Share Holder Litigation Puts Spotlight On Environmental Risk

Madison Condon, JD, Fellow

Earth Institute, Columbia University

NY, NY

 

Dear Ms.  Condon:

 

Thank you for your stunning and seminal work accurately drawing the arc between massive investor losses and poorly developed mining projects  which manifest also in levels of catastrophic public liability and non remediable loss of natural resources.

 

There is so much false miner supplied information among all the metals  bond raters and equity analysts I am amazed that investor lawsuits have not also named  the analysts who have a presumed underlying expertise.  The correspondence between the text of webcasts from the miners and what appears as analysis with no apparent independent vetting is stunning and inexcusable.

 

We have followed the thread on a few mines in development to monitor what becomes of the capital raised in public equity markets.  Shocking.  One Canadian company actually lost all the funds raised in public markets on derivatives.  They simply changed their name and went right back to market and more fundraising under the exact same permits. 

 

How is it that Samarco is all but flat broke after those two huge >$1 billion bond offerings one in July just months before the avoidable failure.  Where did that capital go?  Has anyone tracked that? 

 

I hope your work as fellow at Columbia Earth Institute will keep you on this important topic of the link between mining investor losses and public liability losses. I think it is a cornerstone reality that the things about mining projects that cost investors billions  also cost governments and the public billions in damages .  It is  one in the same.

 .

 

Lindsay Newland Bowker, CPCU, ARM Environmental Risk Manager

Bowker Associates

Science & Research In The Public Interest

15 Cove Meadow Rd.

Stonington, Maine 04681

 

207 367 5145

 

lindsaynewlandbowker@gmail.com

lindsaynewlandbowker.wordpress.com

Posted in Analysis TSF Failures, Bowker Associates Science & Research In The Public Interest, Catastrophic Tailings Failures, Causes Of Catastrophic Tailings Dam Failures, Earth Institute Columbia University, financial risk and public liability, Fundao Talings Dam, Germano Tailings Dam Failure, Global Capital Squeeze In Mining, global cash flow crunch, Highly Valued Natural Resources, Lindsay Newland Bowker, Measuring Magnitude of Consequence TSF Failures, Metallic Mining, Mining Economics, mining environmental risk management, Mining Financial Feasibility, mining investor lawsuits, mining public liability, Mining Regulation, Public Liability & Financial Risk, Responsible Mining, Risk & Public Liability of Tailings Dams, Risk Avoidance & Loss Prevention Metallic Mining, Risk Economics and Public Liability of Tailings Dam Failures, Samarco $44 billion lawsuit by Brazil, Samarco Environmental Crimes Investigation, Samarco falha de barragem de rejeitos, Samarco investigação de crimes ambientais, Samarco Mineracao S.A., Samarco Murder Charges, Social Premium of Metallic Mining, Tailings Dam Failures, Tailings Dam Risk Management, TSF Failure Environmental Costs, Uncategorized, unfunded public and enviornmental liabilities, Vale Indictments, Vale SA. | Leave a comment

Samarco Mine Disaster – UN Experts Welcome Settlement Suspension and Call for a Timely & Equitable Resolution

The following text, in English and in Portuguese is as issued by the UN Special Procedures, Human Rights. They have been actively engaged and independently investigating and monitoring on the ground in Brazil since immediately after the disaster in November 2015. The press release speaks to the recent action overturning the court ratification of the settlement agreement which left all control of settlement with the miner although retaining a government oversight committee with no clear mandates or funding for exercise of the broad mandate given. Bowker Associates has posted favorably on other aspects of the agreement as a spring board for pre planning recovery and settlement in the event of disaster but has called from the beginning for an independent claims management litigation support entity to do outreach, formulate and present claims and track them to conclusion. Bowker Associates has also called for an independent team of architects and planners to work with the displaced of Bento on the master plan for the new Bento and its resettlement.

Contact: Lindsay Newland Bowker, Managing Director Bowker Associates Science & Research In The Public Interest

207 367 5145   lindsaynewlandbowker@gmail.com

 GENEVA (5 July 2016) – A group of United Nations human rights experts today commended the decision of the Brazilian Superior Court of Justice to suspend the settlement reached between the Government of Brazil and Samarco Mining S.A., and its parent companies Vale S.A. and BHP Billiton Brazil Ltda in response to what has been described as the worst socio-environmental disaster in the country’s history. 

 “The agreed settlement ignored the victims’ human rights, and its suspension on 1 July is a perfect opportunity to perform a thorough human rights-based review of the remedies and compensations due to the victims with transparency and public participation” the experts said. “We urge the Brazilian Government to seize it in order to address timely and adequately persisting human rights concerns.”

 In November 2015, the collapse of a tailing dam in Mariana in the state of Minas Gerais released about 50 million tonnes of iron ore waste, exacerbating the levels of several toxic substances, over approximately 700km of several rivers including the vital River Doce. Nineteen people were killed as a direct result of the collapse.

 The lives of 6 million people were severely affected, as many homes and villages were buried or destroyed, and, essential sources of water were contaminated. Sources of food and water for indigenous peoples and local communities were greatly compromised. > > “The Executive powers and companies appeared to have, in their haste, ignored the rights of the victims to information, participation and an effective remedy, and to provide assurance of accountability. For the victims, this adds insult to injury,” said the UN Special Rapporteur on human rights and hazardous substances and wastes, Baskut Tuncak. “They appeared willing to forgo the rights of all victims in an effort to sweep this disaster under the rug.”

 The UN experts noted that Brazil’s public prosecutor estimated the cost of damages at  25 times greater than the amount guaranteed in the initial settlement, and cautioned that the settlement agreement was negotiated at record speed comparing with other environmental disasters of this magnitude, during a tumultuous period for the Government of Brazil, which is mired in a political crisis and allegations of mass corruption.

 “The eventual costs of providing full reparation and compensation to all victims will be colossal, and might be the greatest for water and sanitation,” warned the UN Special Rapporteur on the human right to safe drinking water and sanitation, Léo Heller. 

THE SETTLEMENT

 The suspended settlement provided for the establishment of a private foundation to undertake several reparatory and compensatory programmes over the next 15 years. In that regard, the UN experts raised alarm about “the abysmal lack of transparency and participation of victims in the negotiation process of the settlement agreement,” and noted that the agreement was not made available to the general public.

 They also expressed serious concerns regarding the governance bodies to be established by the agreement, which would leave little or no room for effective participation of public authorities and the affected communities in the design and execution of the environmental, social and economic programmes. 

 If settled, the mining company would have the power to decide on the indemnities to be given to the affected populations without any possibility of such decisions being subjected to questioning or appeal. Moreover, the agreement did not project sufficient mechanisms to ensure the participation of all affected communities in the implementation of the foundation.  > > “Seizing the opportunity of the suspension, the agreement’s terms must provide adequate safeguards to make sure there will be sufficient funds for all projects. The allocation of funds must be reviewed and decided in accordance with democratic principles and must be applied observing human rights principles,” they stressed. > > The experts’ call has also been endorsed by the UN Special Rapporteur on the rights of indigenous peoples, Victoria Tauli-Corpuz, and the current Chair of the UN Working Group on Business and Human Rights, Pavel Sulyandziga.

