Brazil reaches $23 billion settlement with mining companies over 2015 environmental disaster

FILE – A car and two dogs stand on the roof of destroyed houses in the small town of Bento Rodrigues after a dam burst in Minas Gerais state, Brazil, November 6, 2015. (AP Photo/Felipe Dana, File)

SAO PAULO (AP) — Brazil’s federal government on Friday reached a multibillion-dollar settlement with the mining companies responsible for a 2015 dam collapse that the government said was the country’s worst environmental disaster on record.

Under the agreement, Samarco – a joint venture of Brazilian mining giant Vale and Anglo-Australian company BHP – will pay 132 billion reais ($23 billion) over 20 years. The payments are intended to compensate for human, environmental and infrastructure damage caused by the release of a huge amount of toxic mining waste into a major river in the southeast of Minas Gerais state, killing 19 people and destroying entire villages.

‘We are fixing a disaster that could have been prevented, but wasn’t’ President Luiz Inácio Lula da Silva said this in a room of the presidential palace, surrounded by governors of the affected states, members of his government, reporters and victims.

Lula’s speech, filled with criticism of what he called the irresponsibility of mining companies in the pursuit of profit over safety, was received with applause from the audience.

The toxic sludge – enough to fill 13,000 Olympic-sized swimming pools – flowed down the Doce River a distance of 420 miles (680 kilometers) into the Atlantic Ocean, polluting waterways and coastal areas in two neighboring states.

The mining companies told the federal government during negotiations that they had already paid 38 billion reais ($6.7 billion) in reparations.

The settlement includes compensation for more than 300,000 victims, although that figure does not include all those affected. Twice as many people – 620,000 – took their case to a British court on Monday to claim compensation.

The class action lawsuit in the High Court in London is seeking an estimated 36 billion pounds ($47 billion) in damages from BHP. The case was brought in Britain because one of BHP’s two main legal entities at the time was based in London.

The trial in London prompted the Chief Justice of Brazil’s Supreme Court, Luís Roberto Barroso, to personally seek Lula’s commitment to ensure the parties reach an agreement domestically.

“I talked to Lula and said, ‘Mr. President, there is a case abroad and it will be very damaging to the Brazilian courts if this case is resolved outside the country.” Barroso said this on Friday in the presidential palace.

Brazil’s federal government said the victims would receive 35,000 reais ($6,150) each, while fishermen and farmers would receive a total of 95,000 reais ($17,000) in monthly installments over four years.

Cristiano Sales, 42, was born and raised in Bento Rodrigues, one of the districts in the municipality of Mariana that was flooded by the silt nine years ago. When he returned to the ruins of his home three months later, the only item he found was a jersey from his favorite football team, Cruzeiro.

Sales lives in a new house in a neighborhood built by the mining companies as part of compensation to his father. After filing a lawsuit, he was personally awarded 100,000 reais ($18,000) and is still seeking additional reparations through the lawsuit in London.

‘Money cannot pay for what we have experienced here’ he said. ‘We take the money because it is our right. But to say that 100,000 or even 200,000 or 300,000 could bring back the life we had – I don’t think any amount of money can do that.”

Melbourne, Australia-based BHP said in a statement on Oct. 19 that it believes the U.K. action is unnecessary because it overlaps matters covered by recovery efforts and legal proceedings in Brazil, but that it will continue to defend itself.

Pogust Goodhead, the law firm representing the plaintiffs, said Friday that the Brazil settlement should have no impact on the London case and that there will be no double compensation. The company added that its customers were excluded from the negotiations and are still pursuing full reparations for unresolved damages.

“The Mariana Agreement signed in Brazil on Friday shows that, after nine years of negligence, the mining companies have finally decided to respond to the pressure of public opinion and to the trial in England, which started last Monday,” The law firm reported this in a statement. “Yet the amounts determined are far from sufficient to cover the great losses suffered by the victims, who continue to fight for justice and full reparations.”