Death Toll Rises in Brazil Dam Collapse as Mining Company Faces Criticism


A dam at the Corrego do Feijao iron ore mine in Brumadinho, Brazil collapsed on Friday, January 25. The dam’s failure resulted in a 24-foot tsunami of water, mud, and mining waste obliterating the surrounding facilities, homes, as well as most of Brumadinho. The death toll is currently at 65 fatalities and climbing as there are still nearly 300 people missing and presumed dead. The mine is owned by Brazilian metal mining company Vale S.A. (VALE) who is the largest producer of iron ore in the world. The security is held in many international, emerging market, and commodity funds.

Rescue efforts have been underway throughout the weekend but were halted on Sunday after alarms sounded from a nearby mine in the region. It was feared that this dam would collapse too after heavy rainfall and a broken drainage pipe resulted in dangerously high water levels. This emergency not only stopped rescue efforts for over 10 hours but resulted in a recommendation for 24,000 people to seek higher ground and evacuate. It is important to note that this dam is also owned by Vale.

The mayor of Brumadinho, Avimar de Melo Barcelos referred to Vale as “careless and incompetent” as he blamed Vale for the tragedy that has many Brazilians outraged. Many of the missing and deceased are Vale employees who were eating lunch in the company’s cafeteria as it was destroyed by the bursting dam. Renato Simao de Oliveiras lost his twin brother who was a Vale employee. “The cafeteria was in a risky area” he said while claiming that Vale had traded safety for profits. Laudi Soares Ribas is unsure of the safety of her husband who also worked for Vale. “Sometimes we think he is dead, sometimes we think he is in the hospital” she said.

The CEO of Vale, Fabio Schvartsman, commented on the situation saying, “I don’t know who is responsible, but I apologize to everyone.” Schvartsman also announced that they will “go above and beyond any national or international standards” and “will create a cushion of safety far superior to what we have today to guarantee that this never happens again.”

But this isn’t the first time that a Vale dam has burst and resulted in a tragedy. Less than 60 miles away, lies the remains of the Fundao iron ore mine which collapsed in 2015. Fundao was a joint venture between Vale and BHP Group Ltd (BHP), respectively the third and fourth largest mining companies in the world. The catastrophe resulted in the worst environmental and economic disaster to date; 19 deaths, 250,000 left with contaminated drinking water, a destroyed village, thousands of dead fish, impoverished fisherman, and over 2.1 billion cubic feet of waste that flooded rivers and the Atlantic Ocean. The dam collapsed due to a range of construction and design flaws including a failed tailing which is a large dam used to store mining byproducts.

Almost 4 years after the tragic event, Vale and BHP have done nothing but deny responsibility and continue to dismiss the severity of the damage their inadequate dam operation caused to the indigenous peoples’ land. In statements made to news sources, BHP says that they reject the charges they are being accused of and that safety was and remained a top priority throughout the dam’s operation and that the dam complied with the Brazilian legislation. The company states that they stand behind their employees and trusts that executives had no prior knowledge of the possibility of the disaster; however, prosecutors say that despite these statements evidence shows otherwise.

Six months before the accident, unreported company documents showed that BHP’s risk assessment had predicted the high probability of the dam failure but instead “prioritized profits and left safety in second place,” said José Adércio Sampaio, coordinator of a taskforce of federal prosecutors. Several people were charged with qualified homicide from Vale and BHP. Both companies deny their charges and have defended their employees. The companies launched their own investigations on the matter finding other reasons for the failure. Their reports point to possible seismic activity prior to the failure that might have led to the disaster. However, months later a former employee prosecuted against them stated he had informed the company the situation was not under control. Vale responded in an email that it “repudiates vehemently the complaint presented by prosecutors because innumerable pieces of evidence and testimony presented in the case files that proved that Vale was never responsible for the operational management of the Fundao dam were disrespected”.

Clearly safety of their mines has been a previous issue for Vale which calls into question comments made by their CEO about the recent dam collapse. “I’m not a mining technician. I followed the technician’s advice and you see what happened. It didn’t work. We are 100 percent within all the standards, and that didn’t do it.” Despite Schvartsman’s assurance of safety, the dam was in the process of being decommissioned. It was built in 1976. In a Vale risk assessment presentation, Corrego do Eijao was identified as a high potential risk but listed as a low probability of collapse. Schvartsman reported that the facilities were built to code and equipment had shown the dam was stable two weeks earlier.

