Financialization and human rights abuses provoked by business: the case of Samarco disaster in Brazil

Abstract

The aim of this study is to explore the implications of the financialization process on human rights compliance by business, based on an analysis of the Samarco case, in Brazil. In 2015, Samarco Company’s tailing dam collapsed and killed people, destroyed the surroundings and polluted 650 km of a river basin’s waters. The legal approaches on business and human rights do not offer tools for investigating the social conditions that allow such disasters to take place. It was appropriate an exploratory study of Samarco’s context, and the lenses chosen were the Financialization Theory and Tony Evans’ definition of market discipline. The method was the single case study, with analytical procedures of Content Analysis and indirect measurement. Categories were created from the theory and also emerged from the data. I analysed sampled documents and identified narratives that allowed inferences about Samarco’s corporate decisions. The results revealed that Samarco is recently involved in the financialization process by at least two means – its shareholders and its market, so a financial-friendly behaviour was expected. The narratives of the company’s Reports revealed practices guided by the shareholder value maximisation and the increase of concerns with financial risks. The strategies adopted were, among others, austerity measures and expansion, which resulted in great benefits for the shareholders. Such practices were hazardous for the protection of workers and communities because it entailed an increase in collective risks, such as by decreasing the budget for the dam’s maintenance. In different moments, the shareholder value and related practices were identified as the source of power determining the Company’s narratives and actions. In this context, the voluntary human rights instruments were insufficient and inappropriate and legally-binding instruments towards business remain necessary in the legal sphere. Moreover, a politicised, critical human rights discourse could offer a counter-narrative in organisations and society.