R$1 million compensation per worker killed in Brumadinho is “absurd” – Brazil’s Vale

RIO DE JANEIRO, BRAZIL – Vale mining company, on Monday, July 5, appealed the ruling ordering the payment of R$1 million (US$194,000) in “moral damages” to surviving family of workers killed in the collapse of the company’s tailings dam in Brumadinho, Minas Gerais.

Should the Labor Court decide to uphold the ruling, the mining company’s defense is also asking for a reduction in the number of relatives entitled to compensation. Vale’s defense claims in the appeal that the sentencing of R$1 million per victim is “absurd.”

The claim for moral damages was lodged by Metabase-Brumadinho (Union of Workers in the Iron and Base Metal Extraction Industry of Brumadinho and Region). Moral damages, under Brazilian law, are separate from monetary or physical damages, and cover such matters as pain and suffering, mental and emotional distriess, and loss of consortium.

Vale’s tailings dam collapsed on January 25, 2019, dumping an avalanche of mud on the community of Córrego do Feijão. The disaster killed 270 people, 11 of them still unaccounted for.

The union’s lawsuit claims compensation for the mining company’s 131 direct employees who died in the rupture. Workers of service companies outsourced by Vale are not included in this suit. Guests and a lodge owner were also killed in the Brumadinho disaster.

In the appeal, Vale is requesting the exclusion of 21 people from the list of compensations. According to the company, these are workers who do not belong to the category of the plaintiff labor union.

The company also repeated its request to exclude anyone who has previously brought an individual lawsuit or reached an agreement with a broad and general settlement clause. This request had already been made in an appeal lodged by Vale in late June, which was rejected.

Attorney Maximiliano Garcez, who represents Metabase-Brumadinho, says that Vale is proving to be “profoundly insensitive” by appealing the decision. He described the amount as “minimal, if compared to its profits.” The union had asked that the compensation for relatives be set at R$3 million each fatality.

Vale’s defense also contested the compensation amount. In the June 7 ruling, Judge Viviane Célia determined that the calculation of judicial costs (amounts paid by the defendants to the judiciary) should be based on R$150 million.

“If according to the plaintiff there are 131 representatives [relatives of the workers who died] and if each fatal victim would be entitled to R$1 million in damages, the amount of compensation could never be higher than R$131 million,” Vale’s defense says.

“Even if the absurd amount of R$1 million per victim is upheld, the compensation amount should be reduced to at least R$120 million. The maintenance of this unjustified figure causes serious damage to the defendant,” the mining company says.

About two weeks ago, international organizations connected to the defense of human and workers’ rights sent letters to Vale asking the company to recognize and pay the compensation determined by the Labor Court, without resistance.

At the time, Vale said in a statement that it has reached settlements with 1,600 relatives of victims since 2019. Between civil and labor indemnities, the mining company claims to have paid R$2 billion.

“Labor compensations are based on the agreement signed between the company and the Labor Prosecutor’s Office, with the involvement of unions, which determines that parents, spouses or partners, children and siblings of deceased workers will individually receive compensation for moral damages,” the company says.

Vale also says it is paying for lifetime health plan coverage to spouses, partners and children up to 25 years of age, additional insurance for work-related accidents and a monthly R$920 day care allowance for workers’ children up to 3 years of age. Another R$998 is paid for children up to 25 years of age.

X-RAY OF VALE

Founded: 1942
Revenue: R$69.3 billion
Profit: R$30.5 billion
Gross Debt: R$66 billion
Sector: mining, logistics, energy and steelmaking
Main competitors: BHP and Rio Tinto
Data referring to Q1 2021