Brazilian mining firm Vale regularly misled local governments, communities, and investors about the safety of its Brumadinho dam through its ESG disclosures.
The US Securities and Exchange Commission (SEC) has charged Brazilian mining firm Vale with making false and misleading claims about the safety of its dams prior to the January 2019 collapse of its Brumadinho dam, which killed 270 people.
According to the SEC’s complaint, beginning in 2016, Vale manipulated multiple dam safety audits; obtained numerous fraudulent stability certificates; and regularly misled local governments, communities, and investors about the safety of the Brumadinho dam through its ESG disclosures.
Further, the regulator alleges that Vale knew for years that the Brumadinho dam did not meet internationally-recognised safety standards for dam safety.
“By allegedly manipulating those disclosures, Vale compounded the social and environmental harm caused by the Brumadinho dam’s tragic collapse and undermined investors’ ability to evaluate the risks posed by Vale’s securities,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
Investors led by Church of England Pensions Board and the Council of Ethics of the Swedish National Pensions Funds have campaigned for the adoption of more rigorous safety standards in the mining sector, first through the Mining and Tailings Safety Initiative, and more recently via Mining 2030, aimed at addressing systemic issues in the sector to enable it to support the low-carbon transition.
Read more articles like this on Regulation Asia’s sister publication, ESG Investor.