January 16, 2020 / 1:13 PM / 5 days ago

Brazil prosecutors threaten to revive $37 billion lawsuit over Samarco delays: source

BELO HORIZONTE, Brazil (Reuters) - Brazil’s federal prosecutors’ office has threatened to revive a 155 billion reais ($37 billion) lawsuit against Vale SA and BHP Group, citing delays in helping survivors of a deadly dam burst at their Samarco joint venture, a source close to ongoing talks on the matter between the companies and prosecutors told Reuters.

FILE PHOTO: A view of the Samarco mine, owned by Vale SA and BHP Billiton Ltd, in Mariana, Brazil, April 12, 2016. REUTERS/Washington Alves

The prosecutors’ warning that the lawsuit could be revived came during a meeting they held with the companies in December and was aimed at pressuring them to honor their pledges to hire advisory groups to help those affected by the disaster, the source said.

The November 2015 dam burst in Minas Gerais state left 19 dead and hundreds of homeless. Although last year’s similar dam burst in Brumadinho had a higher death toll, the environmental damage from Samarco was much worse, extending to the coast of the adjoining state of Espirito Santo.

Samarco had committed to retaining advisory groups in November 2017 as part of a partial settlement signed with authorities that allowed the suspension of the lawsuit.

Vale and BHP have so far hired advisers for five of the disaster-hit towns, BHP said in a statement to Reuters. Federal prosecutors had set a November 2019 deadline for advisers to be hired for all of the 41 towns impacted, the source said.

The prosecutors’ office has not ruled out other legal measures, added the source, who spoke on condition of anonymity.

The activities to be carried out by the promised technical advisers include both monitoring the implementation of victims’ relief programs and providing technical and legal support to those affected.

Vale, BHP and Samarco reiterated in responses to Reuters that they are committed to helping the communities and areas impacted by the dam burst and are in constant contact with prosecutors.

They said they were in the process of hiring technical consultants for all the affected towns but declined to say when that would happen.

“Vale is not opposed to hiring technical advice for those affected,” said the Brazilian mining company in a statement, acknowledging the advisers’ importance in compensating for the damage caused by the accident.

Following the settlement agreement, the survivors themselves defined a list of 18 companies that could perform the services. Under the terms of the settlement, Samarco is required to hire all of them.

According to Vale, 16 of those listed submitted proposals in October but they remain under review “due to the complexity of the proposed scope and the corresponding costs.”

BHP said the proposals added up to a cost of 630 million reais and that it was also evaluating them.

The Anglo-Australian miner also said the hardest hit communities are receiving support from advisers.

Samarco said that so far about 7.42 billion reais has been allocated to reparation and compensation measures that are being conducted by the Renova Foundation, an independent institution created to conduct the work.

Reporting by Marta Nogueira and Christian Plumb, Editing by Rosalba O'Brien

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