Comments from others close to the matter tell a different story. “There are safe ways of mining, it’s just that it diminishes profit margins, so they prefer to do things the cheaper way and put lives at risk” said Joao Vitor Xavier who is the head of the mining and energy commission in Brazil. Luiz Jardim Wanderley, a mining specialist at the State University of Rio de Janeiro, claims that there is a tendency for mining companies to cut safety and maintenance budgets following a period of falling commodity prices. Commodity prices suffered large losses last year, mainly linked to rising United States interest rates. In the surrounding area, there were 8 sirens intended to warn habitants of a disaster. However, none of the sirens sounded as the dam collapsed and flooded the area. A wife of a Vale employee told reporters, “They all knew the dam could break. Are they never going to learn? Will there be a third? A fourth? It’s unbelievable.”

Vale claims that the waste is non-toxic sand, but United Nations’ reports from the last Vale dam collapse show that what was claimed as harmless mining waste actually contained high levels of toxic heavy metals. Naturally, many fear this collapse is worse than the previous and will bring widespread environmental contamination and destroy the entire agricultural economies of the region.

Prior to this incident, Vale and BHP already had a pending lawsuit against them for over $40 billion. Both companies settled a $5.4 billion claim last year and have paid out an additional $4.4 billion to the community over the past three years. Since the recent collapse, Brazil has frozen over $3 billion of Vale’s liquid assets to be used as funding for rescue efforts and victim compensation and has issued Vale a fine of $66 million. Vale has indefinitely suspended all shareholder dividends, share buybacks, and executive bonuses. The looming liability to Vale for the incident has caused S&P Global Ratings to place Vale on CreditWatch. S&P announced they would consider downgrading Vale’s BBB bond rating by several levels depending on the level of the impact. “Vale’s environmental and social liabilities could be substantial, especially considering that such an incident has happened before. Financial obligations for remediation and compensation might be substantial.” Brazil’s Attorney General, Andre Mendonca, has announced he will be considering both civil and criminal charges against the company. Brazil has already arrested 3 Vale employees and 2 contractors who were involved in ensuring dam safety. The American Depository Receipt for Vale S.A. that trades on the NYSE (VALE), was down over 18% on the first trading day since the accident. This represents almost $13 billion in lost market cap for the company.

On its company website, Vale lists its values as “life matters most”, “prize our planet”, and “do what is right”.

IWP Capital has reached out to Vale’s investor relations, board chairman, and CEO to address environmental, social, and governance concerns.

US SIF Trends Report

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The 2018 edition of the US SIF Report on US Sustainable, Responsible and Impact Investing Trends officially launched October 31, 2018. To view the Trends Report press release, click here.

Since 1995, and now in its 13th edition, the biennial Trends Report presents extensive data on the numbers of institutional asset owners, money management firms and investment vehicles using sustainable investment strategies. It also distills the range of significant ESG issues, including climate change, human rights, weapons avoidance and corporate governance, that investors consider.

“Sustainable and impact investing in the United States continues to grow and to make a difference. Investors now consider environmental, social and governance (ESG) factors across $12 trillion of professionally managed assets, a 38 percent increase since 2016.”

"Medically Necessary" Abortion

Prenatal screening for Down syndrome was widely introduced in 1989 (1), but the recent increase in this practice is due to the introduction of first trimester screening in 2010 (2). The first trimester screening uses maternal serum markers to identify abnormal levels of human chorionic gonadotropin (hCG) and pregnancy associated plasma protein (PAPP-2) which are indicators that the child will likely be born with Down syndrome (3). In the United States, as well as many other countries, it is legal to request an abortion solely because the baby screened positive for Down syndrome. The common term for abortion of this nature is medically necessary. This is surprising, as most often medically necessary abortions are considered to be preventative of the expected death of either mother or child. However, the U.S. definition of medically necessary abortion is “a continuation of the pregnancy that would endanger the life of the pregnant woman or a pregnancy in which the fetus would be very likely be born with a grave, permanent, and irremediable mental or physical defect” (4).

