Vale S.A.

The Council on Ethics’ recommendation, 11 February 2019

Brazilian mining company Vale S.A. has, in a short time, been involved in two major accidents, whereby the company’s tailings dams have burst and flooded large areas with mining waste (known as tailings) in the form of sludge. Both accidents happened in the State of Minas Gerais in Brazil. In the first accident in November 2015, which happened at the site of partly owned company Samarco’s operations in Mariana, 19 people were killed and 600 km of the Rio Doce river were polluted, some parts severely. In the second accident on 25 January 2019, at the Vale mine in Corrego do Feijao Brumadinho, at least 134 people were killed and 199 are missing.

The Council on Ethics initiated a far-reaching dialogue with Vale following the first accident at Mariana in 2015. The dialogue focused primarily on ensuring the company took responsibility for the accident and took appropriate measures – initially for the villages destroyed by the flood wave, but also for the thousands of people along the Rio Doce whose lives were affected long-term. The Council and the other investors involved in the dialogue received information from Vale that the company had inspected the other tailings dams in its operation and deemed them to be safe. In the time that the Council was in dialogue with Vale, the company has reported a number of measures taken for managing tailings and improving safety at tailings dams. The lasting impression of dealings with Vale following the accident at Corrego do Feijao is that the company did not act proactively enough after the Samarco accident.

In this case, exclusion is recommended due to the fact that the Council has lost faith in Vale: during the dialogue, the company claimed that it had inspected all its tailings dams and deemed them safe, yet it did not act on information on shortcomings in the tailings dam at the Corrego do Feijao mine, despite being aware of the huge negative consequences of a burst dam.