ENDS

 Léo Heller, Baskut Tuncak, Victoria Tauli-Corpuz and Pavel Sulyandziga are part of what is known as the Special Procedures of the Human Rights Council. Special Procedures, the largest body of independent experts in the UN Human Rights system, is the general name of the Council’s independent fact-finding and monitoring mechanisms that address either specific country situations or thematic issues in all parts of the world. Special Procedures’ experts work on a voluntary basis; they are not UN staff and do not receive a salary for their work. They are independent from any government or organization and serve in their individual capacity. Learn more, log on to:  > > Water and sanitation: http://www.ohchr.org/EN/Issues/WaterAndSanitation/SRWater/Pages/SRWaterIndex.aspx  > Hazardous wastes: http://www.ohchr.org/EN/Issues/Environment/ToxicWastes/Pages/SRToxicWastesIndex.aspx  > Indigenous peoples: http://www.ohchr.org/EN/Issues/IPeoples/SRIndigenousPeoples/Pages/SRIPeoplesIndex.aspx  > Business and human rights: www.ohchr.org/EN/Issues/Business/Pages/WGHRandtransnationalcorporationsandotherbusiness.aspx  > > UN Human Rights, country page – Brazil: http://www.ohchr.org/EN/Countries/LACRegion/Pages/BRIndex.aspx  > > For enquiries and media requests, please contact Melinda Ching Simon (+41 22 917 9113 / mchingsimon@ohchr.org) or Patricia Varela (+41 22 928 9234 / pvarela@ohchr.org) or write to srtoxicwaste@ohchr.org  > > For media inquiries related to other UN independent experts:  > Xabier Celaya, UN Human Rights – Media Unit (+ 41 22 917 9383 / xcelaya@ohchr.org)   > > For your news websites and social media: Multimedia content & key messages relating to our news releases are available on UN Human Rights social media channels, listed below. Please tag us using the proper handles: > Twitter: @UNHumanRights > Facebook: unitednationshumanrights > Instagram: unitednationshumanrights  > Google+: unitednationshumanrights > Youtube: unohchr  > _________________________________  > > NOTA À IMPRENSA  > > Desastre mineiro no Brasil: Especialistas da ONU saúdam suspensão de acordo e pedem uma resolução oportuna > > > GENEBRA (5 de julho de 2016) – Um grupo de especialistas em direitos humanos das Nações Unidas elogiou hoje a decisão do Supremo Tribunal Federal brasileiro de suspender o acordo alcançado entre o governo do Brasil e a Samarco Mineração S.A., junto com suas empresas controladoras Vale S.A. e BHP Billition Brasil Ltda., em resposta ao que tem sido descrito como o maior desastre socioambiental na história do país.  > > “O acordo ignorava os direitos humanos das vítimas, e sua suspensão em 1° de julho é uma oportunidade perfeita para realizar uma completa revisão baseada em direitos humanos das devidas reparações e compensações para as vítimas, com transparência e participação pública”, afirmaram os especialistas. “Pedimos que o governo a aproveite, a fim de abordar de forma oportuna e adequada as persistentes preocupações de direitos humanos”.  > > Em novembro de 2015, o rompimento de uma barragem em Mariana, no estado de Minas Gerais, liberou cerca de 50 milhões de toneladas de rejeito de minério de ferro, supostamente aumentando os níveis de múltiplas substâncias tóxicas em um curso de aproximadamente 700 km de vários rios, incluindo o vital rio Doce. Dezenove pessoas morreram diretamente por causa do colapso. > > As vidas de seis milhões de pessoas foram severamente afetadas, enquanto muitas casas e aldeias foram enterradas ou destruídas, e fontes essencias de água foram contaminadas. Fontes de alimento e água para povos indígenas e comunidades locais ficaram seriamente comprometidas.  > > “Os poderes executivos e as empresas parecem ter, com sua pressa, ignorado os direitos das vítimas à informação, participação e a uma reparação efetiva, bem como a entregar garantias de prestação de contas. Para as vítimas, isso agrava ainda mais a situação”, disse o Relator Especial da ONU sobre direitos humanos e substâncias e resíduos perigosos, Baskut Tuncak. “Eles pareciam dispostos a dispensar os direitos das vítimas em um esforço por varrer esse desastre debaixo do tapete”.  > > Os peritos da ONU observaram que o Ministério Público do Brasil estimou que os custos dos danos são 25 vezes maiores que a quantia considerada no acordo inicial, e alertaram que o acordo foi negociado a velocidade recorde em comparação com outros desastres desta magnitude, durante um tumultuado período para o governo do Brasil, atolado em uma crise política e alegações de corrupção em massa.  > > “Os eventuais custos de fornecer total reparação e compensação para todas as vítimas será colossal, e podem ser os maiores em termos de água e saneamento”, alertou o Relator Especial da ONU sobre o direito humano à água potável e saneamento, Léo Heller.  >    > O acordo  > > O acordo suspenso previa o estabelecimento de uma fundação privada para executar vários programas de reparação e compensação nos próximos 15 anos. Nesse sentido, os especialistas da ONU expressaram preocupação sobre a “deplorável falta de transparência e de participação das vítimas no processo de negociação do acordo”, e notaram que o acordo não foi disponibilizado para o público geral.  > > Eles expressaram também grave preocupação com os órgãos de governança a serem estabelecidos pelo acordo, que deixariam pouca ou nenhuma margem para a efetiva participação das autoridades públicas e das comunidades afetadas no planejamento e execução dos programas ambientais, sociais e econômicos. > > Se for estabelecido, a empresa mineira teria o poder de decidir sobre as indenizações a serem entregues para as populações afetadas sem possibilidade nenhuma de que essas decisões fossem questionadas ou recorridas. Além disso, o acordo não projetava mecanismos suficientes para garantir a participação de todas as comunidades afetadas na implementação da fundação.  > > “Aproveitando a oportunidade da suspensão, os termos do acordo devem fornecer salvaguardas adequadas para garantir que existirão recursos suficientes para todos os projetos. A alocação desses recursos deve ser revisada e decidida conforme princípios democráticos e deve ser aplicada observando os princípios de direitos humanos”, enfatizaram. > > O apelo dos peritos também foi respaldado pela Relatora Especial da ONU sobre os direitos dos povos indígenas, Victoria Tauli-Corpuz, e o atual Presidente do Grupo de Trabalho da ONU sobre empresas e direitos humanos, Pavel Sulyandziga.  > > FIM  > > Léo Heller, Baskut Tuncak e Victoria Tauli-Corpuz e Pavel Sulyandziga fazem parte do que se conhece como os Procedimentos Especiais do Conselho de Direitos Humanos. Procedimentos Especiais, o maior órgão de especialistas independentes no sistema de direitos humanos das Nações Unidas, é o nome atribuído aos mecanismos de investigação e monitoramento independentes do Conselho, que trabalham sobre situações específicas de cada país ou questões temáticas em todas as partes do mundo. Os especialistas dos Procedimentos Especiais trabalham a título voluntário; eles não são funcionários da ONU e não recebem um salário pelo seu trabalho. São independentes de qualquer governo ou organização e prestam serviços em caráter individual. Saiba mais (em inglês):  > > Água e saneamento: http://www.ohchr.org/EN/Issues/WaterAndSanitation/SRWater/Pages/SRWaterIndex.aspx    > Resíduos perigosos: http://www.ohchr.org/EN/Issues/Environment/ToxicWastes/Pages/SRToxicWastesIndex.aspx  > Povos indígenas: http://www.ohchr.org/EN/Issues/IPeoples/SRIndigenousPeoples/Pages/SRIPeoplesIndex.aspx  > Empresas e direitos humanos: www.ohchr.org/EN/Issues/Business/Pages/WGHRandtransnationalcorporationsandotherbusiness.aspx      > > ONU Direitos Humanos, página de país – Brasil: http://www.ohchr.org/EN/Countries/LACRegion/Pages/BRIndex.aspx  > > Para mais informações ou pedidos de imprensa, entre em contato com Melinda Ching Simon (+41 22 917 9113 / mchingsimon@ohchr.org) ou Patricia Varela (+41 22 928 9234 / pvarela@ohchr.org) ou escreva para srtoxicwaste@ohchr.org  >    > Para consultas de mídia relacionadas com outros especialistas independendentes da ONU: > Xabier Celaya, ONU Direitos Humanos – Unidade de Mídia (+ 41 22 917 9383 / xcelaya@ohchr.org)   > > Para usar nos seus sites de notícias e redes sociais: conteúdo multimídia e mensagens-chave sobre os nossos comunicados de imprensa estão disponíveis nas plataformas de redes sociais da ONU Direitos Humanos, listados abaixo. Por favor, use os marcadores adequados.  > Twitter: @UNHumanRights > Facebook: unitednationshumanrights > Instagram: unitednationshumanrights  > Google+: unitednationshumanrights > Youtube: unohchr

The following statement summarizing their visit and investigation of the Samarco failure immediately after it occurred  puts the above concern in context  We had added emphasis to what those statements which  align most closely with our own analysis of how public liability and non remediable loss form and evolve.

With regard to awareness about business and human rights issues, our general impression is that mainstream business enterprises, both private and State-owned, and business associations remain largely unaware of the United Nations Guiding Principles. Companies report that they have received little guidance from the Government about the actions they are expected to take in line with the Guiding Principles.

Certain CEOs may know about the requirements placed on business by the Guiding Principles but this is often not translated into middle management activities. Our expectation is that the human rights dimension should be integrated not only at the policy level but also at the sites/operations level, including in a company’s value chains.

In relation to the companies that are aware of the Guiding Principles, the Working Group observed that they primarily understand human rights risks as being about risks to the company, rather than the risks faced by vulnerable rights holders. If companies focus on the question of human rights risks to a specific project, rather than using a holistic approach, then there is a risk that human rights concerns will be traded off and side-lined, to the detriment of affected communities.

Brazil has a number of State Owned Enterprises (SOEs) that have a particular responsibility to protect against adverse human rights impacts. Also, the State’s own human rights obligations come into play when SOEs take decisions that impact human rights. Earlier this year, the Government organised an event in which Brazilian SOEs committed to uphold the OECD Guidelines for Multinational Enterprises which explicitly promote the Guiding Principles. Furthermore, CNI (the National Confederation of Industry in Brazil) is a signatory to the Bahrain Declaration made during the 2015 first Annual Global Employers’ Summit in Bahrain which calls for the implementation of the Guiding Principles. We are not yet seeing the above commitments being reflected sufficiently in the day to day practice of SOEs, or companies in which the State holds a significant share-holding, or other economic entities under the control of the State, such as development banks, and in the business relationships that flow from these entities.