In Denmark and Iceland, first trimester screening is offered free of charge to every pregnant woman. Their governments require each pregnant woman be told about the screening. This has had the effect of a high termination rate for pregnancies that show a greater chance of Down syndrome. In Denmark this rate is 98% and in Iceland this rate is almost 100%. In the United States, this rate is 67% (5).

Though the performance of an abortion to dispose of a baby who is likely to be born with Down syndrome is legal, hospitals in the U.S. are not required by law to perform a medically necessary abortion. The only exception to this is in Alabama, Colorado, Connecticut, Washington D.C., New Hampshire, New York, Rhode Island, Vermont, and West Virginia (6). Medically necessary abortions also are not required by law in many international countries such as Denmark (7) and Iceland (8).

It is our policy at IWP Capital to fail any company that provides abortions to patients, regardless of reason, under our Abortion Provider screen.

(1) NHS Choices, NHS, 5 Mar. 2018,

(2) Gillian M. Tringham, Tariq S. Nawaz, Stephen Holding, Jane Mcfarlane, Stephen W. Lindow, Introduction of first trimester combined test increases uptake of Down's syndrome screening, European Journal of Obstetrics & Gynecology and Reproductive Biology, Volume 159, Issue 1, 2011, Pages 95-98

(3) Karin M. Fuchs, Jeffrey F. Peipert, First Trimester Down Syndrome Screening: Public Health Implications, Seminars in Perinatology, Volume 29, Issue 4, 2005, Pages 267-271

(4) US Supreme Court. Doe v. Bolton. 22 Jan. 1973.

(5) Lajka, Julian Quinones Arijeta. “‘What Kind of Society Do You Want to Live in?": Inside the Country Where Down Syndrome Is Disappearing.” CBS News, CBS Interactive, 14 Aug. 2017,

(6) “An Overview of Abortion Laws.” Guttmacher Institute, 12 Nov. 2018,

(7) Berkman Klein Center,

(8) “25/1975: Lög Um Ráðgjöf Og Fræðslu Varðandi Kynlíf Og Barneignir Og Um Fóstureyðingar Og Ófrjósemisaðgerðir.” Alþingi,

Does United Way fund Planned Parenthood?

Our good friends at 2ndVote have done some great research on this topic.  Check out their story.

This is the text from the United Way website:

United Way Worldwide Statement on Support for Planned Parenthood
United Way Worldwide is the leadership and support organization for the network of local United Ways.
All local funding decisions are made by the individual United Ways with the input of local leaders and community stakeholders. United Way Worldwide does not control funding decisions by local United Ways.  In many instances, funding for Planned Parenthood is the result of specific direction from individual donors, including those from the United Way Worldwide Donor Advised Giving program.
Out of 1,129 local United Ways in the United States, only a small number (less than 3 percent) provide direct support to Planned Parenthood. The amount of financial support represents less than one tenth of one percent of total United Way revenue.
Several local United Way partners provide professional family and individual counseling services. Local United Way-funded pregnancy related programs focus on community health maintenance (e.g. communicable disease prevention; medical care service; family planning; health education; public awareness services; and family preservation) and strengthening services like counseling and family life education.

Dave Palmer of Guadalupe Radio Network Interviews Sam Saladino, Founder & CEO

This morning, Sam Saladino, founder & CEO, was interviewed on GRN Alive.  He discussed Catholic Values Investing and our upcoming Catholic Values Investing Conference.

Dave Palmer, Guadalupe Radio Network Executive Director of North Texas, hosts this weekly program with news and a special emphasis on stories impacting Catholics in cities where the Guadalupe Radio Network stations are on the air.

Article: "Why I Use the Word Catholic to Describe the Ideal Economy"

From Crisis Magazine

By John Horvat II

The adjective Catholic is rarely employed to describe the ideal economy we need. Many would see its use as mere window dressing to make the free market appear a bit more compassionate. Everyone knows that the business of creating wealth comes from industry and business. The accountant’s ledger is the only true measure of this wealth. Catholic can only be, at best, a timid adjective that modifies the more efficient noun, economy.

