Brumadinho
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We will never forget Brumadinho
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Compensation and financial aid
In terms of providing individual financial support, Vale entered into an agreement with the State Attorney General’s Office of Minas Gerais, the Public Prosecutors’ Office of Minas Gerais, the State Public Defenders’ Office of Minas Gerais, the Federal Attorney General’s Office, the Federal Public Prosecutors’ Office, and the Federal Public Defenders’ Office, pursuant to which we committed to make monthly emergency aid payments to affected individuals through October 2021.
In addition to emergency aid, Vale has also paid extrajudicial civil and labor indemnities, in line with our commitment to compensate all those who have suffered any damage.
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The funding provided by Vale for indemnities and financial aid includes:
• Indemnities paid to approximately 14,100 individuals, totaling R$ 3.4 billion, including:
11,600 beneficiaries receiving about R$ 2.2 billion in judicial and extrajudicial civil indemnities.
2,500 beneficiaries receiving approximately R$ 1.2 billion in labor indemnities.
• About 100,000 people receiving a total of R$ 2.4 billion.
• Vale has also voluntarily donated R$ 36 million to around 1,000 people.
• More than 5,300 people have received support through Program Comprehensive Assistance to the Affected Person (PAIA), which provides free support and counseling after indemnity payments.
Comprehensive Reparation Agreement
On February 4, 2021, Vale, the state and Federal public prosecutors’ offices and the Public Defenders’ Office of Minas Gerais entered into a formal Comprehensive Reparation Agreement with the government of Minas Gerais. The agreement establishes Vale’s performance and payment obligations as part of the social, economic and environmental reparation programs in affected communities, with a total estimated allocation of R$ 37.7 billion.
This includes R$ 5 billion earmarked for environmental recovery initiatives in the Paraopeba River basin, the plan for which is currently under discussion and validation by the relevant authorities, with independent audit oversight. The earmarked amount is for known damages and has no cap, potentially expanding to cover any damages emerging in the future—or those currently unknown and subsequently demonstrated to be linked to the dam collapse. Data from water and sediment quality monitoring in the Paraopeba River indicate that water quality has, in general, approximated the conditions observed before the collapse. These data are consistent with monitoring data from the Minas Gerais Institute for Water Management (IGAM) (read more in the December/22 Reparation Report and in the State Environmental Foundation’s reports on water quality in the Paraopeba River (see here).
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The agreement provides legal certainty and ensures swift progress in repairing diffuse and collective social, economic, and environmental damages. This agreement is civil in nature. All criminal proceedings remain ongoing and will be adjudicated by the Judiciary.
Independent audits, as required by the Agreement, assist signatory agencies in enforcing obligations.
Among the measures provided for in the agreement are:
Funding allocated to replace emergency aid payments with the Income Transfer Program, a program administered and operated by the Minas Gerais State Public Prosecutors’ Office and the Public Defenders’ Office;
Measures to enhance quality of life, access to public services, and economic growth in the affected region;
Measures to restore living conditions for affected individuals to a level equivalent to that existing before the dam collapse, supporting their autonomy and empowerment.
Comprehensive Reparation Agreement:
Region: 26 municipalities in the Paraopeba River Basin (including Brumadinho)
Vale obligations: the agreement outlines Vale’s to do and to pay obligations to ensure the comprehensive reparation of social, environmental and economic damages, impacts and losses resulting from the dam collapse and its aftermath, using such technical solutions and arrangements as are defined for each case under the Agreement.
A set of reparation measures aimed at restoring the environment and compensating (financially or otherwise) for all impacts, damages, or losses caused by the dam collapse.
Compensation for known environmental damages: R$ 1.55 billion
Environmental recovery: R$ 5.0 billion (an estimate with no defined cap)
Recovery measures must follow an established reparation plan and environmental quality standards in order to restore landscapes to their pre-dam collapse condition.
Socioeconomic initiatives and projects for Brumadinho and the 25 other affected municipalities in the Paraopeba Basin, preceded by consultation with affected individuals to prioritize investments.
