Vale GC: BRIC builder
3 December 2012 | By Ruth Green
13 December 2013
14 October 2013
17 July 2014
2 December 2013
11 November 2013
An ever-changing taxation environment and a booming resources sector mean life is never dull for Clovis Torres, GC and head of tax at Brazilian super-miner Vale
Clovis Torres, Vale
Title: GC and head of tax
Reporting to: CEO Murilo Ferreira
Legal capability: 140
Legal spend: $115m
Main external law firms include: Allen & Overy; Chadbourne & Parke; Cleary Gottlieb Steen & Hamilton; Clifford Chance; Clyde & Co; Davies Ward & Philips; Machado Meyer Sendacz e Opice; Mattos Filho Veiga Filho Marrey Jr e Quiroga Advogados; Reed Smith; Stikeman Elliott; Sullivan & Cromwell; Veirano Advogados; White & Case
As all eyes turn to Brazil’s sporting arenas and athletes, with preparations getting under way for the FIFA World Cup and the Olympic Games, back in the country’s energy and natural resources sector there’s never a dull moment for Clovis Torres, general counsel at Brazilian mining giant Vale.
For Torres, the sheer variety of his job keeps things interesting.
“It’s amazing to see natural resources transformed into all sorts of products or used on a daily basis by people and we deal with many countries, communities and indigenous peoples so this is a big challenge,” he confirms.
Torres joined Vale in 2003 as corporate counsel, but in 2007 he opted to get even closer to the production side by taking a four-year sabbatical to work for London-listed Bahia Mineração. Taking a break from being a lawyer altogether, he returned to his native mineral-rich Bahia, on the north-eastern coast of Brazil, as the company’s executive vice-president and helped get the its iron stone project (Projeto Pedra de Ferro) off the ground.
“I took a sabbatical to work on the project where I was working not as a lawyer, but a developer, although when I say sabbatical it wasn’t easy - I probably worked harder than I ever have,” he chuckles.
After overseeing the project from the early stages to being ready to initiate operations in 2014 and with estimates suggesting it will produce around 19.5m tonnes of iron ore a year, Torres was finally attracted back to in-house law in July 2011 following the appointment of Murilo Ferreira as CEO of Vale.
This time Torres was brought on board as general counsel. Although the sabbatical had been hard work, he stresses how much the experience helped him on his return to Vale - now the second largest mining company in the world and a ‘multilatina’ (Latin American-based multinational) success story.
“It helped me to gain a much better understanding of environmental issues, taxation, institutional reforms, labour issues and contracts,” he says. “Since the company was privatised in 1997 it has grown exponentially and it’s been an exciting and challenging place to work with so many lawyers from different jurisdictions and cultures.”
Today, he oversees a team of around 140 lawyers - 38 in Rio de Janeiro where he is based, with a further 10 in São Paulo, 30 in Canada and a handful in Mozambique, Austria, China and Switzerland, among other places.
The broad range of his remit and the company’s global reach also mean that Torres is supported by no fewer than four deputies; one lawyer who focuses on the base metals business, another who focuses on corporate, M&A and issues related to projects; another who handles regulatory and environmental issues and one who looks only at the Brazilian market and deals with local labour and litigation issues.
Having had stints at Odebrecht, Cargill Agrícola, the Brazilian government and the International Finance Corporation, Torres has a wealth of experience to bring to his role as general counsel, which involves knowing more than a little about everything. One particular division under Torres’ remit is tax, and as he notes, in Brazil this is an area that can be more than a little taxing.
“Brazil is a complex country when it comes to taxation, with new laws being enacted all the time, and this leads to a lot of legal work related to planning and, if necessary, litigation,” he adds.
As a result, he also has three deputies focused on tax matters - one overall global tax director, one deputy in Switzerland focused on tax planning and another in Toronto focused on transfer pricing.
Aside from tax matters, he oversees a host of legal issues related to projects in the 38 countries in which Vale operates, ranging from labour issues in Argentina to dealing with strikes and claims by indigenous communities in Latin America and further afield.
“Recently, we had a situation in Guinea where a mine was invaded for political reasons, so even these kinds of issues fall onto my desk,” says Torres.
Again, this is an area where his stint as a developer has come to the fore.
“Having done development work I know it’s important for indigenous people to feel part of the community as otherwise it can cause problems, and this understanding is crucial to future developments,” Torres adds.
Such is Torres’ awareness of these issues and how important it is for Vale to address them that he hired Alberto Ninio, former chief counsel at the World Bank and staff attorney at the Environmental Law Institute earlier this year as deputy general counsel for regulatory matters to handle issues related to the company’s environmental safeguarding.
Embarking upon projects in countries where Vale has done little work previously can also be a challenge and typically involves a fair amount of legal groundwork.
“There are always new projects or countries where we’re starting from scratch and for these we have to discuss various issues and work closely with local lawyers and governments,” Torres says.
He is also conscious that changes in the mining sector mean it is for lawyers to be business-savvy.
“Legal has less turnover than operational functions in the organisation so it’s vitally important that lawyers know the business and its economics well, and are able to act as a ‘memory’ with regard to new projects,” he says. “A business-oriented lawyer has a great advantage in a corporate environment.”
Alexandre D’Ambrosio, Director and general counsel, Votorantim
As director and general counsel of Votorantim Industrial I am responsible for an integrated legal department comprising 130 lawyers, divided up into a holding organisation and five business units, all supporting a conglomerate with activities including mining and metallurgy, cement manufacture, aluminium, steel, agribusiness and energy generation.
M&A has been a part of our day-to-day activities for several years. As a holding company we manage a portfolio of companies, so investments and divestments are regular business.
The conglomerate has grown substantially in the past decade. When I joined in 2003 it was present only in Brazil, our home country, plus a few cement plants in the US and Canada. We have since grown both organically and through acquisitions, entering both consolidated and emerging markets. Today, we have plants and operations in 26 countries in South America, North America, Europe, Asia and Africa. We have controlling stakes in listed and unlisted companies, all of which are integrated by common policies of corporate governance and compliance.
Among the challenges faced by our legal department, regulatory compliance has become increasingly relevant, especially in our mining activities in emerging markets. As a result, we have developed a strong environmental practice group, acting in close co-operation with the company’s technical staff.
Brazil’s regulatory environment for mining, the environment and energy is undergoing significant reform. The country has adopted high standards, so every day we face the challenge of making decisions that anticipate changes and ensure compliance within an evolving framework. This requires a legal department that is closely integrated with its business, with everyone working together as partners.