German chemicals maker BASF and oil major Shell have been told by a Brazilian court to pay 1.06 billion Brazilian real ($525.23 million)  into a compensation fund for former employees at a pesticides plant who said their health suffered from working there.

BASF said on Tuesday it would appeal the ruling and would continue talks with the plaintiffs and with Shell to reach an out-of-court settlement.

A Shell spokeswoman said: "Shell does not agree with this decision, but we will abide by it until appeals have been ruled on by higher courts".

In its annual report, BASF had said Shell operated the site in the Brazilian municipality of Paulinia until 1995, when Shell sold it to American Cyanamid. BASF, which bought the plant in 2000, claims the site had been contaminated by Shell.

BASF is suing Shell to accept full responsibility.

The decision is part of court proceedings that, in August 2010, resulted in a judge ordering BASF and Shell to pay €490 million ($616 million) damages, a ruling BASF has been trying to appeal.

The latest ruling determined that $525 million of that amount should go into a fund for compensation of workers.