The lead story on the front page of a recent edition of the Wall Street Journal was about the former chief executive of a Brazilian mining company not widely known in the United States. The Journal’s editors probably realized their readers would be shaken by the news that Fabio Schvartsman has been charged with homicide in the deaths of 270 people in a mining dam collapse last year.
The decision by prosecutors in the state of Minas Gerais to bring such charges against Schvartsman as well as other former executives at Vale SA shows the depth of anger in Brazil at the giant iron ore company over the accident in which a torrent of waste swept away people, submerged houses and created a large toxic wasteland (photo).
Vale and a German consulting company, five of whose officials were also hit with homicide charges, are alleged to have long known about a critical safety flaw in the tailings dam but failed to act.
Although Brazil does not have a death penalty or life sentences for civilian offenses, the filing of homicide charges against corporate executives is an aggressive measure that has rarely been applied in that country or anywhere else.
There are more precedents when it comes to corporate manslaughter, which is the idea that a business entity can be prosecuted for causing the death of employees or other persons. For example, in 2007 the United Kingdom enacted the Corporate Manslaughter and Corporate Homicide Act, though that law has not been enforced as rigorously as many advocates had hoped.
In the United States there is no such federal statute, though the principle of corporate criminal liability is well-established, and numerous companies have faced criminal charges, though they frequently end with deferred prosecution or non-prosecution agreements.
The Violation Tracker database has more than 1,600 criminal cases (compared to 395,000 civil matters). Many of these are financial in nature or involve violations of environmental laws such as the Clean Water Act that are deemed negligent or deliberate but usually don’t involve loss of life.
A much smaller number involve corporate killing, including notorious cases such as BP’s role in the Deepwater Horizon disaster or the Upper Big Branch disaster at a coal mine owned by Massey Energy.
In these matters, however, the corporations, as in civil cases, mainly paid financial penalties and their executives faced no personal liability. One exception was former Massey CEO Don Blankenship, who was convicted of conspiring to violate federal mine safety standards and was sentenced to a year in prison. Otherwise, the Justice Department has shown little interest in prosecuting corporate executives for environmental or workplace fatalities.
There has been a bit more of such activity at the local level, especially on the part of the Manhattan District Attorney’s Office. It has brought criminal charges against both companies and individuals in connection with workplace and other accidents. For example, in November 2019 a building owner, a plumber and a contractor were convicted of manslaughter by causing a 2015 explosion resulting from unauthorized natural-gas connections installed in a rental building.
Three years earlier, the Manhattan DA won a conviction against a construction supervisor accused of ignoring warnings about unsafe conditions on a building site that resulted in a fatal accident.
The approach of the Manhattan DA and the prosecutors in Brazil points to a promising way forward in the handling of corporate misconduct that results in serious harm or death. If they know they may end up behind bars for a long time, corporate executives and managers may become more serious about their responsibility to abide by health and safety laws.