Vale SA: Stakeholder interview report - Jan 2012

VALE S.A.
January 2012
stakeholder interview REPORT

Solaron Sustainability Services - Confidential report2
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3Vale SA Stakeholders Interview Report
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INDEX
Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Analysis of the ESG risks faced by Vale S. A. . . . . . . . . . . . . . . . . . . . . . . . 6
WORKFORCE MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Stakeholder Interviews on Workforce Management at Vale . . . . . . . . . 9
ENVIRONMENTAL IMPACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Stakeholder Interview on Environmental Impact at Vale S.A. . . . . . . . . 13
Community Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Stakeholder Interviews on Community Impact at Vale S.A. . . . . . . . . . . .16
Additional ESG Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Stakeholder Interview on Additional ESG Risks at Vale S.A. . . . . . . . . . 21

Highlights
Interviews done with various stakeholders of Vale S.A. have revealed that the company faces the following
risks:
• Operational: Consistent poor management of labor relations has led to multiple strikes, with a signif-
icant impact on Vale’s ability to keep facilities operating at capacity.
• Regulatory: Vale’s involvement in repeated environmental and occupational health & safety violations
leaves the company exposed to a high level risk of regulatory issues, especially in the form of fines.
Additionally, Vale has faced public criticism from the Chinese, Canadian and Brazilian governments. This
may lead to an unfavorable regulatory environment in the future and may limit the company’s operations
in those countries.
• Reputational: Poor management of labor conflicts, multiple health & safety incidents, a series of en-
vironmental fines and allegations, and poor management of relationships with indigenous communities
all lead to a high level of reputational risk.
• Financial: Vale’s significant environmental impact has resulted in fines from regulators and costly court
settlements in numerous international locations, including Brazil, Canada, and the U.K.
• Governance: Through the inclusion of PREVI as a major shareholder, Vale is highly exposed to risks
from the Brazilian geopolitical landscape. This is seen in the change of CEO that Vale faced last year,
after the former CEO was publicly critical of President Dilma Rousseff and did not approve government
backed ventures.
We are continuing to pursue additional information with regard to the risks listed above. For ongoing cover-
age of these issues, please follow the company through the emNews platform.

Analysis of the ESG risks
faced by Vale S. A.
Especially with regard to the company’s Canadian operations, poor management of labor issues is a con-
sistent problem for the firm. According to multiple media reports and Solaron’s interview with the current
president of the United Steel Workers labor union, Vale has been markedly unwilling to negotiate with
unions across Canada and has utilized scare tactics in attempts to exert control over the workforce. These
continued labor conflicts have lead to, and may continue to cause, halts in production with implicit financial
and operational risks.
Beyond the labor concerns highlighted in interviews on Canada, controversies on the emNews platform
also indicate that occupational health & safety issues are prevalent in numerous other countries where the
company operates. However, this high prevalence of labor or health & safety issues may be attributable to
the company’s involvement in the mining industry. As a result, it is unclear if the series of health and safety
concerns listed are the direct fault of Vale’s policy and practice, or are more indicative of performance in
the sector as a whole.
The tie between Vale’s environmental and social impact is also important to note. Many of the environ-
mental controversies listed below are rooted in the high level environmental impact of Vale’s operations
as a mining company. This environmental impact has fallen on both urban and rural communities, also
incorporating indigenous groups in Canada and Brazil, who are known to already face economic and social
disadvantages. As a result, the company’s high environmental impact has become a substantial social im-
pact. In limited cases where Vale has inherited a positive community relationship, this is severely threatened
by the environmental impact of the firm’s operations. Additionally, the company faces the reputational risk
of social programs being perceived as a mask for the company’s overall detrimental impact on communities
and the environment. As a result of the deep impact that mining operations can have on community health,
Vale faces significant risk of future litigation. The company also faces the risk of losing its social license to
operate. In order to curb the reputational, regulatory, legal, and financial risks that arise from Vale’s poor
community impact, the firm must assess environmental impact as a root cause.
Vale’s environmental impact has also led to multiple fines from regulators. Moreover, it has caused the
company to be entangled in frequent litigation, often resulting in a substantial financial impact. If the
company cannot improve this poor environmental record, it faces the risk of future regulatory and legal
risks, with implicit financial and operational consequences.
There is also criticism of the company’s impact on indigenous communities. In order to avoid the reputa-
tional risks that this entails, Vale must ensure that employee working arrangements, community impact
assessments, and land acquisition attempts encompass the rights and needs of indigenous peoples. In
terms of governance, the string of recent business related controversies may be an indication that business
ethics standards may need improvement at Vale. Moreover, the undue influence over Vale’s operation and
management decisions by PREVI and, by extension, by the Brazilian government is a major concern for
investors. If business decisions continue to be clouded by political calculations, investors cannot expect the
firm to consistently exercise sound business judgment. This geopolitical risk translates to a financial risk as
the company moves forward.
Considering the significant quantity of controversies found for Vale within the reporting period, the remain-
der of this report is organized by ESG topic. The first section encompasses risks relating to workforce man-
agement (including labor relations and occupational health & safety), the second deals with environmental
issues, the third addresses community impact, and the fourth incorporates additional ESG issues (generally
regarding governance and geopolitical risk). Please note that some controversies will fall under multiple
categories, and may be listed more than once.

