Brazilian Authorities Signal Intent to Focus on Vale Executives in Probe of Dam Collapse

BELO HORIZONTE, Brazil—Brazilian police believe top executives and managers at

Vale SA

deliberately shielded themselves from incriminating information about the state of the company’s dam that collapsed in January to avoid liability, according to a copy of a police inquiry reviewed by The Wall Street Journal.

Studies conducted by Vale’s own consultants in the 12 months preceding the disaster, which killed 270 people, showed the structure was fragile and would eventually collapse, Brazil’s federal police said in a 215-page report. The collapse of the dam, which held waste from mining, was the world’s deadliest in more than half a century.

The report served as the basis of the first criminal charges related to the catastrophe, which were unveiled last month against employees of Vale and its German auditor, TÜV SÜD. While the bulk of the report—which hasn’t been publicly released—details the evidence behind those charges, one of its conclusions addresses what police say is culpability on the part of Vale’s management.

“The top bosses of Vale continued to…boast about the falsely impressive quality of their structures,” police wrote in the report. “They closed their eyes to studies commissioned by the company itself, preferring to remain ignorant so that, in a moment like this, they could allege ignorance as their defense.”

The report doesn’t offer evidence to back up the accusation. No official charges against any top Vale executives have been filed.

Brazilian law-enforcement authorities have been investigating

Fabio Schvartsman,

who stepped down as Vale’s chief executive in March, and other top executives in connection with the dam collapse. Prosecutors are examining the possibility of filing criminal charges on the basis of a legal doctrine known as “willful blindness” in the U.S.—the idea that a person intentionally stays unaware of facts in order to avoid liability—people familiar with the probe told the Journal.

Vale said the company’s top executives never had any knowledge or received any indication about a critical or imminent risk to the stability of the dam. All of Vale’s geotechnical engineers and external inspectors considered the dam safe, a spokesman for the miner said.

Through an attorney, Mr. Schvartsman on Friday denied that he had any knowledge of the dam’s structural problems. Mr. Schvartsman said that he proactively sought information on dam safety and that he would have acted on any concerns. Mr. Schvartsman also said Vale increased spending on dam safety under his watch.

On Jan. 25, the 280-foot-high dam, which was no longer in use, gave way near the town of Brumadinho in southeast Brazil. Since then, Mr. Schvartsman and Vale’s other top executives have said they had little detailed knowledge of dams. But mining experts have questioned why executives didn’t try to find out more about the company’s higher-risk dams, such as the one near Brumadinho, especially after a similar dam partly owned by Vale collapsed three years earlier, killing 19.

While Brazilian prosecutors have increasingly looked to borrow legal doctrines such as “willful blindness” from abroad, they are often difficult to apply under Brazil’s criminal law, which doesn’t recognize such concepts, said São Paulo-based lawyer Pierre Moreau.

TÜV SÜD certified the dam as safe in both June and September of last year. The Journal reported in February that employees at Vale and TÜV SÜD knew for months of dangerous conditions at the dam but that TÜV SÜD employees certified it as safe anyway, worried about losing business with Vale.

In last month’s charges, police formally accused seven lower-level individuals from Vale and six employees from TÜV SÜD for covering up structural dangers at the dam during last year’s safety audits.

A spokeswoman for TÜV SÜD declined to comment on the police inquiry, saying the company was cooperating with the authorities.

Police continue to investigate. State and federal prosecutors are also preparing their own charges, which could include murder or manslaughter charges, authorities told the Journal.

In the report reviewed by the Journal, police concluded that consultants hired by Vale and Vale’s own workers were aware of serious problems at the dam in the months and days leading up to its collapse.

The report cites an incident on June 11, 2018, when muddy water started gushing out of the dam’s base after workers installed a drainage pipe in an attempt to improve the structure’s safety. Vale said water readings at the location had returned to normal by that evening and that a subsequent study showed no risk to the dam’s stability. But a geologist at Vale later told police that he was very concerned about the incident and that it was necessary to pile up about 60 sandbags against the face of the dam to help plug the hole. The Journal reported in May that several of the mine’s workers had warned their bosses last year the dam was about to collapse and shored up parts of the giant dam with sandbags on more than one occasion. Vale said it never received any complaints about the dam from workers.

Police in the report also cited the dam’s so-called safety factor—a standard metric used to assess the structure’s stability. While police found Vale considered 1.3 as the minimum safety factor for dams, TÜV SÜD rated the fateful structure near Brumadinho as having a safety factor of 1.09 but then came up with a methodology to justify why that still meant the dam was stable.

Makoto Namba, a senior engineering inspector at TÜV SÜD who has told investigators he signed off on the dam’s September audit at Vale’s behest, told police he couldn’t think of any other mine-waste dam of that type with a safety factor below 1.3, according to the report.

A Vale spokesman said the dam complied with Brazilian legislation.

Police cited a lack of follow-up on problems with water-monitoring equipment and on abnormalities in radar readings in the weeks before the dam collapsed. Vale said the equipment had only “configuration problems.”

Consultants and Vale staff also told police they were concerned over the lack of structural information about the dam’s initial construction in the late 1970s, 25 years before Vale bought the mining complex.

Write to Samantha Pearson at samantha.pearson@wsj.com and Luciana Magalhaes at Luciana.Magalhaes@wsj.com

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