Controversies

Brazil​

Vale understands that mining in Indigenous Land may only take place with the Free, Prior and Informed Consent (FPIC) from the indigenous people themselves, and in light of a regulatory framework that contemplates the participation and autonomy of indigenous people.

Vale does not currently carry out any mineral research or mining activities in Indigenous Lands in Brazil, whether mining titles or legal expectations. Furthermore, Vale's production plan does not consider mineral resources or mineral reserves in Indigenous Lands in Brazil and, for this reason, the new Bill 191/2020, if approved, will not impact its business.

Nowadays, Vale develops activities in traditional lands in countries where there are regulations in force, such as Voisey's Bay in Canada, always with strict observance of the principles mentioned above, with emphasis on Free, Prior and Informed Consent (FPIC).

Brazil​

Vale currently has only 01 (one) mining title granted that partially interfere in Indigenous Land in Brazil. Vale recently filed with the regulatory Agency the partial renounce of the interfering portion of this mining title concession, pending approval only. There are 02 (two) mining title requirements remaining in Indigenous Land, obtained before the homologation of the respective Indigenous Land, when Vale was a state-owned company.

Also, as an inheritance from the state-owned period, Vale has over 29 (twenty-nine) processes of Research Request in Indigenous Land in Brazil, i.e., processes that refer to the expectation of rights, but so far none of these titles (Research Permits) were granted. It is noteworthy that Vale has never carried out activities in these regions due to the absence of the title and regulation by the Government. Besides, most of these research requirements were filed before the approval of the respective Indigenous Lands.

Although there is a greater number of cases on behalf of the Vale Group companies on the website of the National Mining Agency (ANM), most of these cases were subject to Vale's renounce/withdrawal, pending only ANM approval or rejections by the Agency itself.

Pico Mine, Brazil

In February 2015, Ouro Verde Locações e Serviços S.A., which provided transportation services for finished products between Pico and Fábrica mines to Vale S.A., had their workplaces, both owned by Vale, inspected by Ministry of Labor and Employment, currently the Ministry of Economy.

After said inspection, the Ministry of Labor pointed out the non- compliance with several labor obligations related to the conditions of the locker room, cleaning, access to water, working hours, among others.

Upon learning of the notifications, Vale followed all corrective measures and subsequently terminated the contract with the transport company. It so happens that, adopting an extensive interpretation of the legislation, the Ministry of Labor and Employment considered that the outsourcing of the transport activity was illegal, under the argument that it would be considered among the main activities of the contracting company and, therefore, the employees of the carrier company should be considered Vale's employees. It is important to highlight that the service provider's employees were never deprived of the right to come and go, were properly registered and received transportation to and from their homes, in conditions superior to those provided by public transport, had their work cards signed, they did not have their documents withheld, nor indebtedness to the company; being certain that they were not kept in degrading conditions analogous to slave labor. Due to the extensive interpretation of the legislation, adopted by the Ministry of Labor and Employment, Vale was assessed for alleged irregularities committed by Ouro Verde, including the illegality of outsourcing and maintaining employees in conditions similar to slave labor. As the assessments did not match the reality of the work of those service providers, the company presented defenses and administrative appeals.

Since 2016, Vale has reinforced the work of internal groups for the identification and realization of continuous improvements in facilities and workplaces, and the improvements and their results have been monitored in meetings of leaders in the areas. In addition, the contract management area reinforced inspections on contracted service providers to verify compliance with labor criteria. These actions are in line with Vale's position of repudiation of any and all forms of disrespect for human rights and unworthy working conditions; and aim to avoid, and ensure, that cases like Ouro Verde do not reoccur.

Also in 2016, Vale filed annulment actions against the infraction notices that addressed the (i) illegality of outsourcing and (ii) the maintenance of employees in conditions similar to slavery.

Firstly, it obtained an injunction to suspend the effects of the assessments until the final decision in the judicial decisions handed down in the records of the proposed annulment actions. In December/2018, the 6th Panel of the Regional Labor Court of MG accepted Vale's appeal, to annul the tax assessment notice on illegal outsourcing and recognize the validity of hiring transport services. Since outsourcing is lawful, there is no longer any basis for drawing up the tax assessment notice due to a degrading work condition against Vale, given that it was recognized that the workers were not Vale employees.

However, despite the fact that the employment relationship between Vale and the employees of Ouro Verde Locações e Serviços S/A was removed, this fact had given rise to Vale's assessment of the degrading work conditions, the 4th Panel of the Regional Court MG's Labor Court, through a non- unanimous decision, maintained the tax assessment notice. Vale is taking the appropriate legal measures to reform it, given that it is inconsistent with the decision issued by the 6th Panel of the same court.

Carajás Railroad, Brazil

The Carajás’ Railway (EFC) is 892 km long, connecting the largest open-pit iron ore mine in the world, in Carajás, in southeastern Pará, to the Port of Ponta da Madeira, in São Luís (MA). Through its tracks, 200 million tons of cargo and 350 thousand passengers are transported per year, representing the main means of transporting passengers and fuel between the states of Pará and Maranhão. Inaugurated in the 1980s, the Estrada de Ferro Carajás leads the ranking of the most efficient railroads in Brazil thanks to constant investment in technology. 

In the states of Maranhão and Pará, the railroad passes in the vicinity of different traditional communities. They are indigenous peoples, quilombolas and coconut breakers. These populations are recognized for their unique relationship with the territory, which involves not only physical and socioeconomic aspects, but also cultural and spiritual ones.