WORKFORCE MANAGEMENT
Key Events in the Development of Workforce Management Risks at Vale S.A.
As you will appreciate, each of these news items has been taken from the emNews tool which is a risk and
alert tool on companies developed by Solaron’s in-house team. A compiled list of relevant alerts is provided
below.
Vale’s potassium project shut down in Argentina:
O Estado de Sao Paulo | June 18, 2011
On June 17, 2011, Vale’s Potassio Rio Colorado Project was suspended by the provincial government of
Mendoza, Argentina. According to the provincial environmental secretary, Vale has not met the Compre
Mendocino demands. In April, 2011, the government of Mendoza also cited Vale for not meeting the regula-
tion of employing at least 75% of the workforce from local communities.
Deaths at Vale’s Stobie nickel mine:
The Wall Street Journal | June 10, 2011
On June 8, 2011, two workers were killed while working 3,000 feet underground at Vale SA’s Stobie nickel
mine in Sudbury, Ontario. The workers, who were buried under crushed ore and rock, were the first deaths
at Vale SA’s Stobie mine since 2006.
Vale accused of disrespecting Innu and Inuit communities:
The Canadian Press - Broadcast wire | May 12, 2011
On May 12, 2011, Vale responded to an industrial inquiry report into an 18-month strike at its Voisey’s Bay
nickel mine in Labrador, Canada. The report indicated that Vale had failed to respect the aboriginal peoples
in the area of the mine, the Innu and Inuit communities. While Vale has emphasized the benefits that the
project has brought to indigenous communities, the report states that there is a common feeling among
natives in Labrador that Vale has failed to adequately appreciate or comprehend their unique cultural values.
Vale to face difficult labor negotiations in Thompson, Manitoba:
Dow Jones News Service | April 21, 2011
According to an official at United Steelworkers’ Unions, Vale can expect arduous negotiations for labor
contracts at the company’s Thompson, Manitoba site in November and September 2011. The company
recently announced a cutback of 500 personnel at the site; reducing the number of workers from 1,200 to
700. This announcement came on the heels of the resolution of a yearlong strike at two other Vale sites in
Canada, and an 18 month strike at yet another Vale site in Canada.
Vale settles labor dispute:
AE Brazil Newswire - Financial and Corporate News Service | August 24, 2010
On August 24, 2010, Vale announced that it has settled with the Labor Prosecutors’ Office in a case over the
payment of workers’ commuting time. Vale has agreed to pay workers for 44 minutes’ worth of commuting
time per day, and has additionally agreed to make payments retroactive to February 2007.
Strikes at two Vale facilities in Canada end after one year:
The Toronto Star | July 09, 2010
A strike which started on July 13, 2009 at Vale facilities in Sudbury and Port Colborne ended after nearly one
year, on July 9, 2010. The United Steelworkers union has confirmed that 3,100 striking members at both of
the Vale cites had agreed to a five-year contract containing wage increases and some concessions.
Vale worker injured by sulfuric acid:

Radio New Zealand News International | June 28, 2010
In June 2010, a 54 year old worker suffered second degree burns on 20 percent of his body at the Vale nickel
mining plant in New Caledonia. While working, a jet of sulfuric acid used in the nickel and cobalt extraction
process passed the normal limit and injured the man. Vale was also criticized last year, in April, for a large
scale acid spill which was responsible for the deaths of thousands of fish in a World Heritage protected area
in Prony Bay.
Steelworkers file labor complaint against Vale:
Reuters | January 13, 2010
On January 13, 2010, the United Steelworkers union filed a labor complaint to the Ontario Labour Relations
Board against Vale. The union alleged that the company had been unwilling to negotiate with unions during
continuing strikes at Sudbury and Port Colborne. The union has also filed for financial restitution for both
workers and the union itself, which compensated workers during the strike.
Investigation launched into chemical leakage at Vale Inco plant:
South Wales Evening Post | November 14, 2009
On November 14, 2009, a criminal investigation was launched into a chemical leakage at the Vale Inco plant
at Swansea, Wales. While company representatives have affirmed that there is no risk from the leak, the
leaked chemical has been called “liquid death” and nine of the thirty evacuated workers have shown elevated
nickel levels.
Global Union shows support for Canadian Vale Inco strikers:
Canada NewsWire | November 09, 2009
On November 9, 2009, the global union ‘Workers Uniting’ organized a protest as sign of support for the
striking mineworkers from Vale Inco in Canada. Members of ‘Unite the Union’ picketed outside a Deutsche
Bank metals conference in London, United Kingdom. In June 2009, approximately 3,500 Vale workers in
Canada went on an indefinite strike to defend their pay and working conditions. Vale had planned to impose
drastic reductions to pensions and other benefits of the Canadian miners.
Asbestos court case adjourned:
The Western Mail | May 21, 2009
On May 20, 2009, a lawsuit filed in the Swansea Magistrates Court against Vale Inco Europe was adjourned
to June 9. The mining company is accused of failing to comply with the 2006 Control of Asbestos Regulations
at its Clydach nickel refinery in Swansea.
Fatal accident at Vale Inco site in Canada:
American Metal Market | February 26, 2009
On February 25, 2009, a 53-year-old Vale Inco Limited employee died as the result of an accident at the
company’s Thompson Mine in Manitoba, Canada. The production of nickel was halted for one day in order
to investigate the accident. The man was working 4,000 feet below the ground when an explosion occurred;
the cause was not known.

