The company that certified the safety of a Brazilian waste dam that collapsed last week, killing at least 115 people, has worked as both a consultant and an independent safety evaluator for the dam’s owner, raising questions among experts over potential conflicts of interest.
Employees of the company, Germany’s TÜV SÜD, that Vale SA hired to certify the safety of the Brazilian company’s ill-fated dam also acted as consultants on Vale mine closures in Brazil, documents show. Further illustrating the two company’s close ties, TÜV SÜD employees also co-authored research reports with Vale and spoke at conferences with the mining giant’s workers.
International industry benchmarks on the management of tailings dams like the one that collapsed in Brumadinho, Brazil, stress that a safety inspector—also known as an auditor—be able to demonstrate independence from their client.
“In principle, this is a conflict of interest,” said Eduardo Marques, a geology and engineering professor at the Federal University of Viçosa in Brazil, referring in general to such dual roles.
The Vale-owned waste dam burst on Jan. 25, flooding the area with mine tailing waste—the water and chemical byproducts of mining. Another 248 people are missing and feared dead. An investigation is under way to determine what caused the Brumadinho dam to burst.
A Vale spokeswoman said by email that TÜV SÜD is an external auditor for the Brazilian company. She didn’t directly address whether the company’s dual consulting-inspecting role presented any conflict of interest.
The Vale spokeswoman said the Brumadinho dam was repeatedly inspected and monitored not only by TÜV SÜD but by other external companies and Vale itself. She added that a Vale inspection as recently as Jan. 22 showed the dam was stable.
In a statement, TÜV SÜD said it had completed assessments at the dam in June and September 2018. The company said that it regretted the accident but could not comment further, given ongoing investigations.
Despite some international industry guidelines, it is customary in Brazil for companies like TÜV SÜD to assume the dual roles of both consultant and safety inspector, experts say.
Across the globe, the closeness of auditors to the companies who pay them has long raised concern among experts.
“The expertise is too connected with those controlling the money—and nowhere near enough emphasis on protecting the public interest,” said Gavin Mudd, an environmental engineering professor at Australia’s RMIT University.
Investors and politicians in some countries are asking whether companies should be allowed to bid for consultancy work while conducting independent auditing. Audits can range from checking financial statements to certifying safety policies. The concern is that an auditor’s objectivity may be compromised if it also earns money advising its client on business matters.
U.S. firms are barred by law from providing many types of consulting for the companies whose financial statements they audit.
In Canada, another major mining nation, the Mining Association of Canada has set out standards on the management of tailings facilities that have also been adopted elsewhere. The guidelines suggest that external audits should be conducted by entities whose “independence can be demonstrated by the freedom from responsibility for the activity being audited or freedom from bias and conflict of interest.”
The World Bank’s International Finance Corporation, which invests in infrastructure projects, stress in its guidelines that a dam’s owner should hire experts “separate from those responsible for the design and construction” to review it.
The company Vale’s Samarco joint venture hired to check the safety of a dam in Brazil that burst in 2015, killing 19, was also developing projects for the same dam, according to a statement the hired company made at the time.
The company, VOGBR Recursos Hídricos e Geotecnia Ltda, declined to comment. It said at the time that the safety inspection it conducted was based on data provided by Vale and was rigorous.
Vale referred questions to Samarco. A spokeswoman for the Samarco joint venture declined to comment.
A Brazilian law covering mine safety doesn’t address whether auditors should be independent or avoid consulting for the same companies they audit.
Munich-based TÜV SÜD bought Brazil’s Bureau de Projetos e Consultoria in 2013. On its website, the unit describes itself as both consultant and manager of projects as well as providing geotechnical and structural monitoring services.
Shortly before its acquisition, the Bureau de Projetos e Consultoria worked with Vale on two projects on how to deal with the legacy of two decommissioned mines, including their tailings ponds.
Some experts named on the report still work at TÜV SÜD, including Makoto Namba, who Sao Paulo police said was one of five people arrested this week in connection with the disaster. Mr. Namba couldn’t be reached for comment.
In August last year, roughly a month before Mr. Namba signed a report attesting the Brumadinho dam was stable, according to a copy of it published by the Brazilian press, he won an award from a local trade association for a project he co-authored with Vale’s geotechnical risk manager and others.
The group analyzed a new Vale methodology to detect and measure risk at its tailing dams. The paper used a Vale-owned dam near Brumadinho as an example of how the new methodology is applied, concluding that the dam had a low probability of failure.
The LinkedIn profiles of current and former TÜV SÜD employees list consulting work for Vale. Lucas Deroide do Nascimento, an engineer who worked at TÜV SÜD between 2014 and 2016, performed consulting and planning work for Vale in decommissioning projects, according to his profile. Mr. do Nascimento, who had left the company before the audit of Brumadinho, declined to comment.
TÜV SÜD, founded in 1866, has expanded abroad and now has employees in 800 locations working across a range of industries, including telecommunications, railways and healthcare. Its trademark appears on consumer and industrial products across Germany and is seen there as a trusted sign that safety or quality has been tested.
Still, TÜV SÜD has been accused of conflicts of interest in the past. In 2008, a German federal ministry questioned whether TÜV SÜD and other external advisers were truly independent when auditing the country’s nuclear power industry, given they were paid by the operator of a nuclear plant and were therefore financially dependent upon them.
A TÜV SÜD spokesman declined to comment this week on the 2008 incident.
In 2010, TÜV SÜD was suspended from a United Nations program in which the German company validated projects that sought to reduce emissions to claim tradable credits. A UN panel concluded that TÜV SÜD had sometimes given “a positive validation opinion” that reductions would happen despite having concerns that they would not, according to a UN document.
The TÜV SÜD spokesman said the company proposed corrective actions and the suspension was lifted four months later.
—Scott Patterson, Jeffrey T. Lewis and Bertrand Benoit contributed to this article.
Write to Patricia Kowsmann at patricia.kowsmann@wsj.com and Alistair MacDonald at alistair.macdonald@wsj.com
Bagikan Berita Ini
Related Posts :
Britain Knows More About Mystery Substance Behind Illness of Russian Double Agent- Is Kim Jong Un confident or desperate? North Korea's leader remains difficult to read.
- Kim Jong-un, a Mystery to the World, Surprises in Diplomatic Debut
- Kim Jong-un, a Mystery to the World, Surprises in Diplomatic Debut
- Rohingya Muslims will soon face cyclones, monsoons in Bangladesh