There appears to be little instruction coming from the Government, both at the Federal and State level, in relation to the human rights impact of companies and SOEs in particular. It seems that the Government grants a licence for a large infrastructure project and then provides little oversight or regulation of the project. The lack of State presence is problematic. While companies can be privatised, States cannot outsource their duty to protect human rights. States never lose the obligations they hold and human rights impacts must be properly overseen by the State on an on-going basis. The State can have a small presence in the operation of economic activities but it has to have a strong presence in overseeing and enforcing human rights.

childs drawing before and after failure

 

 

Posted in Mine Disaster Recovery, Samarco $44 billion lawsuit by Brazil, samarco disaser recovery, Samarco Environmental Crimes Investigation, Uncategorized, United Nations Human Rights | Leave a comment

Vale Engineer Added To Indictments In Fundao Dam Failure

Brazil’s Folha reported yesterday that the indictment list has  been expanded to include a principal Vale engineer who doctored records about the extent of Vale’s co-use of the Fundao.

 According to Deputy Roger Lima de Moura, responsible for verification, Vale contributed to the breakup because its depositions constituted 27% of the total as of the time of failure ..   Vale had earlier admitted to its unauthorized use of the Fundao for its own tailings from its own immediately adjacent mine  but had provided falsified records to authorities claiming its use was no more than 5%..

The indictment of the Vale engineer also stated the composition of tailings Vale deposited in the Fundao had been falsely reported.. 
 Moura said that the main causes of the failure  were drainage problems, use of low-quality material for the construction of the dam, poor monitoring and lack of control of the amount of tailings deposited.
.

The investigation, according to the delegate, also concludes that the location where the dam was breached –” called retreat of the left jamb was a  modification to the original design ( not approved or initiated by the dam designer. and that from 2012 when De Avila was dismissed there was no qualified engineer in charge.


The Federal Police also pointed  out that Samarco decreased its investment in “Geotechnical work”by 29%2012-2015, while increasing investments in production, which in turn increased tailings volume generated.
Although not mentioned in this additional indictment of engineer Vale had commissioned its own assessment of the major expansion referred to in the police report and was  aware that there was insufficient capacity in the Fundao to accommodate the additional  tailings of the expansion and no room on site for an expansion and nevertheless continued its own depositions.
Posted in Fundao Talings Dam, Uncategorized, Vale Indictments, Vale SA. | Leave a comment

Brazilian Federal Prosecutors File Suit Against Vale, BHP and Samarco for $US43.55 Billion Demanding Immediate Provision of $US2.8 Billion

May 4, 2016  2pm EST  USA

Lindsay Newland Bowker lindsaynewlandbowker@gmail.com

RIO DE JANEIRO—Brazilian federal prosecutors filed a civil lawsuit on Tuesday demanding that Samarco, BHP, and Vale , the mining companies responsible under Brazilian law  for a cataasrophic dam failure on November 5, 2015 payt up to 155 billion reais ($43.55 billion) for cleanup and remediation.

The 359-page lawsuit brought by independent federal prosecutors was the result of a six-month investigation .  Importantly, it also is against state and federal governments. Prosecutors accused the state of Minas Gerais, where the dam collapsed in November 2015, of negligence in its monitoring of the build up of waste and water sludge at the Samrco mine.   Every mine failure is ultimately a failed public private partnership in which miner and permit authority are co -responsible.

If upheld by a judge, the lawsuit would require Brazil’s Vale SA, Anglo-Australian miner BHP Billiton Ltd., and their joint-venture Samarco Mineração to make an initial deposit of 7.7 billion reais to an independent fund responsible for cleaning up the fallout from the Fundão tailings dam collapse on Nov. 5. The accident, the  worst environmental  tailings disaster in recorded history, released an avalanche of 60 million cubic meters of tailings and waters that killed 19 people, destroyed villages and polluted more than 400 miles of rivers before spewing into the Atlantic Ocean weeks later.  The huge plume of suspended wastes has not dispersed as anticipated  and  has returned to the bay  where phyto plankton species, the foundations of ocean health,  have changed dramatically.

Shares in BHP Billiton fell more than 6% in early trading in London.

Prosecutors filing this suit were not signatories  to,  and did not approve, the settlement agreement announced between the mining companies and Brazil’s government in early March. That  deal, the final of which has not been made publicly available,  provides specific minimum payments totaling  9.46 billion reais through 2030 via a foundation run mostly by their own appointees.  The settlement, however, at least in a draft dated days before the final, recognized that actual liabilities could exceed the $us 5.2 billion tentatively estimated as total damages early on after the man made catastrophe.

Shares of both Vale & BHP , after plunging in the wake of the disaster, had  rebounded on news of the settlement . Vale’s stock more than doubled between early February and late April, aided by a rally in iron-ore prices.

However, BHP’s shares slumped 9.5% on Wednesday, underperforming rival iron-ore miner Rio Tinto Ltd. and Australia’s benchmark share index. BHP’s stock is also weighed by weakening global oil prices, which are down more than 5% from their 2016 highs reached last week.

Prosecutors  announcing their action, criticized the deal for not involving victims in negotiations, for failing to establish legal mechanisms to ensure that the mining companies would meet their obligations, and for ignoring the government’s responsibility for the disaster.

“Input from the public prosecutors’ office was not considered by the negotiating parties,” the lawsuit said, adding that the government and companies appeared to be in a hurry to get a deal signed. “This resulted in a settlement that was incomplete, precarious and partial.”

Both the settlement and the prosecutors actions  are governed by Brazilian law which provides strict liability  and joint and several  liability among owners and their co owned operating subsidiary Samarco.  Neither has any bearing on criminal actions pending against Samarco Officials and their consultant VOGBR  who certified the dam  as safe t officials in July 2015.  Neither the agreement nor the prosecutorial action supercedes or overrides any claims individuals or  businesses may assert .

The Brazilian Federal prosecutors amount is not based on any revised estimate of actual total costs for recovery and compensation specific to the Fundao/Santorem damages but on reference to the BP Gulf disaster as a “comparable”

“Based on preliminary studies, the human, economic and socio-environmental impacts caused by the break of the Fundão dam are at least equivalent to those verified in the Gulf of Mexico,” federal prosecutors said in a news release. “It doesn’t seem technically or morally credible that…the human, cultural or environmental value of Brazil should be inferior to that of other countries.”

The $US45B is just a place holder and perhaps  more realistic than the initial estimate of $US5.2B ( which is not the ceiling in the settlement agreement either although referenced.  The draft settlement agreement recognizes that the full loss is non estimable and a good deal of it beyond any concepts of “replacement value” or “replaceable”).
The timing of the settlement announcement was to buoy, Vale and BHP  and give some hope to Samarco debt and bond holders.  At least its anticipation and announcement had  that effect in financial markets  who seem to need to believe that all three companies can survive this economically.
It is certainly a plus for the Public interest that the prosecutors, in taking this action, have spoken to the lack of transparency thus far and to the likelihood of unfair settlement processes if  the process is in Samarco’s control with no informed ( independent) control and direction.
Dislocation and resettlement are almost routine in mining.  It is thought of in the same vein as  displacements that occur for large important public works projects, including urban renewal projects.  Mining thinks of itself and has historically been regulated as if it were an “important public works” machinery.
The subtleties of loss and evaluation of loss in the case of the this largest tailings failure in recorded history of the world, are not within the capacity or culture of Samarco or any miner to assess.  They have a legal and moral duty to pay for whatever  it costs but they have no capacity to actually envision or actualize a fair recovery from the disaster they have caused in their any deviations from best knowledge, best science, best  practice at the Fundao.
The prosecutor has not specifically acknowledged that or shown a full undertstanding of that in this important action in the public interest but through the recognition of the need for transparency and community involvement it may lead to that.
It seems very clear the politics of the settlement agreement were not ever going to lead to that.