Stakeholder Interviews on Workforce Management at Vale
Labor union president highlights risks to health and safety of contract workers - Metabase
Labor Union, Itabira, Brazil, 1 December 2011
Summary: According to Solaron’s interview with a representative of the Metabase Labor Union, labor
conditions at Vale are dangerous by nature of Vale’s involvement in the mining industry, and are not the
result of any particular concerns within Vale. Additionally, Vale has a good relationship with the union and
has implemented some social programs to provide a more positive environment for workers. However, the
interviewee highlights the concern that more serious health & safety issues are concentrated within the
company’s unskilled, contract labor force.
Q: Can you describe the labor conditions at Vale?
A: The working conditions are risky and are at risk level four because of the mining activity. But Vale is an
organization that is concerned with the environment and the working conditions, including occupational
health and safety. We are implementing at Vale, a program where funds will be invested to protect employ-
ees from drug addiction, smoking habits and alcoholism. Moreover, there will be investment for the working
environment inside the mines. The facilities such as bathrooms, cafeterias are very well equipped now with
all the needed things for the workers to live well.
There is always a fight of the labor union with the company to correct the small things that we, as human
beings, always can correct. There is a concern in the mines for the well being of the employees. We have
to fight with depression that is generated by many situations, family problems, addictions. But with the
social program that Vale has in place, we hope that many families can be saved from the curse of various
addictions.
Q: How are the occupational health and safety measures in the company?
A: In relation to the environment, there is good care. Currently, Vale and the labor union have partnered
to protect the environment and surrounding areas. In the metropolitan area of Belo Horizonte, we have
protected areas of more than 12,000 hectares. There is a great concern for this at Vale.
As this is an activity of much risk, we have controlled the accidents well. Our aim is zero accidents, but it
is almost unreachable. We have very low rates in relation to fatal accidents. We have debated this with
Vale. We have a very good relationship with the company, very ethical, honest, always defending the labor
interests.
Q: In 2011, did any major accidents occur?
A: In our mine here, there were no fatal accidents this year. We criticized contract labor. Some activities are
done through contract labor and the contract companies have not reached a high level of development and
working standards. In Brazil, we have too many people who need to work but do not have enough education.
Contract companies gather this unprepared work force. The more serious accidents usually happen with
contractors.
Q: Are there any demands from the labor union to Vale?
A: We are demanding a better profit sharing system. In the issue of health and safety, the demand is an-
nually revised. We are discussing with Vale about improvements in access to education, and are requesting
protection and care for people who have deviated into drug addiction. These are two demands we have. Vale
is sharing part of the profit to care for people.

Labor Rights and Health & Safety Issues at Vale’s Sudbury Plant, Canada Source: United Steel
Workers, Sudbury, Canada. 1 Dec 2011
Summary: Employees of the Vale Inco Nickel Mine in Sudbury, Canada were involved in the largest labor
strike in Canadian history between 2009 and 2010. Despite the union’s initial willingness to start from a
status call agreement and negotiate mutually beneficial terms with Vale, the company was highly uncoop-
erative.
Q: There were two major strikes against this company, as one of the strikes was the biggest
in the history of Canada, can you tell why this strike began and how did it end?
A: Well, Vale bought the old company, Inco in 2006. That is where we were working. In the beginning,
everything was good and the company continued to co-operate with us even though the nickel prices were
high then. Then in 2009, when we began negotiations for a contract, we were dealing with a totally different
company. It was not the same company that we had known for the past two and a half years. The message
that we got was one of power. They wanted to show us that they were in control and a change was needed
in Canada, a change in Sudbury, and the change was going to take place at all costs.
Q: So, practically this started the strike?
A: Yes, this was when the strike started. I was in negotiations with the union against the company and I have
never, in my whole life, been a part of negotiations before where the company did not want to negotiate at
all. All they wanted was to dictate. They did not want to have any conversations on what we wanted as a
union or what they wanted.
Because of the economic circumstances in which the company was getting blown, we offered them at the
beginning a ‘status call agreement’, as a starting point to move forward. We told them we’ll try to deal with
it here and do the best contract for all parties. The company provided reasons as the infrastructure is very
bad and they need to put lot of money into it, which is fine and they should be doing it, but it shouldn’t be
coming from worker’s pay cheques. Yes, they seem to behave the same way in Brazil, Argentina etc. They
had huge opportunities in Argentina, but because they did not co-operate, they lost many opportunities
there.
Their strategies continue to be like this today also. We had a year long strike and we are some 3rd or now
4th generation of miners and we have had fights in the past, we had really bitter ones in 1978-79, but not
to this extent. In 1979, may be prices of nickel were high but they never continued operations. They never
used replacement workers.
They brought in lot of third part security. They were taking pictures, intimidating us. I was Vice President of
the Union then, and President now, but they had 3 lawsuits against me as I was an official of the Union and
also against few others in the Union. This was used to intimidate us.
Q: How did the strike end? What was the bargain at the end?
A: We ended up with dual pension, a nickel bonus system and a small wage increase. With such a tough
situation and also the company we were dealing with, I am not going to say we did very well, But I will say
they did not get what they wanted. We were the first ones to stand against them. They are very arrogant
and do not care for the people. I don’t think you can describe them, they are not human.
Q: What about the issues in a smelter in Manitoba? They have had negotiation in September
2011? How did it end?
A: There were a lot of changes to be made. And they remembered, we had fought at Sadbury, Voisay Bay and
Cortborne, we fought for years and years. When it came to Thompson, Thompson knew about the struggles.
We got the agreement ratified, with Change in Pension plan, got a bonus plan and better package with more
money per hour. They tried giving more money to them than us, so that friction is created amongst workers.
They did it and we are aware about the tactics of the company.

