Vale’s safety measures have not worked, CEO says as woes grow

February 14, 2019

BRASILIA/RIO DE JANEIRO/SAO PAULO (Reuters) – Brazilian miner Vale’s safety procedures have not worked, the company’s chief executive said on Thursday, responding to questions from lawmakers after one of the company’s dams collapsed last month with the loss of hundreds of lives.

The company, which is still dealing with the consequences of the 2015 collapse of a nearby dam it co-owned, is facing several investigations over the Jan. 25 disaster in the town of Brumadinho in Minas Gerais state.

“Vale humbly acknowledges that, whatever we have been doing, it has not worked, as a dam has collapsed,” CEO Fabio Schvartsman told lawmakers in Brazil’s lower house, who are investigating the tragedy.

The break of Vale’s dam polluted the Paraopeba river and killed at least 166 people, with nearly 200 still missing, according to the latest information from rescue workers.

The company’s share price has been hammered and its woes are mounting.

Vale prioritized profit over the safety of its workers at the dam, Deputy Prosecutor-General João Pedro de Saboia Bandeira de Mello Filho said in an opinion, sent to the supreme court, and seen by Reuters on Thursday.

Vale disputed that argument, pointing out that the dam had all its permits, and that the company constantly invested in improving safety there.

Meanwhile, Brazil’s securities watchdog CVM is investigating Vale’s top executives and board members over the dam collapse, newspaper Valor Econômico reported on Thursday.

The CVM is looking into any breaches of securities laws over the incident, and has the power to impose fines and bar executives from working at listed companies in Brazil.

The investigation is running parallel to civil and criminal probes.

The CVM case started on Jan. 28, three days after Vale’s Córrego do Feijão dam burst, the newspaper Valor said, citing documents relating to the probe.

The regulator confirmed to Reuters on Thursday it started two administrative probes into Vale after the dam collapse, but declined to elaborate.

Vale did not have an immediate comment on the CVM investigations.

CEO Schvartsman argued that Vale should not be condemned for the collapse.

“It’s a Brazilian gem that can not be condemned for an accident that happened at one of its dams, however great the tragedy was,” he said.

(This story corrects day to Thursday from Wednesday, paragraphs 1 and 6)

(Reporting by Ana Mano, Ricardo Brito, Marta Nogueira; Editing by Bernadette Baum and Grant McCool)

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