Vale acts with respect for the rights of these populations, managing risks and impacts of its operations and proposing actions, in a participatory manner. 

Since the 1980s, as part of the construction of the Carajás Railway, Vale has maintained a relationship with these populations, which is carried out by dedicated professionals, with indigenous training and experience, in the public, private and academic sectors.

Indigenous People

Vale signed agreements with the Awá, Guajajara and Ka´apor indigenous peoples of the Caru, Rio Pindaré, Awá and Alto Turiaçu indigenous peoples, which have an interface with the EFC's area of influence in the state of Maranhão. These agreements support actions on territorial protection, preservation and conservation of natural resources, economic sustainability, income generation, cultural and institutional strengthening, productive activities and others that contribute to the ethnodevelopment of these communities. Fundação Nacional do Índio, a governmental entity responsible for the protection of the rights of indigenous peoples, and which appears as an intervening party in the different instruments entered into, participated in the development and monitoring of these agreements.

Among the actions carried out by Vale, on a voluntary basis, was support provided for the construction and supply of equipment for 03 (three) Basic Health Units, in partnership with the Special Indigenous Sanitary District (DSEI) of Maranhão and BNDES - Banco Nacional do Desenvolvimento (“BNDES”). The units were installed in two villages of the Awá people and a village of the Guajajara people, located in the Indigenous Territory Caru in the state of Maranhão.

The specificities of indigenous peoples are respected throughout the expansion process of the Carajás Railway (EFC) in accordance with Brazilian legislation, international principles, and Vale's internal policies. The works for the expansion of the EFC started only after the conclusion and approval of the Indigenous Component Study (ECI – Estudo do Componente Indígena in Portuguese) - carried out with the direct participation of indigenous peoples, external consultancy and through FUNAI, a complementary part of the environmental licensing process for the project expansion, conducted by IBAMA.

The Specific Studies (ECI) were conducted by independent consultancy with the participation of the indigenous peoples and addressed important adjustments to the original project, including the non-installation of construction sites with employee housing in stretches close to these communities, and the hiring indigenous workers to operate in these same stretches, thus reducing the impact in these locations.

As expected, the Basic Environmental Plan for Indigenous Component (PBA CI) is still being implemented for the Awá and Guajajara Indigenous Peoples.

In another stretch of the EFC, in the state of Pará, in the municipality of Bom Jesus do Tocantins, Vale has been in contact with the Parkatêjê, Kyikatêjê and Akrãtikatêjê Indigenous People, from the Mãe Maria Indigenous Land, since the 1980s.

Over the years, different forms of partnership and support for indigenous people have been formalized, including actions in the areas of health, education, productive activities, protection, and surveillance.

Vale has always valued the respect for these populations and  keeping a permanent relationship and dialogue. In this context, it supported the elaboration of the Life Plan of the indigenous people of the Mãe Maria Indigenous Land, with a participatory methodology that promoted reflection and discussion on strategies to be adopted in order to guarantee the quality of life of these peoples and guide ongoing projects and activities.

As part of the environmental licensing process for the duplication works of the Carajás Railway, the Basic Environmental Plan for the Indigenous Component (PBA CI) is being prepared, which is conducted with the support of specialized consultancy and previously approved by the indigenous peoples. The PBA aims to propose programs to mitigate the impacts of the duplication of the EFC, in the stretch  that borders the Indigenous Land. Among the programs foreseen in the PBA, we highlight those of productive activities, cultural strengthening, strengthening of indigenous organizations, territorial protection, environmental and territorial management, among others.

In the same way that the indigenous people approve the processes related to environmental licensing, they also authorize all Vale activities that may impact them. This occurs in line with the Company commitments laid out in  its Global Human Rights Policy, which is aligned with the main international requirements related to indigenous rights - such as FPIC (Free Prior and Informed Consent).

Quilombola Communities

With the quilombola communities of Maranhão, the Quilombola Component Study (ECQ) was prepared in a participatory manner and with the monitoring of the competent governmental authorities, which included the territorial, socioeconomic, and cultural characterization of the communities located at a distance of up to 1km from the EFC. The studies made it possible to identify and assess the potential impacts of the railway duplication works and to propose the Basic Environmental Plan Quilombola Component (PBACQ) to mitigate the potential impacts of these works.

These programs involve a set of territorial protection and management actions, communication, environmental education, cultural and institutional strengthening. Committees were established according to the social organization and policies of these communities, which plan the execution, monitor and evaluate the actions developed, considering the objectives, expected results and related indicators of each program. The PBACQ was developed and is being carried out in a participatory manner, guaranteeing the listening of quilombola communities and the possibilities of monitoring actions, evaluating their results and planning activities for each year of work.

Despite pending the authorization to carry out the PBACQ in 07 of the 15 quilombola communities with which we have a relationship, due to questionings from the DPU (Federal Public Defender Office) within the scope of the EFC licensing process, Vale remains engaged with them. Several projects were implemented, including support for productive activities, cultural heritage, health and infrastructure, such as installation of a water supply system, fish farming projects, agro-industries and agro-ecological programs. Vale reiterates its commitment to comply with the determinations in the environmental legislation and  requested the release of the seven communities so that it can also carry out the actions provided for in the PBACQ. The company awaits the response of the competent bodies.

