been subpoenaed in the case in question.
In April of this year, courts ordered the freezing of BRL 1 billion (USD 200 million) of Braskem assets to cover compensation claims, but the decision was later suspended. This week’s decision does not yet specify a total for compensation, only that it will still be calculated in the expert evaluation phase. The company can also appeal the ruling.
In July, the company announced a BRL 1.7 billion agreement with the city government of Maceió. “The agreement establishes the compensation and full refund of the municipality of Maceió in relation to any and all pecuniary and nonpecuniary damages incurred, and is subject to court approval,” Braskem told investors.
The largest petrochemical company in Latin America, Braskem is in the middle of a convoluted sale process, involving its majority shareholder Novonor (formerly Odebrecht) and state-controlled oil major Petrobras. Indeed, potential liabilities with the state of Alagoas were another major stumbling block for the potential sale.
Petrobras holds first refusal in any potential sale, as it holds 36.1 percent of the company’s shares.
Search