 

Posted in Samarco $44 billion lawsuit by Brazil, samarco disaser recovery, Uncategorized | Leave a comment

GUADALCANAL COMMUNITY DOWNSTREAM OF TROUBLED GOLD RIDGE MINE FEAR DEWATERING IS OUT OF CONTROL

April 7,2016

 

http://www.solomonstarnews.com/news/national/10086-heavy-rain-threatens-tailings-facility

 

Sadly, this news this morning from the Solomon’s, underscores the universality of the issues of disenfranchisement and lack of accountability to fundamental community needs and values that is indemic to the “social license to operate” as defined and promulgated by the mining cartel but also, as in this case,  adopted by local communities and indigenous peoples themselves.  In this case,  the mine owners are disgruntled landowners, a collective of 17 tribes of indigenous peoples who owned the land of the mine site,  who foolishly orchestrated a sort of hostile takeover of the  never profitable Gold Ridge Mine.  Local control motivated by profits and a piece of the pie without adequate technical knowledge and adequate capital is as dangerous and as disenfranchising to surrounding community as operation by any miner

 

All mines require adequate capital, excellence in techincal and scientific knowledge, and a standard of deisgn and  operation  that is accountable in the first instance to environmental security and preservation of community.  Local control and local input must be about securing this for every mine that is allowed to operate and expand.

 

This 20 million cubic meter  50 m  high TSF  has hovered on the brink of collapse for almost two years. Landowners sought what St Barbara had been denied before it was locked out: permission to dewater at a very high rate of release and without treatment. Because of downstream community and environmental issues UNESCO stepped in at the request of the Solomon Island Government ( SIG) with its own independent technically expert team and established standards on a safe rate of release and a requirement for treatment.  Local government had been prepared to and actually did grant an untreated release at unsafe levels far in excess of what UNESCO advised: 12,000 cubic meters per day vs 3, 572 cubic meters per day.

SIG & landowner/mine owners opted to await the  installation of the water treatment which only went on line March 29th .  By then overflow conditions had already been reached. Apparently also beginning that date an emergency untreated release was authorized but in fact it is literally overflowing the crest of  spillway  with no means of control or diversion so it cannot be properly called an “authorized release”.  All that , from UNESCO report  ’til March 29th, took a long time and the dam was in a crisis when all these discussions began ( as at Mt. Polley).    Nothing was ordered by SIG or initiated by  the 17 tribes who now own the mine to catch and hold any overflow even though it has been known for some time that an overtopping was likely.   Local control  has not brought increased levels of accountability to environmental security or to the safety and preservation of downstream communities.  

 

 

Like so many other mines that have failed at a catastrophic level this deposit was never properly assessed in the first instance. Flow sheets, and tinkerings with them over several turnovers in ownership, all propped up by the World Bank, IFC and the Australian Export Credit Agency never found a flow sheet that could profitably mine this anomalous deposit.  Recovery rates at each new expansion or tinkering got lower and lower from only 86% at outset to 69% when last operated. The latest tinker and expansion had already been initiated  and miners already knew it had failed again when they  went looking for some hapless buyer that they found in St. Barbara, after quite a time. (there was no long line of eager offerors).  St. Barbara has since admitted they did no independent assessment pre acquisition but relied on the representation of Australian Government.

 

Very shortly after St. Barbara’s ill advised acquisition, the rapid rate of deposition to the TSF, well beyond what facility designers had prescribed (it was filled to near max in a much shorter time than was planned life of mine)  had pushed it to the verge of crisis.  This is the story behind almost all catastrophic tailings failures.  Bad practice and/or miner incompetence.  Important to note that according to Golder , serving as ad IFC , the TSF was not built according to the state of the art plans submitted to all by Ross Mining, the original developer.  Critical aspects of the drainage system were never put in place.  No as built drawings of the TSF have been presented in Golder’s work for IFC or by UNESCO. 

St. Barbara went back to Australia leaving no personnel to manage the mine or reduce the threat level when local government refused to allow them a huge discharge of untreated water to avert collapse. (Such a release was not allowed under the terms of the IFC financing ) St. Barbara refused to install the promised water treatment facility which was destroyed  during their absence their site was taken over by  artisan  miners.  Government refused the security and protection St Barbara expected as a condition of returning in any way. (Throughout the life of the mine, miners and the Australian Government have “papered over” the fundamental issues of technical incompetence that plagued this mine  as a matter only of political risk and social unrest, of unpredictable fluctuations in commodity prices, and a disorganized and incompetent local government.)

 

Local government locked St. Barbara out and local landowners who were owed much money under prior agreements took control and ownership  including responsibility for all liabilities. SIG had refused to do so. They naively assumed , as many citizens do, that all mines are cash in the ground and that there would be a long list of interested parties to co venture with landowners in the reopening and operation of the mine. 

 

After quite awhile the only partner to step forward, AXF, a conglomerate of extremely wealthy Chinese individuals, has no experience whatsoever in mining ( they are in the entertainment and commercial property development business…not clear what motivated AXF but Bowker Associates is investigating whether again tinkering by the Australian Government, perhaps in connection with qualifying for investor immigration  requirements that trades  presence and investment  of foreign entities  for investment in desired or high risk projects ).  AXF created a separate entity for this partnership which was executed in December 2015.  AXF, like the hapless landowners, probably didn’t even know what questions to ask before it signed on.

 

So this apparently out of control dewatering, as it seems to the excluded and most directly threatened Guadalcanal community downstream, has no mining  competent persons involved locally to assess and oversee and accomplish a safe dewatering. ( At least no contracts with competent engineers and scientists have been announced).  There is no one of competence to speak to the concerns of the Guadalcanal community; no one of competence to give any meaningful assurances at all.

 

Speaking concerns is not enough to solve the complex complex problems of mining  necessary to satisfactory levels of environmental and community security.   Concerns, when addressed to the absence of competence can’t possibly bring fruitful or timely solutionsTo be effective on mining threats, spoken  concerns must  come with that competence and demand that that competence be provided as part of the operating and oversight of the mine.

 

This applies as well to concerns about fair and equitable implementation of the Samarco settlement and to the nature of mobilization required to bring that about.

  

 It illustrates that local control, especially without adequate capital for management and adequate technical know how is not inherently a positive and where a serious danger is present, as at this mine, puts the entire downstream at risk with no means of mitigating  the danger.

 April 8, 2016 Additional Press & Video http://www.sbs.com.au/news/article/2016/04/08/major-tailings-dam-spill-solomon-islands-disaster-gold-mine

 

 

 

 

 

Lindsay Newland Bowker, CPCU, ARM Environmental Risk Manager

Bowker Associates

Science & Research In The Public Interest

15 Cove Meadow Rd.

Stonington, Maine 04681

 

207 367 5145

 

lindsaynewlandbowker@gmail.com

Danger of continuing uncontrolled release recognized..dwnstream 8,000 warned but not offered any assistance .  Naezan and the coalition of 17 tribes who own the mine, whose management of it has fallen well below international standards for responsible management, had initially denied that the release was uncontrolled and that it was harmful fully aware of the UNESCO findings and warning that the maximum safe daily release of untreated waters is around 3,500 cubic meters per day.  The uncontrolled , uncontrollable release has greatly exceeded that.  Naezan acknowledged 95,00o cubic meters  over the dam without treatment since March 29th as of last Friday.April 7th.  That is an untreated release rate more 3 times the safe rate known to  SIG and Naezan’s coalition.   SIG, fully aware of the UNESCO advice which they themselves sought, had nevertheless issued a permit to Naezan’s coalition for an untreated daily release of 12,000 cubic meters.

The Naezan group’s new partner, AXF, an entertaninment/commercial property conglomerate  of wealthy Chinese investors  with no mining experience whatsoever has been silent but according to Naezan have had management control since December.  No deep pocket there though as they created a separate company for the partnership and Australian/Solomon Islands law does not have cut through provisions and strict liability as Brazil.

All are mum on cyanide also noted in the UNESCO report .  The initial plan for the mine which started in 1998 and as approved by IFC and the Australian export credit called for cyanide removal at the end for the water only but not the tailings themselves.  In a report by Golder for IFC they noted in 2011 this practice was below acceptable acceptable international standards and that the tailings should be treated before deposition and the waters treated before release..  That was the purpose of the water treatment plant.  No action was ever taken to remove the cyanide from the tailings before deposition.  ( The plan had been to close the wrongly built TSF and build a new one)

http://www.radionz.co.nz/international/pacific-news/301394/poisoning-warning-in-solomons

April 15 In a vague statement Solomons’ Island Environment Minister says Spill over under control and only treated waters being released now 

http://www.radionz.co.nz/international/pacific-news/301501/solomons-tailings-dam-spill-under-control

No details were made available on how much water actually escaped and/or were pumped nder the permit for unteated release;, what the current level of water in the dam is;  whether the treated waters are being held  for monitoring and testing prior to release as advised by UNESCO to the Solomon Islands Government or whether the rate of treated release is otherwise at the rate advised by UNESCO to the Solomon Islands Government.

 

Should this TSF fail, based on modeling of past  failures, this 20 million cubic meter 50 m high facility could easily spill 10 million cubic meters of arsenic and cyanide tainted tailings propelling them  with that nearly 1 million cubic meters of waters and the wall of the dam itself into the settlement of the 8,000 downstream.  If that should happen it would be the  3rd TSF failure in 30 months exceeding 10 million cubic meters.  It would be only the 6th release of tis size ever in recorded history.