Q: Can you tell us something about the two employees who died at Vale’s Mine in Ontario,
Canada? There were allegations from your Union that Vale was interfering in the investi-
gation?
A: We cannot comment about the same now as the investigations have just ended and the outcome will be
made public very soon. We expect to share investigation results in the new year.
Q: How are the working conditions at Vale? You said they need to work on infrastructure?
So do they not take measures to protect workers?
A: No they don’t, I can’t speak for all of Canada, only for Sudbury. We fought to get protected because a lot
of our people died in those mines. This company is trying to rule them. Vale is only about production. This is
all they want. People don’t know it happens every day and we are trying to call the Ministry of Labor to come
in. And because they continue to take short cuts, they don’t stop until they kill more people.

ENVIRONMENTAL IMPACT
Key Events in the Development of Environmental Impact Risks at Vale S.A.
below.
ThyssenKrupp CSA faces second lawsuit for environmental crimes:
Business News Americas | June 10, 2011
On June 10, 2011, Rio de Janeiro’s public ministry filed a second complaint against ThyssenKrupp CSA, a joint
venture steel mill between German group ThyssenKrupp and Brazilian miner Vale. Allegedly, CSA had been
polluting the air with emissions of particulate matter near its Santa Cruz production site, posing a hazard to
human health. Previously, CSA was sued for damages resulting from its first blast furnace in June 2010 and
fined twice, in August 2010, and January 2011, for environmental infringements, the fines and retributions
adding up to BRL 18.6 million (approximately USD 10 million).
Human rights NGOs releases report detailing Vale’s environmental and social impact:
Fidh.Org | May 18, 2011
The International Federation for Human Rights (FIDH), and the Human Rights bodies Justiça Global and
Justiça nos Trilhos have published a Human Rights Impact Assessment Report demonstrating the impact
of Vale’s operations on communities in the state of Maranhão, Brazil over the last 26 years. Community
members reported numerous health problems, including serious respiratory and sight problems due to pol-
lution caused by Vale. The report highlights the difficulties that communities face in obtaining compensation
through the court system and also urges Vale to end its environmental pollution.
CSA coke plant embargoed:
Dow Jones News Service | May 13, 2011
On May 12, 2011, the Rio de Janeiro (Brazil) state government announced the embargo of a coke plant
owned by Companhia Siderurgica do Atlantico, or CSA (a steelmaking joint venture owned by Germany’s
ThyssenKrupp Steel and Brazil’s Vale SA). The environmental secretary has stated that CSA’s operations will
be halted completely if the company does not comply with the environmental regulator’s ruling on covering
an emergency pit within 30 days. According to authorities, the emissions from the pit posit a health risk
to CSA employees and local residents, who have seen a higher incidence of respiratory issues and related
disorders since CSA began operations in the area.
Vale attempts to appeal groundbreaking class-action environmental ruling:
The Globe and Mail | May 09, 2011
On May 16, 2011, Vale lawyers will be attempting to appeal a revolutionary ruling that ordered the company
to compensate homeowners in Port Colborne, Ontario for decades of pollution from smokestacks at the Inco
nickel refinery, which Vale acquired
in 2006. Vale has disagreed with the judge’s decision to stretch the standard time-limitation period for this
lawsuit and has also been highly critical of the property value calculations utilized by the court.
Toxic waste water leak at Voisey’s Bay:
Reuters News | January 26, 2011
On January 22, 2011, a defective valve at a nickel mine owned by Vale at Voisey’s Bay caused a leak of
toxic waste water in Labrador, Canada. The tailings leak contaminated a pond that the company uses for

its complex potable water system. All operations were stopped at the mill and the company announced on
January 25 that the problem was resolved.
Companhia Siderúrgica do Atlântico (CSA) accused of pollution:
Steel Business Briefing | December 07, 2010
The Public Attorney’s Office of the State of Rio de Janeiro (MPRJ) has filed a lawsuit against Companhia
Siderúrgica do Atlântico (CSA), a joint venture between ThyssenKrupp and Vale, alleging environmental
crimes after it received notifications regarding air pollution issues.
Vale Inco ordered to compensate residents of Port Colborne:
Reuters| July 07, 2010
On July 6, 2010, an Ontario Superior Court justice announced that the residents of Port Colborne (Canada)
who filed a class-action lawsuit against Vale Inco, would receive compensation by the company. 7,000
Households whose properties were contaminated by emissions from the nickel refinery have been com-
pensated CAD 36 million. The compensations were awarded due the fact that Inco’s activities lowered the
values of their properties.
Leak at Goro, New Caledonia kills animals and fishes:
Metal Bulletin News Alert Service | April 04, 2009
On April 1, 2009, there was an acid leak at the Vale Inco Goro nickel plant in New Caledonia. The company
sustained that about 2,500 liters of acid were spilled and was kept in a containment area around the plant,
but the Australian and New Zealand press have stated that more than 5,000 liters of sulfuric acid leaked
into nearby rivers, resulting in the deaths of thousands of fish and other animals. In response, the manager
of the World Wildlife Fund in New Caledonia has asked authorities to withdraw Vale Inco’s operating license.
Stakeholder Interview on
Environmental Impact at Vale S.A.
Vale’s Processing facility in Labrador uses healthy lake eco-system as dump for processing
waste: Mining Watch, Labrador, Canada. 30 November 2011
Summary: According to a representative of Mining Watch, Vale has been utilizing a healthy lake as a dump
for processing waste associated with Vale’s nickel processing facility in Labrador, Canada. The interviewee
states that alternative options for waste processing were not adequately pursued by the company, and that
regulators should not have allowed Vale to begin dumping waste.
Q: What are the concerns that your organization currently has with Vale?
A: Our biggest concerns with Vale are around labor issues. Two of the longest strikes in Canadian history
have been at Vale. There is a marked difference in the way they approach labor relations when compared
to Inco. They don’t treat the labor problems as they should and they don’t have very good cooperation with
the labor unions. Some of the other issues, for instance - the Port Colborne issue [where Vale was ordered
to compensate home owners for deterioration in housing prices as a result of pollution from a Vale plant
(previously owned by Inco)]; although Vale is now held as the responsible party, the contamination took place
under the previous owners Inco and might need to be dealt with differently in our opinion.
Q: Are there any other environmental concerns with Vale?
A: On the environmental side, one of our concerns is their nickel processing facility in Labrador. It is going
to use a healthy, well, a formerly healthy, lake ecosystem as a dump for processing waste. It is called Sandy
Pond.

