Samarco tailings breach underscores need for industrywide best practise

TORONTO (miningweekly.com) – On November 5, there was a large, destructive breach of tailings dams at an iron-ore mine run by Samarco Mineração, in the Brazilian state of Minas Gerais. It was reported that about ten people had lost their lives, while hundreds more had to be evacuated. Much of Bento Rodrigues village was swept away.

Vale and BHP Billiton both hold 50% stakes in Samarco. On November 17, it was announced that $260-million had been set aside for an emergency fund. “Our thoughts are with the people of Samarco, the affected community and with the people of Brazil,” BHP Billiton chairperson Jac Nasser stated on November 8.

The costs of damages and reputational harm caused by a tailings breach can be immense; it was imperative mining companies learn from this incident and other recent examples, such as the breach at Mount Polley, in British Columbia, in August 2014, Norton Rose Fulbright associate Michael Torrance told an audience at OntheGround recent Mine Latin America seminar.

“My scenario is not necessarily particular to Samarco; it’s a situation that can occur anywhere in the world,” he added.

AFTERMATH
Companies with tailings considerations should have ensured inspections were both regular and in-depth. Any potential weaknesses identified, either on the ground or within health and safety management structures, should have been acted on immediately.

Therefore, the first questions arising from a tailings breach was whether any problems had been suspected or identified before a breach. “[This would] be tied back to the issues of effective management and whether or not warnings had been acted upon,” Torrance said.

In addition, a company’s disaster modelling would be assessed, alongside any emergency response plans. For example, did the company have an evacuation plan for nearby communities that could be affected by a possible breach? Had it established a warning system for these people? 

Surrounding these questions, day-to-day policies and procedures with relation to tailings would be investigated, usually through the prism of local and international standards. Corporate structures with a bearing on health and safety compliance would come under scrutiny as well.

The reputational damage of a breach could be immense for a company. “And this is when crisis management becomes critical,” Torrance noted.

If the disaster had affected a subsidiary, a parent company must be willing to assist or take over responsibility quickly and firmly. Often, the scale of tailings breaches have been beyond a subsidiary’s ability to cope without support from a parent. Failure to promptly offer this support widens the scope of criticism.

With regard to involuntary resettlement planning, companies should look to standards already in place, such as the International Finance Corporation’s performance standards that set out best practises in this field.

LEGAL MATTERS
Host-country liability would play an important role in determining the level of potential fines. “Brazilian prosecutors are now talking about potential liability in the region of more than $300-million [for Samarco],” Torrance said.

There was also growth in the level of extraterritorial liabilities for companies. “We’ve had case law where international torts were the subject of claims in Canada. They’ve used the existence of industry best practice and international standards, setting the benchmark for the standard of care companies ought to follow,” he said.

However, Torrance stressed that the law in these matters was still in a state of flux, particularly in relation to issues surrounding the duty of care and the extension of this from a subsidiary towards a parent company.

The next few years were likely to witness further clarification and precedence. “There is also some new and evolving case law with respect to foreign judgments,” he added. “If there are civil liabilities attached, can that be enforced in a country such as Canada, Australia, or the UK? Increasingly, this is being attempted and, again, the law is very much in flux.”

The legal framework being built up has also been informed by the Canadian government endorsing certain international standards viewed as the most pertinent in this field, including the environmental health and safety guidelines of institutions like the World Bank.

In addition, large banks also considered these standards when thinking about investing in a mining company and its projects. “There are a lot of synergies and overlap that are drivers for the adoption of best practices globally,” Torrance said.

RIGHT PLAN, RIGHT PEOPLE
A company should prioritise hiring the right personnel to conduct investigations of tailings and waste storage facilities and to build the right disaster models, Hatch regional director tailings and mine hydrology Siavash Farhangi noted.

“Mines produce different waste streams; waste rock, tailings and other material,” he said. “To come up with a solution for addressing the waste streams produced, a company needs a team of specialists with expertise in different areas.”

There were various models to consider with special reference to the type of operation. Waste can be disposed of by using a disused openpit, or as backfill in underground mines. In some instances, it can be disposed offshore and co-disposed with other waste streams.

In relation to tailings, questions surround dewatering and climatic conditions. For example, was the operation in an arid part of the world where dry tailings stacking could be feasible?

The various stages of project development were also important. These allowed companies to fine-tune and adapt their waste disposal planning before construction. Companies also gained a better understanding of the costs that could be involved.

Companies that jumped ahead in development stages must be aware of hidden dangers. For example, moving from early stages to feasibility – without undertaking a prefeasibility study – might cause trade-offs. “Maybe the options you then select are not the most optimal for you,” Farhangi cautioned.

Even when designs are completed, quality control and oversight must continue, especially during a mine’s construction and building phases. “You need inspections, maintenance and monitoring during construction and operations; you need to ensure that the impoundment, the structure of the tailings facility, is performing as per its design,” he stressed.