Brazil dam collapse victims take TÜV SÜD to court

TWO years after the fatal collapse of a Vale dam, victims have brought landmark action against TÜV SÜD, the German technical services company that was responsible for certifying the dam’s safety, in Germany. TÜV SÜD does not believe that it is legally responsible.

The class action is being brought on behalf of the municipality of Brumadinho, represented by its Mayor Avimar de Melo Barcelos, and six family members of one of the victims.

On 25 January 2019, a Vale dam used to store mining waste collapsed releasing a torrent of muddy slurry that buried the surrounding area, including the site’s administrative building and cafeteria, reaching as far as a local community. Since the collapse, 259 people have been confirmed dead and 11 are still missing.

The claim alleges that TÜV SÜD certified an unsafe tailings dam and applied safety standards that didn’t match international or German standards, allowing continued operation and leading to the collapse.

Previously, an executive summary corresponding to a report which was commissioned by Vale found that the dam was certified safe with a factor of safety (FS) below satisfactory levels.  FS is a measure used in engineering design to represent how much greater the resisting capacity of a structure is compared to the relative assumed load.

In a document filed relating to the claim in Germany, it was stated that the German technical services provider acted as a “complacent assistant of the mining company, in order to keep in business with this important client [Vale]”. These documents were filed on behalf of the claimants by local counsel in Germany, separate from those responsible for the class action.

During the time TÜV SÜD was conducting safety reviews for Vale, it was also contracted to provide design services. Previously, it was reported that prosecutors in Brazil accused TÜV SÜD and Vale of colluding to misrepresent the safety of the dam.

The filed document additionally highlights that investigations initiated by Brazilian prosecutors revealed that TÜV SÜD could not have carried out adequate safety certification as they were not supplied with complete documentation about the work carried at the dam before it was hired. Similarly, Vale reportedly withheld information from Brazilian mining authorities that could have prevented the collapse.

In response to the recent claim, TÜV SÜD argues that it is not legally responsible for the collapse, and that the stability declaration issued by its Brazilian subsidiary together with mine operator Vale complied with Brazilian law and standards at the time.

However, the aforementioned document points out that TÜV SÜD reserved an additional €92.9m (US$112.6m) for litigation costs, as revealed in its 2018 annual report, released in August 2019. This money, it added, could be considered an admission of liability.

The recent class action is being brought on behalf of the claimants by international law firm Pogust, Goodhead, Mousinho, Bianchini & Martins (PGMBM), along with German law firm Manner Spangenberg.

According to the prosecutors, Brumadinho Mayor Avimar de Melo Barcelos, commented: “Our people have been crying out for justice for two years now. But the corporate entities responsible for this crime-tragedy have been largely protected from the consequences of their actions.”

The class action law firms say TÜV SÜD is liable for significant damages.

The claim is being brought in Germany despite the collapse occurring in Brazil. This is possible because under international law, victims are entitled to bring action against TÜV SÜD in the country it is based.

The legal process is expected to play out in courts this year, with more documents expected to be filed as the case progresses.

Tom Goodhead, Managing Partner of PGMBM, said: “Our evidence shows that TÜV SÜD certified this dam as safe when it most certainly was not – a fact they knew then. This is a disgusting case in which corporate corruption and willing negligence go hand in hand, directly leading to 270 deaths and the destruction of communities, families, livelihoods and a precious environment.”

“[T]hey still have blood on their hands to this day.”

TÜV SÜD said that it is “deeply affected by the tragic collapse of the dam in Brumadinho, Brazil, on January 25, 2019. TÜV SÜD's thoughts continue to be with the victims and their families”.

However, given it believes it complied with Brazilian laws and standards, the services provider said it will “defend itself against the alleged charges”.

“TÜV SÜD is still very much interested in clarifying the facts of the dam breach and continues to offer its cooperation to the responsible authorities as part of the ongoing investigations.”

Both Brazilian and German prosecutors have been investigating the roles Vale and TÜV SÜD played in the disaster. In February 2020, a Brazilian judge accepted homicide and environmental crime charges filed against 16 people – including former Vale CEO Fabio Schvartsman.

According to the document filed in Germany, the claimants cannot access adequate justice in Brazil because “the local legal system is totally ineffective, which can lead to decades waiting for a decision from the first degree of jurisdiction”.