Economic and financial consequences of process accidents in Brazil: Multiple case studies

Abstract

Along with the advancement of process industries, there has been an increase in process safety accidents (as defined in the 1970s), which often cause deaths and damages to properties, communities, the environment, and the local economy. Process safety management (PSM) and legislation that can minimize dangerous incidents due to the failure of process operations are still insufficient in Brazil. Thus, this work aims to quantify the economic and financial consequences of three different process safety accidents using a case study methodology. The two first cases reflect extreme situations of accidents involving ruptures in tailings dams, which were used to store wastewater generated during ore processing (Mariana and Brumadinho). The Mariana dam disaster caused about 40 × 106 m3 of mining waste to be released, covering ∼1500 ha. The accident had a significant impact on the environment and economy throughout the Doce River Basin, resulting in a loss of US$5.28 billion. The Brumadinho disaster resulted in 270 deaths and 11 missing people, as well as severe environmental damage and property loss. Thirteen million cubic meters of tailings were released, damaging a 270-hectare region, and contaminating the Atlantic Forest natural reserves and the Paraopeba River. The total estimated cost, including production losses, fines, and damages, is US$13.48 billion. The third case is the fire at the Santos port terminal (São Paulo) caused by Ultracargo, which highlights the need for PSM policies and legislation because fire accidents are common in Brazil. Only the Port of Santos experienced at least one major fire case per year from 2013 to 2020. The fire spread to six storage tanks, consuming ∼30,000 m3 of fuel, resulting in a US$91.91 million loss for the company. The fire burned for nine days, causing delays in shipments, and a 4.3% reduction in agricultural exports during that period. Industrial process accidents, regardless of the severity of the accident or the type of product handled, have consistent economic and financial impacts on companies and the surrounding regions where they operate. This study exposes Brazil’s vulnerability in terms of process safety control and product storage. Therefore, Brazil has the opportunity to explore this topic further.