To prevent mining dam failures, whistleblowers need stronger protection

by Carly Fabian, Research Associate

Published on May 01, 2020

To prevent mining dam failures, whistleblowers need stronger protection

As global demand for coal wanes, coal-fired power plants close, and major financiers and insurers back away, experts have begun to predict the “beginning of the end” for the coal industry. Even as coal production declines, however, many of the environmental and safety risks remain. Some of these risks may even be growing as coal companies face increasing financial pressure, making the need to protect and reward coal mining whistleblowers more important than ever.

One of the overlooked but potentially deadly threats stems from dams used to store waste produced by coal mining, referred to as slurry impoundments or tailings dams. These dams can stand hundreds of feet tall, and when they collapse, often due to poor management practices, the consequences can be catastrophic. In 1972, the Buffalo Creek Coal Mine became the site of an infamous disaster when a poorly maintained waste dam collapsed, killing 125 people. A string of similar disasters has taken place in the United States and around the world since then.

Despite the danger, the number and size of mining waste dams has steadily grown. Today, these dams represent some of the largest manmade structures in the world. Research from World Mining Tailings Failures, a non-profit focused on studying mining waste dam collapses, shows that, in spite of promises of better safety technology and stronger regulations, severe dam failures have increased over time. The organization predicts that, without dramatic changes to regulation, industry practices, or technology, 19 very serious failures will occur between 2018 and 2027.

The risk of coal waste dams is particularly acute. Even as coal mining slows, these massive monuments to coal’s legacy remain, requiring careful maintenance in perpetuity. Yet the dams are increasingly managed by marginally profitable companies that may be inclined to cut corners on safety. Research has shown a significant correlation between severe dam failures and financial pressure faced by mining companies; as marginally profitable coal companies face decreasing prices and increasing production costs, dam failures may be more likely to occur.

Unfortunately, limited information about specific dam risks makes it difficult to predict where failures are most likely to occur. A severe dam collapse at an iron ore mine in Brumadinho, Brazil last year forced global investors to recognize the need for research initiatives to investigate risks, but this research has so far relied on voluntary disclosures from only a portion of companies.

Where regulators and researchers struggle to gather information, whistleblowers could help. Employees have unique knowledge about these dams, as well as their potential weaknesses. Investigations in the aftermath of dam failures frequently reveal employees who had serious concerns or who even attempted to blow the whistle prior to the collapse. Since the Brumadinho collapse, reform initiatives have highlighted the need for mining industry standards on protecting whistleblowers.

However, mining employees face significant obstacles to successfully drawing attention to their concerns, particularly due to the threat of retaliation. Mining companies, including Vale, often promote their company whistleblower channels as evidence that they will support employees who report concerns. However, company channels, even anonymous ones, provide weak protection from retaliation and do not guarantee meaningful investigations of employee complaints. Prior to the Brumadinho collapse, a whistleblower attempted to directly warn Vale’s CEO anonymously, but the CEO responded by demanding an investigation into the anonymous individual’s identity and by comparing the individual to a cancer.

For employees to successfully blow the whistle on unstable dams, they need stronger guarantees of protection. Whistleblower reward laws, which allow whistleblowers to report outside of the company, could be a powerful tool for providing this protection. By establishing government-protected channels for reporting, these laws ensure that whistleblowers have a confidential path to report directly to law enforcement. The financial reward for whistleblowers whose original information leads to a successful prosecution also creates an important incentive to take the risk of reporting. American whistleblower reward laws, such as the Dodd Frank whistleblower program, can provide a model for successful reward programs.

Due to their global reach, American whistleblower reward laws can also provide a pathway for whistleblowers around the world. The Brumadinho collapse and subsequent investor initiatives have established that tailings dam failures can be major financial liabilities. While the Dodd-Frank whistleblower program is not a safety or environmental whistleblower program, it allows whistleblowers to confidentially report public companies who mislead investors about risks that could affect share value. Since this program began in 2011, international whistleblowers from 123 countries have submitted reports.

Whistleblowers have the potential to provide a crucial early warning system for unstable dams, but this potential can only be realized with meaningful protections and sufficient encouragement for whistleblowers to step forward. As the threat of unstable dams grows, regulators, safety advocates, and local communities should recognize strong whistleblower laws as a crucial aspect for safety reforms.

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