The respect for the way of life of Indigenous Peoples and Traditional Communities is guided by Vale's Global Human Rights Policy. The Policy is aligned with the main international standards related to the theme and guides the work of the professionals responsible for the relationship with these populations. Vale believes in supporting ethno-development and in respectful, mutually beneficial, and long-term relationships.

Onça Puma Nickel Mine, Brazil

It is important to emphasize that Vale does not carry out mineral research or mining activities of any kind on indigenous lands in Brazil and strictly respects the current legislation. The company reinforces that it respects the FPIC (Free, Prior, and Informed Consent) principle with indigenous communities. Vale further declares that mineral resources or mineral reserves in indigenous lands in Brazil are not being considered in its current production plan. 

The Vale’s relationship with Indigenous Peoples and Traditional Communities is guided by Vale’s Global Human Rights Policy, which is aligned with the main international references related to the theme, such as the UN Guiding Principles on Business and Human Rights, the Equator Principles, the Position of the International Mining and Metals Council on Mining and Indigenous Peoples, Convention No. 169 of the International Labor Organization, the UN Global Compact, the Global Reporting Initiative, IFC Performance Standard No. 07, and the United Nations Declaration on the Rights of Indigenous Peoples, as well as the laws provided for in the countries where Vale operates. Access here to learn more about our commitment, management, goals.

Regarding Vale’s performance in the Carajás mosaic, it is important to clarify that Vale has been in the Amazon for more than 30 years, helping to protect, in partnership with the Chico Mendes Institute for Biodiversity Conservation (ICMBio), about 800 thousand hectares of forest, an area equivalent to five times the city of São Paulo, which represents a stock of 490 million tons of carbon equivalent and the largest area of continuous forest in the south and southeast regions of Pará. This benefits the Xikrin do Cateté Indigenous Land, which remains free from mining and illegal loggers, in addition to having Vale’s support for fighting fires. 

The importance of the partnership with ICMBio can be seen in a timeline that demonstrates the evolution of land use and occupation and shows that the landscape of forested areas in the region is restricted to the conservation units in which Vale works together with the environmental organ and the Xikrin do Cateté Indigenous Land. See this timeline and more information here. 

The relationship with the Xikrin do Cateté People dates back to the 1980s, having Vale contributed to this community through improvements to their homes, access to drinking water, healthcare (where they have the same healthcare plan as Vale employees) ), mobility, memory protection, etc. through voluntary agreements, while recording the collaboration with the quality of life of the indigenous people. In these more than 30 years, the population of the Xikrin do Cateté Indigenous Land has almost quadrupled, from just over 300 individuals, at the time of the beginning of the relationship, to approximately 1100 individuals, according to information obtained by Vale.

Despite the relationship of more than 30 years with the indigenous peoples and the environmental actions described above, Associations representing the Indigenous Peoples of the Xikrin do Cateté, and Kayapó and some Brazilian public authorities allege a negative impact on the health of communities close to the nickel mines of Onça Puma. These associations  also claim that the plant residues polluted the Cateté River with heavy metals.

In September 2017, the 5th Panel of the Federal Court of the 1st Region ordered the suspension of extraction activities in the mines of Onça Puma, under the condition for its operational resumption that Vale prove  the implementation of an economic and environmental management project to compensate the indigenous communities affected by the Vale appealed the decision. The Federal Court of Redenção ordered  a Court expert investigation in 9 scientific matters, with a focus on limnology, biology, geology, and metallurgy. The judicial experts were nominated by the judge and agreed upon by Vale, the Federal Public Prosecutor’s Office, and the indigenous people. The result of the analyzes in seven of the nine scientific subjects studied, pending the analyzes in the subjects of anthropology and medicine (genetics), demonstrated that there was no causation link between the Onça Puma mining operation and the alleged contamination of the Cateté River. Therefore, the enterprise is not the source and contamination of the referred watercourse, thus ratifying the efficiency of the operation control systems and the existing data in the reports periodically submitted to the State Secretariat of Environment and Sustainability (SEMAS) of the State of Pará - the competent environmental agency that issues the licenses and inspects the mining enterprise.

It is worth noting that the Itacaiúnas Hydrographic Basin, which encompasses the Cateté River, its streams and contributors, is located in a geological region with a natural presence of metals, such as iron, nickel, copper, among others, and therefore, such metals are inherent characteristics to the region’s soil, occurring in volumes naturally higher than those estimated in the parameters of the legislation. The information recorded and confirmed in the Environmental Impact Study (EIA) and Environmental Impact Report (RIMA), prepared in 2004 and subsidized the project’s license. The preparation of such documents used the monitoring data prior to the implementation of the project’s activities, between 2003 and 2005. The systematic monitoring points of the Onça Puma Operational Unit for surface water, located in the Cateté River channel, were taken as quality reference, for the purpose of comparison between possible interferences on the characteristics of the waters, before and after the start of the enterprise implementation and operation.. In addition, Vale has a systematic monitoring program for the quality of surface water and effluents with a historical series from 2008 to the present day. It is important to highlight that the past data and the historical monitoring series supported the background study carried out through the statistical analysis of these results, formally recognized by the environmental licensing agency.

