Ann Crotty
At yesterday’s annual general meeting (AGM) of ArcelorMittal South Africa, shareholder activist Theo Botha asked why the group’s integrated annual report contained no discussion of environmental incidents and made little reference to environmental issues.
The steel maker’s chief executive, Nonkululeko Nyembezi-Heita, acknowledged that there had been numerous environmental incidents during the 2012 financial year. Details of these incidents have not yet been disclosed to shareholders.
An ArcelorMittal SA spokesperson confirmed that details of these incidents would be published in its sustainability report, “which is due for publication shortly”.
Botha pointed out that the failure to release the information in time made a mockery of shareholders being expected to hold management to account.
“This is a company that has a very controversial environmental record and it has provided its shareholders with no details about environmental issues… that are likely… to affect the way in which the company operates and its ability to make profits,” Botha said.
In one brief reference to the environment, the group’s 2012 integrated report describes an apparently benign situation: “Highlights on the environmental front during recent years include the completion of the new dust extraction unit at Vereeniging Works, the launch of the zero effluent discharge project at Newcastle Works and our ongoing engagement with various stakeholder groups on environmental issues.”
During 2012, community members in the Vaal region around the group’s Vanderbijlpark premises marched to the company’s offices to hand over a list of demands to management. The list dealt with “misleading information regarding environmental impacts, air quality, medical issues and compensation for occupation-related illnesses”.
Last year ArcelorMittal SA also received a compliance notice from the Gauteng Department of Agriculture and Rural Development, instructing the company to cease operations at certain units, due to alleged non-compliance with conditions in its atmospheric emission licence. Last month the steel maker applied for a limited waiver of the conditions of this licence.
During the AGM, a number of shareholders raised concerns about ArcelorMittal SA’s remuneration policy, which they described as “vague”.
At last year’s AGM, almost 50 percent of the shareholders voted against the remuneration report. The Public Investment Corporation, which holds an 8.4 percent stake, noted on its website last year that the remuneration policy appeared to be inconsistent with best practice and that the existing long-term incentive scheme had no performance conditions.
At this year’s AGM, only 10 percent of the shareholders voted against the remuneration policy, although Mehluli Mncube, a representative of the Eskom pension fund, told Business Report that it was still “very vague”. He added: “Last year there was a large vote against the policy because of the size of the bonus awarded to the chief executive; this year the bonus was low.”
Botha queried the independent auditors’ report, which described ArcelorMittal SA’s dispute with Sishen Iron Ore as a “significant uncertainty”.
“We draw attention to the dispute with Sishen… over the supply of iron ore on a cost plus 3 percent basis.”
Mncube said there seemed to be little ArcelorMittal SA could do about this. It was a concern that the operating performance deteriorated every year, but shareholders were encouraged to believe it would turn around. Business Watch, page 18