 

Even with Samarco’s man made catastrophe and its horrific images so fresh and current in global awareness, this long  unfolding catastrophe  has received no notice outside of regional and local press.

 

 

 

 

Posted in Catastrophic Tailings Failures, Causes Of Catastrophic Tailings Dam Failures, Gold Ridge Mine, Tailings Risk Management, Uncategorized | Leave a comment

Blankenship , Energy CEO, Jailed In Fatal 2010 Mine Accident

 

Per Business Insurance

“Former Massey Energy Co. CEO Don Blankenship was sentenced Wednesday to a year in federal prison and ordered to pay a $250,000 fine for his role in the Upper Big Branch mine explosion in West Virginia that killed 29 miners in 2010.

“Mr. Blankenship was acquitted of all felony charges, but convicted of a misdemeanor conspiracy charge in December for willfully violating U.S. mine health and safety standards and received the maximum sentence and fine applicable under his conviction, according to news releases.

“This sentence is a victory for workers and workplace safety,” Acting United States Attorney Carol Casto for the Southern District of West Virginia said in a statement. “It lets companies and their executives know that you can’t take chances with the lives of coal miners and get away with it. Putting the former chief executive officer of a major corporation in prison sends a message that violating mine safety laws is a serious crime, and those who break those laws will be held accountable.”

 

Upper Big Branch Miners Memorial

Upper Big Branch Lost Worker Memorial

During the trial, more than two dozen witnesses, including coal miners who worked at Upper Big Branch, testified about unsafe working conditions at the mine, violations of U.S. Mine Safety and Health Administration regulations and organized efforts to obstruct and interfere with MSHA inspectors, according to the government’s release.

Mr. Blankenship’s motion to stay his sentence pending appeal was denied by the judge, who ruled he will self-report once the Bureau of Prisons determines where he will serve his sentence, according to a government spokesperson.

An attorney for Mr. Blankenship could not be immediately reached for comment.”

Don Blankenship

Massey Energy Company Chief Executive Officer Don Blankenship pauses as he testifies on Capitol Hill in Washington, Thursday, May 20, 2010, before the Senate Health and Human Services subcommittee hearing on mine safety. (AP Photo/Carolyn Kaster)

Criminal charges for homicide  against Samarco Execs, including their former President, and one consultant VOGBR,  have also been made but not yet heard. Heruculano Mine partners were recently indicted for murder for deaths in the 2014 tailings dam failure.

In a recent industry update the Insurance Information Institute reported

  1. Mining accounted for 7 of 147 man made disasters known to insurers in 2014( 5%)
  2. The 7 manmade* mining disasters in 2014 known to insurer resulted in 400 death but involved an insured loss amount of only $100 million indicating not the consequence of of loss but the very low presence of insurance and risk management outside of Property ($625 billion in insured assets) Business Interruption and Political Risk.

(*”manmade disaster” means arising from human activity and includes causes other than those originating from the insured miner’s operations)

In their 2016 Mining Market Outllook report global brokerage house Marsh & McClennan provides extensive stats and analysis showing that as risks have grown and the value of insured assets has grown, more and more insurers have reduced limits of coverage ( ie bought less coverage even though for property at least limits are generous and cheap.

In the worlds most costly and damaging mine failures, the Marsh report notes the  values the total damages was extremely low.   They made specific note of both Mt. Polley and Samarco..  Even for all those Tailings facilities rated “Extreme Hazard”,usually meaning that human settlements would be completely lost as happened at Samarco, permitting regulations and statutes rarely require adequate third party liability limits.

The government has assessed damages against Samarco of $(us)5.2 billion.  Samarco self reported that they had only about $600 million available for compensation from insurance almost all of that for their own proper  ty damages and their Business Interruption.  Under applicable liability applies and the settlement agreement, which flows the dictates f law, does not limit liability to that amount but sets minimums for each year to serve as benchmarks for minimum compliance ( falling below these minimums would consitute non compliance and subject Samarco, Vale & BHP to very costly daily penalties)  and further action under environmental crimes law.

The Upper Big Branch Mine disaster occurred on April 5, 2010 roughly 1,000 feet (300 m) underground in Raleigh County, West Virginia at Massey Energy‘s Upper Big Branch coal mine located in Montcoal. Twenty-nine out of thirty-one miners at the site were killed.[1] The coal dust explosion occurred at 3:27 pm.[2] The accident was the worst in the United States since 1970, when 38 miners were killed at Finley Coal Company‘s No. 15 and 16 mines in Hyden, Kentucky.[3][4][5] A state funded independent investigation would later find Massey Energy directly responsible for the blast.[6]

The Mine Safety and Health Administration (MSHA) released its final report on December 6, 2011, concluding that flagrant safety violations contributed to the explosion. It issued 369 citations at that time, assessing $10.8 million in penalties.[7] Alpha Natural Resources, which had bought Massey Energy in 2011, settled its corporate criminal liabilities with the U.S. Attorney for $209 million.[8] Investigation of possible personal criminal liability continues,[8] with one former superintendent, Gary May, pleading guilty in March 2012, and “confess[ing] to conspiring to ‘impede the [MSHA]’s enforcement efforts'”. The CEO of Massey Energy at the time of the disaster, Don Blankenship, was convicted in 2015 of conspiring to willfully violate safety standards. He was found not guilty of charges of securities fraud and making false statements.[9]

In April 2012, Coal producer Alpha Natural Resources Inc. (ANR) (the then current owner) said it will permanently close its Upper Big Branch mine in West Virginia.[10

Wikipedia Summary

Posted in Uncategorized, Underinsurance for Manmade Mining Disasters, Upper Big Bank Mine Explosion 2010 | 1 Comment

Samarco Agreement Draft A Springboard To Model Language on All TSF’s With “Extreme” Hazard Classification

“There will be complete restoration of socio-economic conditions and of the affected environment. And I want to emphasize: There will be no financial limits until there is full reparation,” Rousseff said, according to AFP. “We want to build a new life on the ruins.”
Attached please find a still very crude Google/Bing  translation* of  the February 26th draft of the Samarco, BHP, Vale settlement agreement on the $US5.2 billion in civil damages.

The actual final is still not available for examination but this draft as of a few days before the final was signed and announced, offers a  powerful, enlightened springboard to model language that should attend all approvals of TSF’s with “Extreme” or “Very High” hazard rankings. With eloquence, wisdom and  clarity this document recognizes the nature and extent of present, still unfolding and enduring loss and the impossibility of restoration to “as before” for so much of the social, cultural, biologic,terrestrial, riverine,watershed, marine and other losses this man-made, avoidable catastrophe has caused.  Even stray dogs and cats are mentioned and wild animals who have lost habitat as is the enduring collective trauma of witness to this event and the psychological damage of non-presence of any help or relief in its wake.

 

childs drawing before and after failure

When the river was clean, I and my family would go swimming every Saturday and Sunday. But that can’t happen anymore because it’s dirty and orange” 

​​”Quando o rio estava limpo, eu e minha familia ia tomar banho todo sabado e domingo. Mas agora não pode mas tomar porque está sujo de lixo e laranja.

