I. Introduction
The collapse of the Fundão tailing dam, owned by Samarco (a joint venture between the mining companies Vale and BHP Billiton), occurred on 5 November 2015. It is considered the worst socio-environmental disaster in the history of Brazil, unleashing over 48 million cubic metres of iron ore rejects, claiming 19 lives, leaving thousands of people displaced, and destroying several cities.Footnote 1 Once it entered the Doce river, the toxic waste travelled over 500 km through two states (Minas Gerais and Espírito Santo) and reached the Atlantic Ocean, contaminating the marine life, soil, riverbanks and vital sources of water supply with heavy metals.Footnote 2
Right after the disaster, instead of making all possible efforts to prevent further harm, public authorities and the three companies adopted a defensive posturing to avoid investigations on the levels of heavy metals in the water and on the causes of the collapse.Footnote 3 The humanitarian relief measures undertaken were not sufficient to meet the needs of the affected communities.Footnote 4 As a result, thousands of individual and collective lawsuits were filed, both by individuals affected by the disaster and public authorities, such as the Public Prosecutor’s Office and the Public Defender’s Office. One of the legal claims was filed by the Federal Union,Footnote 5 joined by other public law entities,Footnote 6 against Samarco, Vale and BHP Billiton, seeking approximately US$4.7 billion in damages. In March 2016, without holding any consultation with the affected communities, the parties in this lawsuit signed a settlement agreement to remedy the disaster.Footnote 7
This piece will analyse the remedy mechanism. It will begin by presenting the process of negotiation of the 2016 agreement, describing the functioning of the mechanism and the attempts of improvement carried out by the Public Prosecutor’s Office through two subsequent settlement agreements signed over the course of 2017. The second part will focus on the most recent settlement agreement, signed in June 2018, creating a participatory structure through which the affected communities may recommend adjustments to the remedy programs. Finally, the piece will identify measures that may improve the affected communities’ access to remedies for harms caused by the dam collapse.
II. Remedy Mechanism in the Doce River Case
Rights holders who suffer gross human rights violations should not be treated merely as recipients of remedies. The United Nations (UN) Working Group on Business and Human Rights, in interpreting what an effective remedy means under the UN Guiding Principles on Business and Human Rights, stated that rights holders should also actively participate in the set-up, assessment and operation of remedy mechanisms.Footnote 8 This is particularly important in cases of human rights violations committed by business enterprises, given the need to level the playing field between enterprises and the affected people.Footnote 9 The participation should occur before the implementation of the remedial mechanism, so the parties can co-create and jointly design it.Footnote 10 However, this did not occur in this case.
On the contrary, the mechanism to remedy the Doce river disaster was created by a settlement agreement signed between the three involved companies and the Brazilian governmentFootnote 11 without any consultation or participation by the affected communities. Nevertheless, the 12th Federal Court of Belo Horizonte ratified this settlement agreement in May 2016. The agreement was intended to be an umbrella agreement under which the parties would develop 41 remedy programs. It also created the Renova Foundation (Renova) and the Interfederative Committee (CIF) – the two legal entities responsible, respectively, for implementing and monitoring the remedy programs.
Civil society organizations, scholars, members of the Public Prosecutor’s Office and the Public Defender’s Office, and representatives of social movements and the affected communities strongly criticized the initial mechanism.Footnote 12 The main criticism referred to the lack of participation of the case’s most important stakeholders: the affected communities. They did not participate in the negotiation of the settlement agreement and there were no representatives of the affected communities in the bodies with decision-making power within the structure of Renova and CIF.
In response to the 2016 settlement agreement, the Public Prosecutor’s Office filed a second lawsuit, this time against the three companies and the Brazilian authorities who signed it. This lawsuit sought the annulment of the 2016 agreement and approximately US$37 billion in damages,Footnote 13 which led the Regional Federal Court of the 1st Region, the appellate court level, to cancel the earlier judicial decision ratifying it. However, the Brazilian State and the involved companies continue to apply the settlement agreement as if it was still enforceable. Renova and CIF are operating and implementing the remedy programs according to the 2016 agreement’s provisions, causing systematic human rights violations.Footnote 14
Many of the concerns expressed from the outset have proven to be true. An agreement reached without any consultation with the affected communities, civil society organizations, and social movements was not able to deal with the complexities of social reality, aggravated by the damages caused by the disaster. CIF, far from the reality of the affected territories, was not able to effectively supervise Renova’s activities and their compliance with legal regulations. In addition, the power to design, approve and implement the remedy programs remained with people appointed by the involved companies within Renova.