I am the first to recognize that the role of economics is to define norms by which goods and services are produced, exchanged, and consumed. These norms are reflected in ledgers. However, economic activities also involve moral acts that are influenced by our free and rational nature and the pull of our sentiments. Thus, the Church can play an important role in the concrete functioning of an economy, although it is often hidden.

Generating Wealth in a Catholic Society

I was reminded of this fact by a news item that triggered these considerations. A 2017 Merrill Lynch report found that some 34.2 million people provide unpaid care to older people in America. Most of these caregivers are family. Together they form the backbone of the nation’s long-term elderly care system, supplying an estimated $500 billion in free care every year. This is three times the amount spent by Medicare’s long-term care budget.

I was struck by this example of a current economic problem—the cost of caring for the elderly. It is resolved with almost medieval means by non-monetary processes. While not all these care-givers are Catholic, their actions are modeled by Christian virtues reflecting the Church’s charity and solicitude for the suffering. This charity can far outperform government programs at no cost to the taxpayer. It provides better and loving care. There is no question that this care helps the formal economy.

This is where the “Catholic economy” offers great benefits. In a Catholic society, there are many social and cultural structures like the care-givers that generate enormous value. The non-monetary processes found in family, religion, and communities are sources of immense material and spiritual wealth that largely go uncompensated, remain unrecorded, or defy quantification. Saint Thomas Aquinas called this economic activity, economia pura. It is this pure domestic economy that modern economists ignore because it cannot be found on spreadsheets. French historian Fernand Braudel claimed that one third or more of dealings in modern industrialized economies are found in this sector.

I believe these vast sectors constitute the heart and soul of the economy and merit my use of the august adjective of “Catholic.” Perhaps the most productive thing a person can do to fuel prosperity is to help make the economy more Catholic.

Defining These Areas

These wealth-generating social structures can be found everywhere in Catholic society. Most of them were unknown in pagan society. At the same time, they are systematically rejected and disparaged in our neo-pagan modern culture.

The first institution is the family based on the Catholic insistence of the insolubility of marriage. This extremely stable relationship is a dynamic source of uncompensated activity that freely provides its members with shelter, nourishment, education, affection, and healthcare.

The Church raises marriage to the level of a sacrament and thus provides the couple with the necessary graces and strength to bring new souls into the world and provide for their formation and education. The Catholic family becomes not just a basic social unit but an economic unit that generates and distributes wealth and benefits to its members.

There are other lesser institutions influenced by the Church that display similar qualities. We can refer to local, cultural, or religious associations that generate arts, civic spirit, and works of charity that enrich the community in ways that cannot be quantified. This can also be seen in any kind of organic neighborhood or ethnic community where inhabitants receive the great benefits of solidarity and a distinctive local identity.

Inside a climate of mutual trust provided by the Church, common local transactions, barter, or acts of neighborliness are clearly valuable actions that strengthen economy. We might also point to the long history of the Church’s support of agriculture where the land, besides freely giving its fruits and creating abundant wealth, also creates a sense of self-sufficiency, the development of character and a strong attachment to property.

All of these institutions and activities enrich society and culture. They have an indirect impact upon the formal economy and truly nourish and sustain it.

The Church Enriches Culture

However, it is the Church that is the principal agent in this society that supports the economy. It is not just a generic “Christian” outlook that made Western civilization economically great. The Church served as the foundation for our civilization, which includes our economy. This is why I use the adjective Catholic, and not the ecumenical Christian, to modify the ideal economy we need.

In the first place, the Church is an institution that enriches culture and generates enormous value in society in the spiritual sphere. We can look at her liturgical, moral, and religious acts that communicate untold spiritual benefits to a community. Giving meaning and purpose to life is a priceless commodity in today’s world of depression, hedonism, and loneliness.

The Church further gratuitously bestows culture, charity, and learning upon her children and society as a whole. It was the Church that first established universities and hospitals. Her religious orders freely served the poor in their hospitals and even went to the point of seeking out patients in the highways and byways. The Church has the unique ability to get people to think of serving others for the love of God.

