This follows a series of events following the collapse of the companies’ tailing dam in November last year.
In March this year Samarco, Vale S.A and BHP Billiton Brasil reached an agreement with the Federal Government of Brazil, the States of Espirito Santo and Minas Gerais and certain other public authorities
The Framework Agreement provided for the restoration of the environment and communities affected by the Samarco dam failure and suspension of the BRL20 billion civil public claim by the Brazilian authorities against the three companies.
The Agreement settlement was broken down as follows:
- During 2016, Samarco will contribute US$500 million to the foundation, less the amount of funds already spent on, or allocated to, remediation and compensation activity.
- In 2017, Samarco will contribute $300 million and another $300 million in 2018.
- The amount of annual contributions for each of the years 2019, 2020 and 2021 will vary between a minimum of $200 million and a maximum of $400 million), depending on the remediation and compensation projects which are to be undertaken in the particular year.
The term of the agreement is 15 years, renewable for periods of one year successively until all obligations under the agreement have been performed.
The Framework Agreement was subject to ratification by the courts in Brazil. On 5 May 2016, the Framework Agreement was ratified by the Federal Court of Appeal in Brasilia.
The Federal Prosecutors’ Office appealed against the ratification of the Framework Agreement. On 30 June 2016, the Superior Court of Justice in Brazil issued an interim order suspending the decision of the Federal Court of Appeal to ratify the Framework Agreement.
The effect of the interim order of the Superior Court of Justice is to reinstate the claim.
BHP Billiton Brasil intends to appeal the decision of the Superior Court of Justice.
In the meantime, Samarco will continue to support the long-term recovery of the communities and environment affected by the dam failure.