Under the provisions of the 2016 agreement, Renova has the authority to determine: (i) what losses will be remedied; (ii) what type of remedy will be provided for each loss; and (iii) what would be the accepted means of evidence to prove that a certain person was affected. People seeking to be recognized as affected are required to respond to a questionnaire of almost 600 pages with hundreds of questionsFootnote 15 and bear the burden of proving the damage they suffered.Footnote 16 Moreover, the eligibility criteria to determine who should be registered as affected is not transparent. As a result, almost three years after the disaster, many communities and individuals are still struggling to be recognized as affected by the disaster, which is the very first step of the remedy process.
Once individuals and communities are registered as affected, they may adhere to the Mediated Compensation Program seeking out-of-court monetary compensation. Within the program, the affected people do not have free legal advice, they are offered compensation far below what is adequate,Footnote 17 and are required to waive any right to a future claim. Although Renova recognizes only a limited list of losses subject to remediation,Footnote 18 it requires the affected people to sign individual agreements containing clauses discharging the three companies from all the losses that may arise from the disaster, even future ones. Still, the mediation program has a high adhesion rate, given the sluggishness and unpredictability of judicial remedies in Brazil.
In the second lawsuit, the Public Prosecutor’s Office and the three involved companies signed two other agreements over the course of 2017. The 2017 agreements provided for the hiring of experts: (i) to assess the effectiveness of the programs developed thus far; (ii) to conduct a complete impact assessment of the disaster; and (iii) to implement technical assistance committees to advise the affected people throughout the remedy process.Footnote 19 The complete impact assessment of the disaster is still underway, which will provide all the actors involved in the case with a better understanding of the extent of the damage and the measures needed to remedy all the losses. The technical assistance committees are intended to facilitate the affected communities’ access to relevant information.
Concerning the technical assistance committees, the 2017 agreements established that each affected territory will appoint a committee consisting of experts in different areas to advise them throughout the remedy process. According to the 2017 agreements, entities providing technical assistance, as well as the natural persons hired by them, should be independent of the involved companies. A recent judicial decisionFootnote 20 amended such provision to add new and illegitimate eligibility requirements to the technical assistance committees. In disregard of the affected communities’ civil and political rights, this court decision established that the technical assistance committees should also be independent from religious organizations, human rights non-governmental organizations, political parties, social movements, and other groups already engaged on the Doce river case. The decision is still subject to an appeal, but it hinders one of the main tools that is available to the affected communities to defend their rights.
Finally, the 2017 agreements also provided for the assessment of the effectiveness of the remedy programs. According to Ramboll (the company hired to conduct the assessment), while the governance structure of Renova and CIF may meet legal requirements and traditional models of command-and-control regulations, it fails in creating adequate spaces of dialogue and participation.Footnote 21 The evaluation report also states that the remedy mechanism should focus on building the resilience of the affected communities, guaranteeing full remediation.Footnote 22 Therefore, this first evaluation emphasized the need of adjusting the remedy programs, improving the governance structure and enhancing the affected communities’ free and informed participation in the program’s design and implementation.
The 2017 agreements – especially before the changes on the technical assistance committees’ provisions – improved the remedy process by minimizing the power imbalances between the parties involved. However, the affected communities did not participate in the negotiations of any of these provisions, nor could they choose who would be hired to conduct the impact assessment of the disaster. Therefore, the affected communities were still in need of formal spaces of participation in the decision-making process of the remedial mechanism. After repeated requests for public consultation and participation, the Public Prosecutor’s Office, the Brazilian authorities, and the three involved companies signed a new agreement in 2018 to adjust the governance of the remedy mechanism, which is discussed below.
