Anger at Vale over Brazil mine accident fed by cautious, slow public response

jueves 31 de diciembre de 2015 12:32 GYT

By Stephen Eisenhammer
    RIO DE JANEIRO, Dec 31 (Reuters) - Within hours of a deadly
mining spill in November that would become Brazil's worst
environmental disaster, BHP Chief Executive Andrew
Mackenzie was in front of a camera offering his sympathies to
those affected.
    Meanwhile, his counterpart at joint venture partner Vale SA
, Murilo Ferreira, took nearly a week after the mine
wastewater flood to talk to the press, setting the tone for a
media strategy experts say has been slow and clumsy. 
    While both companies' legal strategies seem similarly aimed
at limiting their direct liability for the dam collapse that
caused the disaster, a divergence in public relations tactics
has left Vale, the world's biggest iron ore miner, taking the
brunt of social media outrage and street protests over the
tragedy, which killed 17 and left hundreds homeless.
    The Brazilian company regularly denies responsibility for
the accident in interviews and press conferences, putting the
blame solely on Samarco, the joint venture with BHP Billiton
which ran the iron ore mine where it occurred. In contrast,
Australia-based BHP tends to avoid discussing the subject,
focusing instead on offering condolences and explaining the
    "Instead of being proactive and taking responsibility, they
stuck their head in the sand," one ex-Vale employee said of his
former employer. 
    Vale and BHP have both lost a quarter of their market value
since the dam burst on Nov 5.
    For sure, Vale, as a household name in Brazil, has been
under more intense public scrutiny in the country than BHP, and
any company could have struggled to deal with the fallout of a
disaster that saw enough thick mining waste to fill 20,000
Olympic swimming pools spread across two states. 
    In Rio and London, protesters took to the streets, some
covered in mud and others carrying pictures of dead fish, with
banners reading "Vale kills."
    The company's response has been improving. Ferreira struck
an emotional cord towards the end of last month, promising to
dedicate his days both as CEO and in retirement to cleaning up
the Rio Doce river, heavily polluted by the mud flow.   
    Nonetheless, critics who spoke to Reuters, including the
ex-Vale staffer and another former executive who both asked to
remain off the record, as well as external public relations
consultants, said Vale's particular missteps are emblematic of
Brazilian companies' perceived unwillingness to communicate. 
    "It's this perception of who's in charge, who's responsible
that is so important in these matters," said Gary Davies,
Professor of Corporate Reputation at UK's Manchester Business
School. Davies explained that different language is needed for
the courts and the public, a separation Vale appears to have
struggled to get right. 
    In an email to Reuters, BHP declined to comment on whether
it was seeking to put the blame purely on Samarco, saying only
that it is "committed to communicating transparently as it works
with Samarco and Vale to restore the environment and help the
community rebuild." 
    Vale declined to comment for this piece, but has previously
said its ability to talk about the disaster is limited by a
Chinese wall between it and Samarco, which Vale and BHP both
compete against in the iron ore pellet market.
    "Lawyers have huge influence in crisis situations like this,
but the communications team have to push back... It looks like
Vale didn't get the balance quite right here," said Lais
Guarizzi, president of crisis management firm G&A Comunicação.
    In one recent example, Vale's General Counsel Clovis Torres
expressed the company's position in an analogy that backfired. 
    "Samarco is not some little bar," he told reporters,
explaining that with revenue of $2 billion it could cover the
damages itself. 
    Columnist Elio Gaspari countered in Rio de Janeiro's main
daily, O Globo, that this was an insult to bar owners who would
have behaved better. "With schoolmaster arguments, Vale shows it
is reluctant to become part of the solution," he wrote. 
    On social media, one tweet showed the resemblance of Vale's
green and gold "V" logo to the lines formed where mining waste
met the green Atlantic Ocean. "Nice publicity, it just cost the
environment," read the caption.
    Vale has also suffered setbacks in court. Earlier this month
a judge froze it and BHP's assets in a decision that dragged
both mining giants further into a damages lawsuit with the
    Yet, Vale, which plans to appeal the decision, will probably
stick to its strategy, legal experts say, as it fights to keep
the 20 billion reais ($5.05 billion) liability being sought by
the government off its already stretched balance sheet. With
Samarco registered as a separate legal entity, it is an argument
that could still succeed. 
    But the public have had little stomach for such legalese and
sources close to Vale say the company underestimated how popular
opinion can mold government and judicial decisions.  
    With the courts on recess over the holiday period, Vale has
time to form its appeal. 
    Still, the ex-Vale employee said it faces an uphill battle
to improve its public image, "They got their initial judgment of
the situation very wrong and that's going to be hard to correct
($1 = 3.96 reais)

 (Additional reporting by Marta Nogueira; Editing by Alden