By Gabrielly , Regencia, Brazil
Principal features of the agreement that are readily generalizable as  conditions attending any permit for any TSF and urgently needed as revised conditions for already permitted facilities with an “extreme” or “very high” hazard classification are:
(1) There is no limit of liability only an agreed commitment to full reparations and restorations over a 15 year period and beyond if necessary  under an open transparent  publicly controlled and monitored process completely apart from the permitting process and its authorities. This follows from the strict liability in Brazilian law from which miners everywhere have traditionally negotiated exemption . ( Strict liability in common law automatically applies to all consequence for ultra hazardous activities without limitation.  It is negligence per se for which no defense( other than natural catastrophe) is available).  It is therefore most likely that this provision is in the final agreement.
(2) The liability  is joint and several among Samarco, Vale and BHP and the original $US5.2 billion of the civil suit is reaffirmed as the best available estimate  and without any agreement to limit liability even to this amount.  This also follows from Brazilian law which has  cut through provisions built in where a subsidiary cannot finance its own liabilities for damages.  So this provision almost certainly is in the final agreement as it follows directly from law.  The schedule of payments are minimums and  part of a system of penalties for non compliance )  Again,there is no financial cap on the civil liability which by law is unlimited where strict liability applies.
​(3) The creation of a foundation as the vehicle for undertaking the main part of the reparation and restorations transfers no liability.  The liability remains with Samarco,Vale & BHP​.  The foundation is merely a public interest non profit vehicle for passing the funds from the miners to the many programs and projects it will take to carry out the full mandate of the agreement.  The one government seat on the foundation board allows an ongoing inside eye on the foundation’s operations and management.  The main control and oversight is via a separate external committee of municipalities and government agencies who decide what qualifies under this agreement.  Virtually all of what Samarco had claimed “as already spent on clean up” was disallowed.  The miners have no control over what consiitutes restitution, compensation, restoration and reconstruction.  These decisions are all solely in the public realm with full transparency and full accountability to each affected sector of the mine affected area.
(4) Funding is not pre conditioned on continued operation of the mine or its economic feasibility.  The obligation is to all of VALE, BHP and Samarco. ( again as distinguished from the BHP settlement at OK Tedi which transferred the mine itself to a “public benefit entity” and BHP was free of all liability via that transfer of ownership).
(5) No part of the reparation and restoration is for the mine itself ( at Mt Polley all of the money was spent on the mine itself essentially annexing, not restoring Hazeltine Creek. The responsibility and financing to make the TSF and waste piles safe against continued seepages, flows and breaks is in the context of the permit.
(6) The process of settlement of  damages is separate and apart from the law governing permitting operations and oversight and also only for civil liabilities.  The criminal charges are active under a separate “Environmental Crimes” statutes which have their own oversight as separate branch of law.  (It wasn’t designed for mining, it was designed for illegal clear cutting of the amazon but it has been serviceable and effective in  its application to this man made catastrophe).  I haven’t  seen any other comparable structures in law ..it is very different in purpose to say EPA ,Environment Canada  or at the State level in the U.S. DEP’s and  makes great sense for any political jurisidiction which has an extraction based economy.
(7) The agreement provides, overall, a fluid pre-determined out of court process for damages to have their own focus , their own accountability, that is not co entangled with the mine revenues.
As a condition of permits it would provide for immediate response on a finding that there was no “natural non MCE ( Maximum credible event) Cause”. More importantly it would disallow approval of any extreme or high hazard TSF without up front corporate capacity and commitment of security.  Simply put, applicants without extra deep pockets can’t build extra hazardous TSF’s.  They would have to go back to the drawing board with a less hazardous design or partner up with a deep pocket entity accountable to the permit authority ( ege through pledge of security in actual shares of the parent).  With a collective global commitment for miners and their permitting authorities to account centrally for consequence of loss, it will be possible to refine expected losses beyond what was done in Bowker Chambers 2015.  For now using best available data we can say that a non-mine source of revenue must be available to a specific mine project  to fund a $543 million loss over 10 years.   And of course only a handful of companies are large enough to do that.
(8) this obligation will have to be reflected on the books for Samarco Vale and BHP.  BHP has already taken a $5.2 billion write down for its share of the Samarco which is entirely separate accounting to do only with the present and future viability of the mine and nothing to do with this legal obligation for damages caused by faulty operation of the mine  BHP’s and Vale’s unlimited accountability  for these damages will have to be provided for in its annual statements at least until 2031.  This underscores the absurdity of  licensing TSF’s with an extreme or very high hazard rating to entities with no financial capacity whatsoever to be responsible for its own negligence.  The probability modeling used to justify these permits is actuarially absurd and further exacerbated by the reality that when miners stray from sound practices they dramatically increase the probability of loss and that loss will be felt in the mining affected area. .
The Samarco BHP Vale unlimited liability settlement underscores that the main emphasis, as respects existing and planned TSF’s, must be on preventing loss and not issuing permits or even accepting applications from entities that do not already possess the actual technical and financial capacity to develop a proven financially viable resource  for its projected life.  No community can absorb losses of this scale.  And THIS IS THE SCALE THAT ATTENDS MEGA SCALE SUPER LOW GRADE ORE  PROJECTS LIKE PEBBLE or the rejected Prosperity.
It is of note that Vale & BHP two of the worlds top miners, to protect their own viability, together still had to negotiate even the minimal payments set up to establish minimum compliance.. had to negotiate even  the  minimum annual payments schedule.  What this means is that there are only a handful of mining companies in the world large enough  to enter a compensation and reparations agreement of this scale with any hope of making good on it.
Bowker Associates believes that incorporating this language into all existing permits for extreme and high hazard TSF’s would most likely force large miners to establish some form of joint professionally managed self insured retention facility with an attending underwriting division that independently holds each TSF to the  highest standards.  Vale would not likely  have signed off on going ahead with the $3.1 billion expansion at Samarco knowing there was not adequate TSF capacity, knowing production would push the Fundao to  unacceptable limits, knowing there was no available land on site to create a facility that is big enough, knowing that an upstream dam should never have been used for a facility of this size in the first place,.   ( Of course no local permitting entity would accept certificate of insurance from any such facility..the local entity would rely only on security posted in the form of actual shares in the company guaranteeing the losses)
 Bowker Associates  will try to smoothe  the translation  out a bit more but does not have the resources to commission a full professional translation.  . If you are able to offer smoothe text for any portions would be very grateful if you would share.

Lindsay Newland Bowker, CPCU, ARM Environmental Risk Manager

Bowker Associates
Science & Research In The Public Interest
15 Cove Meadow Rd.
Stonington, Maine 04681

lindsaynewlandbowker@gmail.com

Posted in Analysis TSF Failures, BHP, Measuring Magnitude of Consequence TSF Failures, Samarco Settlement Agreement, TSF Design & Management Standrds, TSF Failure Environmental Costs, TSF Failures Consequence, TSF Risk Management, TSF Risk Profile, Uncategorized, Vale SA. | Leave a comment

Mining Financial Risks Post-“Super Cycle” Point to Escalated & Unexamined Already Accrued Public Liabilities & Environmental Security Losses