In September 2019, the President of the Supreme Federal Court (STF), in a monocratic decision, considering the information in the reports prepared by the judicial experts, allowed for the resumption of operations of the Onça Puma mine, until the final decision that analyzes the merits of the judicial demand is reached,. In addition, it ordered the release of judicial deposits to the indigenous peoples of the Xikrin do Cateté and Kayapó Indigenous Lands and the maintenance of their monthly payment. This application must fully comply with the obligations assumed by the indigenous communities in the Adjustment Terms of Conduct (TACs) concluded between these communities and the Federal Public Prosecutor’s Office (MPF). In trial, the STF Plenary confirmed, by a majority of votes, its president's monocratic decision in its entirety.

At a conciliation hearing held within the scope of the Class Action (ACP) pending before the Federal Civil Court of the Judicial Subsection of Redenção (PA), on November 4, 2020, an agreement was signed between Vale, Indigenous Peoples Xikrin do Cateté and Kayapó, and MPF, with positive reactions from the Fundação Nacional do Índio (FUNAI) and the State of Pará, also in the ACP. There was also the temporary suspension, for a period of 1 year, of the Class Action procedural course, its resources and developments, as well as other legal proceedings in which the company and these peoples, jointly or separately, appear as parties, to create a favorable and harmonious environment for the construction through a joint and participatory manner of a more significant agreement that may close all of these lawsuits. 

Despite the above facts, Vale learned about the Monitoring Report of the Cateté River of the Indigenous Land of the Xikrin do Cateté in June 2018, prepared by Prof. Dr. Reginaldo Saboia de Paiva, from the Federal University of Pará (UFPA), who presents the results of the sampling campaigns and chemical analyzes of monitoring points of the river that crosses the Xikrin indigenous lands in the Carajás region. Vale also has unofficial knowledge of the Partial Monitoring Report of the River of the Cateté das Terras Indígenas dos Xikrins December 2019 to march 2020, since Vale has not yet been summoned by the VCF-Redenção court to comment on this document.

Although the effort undertaken by the Federal University of Pará, through the Energy and Environment Minerals Treatment Group - GTEMA / CNPQ, to develop research and work supported by the indigenous people, essential aspects of the collection and testing processes must be observed so that the results of the environment to be analyzed are the most representative. 

After careful analysis of the results, it appears that the evaluation of the analytical results of the campaign carried out by Prof. Reginaldo Saboia in 2020, was rendered unfeasible.  The quality of the results cannot be guaranteed, given the technical non-conformities indicated in the sampling process, a fundamental step for guaranteeing the quality of the results, in addition to the absence of accreditation of analytical laboratory.

Besides that, it is important to reinforce that the allegations of contamination of the Cateté River, as well as health problems caused by impacts from the operation of the Onça Puma Mines, are unfounded, as evidenced in the expert reports presented to the VCF-Redenção court.

Vale remains adherent to its commitment to ensuring efficient management of the environmental control systems of the Onça Puma operation. It is also imbued to strengthen its relationship with the Xikrin People of Cateté, supporting the implementation of productive and cultural projects, as well as actions in the health area, which include measures to support the combat of the Covid-19 pandemic, among other initiatives aimed at improving the quality of life of this community.

It also reiterates its respect for indigenous peoples and its total willingness to resolve this controversy with the Xikrin People of Cateté.

State of Espírito Santo, Brazil

Tubarão Port, in the municipality of Vitória, Espírito Santo, is an iron ore port and a coal dock, which imports coal and exports iron ore from the Minas Gerais Iron Quadrangle, as well as steel to ArcelorMittal's operations in Brazil. A police investigation conducted in January 2014 revealed that Vale's operations at the Tubarão Port had resulted in the release of dust in its surrounding bodies of water and air.

The municipal government of Vitória subsequently penalized Vale and ArcelorMittal with US$ 8.35 million each, as well as demanding that both companies repair any damage resulting from the dust release. The companies appealed the fine.

In May 2018, Vale and ArcelorMittal received a study made by the São Paulo State Environmental Company of São Paulo (Cetesb) containing over 190 targets to reduce pollution based on an agreement signed by the companies and the local regulators until 2023.

Vale operates and continually invests in environmental control systems. The entire productive system of the Tubarão Complex - from the arrival of the ore to the shipment - has the latest environmental control technology. By 2023, Vale will have invested approximately R$ 1 billion in environmental control measures in its operations at the Tubarão Complex, adding the amounts invested in recent years.

With regard to health, Vale informs that it monitors the health effects of its employees related to the exposure to the iron ore present in the workplace environment. It emphasizes that there are no records of current employees, or retirees, with health problems, or who have been removed from work, due to exposure to iron ore at the Tubarão Complex.

It is noteworthy that, according to a Social Security report, there have been no records of respiratory diseases related to the exposure to iron ore in Vale employees in Brazil.

Fundão Dam, Mariana, Brazil

The mining tailings dam, called Fundão Dam, owned by Samarco Mineração S.A., ruptured in November 2015 in the sub-district of Bento Rodrigues, 35 km from the center of the Brazilian municipality of Mariana, Minas Gerais.

Vale and BHP Billiton each own 50% of the shares of the mining company Samarco. Vale has always pointed out to Samarco the importance of implementing policies and standards in compliance with its own and has been supporting Samarco in its efforts to address the damage caused by the rupture of the Fundão Dam in the state of Minas Gerais.

From day one of the breach, Vale and its employees have been committed to responding to the emergency, with the remediation of human rights and the environmental recovery.