Projects for the Paraopeba Basin: R$ 2.5 billion (+ payment obligations)
Projects for Brumadinho: R$ 1.5 billion
- These include Framework Agreements (TACs) signed with the Civil Defense Department and the Fire Department; construction of a Wolbachia biofactory for control of arboviruses such as Zika, Dengue, and Chikungunya; and restructuring of the Ezequiel Dias Foundation (FUNED), a leading drug research, development, and production institution in Minas Gerais. Investments amount to a total of R$ 303 million.
Amounts disbursed under the Comprehensive Reparation Agreement as of December 31, 2023:
* Amounts spent by Vale prior to the Agreement that were recognized and taken into account in the total document.
Disbursed as of December 31, 2023:
- 87% of payment obligations have been completed
- 25% of performance obligations have been completed
- 15,400 people indemnified, totaling R$ 3.4 billion
- 7,700+ civil and labor settlements
- 76% of tailings removed, out of 12.4 million m³
- 434 local associations and small businesses supported, directly and indirectly, impacting more than 16,000 people
- 129,000 seedlings planted, all native to forests in Minas Gerais
- 500+ water supply facilities built, providing sanitation for a population potentially exceeding 4 million people
- 2.0+ billion liters of water for human, animal, and agricultural consumption
- Water quality has progressively improved, with quality analysis similar to or better than dry-season baseline figures before the dam breach
- 31% of disturbed land under environmental rehabilitation, out of 658 hectares
Other initiatives
These initiatives include:
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Water: a series of completed and ongoing initiatives to ensure that all residents and farmers affected by the interruption of water withdrawals from the Paraopeba River have access to water of the required quality and quantity. These initiatives include the installation or recommissioning of wells, new water withdrawal and storage facilities, emergency water trucks, and construction of treatment systems. Permanent monitoring of water quality is also in place. Independent auditors conduct analyses, including confirmation essays and on-site audits of sample collection. Learn more here.
Active listening
Evacuated areas
Since the collapse of Dam B1 in Brumadinho, we have adopted more conservative standards in evaluating our dams. We respond promptly to any identified risks through preventive relocations or emergency evacuations when deemed necessary. We are aware of the resulting impacts and make every effort to improve quality of life for residents and to restore conditions as close as possible to those before the incident..
For detailed information on our compensation and reparation initiatives for families in evacuated areas, see here.
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Dam management
Investigations
Announced on February 15, 2019, the Independent Ad Hoc Advisory Committee for Dam Safety (“CIAE-SB”) was established by Vale’s Board of Directors, under the oversight of Professor Flavio Miguez Mello, a leading expert in dam engineering with over 50 years of professional experience. The group also included geotechnical experts Willy Lacerda and Pedro Repetto.
Throughout 2020, CIAE-SB continued to support safety assessments of dams and dikes used in our Brazilian operations. Priority was given to upstream-raised facilities and those located in sensitive areas. The committee recommended measures to the Board of Directors to improve dam safety.
In 2020, CIAE-SB issued 29 reports, 15 technical briefs, and 2 progressive summaries, and held 11 regular meetings. In April 2021, CIAE-SB concluded its work and submitted its final report to our Board of Directors. Vale has developed action plans to address all recommendations, which are regularly assessed in a multiple layer system and any changes justified and approved by senior leadership. As of 2022, 82% of the action plans had been completed, and the remaining 18% are expected to be completed by 2024.
We continue with our work on dam safety, now conducted by the Independent Tailings Review Board (“ITRB”), composed by the former CIAE-SB members, among others, in line with the best international practices and with the Global Industry Standard on Tailings Management. Read more in Dams.
Announced on January 27, 2019, this committee was established by Vale’s Board of Directors, under the coordination of retired Supreme Federal Court Justice Ellen Gracie, to investigate the causes of and responsibilities for the B1 Dam collapse.
Governed by a charter that included specific requirements on independence, autonomy, and the availability of a sufficient budget for its activities, the committee conducted investigation activities that included interviews with key individuals, document reviews, on-site visits to the dam site, among other activities. The committee also collaborated with authorities responsible for related investigations, and followed the work of various parliamentary committees to obtain relevant information from diverse sources. The Investigation Committee’s work was overseen by Vale’ Board of Directors and Oversight Board through regular reports.