cuajone-copper-mine-43-l
Although this Ernst & Young report on “post super cycle” mining business risks speaks from the miners point of view, not from the environmental risk/public liability point of view, the economic realities presented here are what Bowker Chambers (2015) was pointing at (and named) as a major factor in the formation and manifestation of public liability risks.   This report details the dramatic elevation of global business risk in the mining & metals sector.  The steps the global mining cartel  have taken, and are continuing to take, to navigate what Ernst & Young lays out here  leave local communities with existing, operating, financially at risk zombie mines and zombie companies with ever higher levels of public liability risk and ever diminishing possibilities of intervention in time to prevent the irrevocable manifestation of that risk in environmental security breakdowns of unimaginable economic and biologic consequence.
 herculao dam failure_
The knowingly myopic focus of the ICMM, MAC and the other huge mining lobbies on “the mechanics of failure” in the wake of Mt Polley and the Samarco TSF failures is meant to divert public attention and any and  any demands for fundamental legal reform away from interference with the massive consolidation and reallocation of viable global mining assets under the control of a very few very large miners.
Those less desireable financially marginal assets spun off by the global cartel or, that a Zijin or some other notorious violator of human rights and environmental security will take on, will be beyond any control or accountability  to local voices and local rights and beyond the  reach of existing legal frameworks for mining.  Witness the Chinese owned Yukon mine, the Wolverine.  Those deposits  that not even the most avaricious foreigners will view as actual “assets”in this new epoch of metallic mining, will become, really already are, “stranded assets” both in the usual sense of that  in economic terms and  in a broader sense from the point of view  of local community, local budgets and GDP. (In other words what is being thrown as  life lines to these already fatally impaired mineralized deposits and/or what it will take to assure their environmental security, is a net financial loss to the local community and local natural resources.  There’s always a  community economic, social and environmental impact side to any economically stranded mine asset.( witness coal which is a far more advanced cycle  of loss of place in global economy)
 liquid gold
The global mining agenda being executed by the  mining cartel is the consolidation and therefore global market control of potentially still viable metallic  assets with a few large companies.  Non performing assets and assets that are fully depleted in this new era of mining will simly be written off and abandoned  They are already “stranded assets” in the fuller meaning of that economics term that Bowker Associates uses here.   They are already fully accrued but unexamined public liabilities.
The message to public interest and environmental advocacies is clear.  It isn’t enough to speak louder to the statistically irrefutable trend to increasing consequence and severity of loss from mines that have been mis planned, mis developed  and which cannot be  operated profitably even with the huge direct and indirect subsidies from the public sector ( approval of ever larger deferral of royalties and taxes, the push for lacustrine riverine and marine dispoal of tailings & toxic mine wastes etc). Witness among a long list in B.C.,  Taseko , Tulsequah and the Gibraltar Mine.
The message on behalf of environmental security is to pay much more attention to the  fundamentals  of economic viability and to global markets and trends.  To recognize that the present economic epoch of metallic mining puts the economics of mining on a collision course with environmental security at a greatly higher level of public consequence and real public  “off the top of GDP” cost.
Some points of advocacy that call for an essential fundamental  course correction in mining public policy  might include:
(1) a complete and immediate  financial risk assessment of all permitted assets and some sort of legislation to prevent  the abandonment or undesireable transfer of the assets  (ie keeping existing permit holders and their remaining assets accountable to the public consequence they are trying to escape  ( witness St. Barbara’s improved financial condition after  transfer of a trouble asset ( Gold Ridge Mine) to hapless local landowners.  Contray to local landowner expectations there has been no competition to take on this mine and its enormous liabilities). In plain English:..fine sell, but you are still  legally liable for the public liabilities accrued under your tenure unless the entity you want to sell to  has the assets and technical capacity to assume that liability and actually does.including taking immediate responsibility for the corrections necessary to make the asset immediately secure environmentally, and of course actually performing on this commitment ( which has not happened at Tulsequah).
(2) an immediate national and provincial re assessment of mineralized assets against these global economics and a responsible expertly informed  repositioning of the place of metallic mining viz competitiveness in global markets and effect on GDP
(3) a  complete reform of the legal framework for mining to insure that no mineralized asset is given a permit or allowed to submit an application without a peer reviewed proof  that:
(a) the deposit actually is financially viable life of extraction inclusive of and conditioned  on full incorporation of essential environmental security
(b) there is a field proven ( not theoretical or bench proven) technology /BAP available to attain adequate levels of environmental security (see unproven seepage control proposed at Tasekeo’s New Prosperity or the “innovations” to TSF’s of upstream construction that are outside best knowledge/best practice especially Samarco)
(c) the miner has the technical and financial capacity to undertake the proposed development within acceptable boundaries of financial risk.
If these are some of the mining legal framework  reforms which will assure higher levels of accountability to environmental security and public risk, the legislative drawing board must have input from all voices and sectors of expertise and advocacy.
contact: Lindsay Newland Bowker, CPCU. ARM Environmental Risk Manager, Founder & Director Bowker Associates Science & Research In The Public Interest  lindsaynewlandbowker@gmail.com
Posted in Bowker Associates Science & Research In The Public Interest, Catatrophic Tailings Dam Failures, Causes Of Catastrophic Tailings Dam Failures, Environmental Risk Management, financial risk and public liability, Fundao Talings Dam, Germano Tailings Dam Failure, Gibraltar Mine, Global Capital Squeeze In Mining, global cash flow crunch, global copper market outlook, Gold Ridge Mine, Height Limits of Earthen Dams, Highly Valued Natural Resources, lacustrine mine waste disposal, Lindsay Newland Bowker, Measuring Magnitude of Consequence TSF Failures, Metallic Mining Risk Management, mine Company Valutaion, Mine Feasibility, Mine Risk Management, Mining Economics, mining environmental risk management, Mining Financial Feasibility, mining post-supercycle, Mining Regulation, Mining Risk Management, New Prosperity Mine, plutonomy, politics of mining, polluter pays, Prosperity Mine, Public Liability & Financial Risk, Rate of Raise for Upstream Tailings Dams, Responsible Mining, Risk & Public Liability of Tailings Dams, Risk Avoidance & Loss Prevention Metallic Mining, Risk Economics and Public Liability of Tailings Dam Failures, Samarco falha de barragem de rejeitos, Samarco investigação de crimes ambientais, Samarco Mineracao S.A., Science for Sale, Social Premium of Metallic Mining, Tailings Dam Failures, Tailings Dam Risk Management, Tailings Storage Facility Failures, Taseko, TSF Failure Environmental Costs, TSF Failures Consequence, TSF Risk Profile, TSF Risk Profile Globally, Uncategorized, Upstream Tailings Dam Safety | Leave a comment

Samarco Executives May Face Homicide Charges For Deaths In Fundao Tailings Dam Failure

 It was reported on February 5th that Samarco executives may face homicide charges on the basis of victim autopsies and records seized by police.

We have gathered all of the findings from the autopsy reports, in which we determined that the crime of murder had been committed,” said Rodrigo Bustamante, who has been heading up the investigation for the state’s civil police

What is suggested in this report is that the evidence supporting criminal charges for murder  was based on (1) cause of death clearly attributable to the gigantic mudflow (2) that the risks  of failure and its consequence were clearly known and/or  forseeable and that  (3)  not  taking recommended steps to prevent failure .

As part of their criminal investigation, authorities carried out searches on the premises of the Samarco headquarters, in which they collected copies of emails and internal company messages in order to determine whether the company executives know about the impending risk of the dam breaking.

Independent experts warned two years ago that the jointly owned Samarco mine, which collapsed in southeastern Brazil killing 19 people, was not safe.

 

Most of those killed were workers at the mine working on a project preparatory to the merging of the closed Germano and the Fundao by removing the Silenha Dike separating the two .  That plan had not been authorized or approved though steps towards its implementation were underway.  The Silennha dike was one of the structures damaged during the failure.  Some of those may have been employees of the contractor retained by Samarco for this work.

The criminal investigation, presumably through new evidence gathered in the raid on Samarco’s record, may increase the amount of the already initiated $us5.1 billion damage claim.  It was not disclosed whether criminal charges other than murder would also be brought.  A separate lawsuit and investigation under Brazil’s Environmental Crimes Statute has been underway since right after the failure on November 5th.

Still another law suit was recently initiated by  the Federal Office in Linhares near the mouth of the Rio Doce on behalf of fisherman whose livlihoods have been indefinitely interrupted and impaired by the mud flow.

Criminal charges have also been filed against Herculano Mine exceutive for a tailings dam failure there in 2014.

A finding of criminal acts would most likely nullify all or most of the $60 million of the loss previously reported as insured.  Property & casualty insurance , which would include claims fied by homeowners, business owners, farmers and the two states involved where a cause is “an act of God”  would not respond to any claims resulting from criminal acts or fror forseeable and preventable.   Until recently, as usually happens following a mine catastrophe owners were suggesting that the final investigation would show the cause was two small earthquakes quite close to he site of failure.  Bowker Associates has reviewed that data and it appears that both were after the Fundao failure and possibly caused by it.  In recent comments Samarco, BHP and Vale have not referred to the two small tremors as a possible cause of failure.  That would be an unsustainable claim anyway as the dam should have been built to withstand a maximum credible event during its operation and into perpetuity and that is well above 4.5.  The two small quakes were 2.5 and under.

 Claims by victims families and all who suffered damages can still be pursued in civil court and by writing a notice of cliam directly to Samarco at its Corporate Headquarters. And of course, all claims are still be valid, regardless of insurance coverage  but there would be no insurance to respond and it would be that much harder for victims to prepare, file and manage their claims.

Minas Gerais has not required Samarco to set up and fund a claims management litigation support process for victims.  Bowker Associates is investigating whether it is possible to set up a miner funded claims management litigation support process for the victims likely to number in the thousands.  They have enumerated $R 1.2 billion in damages and losses to the two municipalities affected by the failure exclusive of te $US 5.1 billion in envionemntal damages and any payment to families and affected businesses.

O valor consta em relatório divulgado nesta quinta-feira (4), pela força-tarefa montada pelo governo de Minas para apurar prejuízos causados pela tragédia.) The value contained in a report released on Thursday (4), the task force set up by the government of Minas to determine damages caused by the tragedy.( O valor será cobrado da Samarco, que pertence à Vale e à BHP Billiton.) The amount will be charged  to Samarco, which belongs to Vale and BHP Billiton. (No total não estão incluídos danos ambientais e recursos que serão utilizados para o pagamento de indenização a famílias). This amount is nand does not include environmental damages or provision for the payment of compensation to families.

(Conforme o relatório, 320 mil pessoas foram atingidas pela tragédia, que já tem 17 mortes confirmadas.) According to the report, 320,000 people were affected by the tragedy, which already has 17 confirmed deaths. (Duas pessoas ainda estão desaparecidas. Two people are still missing.

“….According to the report, the production chain in the region recorded losses to the private sector of R $ 540,466,816.00, according to information forwarded by municipalities.( As perdas foram por morte de animais, destruição de lavouras, pastagens, máquinas e construções). Losses were due to death of animals, destruction of crops, pastures, machinery and buildings. (Os prejuízos públicos totalizaram R$ 146.066 455,33, principalmente com a prestação de serviços como abastecimento de água, que ficou prejudicado com a lama no Rio Doce.) Public losses amounted to R $ 146,066 455.33, mainly to the provision of services such as water supply, which was damaged by the mud in Rio Doce. (Em relação à infraestrutura pública, a lama da Samarco consumiu R$ 513.755.631,00, com a destruição de estradas, postos de saúde, escolas, e comunidades, total ou parcialmente, como Bento Rodrigues e Paracatu de Baixo, em Mariana.) In relation to public infrastructure, the  Samarco mud flow caused R $ 513,755,631.00, in losses including the destruction of roads, health centers, schools, and communities, in whole or in part, as Bento Rodrigues and Paracatu Low in Mariana”

Samarco has claimed it relied entirely on qualified consultants with recognized expertise for the design and ongoing  management of the failed tailings dam specifically naming Dr. Joaquim Pimeta De Avila who has been a key witness in the police investigation.  They say they received no notice of imminent risk of failure and had no knowledge of any problems that elevated the risk of failure.

