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Shell and BASF agree $316m toxic payout

FINANCIAL TIMES

By Samantha Pearson in São Paulo: March 12, 2013 5:24 pm

Royal Dutch Shell and Germany’s BASF have agreed to pay up to $316m to workers exposed to toxic chemicals in Brazil, drawing to a close a six-year legal battle that has overshadowed the companies’ local operations.

A pesticide factory in São Paulo state, operated by the companies for three decades until it was shut down in 2002, has been blamed for 60 deaths in the local community as well as a series of health problems ranging from memory loss to prostate cancer.Please use the sharing tools found via the share button at the top or side of articles.

Shell has denied that the environmental contamination at the site had any impact on human health. In a statement on Tuesday, the company praised efforts to “bring to an end this long and complex judicial dispute via a settlement.”

Brazil’s public labour prosecution service said the companies had agreed to pay individual compensation and lifetime medical care for 1,068 former workers at the plant, which they estimated could amount to R$420m ($214m).

Shell and BASF will also make another payment of R$200m for collective moral damages, which will be donated to local health centres and spent on building a maternity clinic in Paulínia where the factory is located, about 120km from São Paulo.

The agreement, which is expected to be formalised in a contract by next week, brings to a close years of legal wrangling since the case was first brought in 2007 and comes as Shell prepares for the resumption of key oil concession auctions in Brazil in May.

Within the next 30 days, 76 workers pursuing individual court action must also choose whether to take the compensation offer and drop their own cases.

Shell originally built the factory in the early 1970s, sold it to chemicals company Cyanamid in 1995, which then sold it to BASF in 2000. BASF says the site was contaminated before it bought it.

Shell bought the site back in 2008 and started offering assistance to the local community. The factory remains shut.

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