Six months since a tailings dam collapsed in the Minas Gerais town of Brumadinho, spilling billions of liters of mud into the surrounding area and killing 246 people and leaving 24 missing, authorities are beginning to get closer to holding those responsible to account.

In the Senate, a parliamentary investigation committee (CPI) was set up to examine the incident and whether the dam’s owners—Brazilian mining giant Vale—were liable in the failure. Months of hearings later, and senators have requested that former Vale president Fabio Schvartsman be indicted for “depraved-indifference murder,” along with 13 other people.

</span></p> <p><span style="font-weight: 400;">Among the other parties held liable by senators are 11 employees of German company Tüv Süd, which was responsible for attesting to the safety of the Córrego do Feijão dam, which had a catastrophic failure on January 25. The CPI&#8217;s recommendations will be sent to the Federal Prosecution Service, which will decide whether to act on them. Beyond the 14 indictments, the committee also recommended charging Vale and Tüv Süd as companies, requesting that they answer for &#8220;crimes of destroying permanently preserved flora and pollution.&#8221;</span></p> <p><span style="font-weight: 400;">On the São Paulo stock exchange, Vale shares tanked 6.51 percent yesterday afternoon, before making a timid recovery late in the day. On Wednesday, VALE3 climbed a meagre 0.3 percent.</span></p> <div class="flourish-embed" data-src="visualisation/461214"></div> <p><script src="https://public.flourish.studio/resources/embed.js"></script></p> <p><span style="font-weight: 400;">The mining company blasted the CPI report, saying there must be &#8220;expert, technical, and scientific&#8221; conclusions about the Brumadinho dam failure before blame can be placed on anyone&#8217;s doorstep.</span></p> <h2>Mariana, Never Again …?</h2> <p><span style="font-weight: 400;">Indeed, the last time Vale was involved in an environmental and humanitarian disaster of such a scale—when another tailings dam burst in Mariana in 2015, just 86 kilometers away from Brumadinho. Arguably, the Mariana disaster has served as an aggravating factor for Vale this time around, showing that despite adopting a slogan of &#8220;Mariana, Never Again,&#8221; the company learned little from its mistakes.</span></p> <p><span style="font-weight: 400;">While the amount of toxic sludge released in the Mariana failure was infinitely larger, killing the entire Rio Doce and causing huge irreversible environmental damage, Brumadinho has resulted in its own share of catastrophe to the surrounding area. Over 133 hectares of Atlantic Forest were engulfed in a wave of sludge which has made it all the way to the São Francisco River, the waterway responsible for 70 percent of the available fresh water to the entire Northeast region—the country&#8217;s poorest and most arid area.</span></p> <h2>Legal measures for the mining sector</h2> <p><span style="font-weight: 400;">Beyond the recommendations for indictments, the Senate committee proposed a number of further measures affecting the mining sector. In the context of the Brumadinho disaster, the most relevant proposal is to block all licenses for new tailings dams for a period of 10 years, and decommission those in operation. The report also demanded that inactive tailings dams be decommissioned within five years. Brazil currently has 769 tailings dams, 42 percent of which are operating without proper licenses. Regulators reckon the country will suffer a further 19 &#8220;extremely severe&#8221; dam accidents by 2027. </span></p> <p><span style="font-weight: 400;">Another proposal is to increase tax for mining companies, instating something close to a royalties system for mining. The idea would be to charge an extra share on the company&#8217;s net revenue, proportional to the richness of the firm&#8217;s mineral deposits, reaching up to 40 percent. The rapporteur of the final report of the CPI, Carlos Viana, claimed that &#8220;mining companies pay tax at very low rates,&#8221; stating that the current contribution for mining activities currently stands at only 3.5 percent. Mr. Viana stated that the proposal is unlikely to make it through Congress, however.

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MoneyJul 03, 2019

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