Q: Has Vale received government approval to use Sandy Pond as a dump for waste?
A: Yes they did. The ecosystem is being destroyed as we speak because, as I understand, it is a pond and a
fishing ground. It was a popular place for locals, it wasn’t a commercial fishery it was a recreational fishery
that produced very nice size fish for the area.
Q: It would seem that this not only has an environmental impact but a social one too. Please
comment.
A: Certainly, and some people supported the project, because Inco and Vale portrayed this as the only
option. People accepted this as a trade-in for economic benefit. There were other more expensive options
for Inco and Vale which, for obvious reasons, were ignored. We were disappointed with our regulator for
yielding in.
Q: At present, what impact has Vale caused on Sandy Pond?
A: They don’t have the processing facility built yet but they have started to use the Pond to receive waste
water from their camp. They also started to do earth work around it, so it’s hard to know to what degree the
pond was already impacted. It will be very difficult to get the regulator’s decision reversed at this stage. They
are not producing anything there yet, there is no active process, it is under construction, they are taking ore
from quite a distance to ship it there to be processed.

Community Impact
Key Events in the Development of Community Impact Risks at Vale S.A.
As you will appreciate, each of these news items has been taken from the emNews tool which is a risk and alert
tool on companies developed by Solaron’s in-house team. A compiled list of relevant alerts is provided below.
Human rights NGOs releases report detailing Vale’s environmental and social impact
Fidh.Org | May 18, 2011
The International Federation for Human Rights (FIDH), and the Human Rights bodies Justiça Global and
Justiça nos Trilhos have published a Human Rights Impact Assessment Report demonstrating the impact
of Vale’s operations on communities in the state of Maranhão, Brazil over the last 26 years. Community
members reported numerous health problems, including serious respiratory and sight problems due to pol-
lution caused by Vale. The report highlights the difficulties that communities face in obtaining compensation
through the court system and also urges Vale to end its environmental pollution.
CSA coke plant embargoed
Dow Jones News Service |May 13, 2011
On May 12, 2011, the Rio de Janeiro (Brazil) state government announced the embargo of a coke plant
owned by Companhia Siderurgica do Atlantico, or CSA (a steelmaking joint venture owned by Germany’s
ThyssenKrupp Steel and Brazil’s Vale SA). The environmental secretary has stated that CSA’s operations will
be halted completely if the company does not comply with the environmental regulator’s ruling on covering
an emergency pit within 30 days. According to authorities, the emissions from the pit posit a health risk
to CSA employees and local residents, who have seen a higher incidence of respiratory issues and related
disorders since CSA began operations in the area.
Vale accused of disrespecting Innu and Inuit communities
The Canadian Press - Broadcast wire |May 12, 2011
On May 12, 2011, Vale responded to an industrial inquiry report into an 18-month strike at its Voisey’s Bay
nickel mine in Labrador, Canada. The report indicated that Vale had failed to respect the aboriginal peoples
in the area of the mine, the Innu and Inuit communities. While Vale has emphasized the benefits that the
project has brought to indigenous communities, the report states that there is a common feeling among
natives in Labrador that Vale has failed to adequately appreciate or comprehend their unique cultural values.
Vale attempts to appeal groundbreaking class-action environmental ruling
The Globe and Mail | May 09, 2011
On May 16, 2011, Vale lawyers will be attempting to appeal a revolutionary ruling that ordered the company
to compensate homeowners in Port Colborne, Ontario for decades of pollution from smokestacks at the
Inco nickel refinery, which Vale acquired in 2006. Vale has disagreed with the judge’s decision to stretch
the standard time-limitation period for this lawsuit and has also been highly critical of the property value
calculations utilized by the court.
Vale Inco ordered to compensate residents of Port Colborne
Reuters| July 07, 2010
On July 6, 2010, an Ontario Superior Court justice announced that the residents of Port Colborne (Canada)
who filed a classaction lawsuit against Vale Inco, would receive compensation by the company. 7,000 House-
holds whose properties were contaminated by emissions from the nickel refinery have been compensated
CAD 36 million. The compensations were awarded due the fact that Inco’s activities lowered the values of
their properties.