Direct Support for the Economy

These indirect means are joined by more direct means by which the Church helped facilitate the smooth running of economies.

Transactions depend upon trust and honesty. As guardian of the moral law, the Church naturally issues objective norms that concretely help identify and denounce injustice in the economy and create a climate of trust. In addition, the Sacrament of Confession not only insists upon honest dealings but enforces restitution for theft or damage.

Even in the field of economic theory, it was the Church that led the way. Contrary to the popular myth, the science of economics was not invented by Adam Smith (who saw Catholic charity as disruptive). The early foundations of economics are found in the writings of medieval figures like Saint Bernardine, Saint Antoninus, Saint Thomas Aquinas, and other early Scholastics.

Libertarians, the Austrian School of Economics, and other economic schools all trace their origins back to Spain’s School of Salamanca (1500-1650). Its Dominican friars developed complex economic concepts like the theory of utility, the quantity theory of money, opportunity cost, and liquidity preference long before modern economists.

We cannot underestimate the role of the traditional teachings of the Church in forming the modern economy. This same moral guidance is still much needed in increasingly impersonal economies run by algorithms and quarterly earnings reports.

The Limitations of Catholic Economy

However, there are limitations to a Catholic economy.

Justice must govern every economy, whereas the Church depends much upon charity and poverty. This is why an economy cannot be governed by charity lest it leave the marketplace in the hand of those who would take advantage of the honest.

The Church is limited to creating the conditions for economies to flourish. It can do no more. The marketplace can never be a church although markets were often situated in the Church squares. Nor can a Church become a marketplace.

“Catholic” must always be an adjective to the noun “economy.” Whenever this adjective tries to become the noun, it quickly leads to the moneychangers of the temple whom Our Lord so violently cast out.

A Terrible Alternative

I fear for the time when all vestiges of the Church are scrubbed from economy. Then there will be no more familial caregivers. The family will be reduced to a mere collection of selfish individuals. The moral law will be erased by the unbridled passions of frenetic markets. The marketplace will once more be left to the dog-eat-dog brutality of those who seek only their own profit. Society will fall apart, as it is today, and no amount of tax dollars, jobs or economic policies will put it back together.

This is why I use the adjective Catholic to describe the ideal economy we need. When the Catholic element is expunged, the heart and soul of economy will also be gone and we will be left with the terrifying ledger of a world without God.

Bayer’s Contraceptive Controversy

Bayer AG  (BAYN)

When you visit your doctor, you expect to receive honest advice about your health.  But, the pharmaceutical company, Bayer, has taken this an opportunity to push their products into your system.

Bayer, the company behind many household brands including Claritin, Coppertone, Aleve, and Aspirin, paid 11,850 doctors over $2.5 million in “consultation fees” starting in 2013.  These doctors would receive significant payments and coincidentally would heavily recommend and prescribe its contraceptive product Essure to women.

Essure is implanted in a woman’s fallopian tubes and causes scar tissue to form and block the tubes so that sperm can no longer travel to the egg. It is a permanent procedure that renders a woman sterile and unable to become pregnant for the duration of her life.  Though this product has been used over 750,000 times since 2002, several concerns have arisen lately about the safety of the product.

In April of 2018, the US Food and Drug Administration issued an order that restricted the sale and distribution of Essure due to patients not being provided with “adequate risk information” by their doctors.  More than 10,600 women have claimed that Essure has resulted in serious health issues for them.  Device migration, organ perforation, autoimmune disorders, and accidental pregnancies have affected these women.  There is currently a class action law suit against Bayer for these injuries.  Also, a Netflix documentary titled "The Bleeding Edge" about the lives of the women who suffered has just been released.  Bayer has announced they will discontinue the product by the end of 2018.

IWP Capital currently lists Bayer as a "Fail" due to their contraceptive production.  As of July 27, 2018, their stock price is down -4.93% Year To Date and their 1-year and 3-year trailing returns are down -11.78% and -7.58% respectively.  Many analysts are downgrading the stock to a "Sell" recommendation amid the Essure controversy.

Netflix Original Content Celebrates Abortion

Netflix Inc  (NFLX)

Comedian Michelle Wolf on her Sunday show led a "salute to abortion" that culminated in her cheering, “God bless abortions and God bless America!”

