Critical Analysis of Fundao Dam Failure Case Study

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DISCUSSION POST
Assignment 3 Case Study Critical Analysis

Contents
Discussion..................................................................................................................................3
1. Development of Strategic Management Plan..................................................................3
2. Failed Fundao Tailing Dam............................................................................................3
3. Incident............................................................................................................................3
4. Design Failures................................................................................................................4
5. Impact..............................................................................................................................4
6. Investigation....................................................................................................................4
7. Legal Consequences........................................................................................................5
8. Economic loss to the company........................................................................................5
9. Assessment of Risk.........................................................................................................5
10. Reactions.....................................................................................................................5
References..................................................................................................................................6

Discussion
1. Development of Strategic Management Plan
The aim of Strategic Management Plan (SAM) is to add value to the performance of the
assets, reducing the risk, cost reduction and identification of opportunities. Common issues
related to the strategic management can be resolved by framing a Strategic Management Plan
(SAMP). SAMP’s objective is to identify and evaluate those solutions by enhancement of
networking opportunities (Hodkiewicz, et. al., 2015). It also aims at filling the knowledge
gaps and outlining the guidelines for future cooperative projects.
 Categorizing value of SAM according to their utility and functions by adopting asset
management methods.
 SAMP starts from signifying Utility corporate mission and framing the strategies for
achieving the mission.
 Establishing alignment between SAM utility strategies, methods and procedures.
 For proper implication of SAMP, it is important to consider and include other
business operations, like information management, material management, stakeholder
management, customer services and information management.
 Combining business operations, procedures, activities, risk management for
determination of asset investments.
2. Failed Fundao Tailing Dam
By magnitude score of 41.42 the failure of Fundao Tailing Dam failure is the largest failure
in the history of world. According to available statistics approx. 60 million meters3 flowed
reached Doce river (Lall, 2018). The mixture flowed into Atlantic Ocean in 17 days which
had majorly polluted the water and the local communities suffered water shortages. The
companies (Vale and BHP Billiton) admitted the fact that dam has failed but the other dams
have passed the inspection.
3. Incident
The catastrophic incident took place on 5th Navember 2015 due to the failure of tailing
storage facility. As a result of the failure the local communities and environment suffered loss

which is huge and difficult to remediate. Many people went missing and the incident caused
humanitarian crisis. 19 people were killed and the reports have shown that 300 people went
missing after the incident took place. The repercussions of the incident were so disastrous
that it polluted the water of Doce river and of Atlantic Ocean (Carter, 2018). The failure
destroyed Bento Rodrigues Village and caused water shortage for the local communities.
Though the Samarco failed after occurrence of 3 minor earthquakes but this was not the only
reason for the failure. One of the vital reason was the defect in the construction design.
4. Design Failures
The technology used in constructing the dam was upstream embankment which often result
in failure of the dams. Although, this design or technology is economical but this life of the
design is not stable. Till date 66% of dams which used this technology has failed and largest
failure reported is of Samarco. The design failed to apply the main technology i.e. dry
staking, application of this technology would have minimized the risk of flow of iron ores
and sand lot (Silveira, et. al., 2019). The technical report identified certain errors in the design
which were not retreated.
5. Impact
As discussed earlier, the incident not only impacted the environment but also resulted in
humanitarian crisis. The mixture of the dam covered 620 km and reached Atlantic Ocean in
17 days’ period. The iron ores and sandlot contaminated the water of Doce river which
eventually resulted in water shortage. The mud flow which reached river and the ocean
contained unacceptable amount of toxic substances. The result of failure was so catastrophic
that it impacted the environment negatively. The toxic substances that flowed killed 19
people and suppressed villages (Mura, et. al. 2018). The impact could not be remediated even
after incurring huge expenses.
6. Investigation
The committee which investigated the matter is known as Fundao Tailings Dam Review
Panel. Also, the government authority, Brazilian Chamber of Deputies looked into the
matter. Along with this committee, other committees were also formed to investigate the
matter. Several Brazilian newspapers claimed that these committees received donations from
Vales and the result brought by the committees were biased (Chambers and David 2017). A
document leaked in January 2016, claimed that a technical report was made by a technical