The CIAE-A was discontinued on February 20, 2020, when its findings were submitted to the Board of Directors and relevant authorities. Vale released an executive summary to the market to ensure accountability to society. The committee’s technical and governance recommendations were implemented between 2020 and 2022.
Also on January 27, 2019, Vale’s Board of Directors established an Independent Ad Hoc Advisory Committee for Support and Reparation (CIAE-AR).
The committee concluded its work in February 2020 and issued a report with 84 recommendations. The report, available here, included analyses and recommendations on commitments and measures to be taken by Vale to further advance the reparation process.
Reparation efforts continued to be led by the Reparation Department and were periodically monitored by the Sustainability Committee. Vale completed 82 recommendations, including 5 in 2019, 64 in 2020, and 13 in 2021. Two recommendations were not accepted by the Company.
Independent consultants conducted annual, external, and independent assessments of progress on implementing the recommendations, confirming their successful completion.
Accountability
Our commitment to full reparation for the Brumadinho disaster includes transparency in managing the entire process and maintaining constant dialog and communication at each stage of the efforts.
Every six months, we here release a report on ongoing initiatives, including funds invested, major projects completed, and other details.
Our Vale+ Comunidade publication provides monthly updates on key initiatives, presented separately for Brumadinho and the broader Paraopeba River Basin and its 25 municipalities (excluding Brumadinho).
Additionally, the Pró-Brumadinho Committee portal, coordinated by the compliance enforcement agencies, provides information on impacts on affected communities and the environment and details on ongoing initiatives and projects under the Comprehensive Reparation Agreement.
This committee collaborates with the Getulio Vargas Foundation (FGV), engaged as independent auditors, to support decision-making on economic reparation projects. Learn more here.
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Other references
- 4 anos Rio Paraopeba – Recovery Initiatives in 2022 - Reparation Plan - prepared by the State Environment and Water Resource System (SISEMA)
- SIF Technical Report on the biotic environment, from the Forest Investigation Society (SIF) at the Federal University of Viçosa (UFV)
- Citizen information bulletin on water quality in the Paraopeba River - State Foundation for the Environment of Minas Gerais (FEAM)
Reparation disbursements and provisions
Visit our website to stay up to date with company releases and reports containing related operational information and financial disclosures.
Impact of Brumadinho and De-characterization from 2019 to 4Q23
USD millions | Impact/EBITDA | Payments | PV and FX adjustments² | Provisions balance as of 4Q23 |
---|---|---|---|---|
De-characterization
|
5,191
|
(1,596)
|
(144)
|
3,451
|
Agreements & donation¹
|
9,119
|
(6,332)
|
273
|
3,060
|
Total provisions
|
14,310
|
(7,928) |
129
|
6,511
|
Incurred expenses
|
2,979
|
(2,979)
|
-
|
-
|
Others
|
180
|
(178)
|
(2) |
-
|
Total
|
17,469
|
(11,085)
|
127
|
6,511
|
² Includes foreign exchange, present value and other adjustments.
Cash disbursement for Brumadinho and de-characterization commitments¹² US$ billions : | Disbursed from 2019 to 3Q23 | 2024 | 2025 | 2026 | 2027 | Yearly average 2028 - 2035 |
---|---|---|---|---|---|---|
De-characterization
|
1.6
|
0.6
|
0.6
|
0.6
|
0.5
|
0.3
|
Agreements & donations
|
6.3
|
1.1
|
1.0
|
0.7
|
0.3 |
0.1 (4)
|
Incurred Expenses
|
3.0
|
0.5
|
0.4
|
0.4
|
0.3
|
0.4 (5)
|
Total
|
10.9
|
2.2
|
2.0
|
1.7
|
1.1
|
-
|
2. Amounts stated without discount to present value, net of judicial deposits and inflation adjustments.
3. Estimate annual average cash flow for De-characterization provisions in the 2028-2035 period is US$ 277 million per year.
4. Disbursements related to the Integral Reparation Agreement ending in 2029.
5. Disbursements related to incurred expenses ending in 2028.
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