Brazilian state sues Braskem over liabilities for damages from mining


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Brazilian state sues Braskem over liabilities for damages from mining

On Friday, the 7th of June 2019, the Brazilian northeastern state of Alagoas Government had issued a statement saying that the prosecutors of Alagoas had filed a lawsuit against the Latin America’s largest petrochemical company, Braskem SA, headquartered in Sao Paulo, in order to guarantee compensation for damages driven by the mining operations of the firm.

Over the lawsuit, the state had asked a local court to block any attempt of Braskem’s majority stakeholder, Odebrecht, the Brazilian conglomerate, to discontinue its business based on Alagoas by facilitating a possible sell-off.

Nonetheless, according to a Local Newspaper, O Globo report published earlier this week, the deft-sickened Odebrecht had still been struggling to grapple with its havoc sum of around $20 billion in debt and contemplating a sell-off of its Alagoas business, which would eventually help it evade the financial liabilities and claims of damages resulted by its mining operations over the state of Alagoas.

According to the lawsuit, the government of Alagoas had accused Braskem’s mining activity of causing damages to hundreds of residences and commercial structures, while the state had been seeking a compensation of as little as $7.5 billion (30 billion Brazilian Reals).

Adding that Odebrecht could not be allowed to spin off its Alagoas’ assets, the governor of Alagoas, Renan Filho said, “Braskem cannot be sold in parts. They cannot spin off the Alagoas part and let it be the sole party responsible to compensate families and the state for the damage caused”.