Stakeholder Interviews
on Community Impact at Vale S.A.
Positive community relationship threatened by ongoing water shortage:Paz & Natureza
Pantanal, Antonio Maria Coelho, Brazil. 8,December 2011
Summary: The ‘Antonio Maria Coelho’ community of riverside residents, in Corumbá Brazil, was left with-
out water due to the mining operations of Vale in the unit bought from Rio Tinto. Rio Tinto left a positive
inheritance of a community program which Vale is carrying on. However there is some environmental impact
related to the abuse of water resource, damaging local communities.
Q: What are the current impacts of ex-Rio Tinto mining operations, now a unit of Vale, in
the Corumbá region, Brazil?
A: Out of all of the companies in Corumbá (Brazil), Rio Tinto [unit sold to Vale in 2009] is one of the lesser
pollutants - we cannot say it does not damage the environment, because all mines do. There are some mines
which are worse because they do not do any social work in the community.
The river side communities are the most vulnerable. The Vale (ex- Rio Tinto) mine is the only one which has
some social work with the community - they maintain a program. In reality, this program was acquired by
Vale. Rio Tinto had a community relationship program, then Vale was obligated to continue it because of the
positive experience of this program in the communities.
The program depends on the damage that the company is causing to the community or the ecosystem in
exchange for some shopping basket.
We promote awareness so that communities become autonomous and do not take this program as a subsidy
or community domination.
Q: Could you describe this program?
A: The program is called Participative Workshop. Some funds are allocated by the company, and the com-
pany calls the community to present projects. It is an income generating or social transformation project.
There is a training program related to the needs of the community. This is an inheritance that Rio Tinto left
in the region.
When Vale acquired Rio Tinto, the community was afraid of losing this program. And the company was so
pressured that it had to maintain the program.
Vale is not known much for sustainable actions in the region as it has a history of many fines but when Vale
acquired Rio Tinto, it received some trust from the community by continuing the program.
MMX (subsidiary of EBX as OGX) is the company that has damaged the region the most and the one with
the greatest number of fines, greatest incompliance with the laws.
In relation to Vale, the community feels closer to the company and is able to monitor it. However this does
not mean that every community petition is fulfilled. But at least there is a channel.
Rio Tinto had the tradition of calling communities annually to discuss the community investment in the
region. This was also adapted in some way by Vale. Whenever we need, we ask for a public audience or
meeting with the company to discuss. There is a dialogue platform among many entities and the govern-
ment where mining investment is discussed.
Q: Is there any known environmental damage?
A: There is damage to the Antonio Maria Coelho community which is without water because of the mining
activity of Vale. It happened some time ago and has not been solved till now. It is a small village being
pressured to leave their lands due to a lack of water that the mining activity caused.
All the legal proceedings were not very transparent, permits were prematurely given causing a series of
disasters and fines, but the government is also supporting them not to pay the fines - this is a very compli-

cated situation, full of corruption in this investment.
The great problem is that the Pantanal region is an extended lowland and the environmental impact needs
to be very huge to appear. But the visible impact is in the local residents, the riverside residents that fish for
their daily meal, who are harmed. These are the people who cannot survive.
It is very important to have this dialogue, because these communities are the ones with a less voice and role
in the local development. If we could build a pressure directed towards understanding this need, it would be
highly interesting.
Vale fined BRL 1.5 million (USD 958,000) for rain of dust on Itabira, Brazil: Itabira
Environmental Secretary, Itabira, Brazil. 1 December 2011
Summary: On August 3rd, 2011, Vale was fined BRL 500,000 (USD 320,000) for causing a rain of dust
to fall on the city of Itabira, Brazil. On August 4th, the same fine was implemented again and doubled as a
result of the company’s continued negligence. As a consequence of the nature of the open air mining that
Vale does in the region, the company is not always able to control the level of pollution that falls over the
city. According to the interviewee, this can have a significant impact on the health of Itabira’s residents.
Q: We would like to ask some questions about the rain of dust that happened in August
2011 due to the operations of the company ‘Vale’ in the city of Itabira.
A: Between August 2nd and 4th, 2011, there was a rain of dust that resulted in 2 fines to the company
Vale. The first fine was related to the 3rd of August, a fine of BRL 500,000 (USD 320,000). As the company
committed the same fault on August, 4th, the fine was doubled and the total fine was BRL 1.5 million (USD
958,000).
Q: After the fine, how was the problem of dust pollution in Itabira?
A: Between May to September, during the dry season, there is a change in the direction of winds, from the
mines to the city. Vale has four automatic air quality monitoring stations along the city. This time, the values
reached levels above the allowed limit of 150 micrograms/m3. When that happened, Vale paralyzed all the
work in the mines but it could not control the rain of dust over the city. Vale could reduce the fine to BRL
1.04 million (USD 664,000) as it has appealed the fine to the Environmental Secretary.
The Environmental Epidemiology Department of the University of Sao Paulo verified that each increase
of 10 microgram/m3
of particles increased the number of people being hospitalized, especially children,
teenagers and the elderly.
Q: There is the natural element of the direction of wind, but the company does not have
equipment to avoid these kinds of accidents?
A: The mines are in the open air, but inside the mining area the company uses water trucks, water cannons
and chemical products to reduce the amount of mineral particles.
Q: Before August 2011, when was the last time that a rain of dust had occurred?
A: In 2003.
Missionaries of Maranhão gather significant criticism of Vale: Missionarios Camboianos do
Maranhão. 7 December 2011
Summary: In the state of Maranhão, Brazil, there are many cases of community and environmental dam-
age caused by Vale which are hidden from public attention because they occur in remote locations. A group
of missionaries have decided to speak out and have created a movement to raise awareness of Vale’s wide
range of community and environmental impact in the state.

