Investors looking into Brazilian dam disasters slam the mining companies involved

May 26, 2023
LAPFF

Investors looking into the Mariana Dam and Brumadinho Dam disasters in Brazil have slammed the mining companies involved.

The report by the Local Authority Pension Fund Forum (LAPFF) backs up many of the claims by Pogust Goodhead in its case against BHP over the Mariana dam disaster.

“Nearly seven years after the [Mariana] dam collapse, the end of these reparations and compensation is nowhere in sight. Consequently, affected community members have suffered for over seven years, and the companies and investors continue to accrue costs associated with the delayed provision of reparations and compensation,” says the report.

It also slams mining companies BHP, Vale, and Anglo American for ‘poor governance practices’ and says the incidents still represent significant risks for investors in these companies.

“LAPFF has a general concern that Anglo American, BHP, Vale, Samarco, and Renova Foundation have not accepted an appropriate level of accountability and responsibility for the impacts of their business practices on a range of stakeholders, including affected communities.”

“It has become evident there are significant financial impacts on investee companies resulting from both [Mariana and Brumadinho] operational disasters.” It continues: “These are real financial risks to our investments as our investee companies could be exposed to losses of billions of pounds.”

Pogust Goodhead is calling on BHP to do the right thing over their responsibility for the Mariana dam disaster of 2015, Brazil’s worst ever environmental disaster, and to finally provide justice for the 700,000 victims we represent.

The report, titled Understanding Investment Risk in the Mining Sector, adds: “The Renova Foundation does not appear to have a competent skill set to deliver the needs of all stakeholders.

“Community members with whom LAPFF spoke also state that Renova did not plan adequately for the full scope of compensation and reparations at the outset, an allegation which precedes Mr. de Freitas’ tenure as CEO. However, these shortcomings do not appear to have been rectified.

“Given these structural concerns with Renova and its slow pace of reparations, it is hardly surprising that the community for the most part has little faith in the organisation’s leadership.”

Read the full report here. 

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