After the signing of a Conduct Adjustment Transaction Agreement (TTAC) between Samarco, Vale and BHP Billiton, with the federal and state governments of Minas Gerais and Espírito Santo, the Renova Foundation was created. This is an institution responsible for conducting the programs of repair, restoration and socioeconomic and socioenvironmental recovery in the areas impacted by the rupture of the Fundão dam.

Vale has always supported Samarco and the Renova Foundation in all the required areas and has guaranteed the funding and the implementation of over 40 programs that were established in agreement with the federal and state governments, together with the mining company BHP Billiton.

Following the rupture, Vale has internally created a Dam Department to evaluate and improve its dam management processes, with action plans and targets. The company has also reviewed its emergency plans, including the involvement and mobilization of the community in the event of an accident.

All the remediation and recovery actions adopted by Samarco and now by the Renova Foundation are in compliance with Brazilian and international standards and best practices, and also to the National and State Dam Safety Policy.

Pará, Brazil

Belo Monte is a hydroelectric power plant project located on the Xingu River with the objective of expanding the Brazilian generator park. It allows for a large energy production and a favorable condition for integration with the national electric system.

In June 2011, Vale acquired a 9% interest, originally held by Gaia, and became a shareholder of Norte Energia. At that time, the contract for the construction of the plant had already been signed. In March 2015, Vale sold 49% of its interest in the Belo Monte Hydroelectric Power Plant project to CEMIG and, therefore, the indirect interest of Vale in the capital of Norte Energia is 4.59%.

In December 2018, local communities with legal assistance from international civil society organizations, filed proceedings for a motion, presented in 2011, to the Inter-American Commission on Human Rights (IACHR), requesting that the Belo Monte project be officially labeled as a violation of human rights. In November 2018, the IACHR published its preliminary conclusions stating that the dam threatens the unique aquatic ecosystem of Volta Grande do Xingu and harms the local communities that depend on fishing from the Volta Grande do Xingu for their subsistence.

The project has provoked controversial reactions in relation to the social and environmental impacts and the well-being of the region's indigenous communities during the construction and operational stages. Vale believes, however, that Belo Monte is a sustainable project in all its aspects, despite the inherent impact of any hydroelectric project.

Since its entry into the Belo Monte project, Vale has hired professionals with extensive experience in the implementation and operation of hydroelectric projects, especially in studies of environmental and socioeconomic impacts and indigenous issues. This allows us to monitor and verify that these matters are being properly addressed from the planning to the execution of the project, seeking positive results and the improvement of the quality and living conditions of the communities in the region where the project is being built.

Republic of Guinea

Considered  to be one of the best unexploited iron ore deposits in the world, Simandou was acquired by Vale in April 2010 as part of a joint venture with BSG Resources Limited (“BSGR”).  At the time, the project was announced as a major impetus for the company’s faster growth in iron ore production.

Prior to entering into the joint venture with BSGR, Vale conducted a thorough and in-depth due diligence, with support from internationally renowned companies and law firms, to understand how BSGR obtained its mining concessions and to assure itself that BSGR had not engaged in any corruption activities in that regard.  BSGR repeatedly attested and assured Vale that BSGR had lawfully obtained its mining rights in Guinea and followed proper procedures in obtaining its rights. Vale diligently requested, prior to the formation of the joint venture, personal anti-corruption declarations from representatives of BSGR, including Mr. Benjamin Steinmetz, which were duly submitted.

Vale paid BSGR an initial purchase price of US$ 500 million, and invested over US$ 700 million more in developing the mining concession, principally in Zogota. 

In October 2012, the new Guinean government began investigating the manner in which BSGR obtained its rights.

At the same time, in 2013, investigations conducted by the U.S. Department of Justice and the FBI resulted in the arrest of a BSGR intermediate who had attempted to bribe the wife of Guinea's late dictator to destroy evidence of his relationship with BSGR.

The new Guinea government's investigation concluded that BSGR had obtained the rights to Simandou through corruption and bribery of Guinean officials.  In April 2014, the Guinean government revoked the mining concessions after determining that BSGR had engaged in bribery and corruption.  The Guinean government explicitly concluded that Vale had played no role in any of BSGR’s corrupt activities.  In March 2015, Vale transferred the interest of the mining joint venture stake in Guinea back to the partner company BSGR. 

In April 2014, Vale instituted an arbitration against BSGR before the London Court of International Arbitration (“LCIA”) seeking to recover over US$ 1 billion in damages Vale suffered due to BSGR’s fraud in inducing Vale through false statements and representations to invest in the joint venture and develop mining rights in Guinea that, unknown to Vale at the time, BSGR had obtained through bribery and corruption.  On April 4, 2019, an arbitral tribunal of the LCIA issued an award against BSGR, awarding Vale more than US$ 1.2 billion in damages (with interest, correction and expenses the value totals more than US$ 2.0 billion). Vale promptly commenced proceedings to enforce its award against BSGR in the High Court of Justice of England and the United States District Court for the Southern District of New York.  The award was recognized in both the United Kingdom and the United States in judgments that are final and not subject to appeal. 

On January 22, 2021 a Swiss Court convicted Beny Steinmetz on criminal charges of bribery and forgery in connection with his company BSGR procurement of valuable mining rights in Simandou. Two Steinmetz’s associates were also found guilty, one was found guilty of bribery and forgery and the other of bribery. The court sentenced Steinmetz to 5 years of imprisonment and ordered forfeiture of CHF 50 million. The decision of the Swiss Court to hold Steinmetz personally accountable for his corrupt acts follows the April 2019 award of the London Court of International Arbitration, which found that BSGR defrauded Vale by concealing its bribery and corruption from Vale in order to secure Vale’s investment in Simandou and awarded Vale more than US$2 billion in damages. That award was subsequently confirmed by courts in the United States and England, the latter of which described BSGR’s appeal as “hopeless”. 