Q: There is a lot of criticism of the company Vale and its social and environmental impact
in Maranhão, Brazil. What are the main controversies that your organization has seen
recently?
A: There are many controversies associated with Vale. Here are a few of the most prominent:
There is aggression against traditional communities (indigenous and maroon [communities created by
escaped slaves during colonial times]) in the Carajás corridor.
In Monge Belo and Santa Rosa dos Pretros (city of Itapecuru, state of Maranhão, Brazil), Vale is opposing
the land regularization process created by INCRA (national land reform body) which would provide land
rights to the maroon community. In the case of the maroon community of Moje/PA, there are significant
environmental and community impacts as a result of Vale’s ore pipeline. For this, Vale was prosecuted by
the Federal Court in Belem.
Additionally, there is well known impact on the Xikrin indigenous community, in the state of Para, which
gave origin to a public suit through the Public Ministry and FUNAI (Indigenous protection government body).
Many conflicts were also caused by a Vale operated railway that crosses rural and urban communities - many
of these communities existed before the construction of the railway. The majority of conflicts denounced
by the communities which we are following in our visits are: misappropriation of public patrimony by Vale,
siltation and inundation, constant train noise and train whistle noise, train blocking passages while parked
in the railway, people and animals trampled by trains, fissure and collapse of wells, pollution (and consequent
fine of BRL 1,5 million - USD 950,000), damages to roads by the heavy trucks, sexual exploitation of children
and teenagers in the construction areas by Vale employees, and the transportation of children without
parental authorization in cargo areas in dangerous and undignified conditions.
Vale has also been involved in a series of work conflicts, including: employee exploitation, retaliation and
threats to prevent employees from denouncing the violence, moral harassment, and lack of payment for
commuting hours (the long working hours prevent employees from engaging in any other family, cultural or
leisure activity). In relation to the latter, there is a lawsuit in process from the Vale employees of Mariana,
state of Minas Gerais.
Additionally, there are significant health impacts related to the chain of mining and metallurgy, specifically
in the city of Açailandia. Within Açailandia, there is an industrial area called Piquia de Baixo, considered an
extremely polluted area in Amazonia. In this area, all of the impacts of the development provided by Vale
are visible (air, water, soil and noise pollution).
In the same city of Açailandia, there is a register of at least four years of intense pollution generated by 70
industrial blast furnaces for coal production - all property of Vale.
In scientific research by the International Federation of Human Rights (FIDH), Vale and other companies’
responsibility were demonstrated - the federation denounced these grave violations of human rights.
Social programs mask continued environmental abuse at Vale: Missionarios Camboianos do
Maranhao. 23 January 2012
Summary: This additional interview with the Missionarios Camboianos do Maranhao provides deeper
level of information on Vale’s impact in Açailândia. Here, the interviewee highlights Vale’s usage of social
programs to mask its poor social and environmental practice in the region. The interviewee also brings
attention to the long term impact of cultivating Eucalyptus to cover the company’s high carbon footprint.
Ultimately, monoculture eucalyptus cultivation results in land displacement of local people, water source
silting and expulsion of more functional agriculture.

Q: How do companies contribute to projects in Açailândia? You have indicated that these
contributions are “seductive” injections of small amounts of money. Could you clarify this
point?
A: Vale and other companies are investing in Açailândia by contributing to the City Fund for Infancy and
Adolescence (FIA). It is related to public money because companies do not pay taxes, but directly for these
projects. It is well known that in this case, the company cannot designate what the funds should be used
towards. In spite of our criticism, the City Council for the Infancy and Adolescence continues to pressure
organizations to show the sponsors of their projects. In this way, the organizations have the “informal obli-
gation” of putting Vale’s logo on the T-shirts of children who participate in the project. These organizations
also get the opportunity to publicize Vale’s and other companies’ donation to FIA in the local press.
There are other sponsorships by Vale which, in our opinion, go in the same direction - to allow the visibility of
the company in the local surroundings without really making policies and actions of effective and continuous
transformation.
Q: Who are Vale’s metallurgical customers in Açailândia that contribute to these practices?
A: Gusa Nordeste, Viena Siderúrgica S.A., and the metallurgic companies of Simasa e Pindaré
(Queiróz-Galvão Group), Fergumar.
Q: Vale has also been involved with monoculture cultivation of Eucalyptus in the region?
What impact does this have on the community and larger environment?
A: In general, some of the harmful effects of the monoculture cultivation of Eucalyptus in the region MAPI-
TO (Maranhão-Piaui-Tocantins) are: silting of rivers and water sources, impact of pesticides on neighboring
lands, gradual expulsion of the peasants from their lands for the advancement of monoculture cultivation,
the isolation of familiar agriculture, undocumented land appropriation and expulsion of landholders form
their lands. Vale possessed a lot of land cultivated with Eucalyptus here in our region (Maranhão state). Now,
they sold all Eucalyptus areas to Suzano (there are informal criticisms from the technicians and agronomists
of Suzano about how the cultivation of Eucalyptus had been done in these regions, without respecting the
river banks). Vale still has cultivation of Eucalyptus in Pará. They even want to invest in them to get carbon
credits in the future.

