Terrible magnate

Published: Monday 30 June 2008

Down to Earth
On May 13, individuals and groups from from Kazakhstan, the Czech Republic, South Africa, Romania and the us gathered at Luxembourg for ArcelorMittal's annual general meeting with a long list of complaints against the world's largest steel company. Charges of pollution, bad safety record, forceful eviction and little or no information sharing with communities rent the air as ArcelorMittal's directors began taking stock of the company's fortunes.

Mittal's success has been predicated on weak national laws and political wrangling. In the last three decades the company has bought up run-down state-owned steel factories in Trinidad, Mexico, Poland, Czech Republic, Romania, South Africa and Algeria. The cost of its success has largely been paid for by communities living and working near Mittal's plants.The steel giant has also benefited from tax exemptions or reductions in several countries including Kazakhstan and the Czech Republic prompting many to ask why can't the largest steel company in the world afford to pay full taxes?

Mittal Steel has also received low-interest loans from the International Finance Corporation and the European Bank for Reconstruction and Development. These banks are indeed mandated to contribute to the development of the private sector. But the emphasis of their mandate is on small and medium enterprises and projects, which cannot attract finances from other sources.

Pollute and profit
ArcellorMittal has now set its sight on India. The company plans to invest us $ 20 billion in two projects in Orissa and Jharkhand. It is all set to invest nearly us $ 9 billion to build an integrated steel plant with a total annual capacity of 12 million tonnes in the iron-rich Keonjhar district in Orissa. The company has sought a special economic zone status for its unit, which will not only result in substantial tax savings, but also give Mittal India the leeway to bypass many environmental regulations.

Given the huge investment ArcelorMittal is planning in India, it makes sense to take stock of some of the charges levelled against the company at its annual general meeting. For instance, in South Africa, the company has been charged with pollution and intimidating families who have refused to sell their land for its expansion plan. Explosions in the mines owned by the company in Kazakhstan have caused 191 deaths since 1996--the most recent explosion was in January 2008.

Mittal's infringement of environmental norms is not limited to developing countries. In August 2006, the us Environmental Protection Agency held Mittal Steel usa Inc. responsible for violations of clean air norms at its steel mill in Indiana and at its plant in Ohio. The company has denied Ohio communities' demands to engage in public debate despite receiving 33,891 personal, handwritten letters and petitions.

Corporate irresponsibility
According to an mou which ArcelorMittal has signed with the Orissa government on December 21, 2006, the company's plan consists of building a coke oven, steel making, rolling mills, and a 750 mw captive power plant. The company has asked for 3,200 hectares at the proposed location--almost double the land sought by the South Korean Steel Company, posco, at Paradip, Orissa. Mittal India claims that the excess land is needed for its future expansion plans.

The land sought for the project is multi-crop, fertile, and irrigated agricultural land. Health care and a sport facility is all that Mittal has offered to the people who will lose their only source of livelihood and homes. Remi Boyer the company's head of corporate responsibility laughed off a provision in the Orissa's relief and rehabilitation policy which calls for affected people's right to company shares. Boyer called this provision ridiculous.

Down to Earth
Groups from around the world have formed a coalition, Global Action on ArcelorMittal, to highlight that problems associated with ArcelorMittal steel plants are not occasional blips, but part of a global trend. ArcelorMittal officials met the members of the group at Luxembourg. But they did not give any commitment about disclosing information about their environment action and remedial plans in like Ukraine, Romania and South Africa Given its track record, it is still to be seen how this company behaves in India.

Sunita Dubey coordinates the activities of the "Global Action on ArcelorMittal" and can be reached at sunita@groundwork-usa.org

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.