Steel giant secretive about Vaal incidents

Published May 31, 2013


It is not only the shareholders of ArcelorMittal South Africa who are being deprived of access to information about environmental issues affecting the group. The Vaal Environmental Justice Alliance (Veja), which is a community-based organisation focused on environmental issues in the highly industrialised Vaal Triangle corner of Gauteng, will go head to head with the powerful multinational steel group in the South Gauteng High Court on Monday.

Veja has applied to the court in a bid to set aside ArcelorMittal SA’s refusal to provide it with access to two documents relating to the environment in which the firm operates.

Veja made the request in terms of the Promotion of Access to Information Act (Paia).

The first document being sought is the “Environmental Master Plan” developed by ArcelorMittal SA, which deals with plans for the rehabilitation of its Vanderbijlpark site and includes discussion of progress reports on the plan’s implementation.

The second document comprises records of what action was taken to close and rehabilitate the so-called “Vaal disposal site” in Vereeniging.

This was an unlicensed site on which ArcelorMittal SA dumped hazardous waste, prompting the Department of Environmental Affairs and the Gauteng Department of Agriculture and Rural Development to take enforcement action against the steel maker in 2007.

ArcelorMittal SA has steadfastly refused to provide the documents to Veja and has questioned what right the organisation has to monitor and enforce its compliance with environmental laws or to hold the steel giant accountable to the public for remedying or preventing any harmful pollution it may have caused.

Veja will argue in court that people have a constitutional right to live in an environment that is not harmful, and that in assessing the compliance status of any enterprise carrying on activities that affect the environment it is playing a complementary role to that of the state.

“By requesting information, the applicant does not purport to take the law into its own hands. It seeks the information to exercise the powers and responsibilities afforded civil society and the public at large under the relevant environmental laws, to work with the authorities to protect the right to an environment not harmful to health or well-being,” Veja contends.

It adds that the constitution and environmental legislation expressly contemplate that civil society plays an important role in environmental governance.

The issue of not getting access to information relating to the environment has also caused concern to ArcelorMittal SA’s shareholders. At this week’s annual general meeting (AGM), shareholder activist Theo Botha asked the board why there was no mention of environmental issues in the group’s integrated report.

Chief executive Nonkululeko Nyembezi-Heita told the meeting that environmental issues had been addressed in the group’s sustainability report, which she said was currently at the printers.

Nyembezi-Heita confirmed that there had been a number of “environmental incidents” during 2012. Botha replied that it was critical that shareholders had access to these reports ahead of the AGM so that they could engage management on any critical issues raised in the report. “Who will hold management to account?” queried Botha. He was told: “We note what you say.”

Meanwhile, shareholders and other stakeholders keen to get access to some information about environmental and sustainable issues affecting ArcelorMittal SA may soon be able to access a report on the company that has been compiled by Bench Marks Foundation.

Bench Marks is an independent NGO which aims “to ensure that the operations of big corporations do not undermine community life or destroy the environment.”

For the past 10 years Bench Marks has researched and written on the sort of issues that have spilled over into the social/political and economic crisis that has blighted the Rustenburg platinum mining area for the past 12 months.

The Bench Marks report on ArcelorMittal SA’s operations in the Vanderbijlpark area, which is due to be published in the coming weeks, is based on two years of community-based research which involved input from current workers, ex-workers, community residents and civil society. The steel maker did not accept invitations to provide input into the report.

The report is expected to conclude that working conditions are unacceptably risky with high incidences of illness and injury. The research found a lack of compensation for injury and illness caused by the work conditions. With regard to pollution and environmental degradation, researchers indicated “there is excessive air, water and sound pollution affecting the health of community members” and that the company appeared to have taken no steps to address these pollution problems.

On the issue of community sustainability, the research points to evidence that the sustainability of the community is threatened by ArcelorMittal SA’s poor environmental and labour practices.

Bench Marks acknowledges that the steel industry is of strategic importance for South Africa and that it is making a positive contribution to gross domestic product. But it notes that the manner in which this particular resource is being exploited is at odds with the basic principles of corporate social responsibility.

ArcelorMittal SA claims that it aspires to the highest standards of corporate social responsibility and takes seriously its duty to ensure that the steel production process takes place in a safe and sustainable manner.

However, Bench Marks contends that contrary to these aspirations the evidence suggests ArcelorMittal SA has had a negative impact on the physical environment, employees and communities in and around Vanderbijlpark.

Despite ongoing controversies around its environmental track record, ArcelorMittal SA is a longstanding constituent of the JSE’s Socially Responsible Investment index.

The concern raised by Bench Marks is “the failure by government to take appropriate steps and ensure ethical practices of corporate responsibility leaves communities vulnerable to large profit-making organisations such as ArcelorMittal”.

For shareholders who attended this week’s AGM, their concern is likely to be that the government is going to come under increasing pressure to enforce environmental standards and laws.

In the short term, this will add to ArcelorMittal SA’s operating costs at a time when the outlook for the global steel industry is uncertain.

And so it seems that after years of extracting enormous dividends from its grim exploitation of areas like Vanderbijlpark, the controlling shareholders, domiciled in Europe, could be in for a prolonged dry spell. - Ann Crotty

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