Vale continues to pursue collection from BSGR and Steinmetz personally, including through litigation in the High Court in London, which has entered a worldwide freezing order on the assets of Steinmetz, his foundation and other defendants. 

Vale is confident that the Brazilian authorities will likewise not be misled by Steinmetz’s continued efforts to shift blame and attention away from his corrupt acts.

Vale New Caledonia (VNC), New Caledonia

Vale has nickel operations in New Caledonia, known as VNC.

VNC entered into an Agreement for the Sustainable Development in the Great South of New Caledonia on September 27, 2008. It is an agreement between Vale New Caledonia and the indigenous communities affected for a period of 30 years. In 2014, there was a spill of industrial effluent from Vale's operations in New Caledonia, which reached North Bay Creek, in the southern province. The leak was contained within a few hours, neutralizing the effluent and pumping it back to safe storage.

The License to Operate was suspended for 4 weeks by the Regulator. The immediate impact was a temporary acidification of the creek of 4km, leading to the killing of 50kg of fish. There were no significant lasting impacts on the environment or in the local indigenous populations. Following the spill, there were demonstrations by some local community residents that resulted in damage to Vale properties and delays in resuming production. A Sustainability Department was created to better promote social and environmental projects. In addition, monthly reports on VNC's environmental performance are shared with the local communities, for better transperancy.

Vale New Caledonia has implemented a set of action plans to protect the site, covering safety, organization, environment and quality. These plans were jointly established with the authorities of the Southern Province as part of a legal act requiring the implementation of measures to protect the environment and the communities

 

Sudbury, Canada

The Sudbury Basin in Canada contains one of the most important mining fields in the world, producing hundreds of millions of tons of copper and nickel per year. This location is also the center of Vale’s operations in Ontario.

Two miners died at Vale's Stobie Mine in Sudbury, Ontario, Canada, on June 8, 2011, after an uncontrolled emission of material (muck). Vale was not criminally charged as a result of this incident, but received charges under the Ontario Occupational Health and Safety Act, and pleaded guilty to three counts.

Following Vale's internal investigation into this incident, an action plan, including more than 40 recommendations, was implemented to address the contributing factors and to improve the control measures to protect the health and safety of its employees. These recommendations included actions in the fields of water management, operational controls, hazard identification and risk assessment, among others. These actions and their recommendations are intended to prevent similar issues in Vale operations.

Copper Cliff, Canada

Vale’s mining operations in the Sudbury Basin include mines, a mill, a smelter and a nickel refinery; collectively, these assets constitute one of the largest integrated mining operations in the Americas.

During the planned maintenance period of Vale’s smelter complex at Copper Cliff, in August 2015, as a result of the standard procedure for washing and draining the acid plant, there was a release of nitrogen oxide and nitrogen dioxide (NOx) mist during a standard procedure to wash Vale’s Acid Plant and to drain it. At the time, a yellow plume was visible above the Vale complex, but the levels that were registered during the event were very low and dissipated.

Emergency measures were activated as a precaution and the emergency siren was activated to notify residents from the region. The release was contained and there were no injuries or impacts on production. Since this event, the procedures to clean the acid plant have been adjusted to prevent a similar incident from happening.

Mozambique

Moatize

For the implementation of the Carvão Moatize Mine, whose operation began in 2011, it was necessary to carry out a plan for the resettlement of families residing in the areas concessioned to Vale. Following international standards and governmental guidelines and decisions on the subject, this plan began in 2006 and had broad community engagement and formal approvals from different levels of government and traditional leadership. The relocation was completed in 2010, with 1,365 families in two resettlements distributed in areas provided by the local government - in the locality of Cateme with rural characteristics, and in 25 de Setembro, with urban characteristics, and 107 families distributed in the village of Moatize on an assisted indemnity basis.

In May 2012, the international organization Human Rights Watch conducted an assessment in Tete province, Mozambique, in the resettlements related to mining activities, including Vale's coal operation. Based on Human Rights Watch's findings and recommendations, Vale and the Government of Mozambique signed a Memorandum of Understanding (MOU), with a commitment to address these recommendations and other demands from the communities.

Since then, Vale has been working continuously on improvements in resettlements and is committed to the development of actions to support families, together with several stakeholders, through the implementation of a listening and response mechanism with these communities and other stakeholders engagement through our Stakeholder Engagement Program (PES), with the objective of reestablishing the living conditions of these families and supporting local development by promoting sustainable activities. Since 2012, about 80% of the actions agreed in the MOU have been implemented, and in an assessment approved by the community and local governments.

This agreement was made possible through a partnership between Vale, local governments and the community and brought important improvements to both resettlements, focusing on the following actions: 

• Rehabilitation of the water supply systems. 
• Construction of paved access roads, bridges and revitalization of roads.
• Expansion of access to public transport.
•  Expansion of the electricity supply capacity. 
• Training of teachers from primary and secondary schools. 
• Acquisition of ambulances, construction of a pregnant woman's waiting room and a pharmacy at the Cateme Health Center.
•  Construction of a football stadium and market on 25 September. 
• Income Generation Programs in poultry, agriculture, training, goat farming, among others.