engineer suggested that there is need of change in the structural design of the dam. However,
BHP Billiton disagreed about the fact that they were warned before the occurrence of
collapse.
7. Legal Consequences
Soon after the collapse, the operational license of Samarco was suspended and the Brazilian
Government charged the owners of Samarco with US$66.3million. Companies faced charges
for damaging the environment and manslaughter. Also, the government warned the
companies about the increment of the fine of they were found guilty of polluting water and
for other damages. In 2016, January, both the companies and the Brazilian government came
to an agreement of US$4.8 billion, excluding the cost of damages that affected the
environment and people (Jewell, 2016). But the negotiations failed and a suit was brought in
the apex court of Brazil for the amount of AU$8 billion. The case was settled by the end of
the year 2017.
8. Economic loss to the company
As it has been discussed the government authority suspended the operational license of
Samarco, consequently, the company suffered huge economic losses (CLARKSON,
2015). Also, the companies were made liable huge compensation amounting to
$58Billion each and before the settlement of the suit the companies were also charged
with several other penalties. Further, Vales has 10 more dams which are constructed with
upstream embankment and those dams were also made inactive.
9. Assessment of Risk
Several research reports claims that the companies avoided the concern of risk even though
numerous technical reports warned them regarding the disaster. Companies failed to assess
and manage the risk (Fonseca and Ávila, 2017). They did not have any back up or substitute
plan to minimize the damages. Also, they did not have warning alerts which would have
warned the employees and people living in the nearby villages. The warning alarms would
have warned the people and accordingly people would have managed to save their lives.
10. Reactions
The failure is known for its catastrophic results which is recorded as the most disastrous
event in the world’s history (Stefaniak and Wróżyńska, 2018). The incident made many

people homeless, hence, the people of Brazil started collecting donations for helping the
homeless. And the United Nations showed its condolence and helped the affected people and
areas.

References
Carter, Russell 2018, ‘Don’t Let Tailings Management Slide’, Engineering and Mining
Journal, vol. 219, no. 9, pp. 46–50, accessed from.
http://web.b.ebscohost.com.ezproxy.scu.edu.au/ehost/detail/detail?vid=0&sid=7484537e-
4991-4a8a-a832-2e13469bbe36%40pdc-v-sessmgr05&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ
%3d%3d#AN=131826923&db=iih
Chambers, David 2017, ‘In the Dark Shadow of the Supercycle Tailings Failure Risk &
Public Liability Reach All Time Highs’, Environments, vol. 4, no. 4, accessed from.
https://www.mdpi.com/journal/environments?
s=In+the+Dark+Shadow+of+the+Supercycle
+Tailings+Failure+Risk+&+Public+Liability+Reach+All+Time+Highs
CLARKSON, L., STATE-OF-THE-ART MONITORING TECHNIQUES FOR SAMARCO
TAILINGS DAMS.
Fonseca, M.N.E. and Ávila Filho, S., 2017. Assessment of an accident using FMEA to a
tailings dam, a mining event in Brazil. Risk, Reliability and Safety: Innovating Theory and
Practice, pp.223-227.
Hodkiewicz, Melinda, Bekebrede, Geertje, Lo, Julia & Lukosch, Heide 2015, ‘Designing
SNAKES AND LADDERS: An Analogy for Asset Management Strategy Development’,
Simulation & Gaming, vol. 46, no. 5, pp. 455–470.
Jewell, R., Addressing the Risk of Major TSF Failures.
Lall, U., 2018. Tailings Dams Failures: Updated Statistical Model for Discharge Volume and
Runout. Environments, 5(2). https://doi.org/10.3390/environments5020028
Mura, J., Gama, F., Paradella, W., Negrão, P., Carneiro, S., de Oliveira, C. and Brandão, W.,
2018. Monitoring the vulnerability of the dam and dikes in Germano iron mining area after
the collapse of the tailings dam of Fundão (Mariana-MG, Brazil) using DInSAR techniques
with TerraSAR-X data. Remote Sensing, 10(10), p.1507. https://www.mdpi.com/2072-
4292/10/10/1507

Silveira, F.A., Gama, E.M., Dixon, K.W. and Cross, A.T., 2019. Avoiding tailings dam
collapses requires governance, partnership and responsibility. Biodiversity and Conservation,
pp.1-2.
Stefaniak, K., and Wróżyńska, M., 2018. On possibilities of using global monitoring in
effective prevention of tailings storage facilities failures. Environmental Science and
Pollution Research, 25(6), 5280–5297. https://doi.org/10.1007/s11356-017-0995-x
https://search-proquest-com.ezproxy.scu.edu.au/docview/1978528393?
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