Brumadinho: CGU fines Vale by BRL 86 million based on the Anti-Corruption Law

Brumadinho: CGU fines Vale by BRL 86 million based on the Anti-Corruption Law

The Federal Comptroller General (CGU), a federal agency responsible for carrying out public audits and other actions to preserve the integrity of public management, imposed a fine of R$ 86.3 million on Vale. In a decision published today (15), the mining company was held responsible for making it difficult to inspect the dam that broke in Brumadinho (MG) in January 2019.Brumadinho: CGU fines Vale by BRL 86 million based on the Anti-Corruption Law

The rupture of the structure generated an avalanche of mining tailings, culminating in environmental devastation and the death of 270 people. Dozens of mining towns in the Paraopeba River basin were impacted.

The CGU considered that Vale violated Federal Law 12,846 of 2013, known as the Anti-Corruption Law, which in article 5 lists harmful acts to the public administration. The mining company was classified in one of the items for “impairing the investigation or inspection activity of public bodies, entities or agents, or intervening in their performance, including within the scope of regulatory agencies and supervisory bodies of the national financial system”.

According to CGU, between June and September 2018, Vale issued a statement attesting to the stability of the structure. The document is mandatory and must be submitted periodically to the National Mining Agency (ANM), the authority responsible for inspecting the activity of the sector. Without a positive statement, Vale would be forced to halt operations at the dam. According to the decision, the mining company failed to present reliable information in the ANM system.

The elaboration of a false stability declaration was pointed out in several investigations into the Brumadinho tragedy. At first step of the Federal Police investigation, concluded in September 2019, employees of Vale and Tüv Süd, a German consultancy contracted to assess the dam’s stability, were indicted. They were accused of misrepresentation and use of false documents, for ignoring proper technical parameters and forging inspection reports and the declaration of stability.

The complaint by the Public Ministry of Minas Gerais (MPMG), which resulted in the criminal action which is currently pending in the Minas Gerais court, pointed to collusion between Vale and Tüv Süd, who would have hidden the real situation of the dam from the control bodies and society. Reports from the parliamentary inquiry commissions (CPIs) of the Legislative Assembly of Minas Gerais, the Chamber of Deputies and the Senate also indicated the occurrence of manipulation in the issuance of the declaration of stability.

In a statement to the market, Vale announced that it was aware of the decision. According to the mining company, the CGU recognized that there was no corruption or involvement of senior management, applying the minimum amount of the fine provided for by law. “Vale disagrees with the conviction and will present a request for reconsideration within the next 10 days”, the text records.

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