Samarco id not meet the Federal government demand for deposit $R2.1 billion of the $Us5.1 billion to provide immediate funding for emergency recovery claiming it has already spent$R2.3 billion in clean up. and is continuing to fulfill its recovery obligations.They also indicated they need more time to post any further large amounts in cash.

Contact: Lindsay Newland Bowker, Founder & Director Bowker Associates Science & Research In the Public Interest lindsaynewlandbowker@gmail.com

Posted in BHP, Bowker Associates Science & Research In The Public Interest, Catatrophic Tailings Dam Failures, Causes Of Catastrophic Tailings Dam Failures, Fundao Talings Dam, Geoesteval, Germano Tailings Dam Failure, Linhares Civil Action Against Samarco, Samarco Murder Charges, Uncategorized | Leave a comment

1 million Cubic Meter Landslide From Ruins of Failed Fundao Dam

 

On January 27 the debris in the site of the former Fundao dam  shifted causing a 10 minute slide of 1 million cubic meters of material out of the site  and necessitating the evacuation of all workers. According to Paul Kiernan, WSJ, Samarco did not report the slide to authorities. The Extraordinary Commission on Dams of Minas Gerais who visited the site on Januray 29th have stated that there is imminent risk of further failure of material from the Fundao site.

This incident is also cited in the Civil Action against Samarco filed on 2/2/2016 by the Federal Prsoecutors Office in Linhares on behalf of fisherman who have suffered and are suffering economic loss of indeterminate future impact.  I was unable to get a Bing Translation from this pdf but understand that all fishing had been suspended as is the annual custom during the spawning of certain important native species.  During the time of suspension fisherman are compensated for agreeing not to fish.  The original failure on 11/5/2015 occurred during this spawning period. It is not clear what impacts the failure had on the protected spawning species or how long I will be before fishing can resume. com .  The public civil action against Samarco on behalf of fisherman cites the release on 1/27/2016 as 960,000 cubic meters. ( less that the 1 million threshold for classification as a “very Serious Failure”  in the Bowker Chambers 2015 classification of severity.

fish killed by mud samarco.png

Fish Killed By Samarco Dam Failure

“Members of the Special Commission on Dams MGSL (Legislative Assembly of Minas Gerais) were to visit the Germano mine in Mariana, in the central region of the state, on Friday (29).( A estrutura pertencente à Samarco continua em pé, mas apresentou trincas após o rompimento de Fundão , em novembro do ano passado.) The structure belonging to Samarco is still standing, but showed cracks after the breakup of Fundão, in November last year. (Agora, os parlamentares querem verificar se o novo vazamento ocorrido na quarta-feira (27) no complexo das barragens não afetou o local.) Now, lawmakers want to make sure that the new leak occurred on Wednesday (27) in the complex of dams did not affect the site”(link to source in original language)

This is only the 36th recorded event in world history of a tailings dam release of 1 million cubic meters or more, the definition set in Bowker Chambers 2015 for  “very serious failure”.   That global study of trends in the severity of  tailings  dam failures  1910-2010 identified 29 authoritatively documented TSF ( Tailings Storage Facility) failures.  Since then a 1937 previously un documented catastrophic failure in Mexico has come to light and we had authoritatively documented 5 new “very serious” failures from 1/1/2010 to 12/31/2015 (including the Samarco on November 5th, the largest ever recorded in world history).

The January 27th post failure release of and additional 1 million cubic meters from the site brings the count of events for the decade ending  on the date of the “latest very serious failure” at Samarco’s  mine to 10 as compared with 7 for the decade ending 12/31/2009 as reported in Bowker Chambers 2015.

Although there are several events in recorded history of multiple very serious failures at the same mine and a few repeated at same TSF with a time interval of a few years, this is the first recorded  time in history 2nd major failure at the same TSF immediately following a first primary very significant release.

According to company statements following the 2nd “very serious failure” on Wedesday January 27th, there are 20 million cubic meters more at the obviously unsecured, usatble  site of the former dam.  There we no statements about  steps being taken to prevent the release of more of this 20 million cubic meters of material remaining in the site of the former Fundao dam.

After the first release of the  former dam on November 5th there was no evidence of any remaining structural component of the Fundao which was put on line c 2008-2010. ( see photo below). In statements after that failure Samrco eventually reported that structural assessment of the other two dams had been undertaken and that both were below the required 1.5 level.  They made no mention of any stability assessment at the failed Fundao site where this second release occurred  on January 27 or of any work planned there  to assess or stabilize any material in the site.  They did not describe or characterize the  material at the site of the former Fundao.

photo of two dams..

Fundao Dam Former Site Immediately After Failure

In their December 2015 report updating site conditions, repair and relief work no mention at all is made of the Fundao  site, only of the damaged Silenha dike and the damaged Santorem.  That report details the “state of the art” surveillance system  and use of drones to monitor stability and safety at the dam sites and makes no mention of the presence of 20 million cubic meters of material within the former  site of the Fundao dam.

This recurrence points to an apparent gap in the overall statutory and regulatory structure presently applicable to stability and safety at the site . There is no police power to force an independent stability assessment and an independent expert opinion prioritizing actions to prevent further damages at a level 30 times greater in magnitude well above the minimum level for “catastrophic”  potential impacts in the  Bowker Chambers 2015 severity classification .  The public continues to remain at the mercy of Samarco’s reassurances that priority in their decisions making post failure is to prevent further downstream damage.

The New Zealand parliament found itself in this same situation in 1996 when it became clear that the miner was not taking proper action to prevent a complete failure of the tailings dam at Golden Cross.  The flaw in the dam was known at acquisition by the miner and a focus of community demands for its proper indepedendent inspection and repair.  The miner, not very experienced and trying to build a global presence through acquisitions, had under estimated the cost and scope of work necessary to repair the known flaw.  When the inevitable and expected landslide occurred without breaching the dam the parliament met to deliberate whether they had given themselves sufficient power to intervene and realized they had not. In that case fortunately the miners excessive debt and other financial woes came to the rescue of the public interest and court proceedings provided $53 million out of assets towards the damages at the dam. which was successfully repaired and closed without a rupture.

This gap exists in almost all mining statutes and could be cured through creation of independent expert panels funded by applicant miners and those licensed via the overall regulatory framework for mining,  accountable to neither  regulator nor miner,  with clear accountability to investigate and direct action .

It is important to note that Samarco did have an Internal Tailings Review Panel ( membership and details unknown) which functioned as it should in red flagging  emerging stability and safety issues and offering alternative.  Where the ITRP adivce didn’t fit with Samarco’s greater commitment to maintain production costs at a certain level, the panel was ignored. This in essence is the testimony of Dr. Avila to police investigating a possible Environmental Crimes action against Samarco.

As that investigation progresses, there is still no way under existing law to compel independent assessment and action at Samarco’s expense of the actual security and stability of the former Fundao site and the damaged Dike and Santorem.

OLYMPUS DIGITAL CAMERA

Town Of Mariana Where Samarco’s Failed Mine Located

 

We will be updating this post to bring in links to the referenced Golden Cross parallel, to Samarco’s previous statements and to the confirmation of  Samarco’s independent expert panel.  Most of this is already provided in other posts on the Samarco at this site.  Not all of our commentary and analysis is via this site.  Most, in fact is in a running e-roundtable with a multi disciplinary global network of experts, press, other researchers and other pubic interest groups. It is from this “e roundtable” that we will bring in the links.

As always, please contact me directly at lindsaynewlandbowker@gmail.com with any corrections, clarifications or further information related to this post.

February 2 2016 Stonington Maine

Lindsay Newland Bowker, CPCU, ARM, Environmental Risk Manager

Founder & Director Bowker Associates Science & Research In The Public Interest

 

 

 

 

 

 

 

 

 

We will add to and update this post with refernce

Posted in alegria mine, Analysis TSF Failures, Bowker Associates Science & Research In The Public Interest, Brazil 's High Grade Iron Ores, Causes Of Catastrophic Tailings Dam Failures, corporatocracy, Environmental Risk Management, Fundao Talings Dam, Germano Tailings Dam Failure, Height Limits of Earthen Dams, Highly Valued Natural Resources, Lindsay Newland Bowker, Linhares Civil Action Against Samarco, Measuring Magnitude of Consequence TSF Failures, Metallic Mining Risk Management, Mine Feasibility, Mine Risk Management, Mining Economics, Mining Environmental Crimes, mining environmental risk management, Mining Financial Feasibility, Samarco falha de barragem de rejeitos, Samarco investigação de crimes ambientais, Uncategorized | Leave a comment