Brazilian Court: Eternit to Pay!
Last week Judge Raquel Gabbai de Oliveira of the 9th Labor Court in São Paulo ruled that Eternit, S.A. must pay the healthcare costs of former workers from its flagship asbestos-cement factory in São Paulo; the factory was operational from 1939 until 1993. The verdict in this public civil action, the largest class action for collective moral damages (similar to punitive damages in the U.S.) ever mounted by Brazil's Labor Public Ministry, accepted that the company had been responsible for hazardous workplace exposures to asbestos at the Osasco plant, Eternit's largest asbestos-cement facility in Latin America. The total healthcare bill appears unlimited and is dependent solely on the number of claims submitted by the 8,000 or so workers from the plant who might qualify for assistance. In addition, the Court ordered the company to pay 1 billion reais (~US$ 420 million) in collective moral damages.1
Hundreds of people employed at this industrial site have contracted asbestosis, mesothelioma, asbestos-related cancers and conditions.2 Eliezer João de Souza, President of the Brazilian Association of the Asbestos-Exposed (ABREA), is one of them. Commenting on this case, he said:
"We were surprised with such a quick decision, less than one week after the class action had been filed. At the same time, we are thrilled hoping that this time justice will finally be done. One important aspect to emphasize in this decision is the recognition of the value of ABREA's hard work over the last 17 years. ABREA has organized the vulnerable and unprotected asbestos-exposed people and this ruling applies exclusively to our members; it does not cover Eternit workers who signed extrajudicial agreements with Eternit.3 They did not believe in the collective force of our organization and so decided to take unilateral action. It is gratifying to see that the Court accepts the merits of this case. By so doing it has ended the invisibility of asbestos victims and has accepted our constitutional rights as bona fide Brazilian citizens.
According to a statement on the website of the Labor Public Ministry, the decision stipulates that all former Eternit workers from the Osasco factory who do not already receive health care from the company must now be provided with lifetime medical supervision, including medical, nutritional and psychological treatment, physical therapy and the cost of medication. The Court specified that the money be allocated to public institutions, such as Fundacentro, hospitals and clinics that provide healthcare and support for the workers.4 A fine of up to 50,000 reais (~US$20,000) per employee could be imposed should the company fail to comply. The company can appeal this decision.
When news of the civil proceedings first broke, Eternit's share price dropped by as much as 4.3%.5 An article on the Bloomberg website estimated that the healthcare provisions ordered by the Court could cost up to 1 billion reais (US$420m); today's market value of Eternit S.A. is 853.8 million reais (US$359m).
The case brought by the Labor Public Ministry was inspired by the pioneering work of Public Prosecutors in Italy who spent over a decade in researching a case against Eternit multinationals which operated in Italy. In a landmark ruling handed down in February 2012, the Turin Court held executives from Eternit Groups in Switzerland and Belgium responsible for deaths in Italian towns where Eternit asbestos-cement factories operated.6 Although there is little doubt that this case will be appealed, it seems certain that the tide has turned in Brazil. The São Paulo Court's ruling is a manifestation of the undeniable truth of the ABREA slogan: Amianto Mata! (Asbestos Kills). As we await the Supreme Court ruling regarding the unconstitutionality of the controlled use of asbestos in Brazil, it would be well to bear this truth in mind.
August 28, 2013
1 Eternit terá de custear saúde de ex-operários devido exposição ao amianto. [Eternit will have to pay for healthcare for former asbestos-exposed workers.]
3 Under controversial extrajudicial settlements made between individual workers and Eternit, the company agreed to provide lifetime health insurance so long as the company remained solvent and the use of asbestos continued in Brazil. Giannasi F. Eternit in Brazil. Chapter 13. Eternit and the Great Asbestos Trial. IBAS 2012.
4 Eternit deverá custear tratamento de ex-funcionários contaminados com Amianto.
[Eternit should fund treatment of former employees contaminated with asbestos.]
5 Godoy D. Eternit Slumps in Sao Paulo After Asbestos Contamination Lawsuit. August 19, 2013
6 Eternit and the Great Asbestos Trial. IBAS, 2012.