At the end of “The Break with Michelle Wolf,” her new Netflix show, Wolf dressed up in an American flag leotard and led the crowd in pro-abortion cheers backed by a band.

“Women, if you need an abortion, get one,” Wolf said. “If you want an abortion, get one.”

Click on image to view video.  (Warning:  Disturbing content and profanity.)

Click on image to view video.  (Warning:  Disturbing content and profanity.)

IWP Capital, LLC will not sit idly by and let this go.  We cannot remain silent.  And we are not alone in this area of outrage.  Fr. John Rapisarda is taking action shown in his blog post.  This stunt has caused quite a stir with The National Review, LifeSiteNews, The American CatholicThe Daily Wire and many more news sources and blog posts.

This week, we have written letters to the CEO, Chief Marketing Officer and VP of Finance/Investor Relations to protest this atrocious episode of their program and demanding action.

July 25, 2018
Reed Hastings
Netflix, Inc.
100 Winchester Circle
Los Gatos, CA 95032
Re: “The Break with Michelle Wolf”
Dear Mr. Hastings,
An atrocious recent episode of “The Break with Michelle Wolf” has come to our attention.  The title of this episode was “Salute to Abortion.”  This show made a total mockery of the pro-life movement including the statement, “God Bless Abortion.”  We are disappointed that Netflix would choose to promote these views with your original content on your platform.
Our firm, IWP Capital, LLC, performs socially responsible screening and advocacy for many Catholic clients, money managers with Catholic products, and consultants that work in the Catholic market.  We screen over $1 billion dollars of assets and vote many of their proxies, as well. 
Netflix currently passes our screening and is held in many of our portfolios and associated client portfolios.  In light of the cavalier stance Netflix has taken on the grave topic of abortion, we are considering failing Netflix and passing this information on those companies that rely on our opinion.
Beyond a corporate apology, one way to prevent any further action on our part would be for this show to be cancelled or have Ms. Wolf removed as host.  Until such time, we will vote against the whole slate of Netflix’s corporate board members until this is resolved to our satisfaction.  We will recommend this same course of action to our network of like-minded investors.
We welcome a discussion about this issue and hope that it is resolved in a timely manner.
Samuel Saladino III
Founder & CEO
IWP Capital, LLC

Action Items for you to consider:

  • Cancel your subscription to Netflix.  (Many of our employees have done this.)
  • Send an email to their Public Relations Dept.  (See link below.)
  • Write letters to the decision makers at Netflix.  (See contact info below.)
  • Pray for Netflix and all those that work there that their hearts may be softened.

Netflix Contact Info:

Public Relations Dept.

Reed Hastings
Netflix, Inc.
100 Winchester Circle
Los Gatos, CA 95032

Kelly Bennett
Chief Marketing Officer
Netflix, Inc.
100 Winchester Circle
Los Gatos, CA 95032

Spencer Wang
VP, Finance/Investor Relations & Corporate Development
Netflix, Inc.
750 University Avenue
Los Gatos, CA 95032

Company Update: Elevate Credit

Elevate Credit Inc  (ELVT)

Elevate Credit is a subprime lender that focuses on providing responsible loans to low credit or no credit borrowers.

Many subprime lenders are involved in predatory lending which is in violation of the United States Council of Catholic Bishops’ Socially Responsible Investment Guidelines. However, Elevate Credit does the opposite and, instead of targeting vulnerable low credit individuals with predatory rates and terms, offers low credit individuals the opportunity to help build credit with reasonable rates and transparent terms. This is in line with the spirit of the guidance of the USCCB and promotes socially responsible business.

The stance of IWP Capital is that Elevate Credit is a "Pass" with no involvement in any controversial activities.

Company Update: Amgen

Amgen Inc.  (AMGN)

We are pleased to share some good news about Amgen's use of fetal or embryonic stem cells.  After our repeated calls and emails to Amgen, they have verified that they do not currently utilize fetal or embryonic stem cell research in the development of their current product line.  

We will continue to monitor Amgen and other companies in the industry and will seek to engage them on any future plans to use embryonic or fetal stem cell research.