Mining disasters, institutional fragility, and global value chain shocks: evidence from the EM-MNE Vale S.A.

Abstract

Purpose This paper aims to examine the challenges of implementing effective sustainability practices in emerging market multinationals (EM-MNEs) operating in high-risk, globally integrated production networks. The research question guiding this study is: How does home-country institutional fragility shape sustainability governance and accountability in mining EM-MNEs embedded in global value chains?

Design/methodology/approach This study uses a longitudinal archival case study, focusing on the Brazilian EM-MNE Vale S.A. and the Brumadinho dam collapse that killed 272 people. Drawing on extensive secondary data collected from 2019 to 2025, the analysis follows an abductive approach, integrating insights from global value chain (GVC) theory, research on home-country institutional environments, and sustainable governance.

Findings The findings reveal that weak institutional enforcement in the home-country context, combined with misalignments between corporate environmental, social and governance (ESG) commitments and GVC governance mechanisms, contributed to governance failures. These failures generated cascading effects across the GVC, disrupting operations, investor relations and stakeholder trust both locally and internationally. The disaster also triggered stricter regulations and changes in governance practices at the industry level.

Research limitations/implications This study is based on a single case and relies on secondary data, which limits generalisability. Despite its limitations, the study provides new insights into sustainability governance failures in high-risk, globally integrated industries by showing that global ESG compliance does not neutralise home-country effects but instead produces asymmetric accountability (i.e. weak ex ante prevention and strong ex post discipline).

Practical implications For managers, the findings highlight that even if global standards exist (e.g. those promoted by investors, international buyers or non-governmental organisations), EM-MNEs can fail to implement ESG commitments if home-country enforcement and infrastructure are weak.

Social implications Formal ESG commitments are insufficient without strong local enforcement. Policymakers should strengthen monitoring, enforcement capacity and coordination between domestic regulators and global actors to ensure that ESG standards translate into effective practice.

Originality/value The findings presented in this paper will be of significant interest to critical international business scholars, international marketing scholars and sustainability governance scholars.