Such investments have made Vale resettlements a center of attraction for families willing to have access to public services more easily, such as a health center, primary and secondary schools and a police station, in addition to a water and energy network.

In the socioeconomic studies conducted by Vale in both resettlements, improvements were detected in the following indicators:

• Education: Increase in the population's level of education, with higher levels of around 50% compared to the average of the other neighborhoods in Moatize. The presence of a secondary school led to the migration of families to Cateme. 
• Health: improved access to health services (distance traveled to the nearest Health Center - average of 2.2 km for 100% of resettled people, much higher than the average for other neighborhoods) and greater access to specialties. 
• Sanitation: construction of improved latrines in 100% of residences in both resettlements vs 30% of the average of the other neighborhoods in Moatize. Construction of fountains, boreholes and water home connection, to be connected by the families. 
• Energy: improvement of the access to the electricity network, to be connected by the families.

Currently, Vale has made countless efforts to improve living conditions in both resettlements, with the implementation of numerous integrated projects aimed at the needs raised by the most different stakeholders, namely:

• Janitorial Project of Cateme and 25 de Setembro, with repair of house pathologies, capacity building in civil construction and building maintenance.
• Issuance of titles for agricultural land and residences in Cateme and 25 de Setembro.
•  Rehabilitation and increase in the capacity of the Cateme water system. 
• Expanded mobility with the subsidy for the purchase of bikes for all resettled families, in addition to the purchase of buses for the Cateme Moatize transport. 
• Income generation projects focused on poultry for 120 families and agriculture for 712 families, with the purchase of part of the production by the Vale workers' restaurant in Moatize.
•  Local labor absorption program, with training and creation of a CV database connected to Vale and its suppliers.
• Rehabilitation of several public infrastructures, such as primary and secondary schools, police station and health center in Cateme. 
• Rehabilitation of roads, sidewalks and construction of bicycle paths. 
• Construction of a Support Center for Victims of Domestic Violence in Cateme. 
• Distribution of School Supplies - Primary and Secondary Schools - for all schools in Moatize - about 17,000 students.
•  Girl Empowerment: Distribution of Hygienic Kits and Awareness Workshops against School Evasion.

In view of the above, Vale demonstrates its commitment to increase programs and projects to minimize the impacts of the expansion of the activities of the Moatize Coal Mine.

Nacala Corridor

In 2010, as part of the undertaking and with the objective of connecting the Moatize Coal Mine to the market to make the world-class business viable, Vale revitalized 682 km of railways in the Nacala Corridor and built new railway extensions totaling 230 km, crossing Malawi and reach the deep-water sea port built by the company in Nacala-a-Velha, off the coast of Mozambique.

The installation of the Nacala Corridor generated the need to carry out the involuntary displacement of 15,500 families, mostly in impacts on subsistence by agriculture and 1,600 removals of houses, which followed the standards of the International Finance Corporation (IFC, Performance Standard 5) for its execution, which has been assessed by an independent social and environmental auditors (IESC) through several site visits and desktop monitoring activities since 2017. 

In addition to the public consultation and an extensive stakeholder engagement program, the creation of a Livelihood Restoration Program in Mozambique and Malawi stands out, with a focus on agriculture, fishing, training/entrepreneurship, reaching around 80 % of impacted families.

In agriculture, considered one of the largest agriculture development programs in Sub-Saharan Africa, we provide support in inputs and technical assistance to about 12,000 Mozambican and Malawian families, with a constant increase in productivity, access to markets and identified success stories, as well as increased market access food availability, thus guaranteeing food and nutritional security for families and income generation in cash crops. In addition, to ensure the resettlement of land for resettled families, the Nacala Corridor is issuing agriculture land titles to resettled families in the form of production blocks, thus facilitating technical assistance and marketing on a scale by the producers.

The Fishing Program, developed for families indirectly impacted by the construction and operation of the Nacala Port, currently benefits more than 500 families, with the formation of fishermen's associations, technical training, supply of equipment, income diversification and inclusion of women in several economic activities through microcredit and savings programs.

The Capacity Building Program serves hundreds of non-rural families without access to agricultural land, training professionals in areas focused on formal and self-employment, in addition to entrepreneur support kits, containing important tools for the establishment of individual or group businesses.

In terms of voluntary investment, the Nacala Corridor formalized an agreement with the World Food Program to supply daily school meals to 28,000 primary school students in 03 districts covered by the railroad, reducing school dropout rates for boys and girls and promoting commercialization. agricultural products produced by the beneficiary families of the livelihood restoration initiatives.

 

Maranhão State, Brazil

Regarding the community of Piquiá de Baixo, located in the Chemical Industrial Park of Açailândia, in the state of Maranhão/Brazil, where there are allegations of pollution caused by steel mills installed for over 30 years, Vale informs that it does not have any steel mill dedicated to the production of pig iron in Açailândia and participates in the pig iron production chain in the locality, through the supply of iron ore. Vale seeks to strictly comply with environmental standards, controls and monitoring in all its operations.

Despite the impact generated by pig iron producers has no direct relationship with Vale, the company is maintaining a permanent dialogue with all stakeholders interested in the issue of Piquiá de Baixo and acting through the Vale Foundation on the subject, in order to contribute to a sustainable joint solution in favor of the community and the territory that it belongs to.