Additional ESG Risks
Key Events in the Development of Additional ESG Risks at Vale S.A.
below.
Vale S. A. penalized BRL 340 million:
Investimentos e Notícias (Real Time)| April 13, 2011
On April 13, 2011, the Third Federal Appeals Court of Brazil ordered Vale to pay BRL 340 million (USD 213
million) to Petros – the Petrobras employee pension fund. The penalty corresponded to inflation-based
adjustments from the purchase of Vale gold bonds by Petros. In 1988 Petros purchased 4.8 tons of gold from
Vale in a public offering. According to Petros, the payments made by Vale did not include accurate monetary
corrections. Vale has refuted this claim, stating that monetary corrections were unnecessary since the
transaction was undertaken by Brazilian private asset clearing house, Cetip.
Brazil Takes Stronger Hand in Vale with CEO Ouster:
The Wall Street Journal | 6 April, 2011
On April 4, 2011, Vale announced that former executive Murilo Ferreira would be assuming Roger Agnelli’s
role as CEO. According to analysts, Agnelli was removed from his post for opposing government supported
business ventures that he did not view as strategically beneficial to the firm. Analysts have also reported
that current President Dilma Rousseff had a prior connection to Ferreira through their previous roles in
energy regulation and that Ferreira is expected to re-orient Vale towards a domestic focus.
Vale to appeal $15 billion Brazil court ruling on taxes:
Reuters News | March 30, 2011
On March 29, 2011, a Brazilian federal court upheld a former ruling on the taxation of foreign subsidiaries,
resulting in the government’s ability to charge Vale taxes on profits from its subsidiaries abroad. Vale has
argued that this ruling does not provide for bilateral agreements to prevent double taxation or the impact of
foreign currency variations on the firm’s profits. One day later, on March 30, a spokesman of Vale announced
Vale’s decision to appeal the court ruling.
Vale: Roger Agnelli vs. Dilma Rousseff:
The Business of Mining | March 28, 2011
According to a report by The Business of Mining, the Brazilian government maintains a high level of control
over Valepar S.A.,
Vale’s controlling shareholder. Through this influence, the Brazilian government will play an important role in
replacing Vale’s CEO and in pushing the company to operate with government interests in mind.
Vale S. A. criticized by Canadian government:
Resources News (RWE) | May 05, 2010
As of May 2010, Vale S.A. has been criticized by all levels of Canadian government - federal, provincial and
municipal politicians - for its alleged anti-labor agenda. Vale has faced strikes in the country since 2009. To
date, many politicians feel that the company has not made adequate efforts to support collective bargaining
or meet workers demands.

Chinese regulators examine iron-ore market:
The Daily Telegraph | April 16, 2010
In April 2010, the Chinese Government started an investigation into the iron ore market claiming that mining
companies BHP
Billiton, Rio Tinto and Vale had engaged in monopolistic practices. The companies secured a 90% iron ore
price increase in March 2010, and transitioned from the customary annual benchmark system to a quarterly
system shortly thereafter.
Aquila files lawsuit against Vale:
Metal Bulletin News Alert Service | April 03, 2010
On March 4, 2010, Aquila Coal filed a lawsuit against Vale, alleging that the company’s negligence in meeting
deadlines to obtain additional transport capacity has caused damage to the Aquila Coal – Bowen Central
Coal (subsidiary of Vale) joint venture in Queensland.
Vale Inco accused of under-reporting nickel value to avoid royalty payments:
Steel Business Briefing | October 19, 2009
International Royalty and its subsidiaries, Labrador Nickel Royalty Limited Partnership and Altius filed a
lawsuit against Vale claiming USD 26 million damages for allegedly under-reporting the net smelter return
on the sale of nickel from the mines in Labrador and Newfoundland, Canada. Allegedly, Vale under-reported
its nickel sales to avoid paying a 3% royalty.
Stakeholder Interview
on Additional ESG Risks at Vale S.A.
PREVI’s role in the recent change of leadership at Vale S.A.: Professor of Finance & Accounting,
Director of Brazilian Society of Finance, University of Sao Paulo, Sao Paulo, Brazil. 19 Jan 2012
Summary: According to the interviewee, the existence of PREVI as a major shareholder at Vale is a sig-
nificant risk to the company’s operations. As demonstrated in the removal of Vale’s former CEO through
political pressure, the company faces the risk that the government’s interference may continue to draw the
company into political calculations rather than sound business policy.
Q: What are your thoughts on the influence of Brazilian institutional investors in Vale?
A: I know that these pension funds, especially PREVI, are highly influenced by political pressures. The focus
of these major pension funds are not to maximize the long term value of their investments, the focus is
basically to deal with some governmental policies regarding these companies. I think this is something
that should be taken into account as well, the probability that these companies will suffer from political
interference, indirectly through these large pension funds.
These are shareholders that are exposed to high political influence … Last year, the CEO of Vale criticized
the government during the elections. Once Dilma Rousseff assumed the presidency, she has ordered this
CEO to be replaced. He was replaced by the pressure from PREVI, due to political interference, just because
it was the government will. Until that point, he had shown good results as a CEO. Just a small example of
some things that may happen in companies once you have large pension funds indirectly controlled by the
government as main shareholders.

Q: Do you see this as a trend in any company that has a major share held by PREVI?
A: Yes, absolutely. I think that in the past few years, PREVI, which is the largest pension fund and by far the
largest institutional investor in the Brazilian equity market, I think that PREVI is indirectly controlled by the
government. Of course, if you go to speak with them, they will not recognize this. They will tell you that they
are always focused on the long term value of their portfolio, that they only make rational business decisions,
but of course, everyone knows that this is not the case. I think that this is something that should be taken
into account in all companies that have PREVI as one of their larger shareholders.

Vale SA: Stakeholder interview report - Jan 2012

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Vale SA: Stakeholder interview report - Jan 2012