III. Trying to Right the Wrongs: a Participatory Mechanism for the Affected Communities
The governance agreement signed in June 2018 is intended to enhance the affected communities’ participation. Under the provisions of the agreement, the participation may occur in two different manners: (i) through representatives sitting in the bodies with decision-making power in both Renova and CIF; and (ii) through local commissions composed only by affected people in charge of recommending adjustments to the remedy programs at local level. The idea behind this structure is that, on the one hand, a remedy mechanism would be more efficient when a single entity assembles the power to develop and implement remedy programs to the entire area affected by the disaster. On the other hand, given the extent and diversity of the losses, as well as the number of people affected, it is important to establish local decision-making spheres, adjusting the remedy programs to the specific needs of each community.
Despite the good intentions and ignoring the lessons learned after the previous agreements reached in 2016 and 2017, the Public Prosecutor’s Office and the three involved companies negotiated the governance agreement behind closed doors. The affected communities did not participate in the design of the mechanism, no draft version of the agreement was made publicly available before its conclusion, and the companies and the Brazilian government conceived this structure by adopting a top-down approach.
With regard to the local commissions, the governance agreement adopts territorial divisions of the affected areas in order to determine the territorial scope of each commission. While it is positive that the agreement assigned to the communities the power to establish the procedure of election of the members of each commission, the artificial territorial division may lead to serious distortions and further delays in the development and implementation of the remedy programs. In addition, the local commissions do not issue binding decisions within their territory. Their power is limited to making recommendations to Renova regarding the remedy programs.
The representatives sitting in Renova and CIF are appointed indirectly by regional chambers consisting of several local commissions. As described above, the affected communities, divided into different territories, will form local commissions. The commissions must appoint representatives to integrate six regional chambers, and the chambers appoint the representatives to integrate Renova and CIF. The affected communities, however, claim this model to be insufficient to cover the diversity of contexts of each territory. Minority communities may be under-represented in this structure, reinforcing the idea that the creation of a participatory structure without previous and meaningful participation is likely to undermine the entire remedial mechanism.
Finally, the representatives of the affected communities are a reduced minority in the body with decision-making power within Renova’s structure. The Board of Trustees, which has the authority to develop and approve the remedy programs, is now composed of nine members: six of them appointed by the companies, one of them appointed by CIF, and only two appointed by the affected communities. This imbalance neutralizes the representatives of affected communities sitting in this body and hinders their ability to effectively influence the remedy process.
IV. Conclusion
This new governance structure established under the 2018 agreement has not been implemented yet. Although ratified by the judiciary in August 2018, neither CIF nor Renova have taken action to include the affected communities’ representatives in their structure. This participatory mechanism may still prove to be effective, but given the aforementioned shortcomings, the communities still face serious obstacles in accessing fair remedies. It is also worrisome that the companies and the Brazilian government keep following the same pattern of not consulting with the affected communities during the creation of the remedy mechanism. Ensuring their effective participation is critical for the mechanism to fulfil its goal of remedying the damage caused by the disaster.
With that purpose in mind, some measures should be adopted. First, technical assistance committees freely chosen by the affected communities should be effectively implemented. Second, representatives of the affected communities should integrate the bodies with decision-making power within Renova and CIF’s structure in sufficient numbers to influence the remedy programs. Third, the local commissions should have the power to issue binding recommendations. This would allow affected people at the local level to take part in the mechanism and ensures that the specifics of each community are taken into account.
Such improvements may result in a remedy mechanism to be used as model for future socio-environmental disasters. Companies involved in such cases should provide the affected communities with specialized technical support, including legal counsel, which is critical for the affected communities to have an informed understanding of all the information that affects their rights. The communities should also have the power to determine the remedial measures that will be provided. Therefore, legal entities in charge of developing remedy programs in future cases should mainly consist of representatives of the affected communities vested with decision-making power. Moreover, in large-scale disasters, local decision-making spheres should be set up, allowing the affected communities to develop remedy programs that are tailored to their needs.