Thus, Vale has carried out initiatives such as the elaboration of a socioeconomic diagnosis of families located in the community and the formalization of a partnership between the Vale Foundation and the Piquiá Community Association with Banco Caixa Econômica Federal (CAIXA), with the objective of promoting the construction of 312 houses destined to community resettlement. This action was part of Vale Foundation Urban Quality Seal Program, which aimed to support housing projects of social interest, within the scope of the “Minha Casa, Minha Vida Program”, with financial complementation per housing unit, as in the case discussed here.

Due to the contingency of federal resources, the works of the “Minha Casa, Minha Vida Program”, to which the construction of the new neighborhood is linked, were impacted, leading the Vale Foundation to mediate with CAIXA, the unlocking of the Foundation's resources and respective release for the Association to continue the works. In addition to this initiative, still in 2020, Vale contributed with R$ 315 thousand in favor of the Association for assistance in the maintenance of the construction site during the shutdown imposed by the pandemic of COVID-19.

As for the report issued by the International Federation of Human Rights - FIDH pointing out socio-environmental issues in the Piquiá region, corroborated by the Justice on Tracks movement, and after a visit by members of Vale's Sustainability Committee to the site, the pig iron producers have carried out actions to deal issues referred to in the report, and Vale has been following the evolution of these actions, such as the shutdown of operations at a pig iron production plant close to the community of Piquiá de Baixo, ratifying Vale's commitment to be part of the solution and maintain the engagement with the community.

Run over Reduction Plan

The run over reduction plan in the Nacala Corridor has shown significant results in recent years, based on a series of actions implemented to ensure greater safety for the communities and the operation, which resulted in a 46% run over decrease between 2019 and 2020, and 96% between 2020 and 2021, and consequently, the THP (Train Stoppage Hour) rate, which greatly impacts communities mobility.

Among the implemented actions are:

• Social monitors: the Nacala Corridor hired 320 monitors who work both in Malawi and Mozambique, 24-hour and 7 days a week, with an anticipation control and warning system for the trains approaching in the community, allowing the social monitor to position themselves at critical points, avoiding accidents and collisions.
• Mobility infrastructure: construction of 17 footbridges, 152 level crossings and 30 safe crossings by 2021, with others being implemented and planned.
• Railway Safety Campaigns: permanent implementation of railway safety campaigns such as hiring sound cars for campaigns in the communities, behavior dialogues in strategic points as bars, schools, restaurants, cinemas in the community, radio spots, among others.

The run over decrease in the Nacala Corridor aligns the operation with international safety standards and creates a greater perception of risk by the community and a healthy, open and transparent relationship between the company and its various stakeholders.

Vale seeks to prevent and mitigate the potential emission of particulate matter emission in its operations through performance evaluation. The company initiatives are based on the requirements of its operational licenses and voluntary actions.

Action Planning

Vale has a particulate emission study and inventory, carried out by a specialized company, which identifies and classifies the relevance of each source. Based on these studies, we plan actions and resources to create and maintain controls, monitoring and specific management systems. In this sense, since 2018, US$ 18 million have been invested in the implementation and revitalization of environmental controls for particulate matter.

Air Quality Monitoring

In Mozambique, Vale maintains an Air Quality Monitoring Stations Grid, a pioneering initiative in the country, which online monitors the region’s air quality. The grid is comprised by four stations that are technically positioned in the city of Moatize, two of which even have meteorological analyzers for better interpretation of atmospheric phenomena. The data is quarterly reported to the environmental agencies.

Mitigate efforts for particulate emission

An important mitigation initiative for emissions is the implementation of a process for wetting roads with water and suppressants polymer and sprinkling in mining fronts, stockyards and secondary roads, reducing the potential particulate emission and wind transportation. Vale Mozambique has acquired  tanker trucks with a capacity of up to 85,000 liters to carry out this process on roads, and other smaller trucks are also used in smaller locations.

The operation adopts fixed sprinkler systems in the coal stockyards, in the primary and tertiary crusher, and in the transfer towers in the coal processing plants. During the process of loading coal onto wagons, a fixed sprinkler system is used with the addition of suppressant polymers, which are intended to create a film on the cargo, avoiding emissions from wind dragging during transport to the Nacala port terminal.

Vale also carries out visual monitoring of particulates, with a monitors team based in strategic locations and following a specific procedure, prepared aligned with technical recommendations in force, interrelating with the operation's management to take immediate action in the event of a critical emission, ranging from mitigation at the source to operational shutdown. This team is also responsible for verifying the functionality and efficiency regarding the environmental controls.

Finally, and also as part of the ongoing dialogue with the communities, Vale monitors environmental sensitivity in the communities, using social agents who conduct interviews with residents to measure their sensitivity to the dust, noise, and vibration coming from the Mine.

Natural conditions in the Tete region

Importantly, air quality is the result of complex interactions, involving the emission of air pollutants by fixed and mobile, local and remote, natural and anthropogenic sources, which together with meteorological conditions and topography characteristics, determine the concentration of pollutants in the atmosphere, influencing the air quality of the Moatize region.

In this sense, the monitoring of air quality in the village of Moatize comprises all emissions beyond Vale's operations, i.e. from other industries, the precarious conditions of urban infrastructure, fires and the use of charcoal as an energy source by the inhabitants, as well as the adverse climatic conditions of the region, such as dry weather, high temperatures, deciduous vegetation (all leaves fall), sandy soils and strong winds.