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Legal Questions Surface in Mining Dam Breach

Legal Questions Surface in Mining Dam Breach

A swath of mineral-filled mud is slowly making its way through southeast Brazil and spilling into the Atlantic Ocean. In its wake lies a trail of destroyed homes, contaminated land, and polluted water. The breach of a mining dam in the state of Minas Gerais has killed at least eleven people and created an environmental catastrophe with a financial toll that has yet to be calculated. The incident, which ranks among the largest environmental disasters in the region, could also become one of the biggest environmental law cases in Brazil. The government has already levied millions in environmental fines and is now investigating whether any criminal laws were broken.

Samarco Mineração SA, the joint venture owned by mining companies BHP Billiton Ltd and Vale SA, operates the mines. The breach of the containment ponds holding the mine waste has led to preliminary fines totaling roughly $66.2 million for environmental damages and water pollution, Reuters reported. After viewing the damage, President Dilma Rousseff said the mining companies could face additional state and federal penalties, and a government lawyer is reportedly working with environmental regulators on a civil suit seeking up to $1 billion in environmental damages from the mine owners. Those penalties would be in addition to paying for rescue and cleanup efforts, as well as compensating the 500 displaced people whose homes were destroyed by the deadly mudflow.

Samarco has said that there were no toxins in the mining waste, but The Guardian has reported that Brazil’s water agency has warned residents that chemicals and metals found in the water make it unfit for drinking. The mine operators said in a statement that they are working with authorities to ensure that people have access to drinking water.

Besides the civil suit and state inquiry, the mine operators could also face federal criminal charges. Reuters reports that the government is forming a task force that will work with Minas Gerais prosecutors to determine whether federal crimes were committed. The Guardian reports that there are allegations of unheeded warnings about the design and safety of the dam. “Vale and BHP were totally careless in preventing this,” Brazil’s Deputy Attorney General Sandra Cureau told The Guardian. “They did not show a plan of action in case of disaster. They had no alarm system in place.”

The timing of the spill is noteworthy. Congress is currently debating a law that would diminish environmental regulations for projects that are in the national interest – including mining. The spill, however, could sink the legislation. Meanwhile, BHP Billiton shares have fallen by more than 14 percent in the wake of the environmental disaster. As scrutiny mounts on the mine owners’ practices, another form of legal action could be forthcoming: shareholder lawsuits.

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