Centre for Environmental Rights – Advancing Environmental Rights in South Africa

FOR IMMEDIATE RELEASE
19 MAY 2022   

­Today Environmental activist groups the Vaal Environmental Justice Alliance (VEJA) and groundWork (gW), supported by the Centre for Environmental Rights (CER), will attend steelmaker ArcelorMittal SA’s annual shareholders’ meeting to demand detailed plans to decarbonise its operations. The groups will take AMSA to task over ongoing environmental non-compliance and failure to engage meaningfully with fenceline communities.   

ArcelorMittal South Africa (AMSA) remains South Africa’s third worst greenhouse gas emitter, responsible for nearly three percent of the country’s emissions. The steelmaker has a long history of toxic air pollution, land and water contamination and a poor record of meaningful engagement with those communities most affected by the company’s environmental violations.  

While environmental justice groups recognise the publication of AMSA’s first Environmental, Social and Governance (ESG) report as being an important step forward, the report fails to provide sufficient detail on its ability to meaningfully realise key commitments. In particular, the steelmaker’s plans to reduce greenhouse gas emissions by 25% by 2030 and to reach net-zero by 2050 are simply too vague.  

The ArcelorMittal Group, based in Luxembourg, has revised its climate commitments in respect of its European operations, making bolder commitments to a 35% emissions intensity reduction by 2030. Here in South Africa, however, AMSA’s climate commitments are lacklustre at best, and the steelmaker has not indicated why it is unable to improve on these commitments. Critically, the company has not indicated how it plans to finance even their mediocre commitments. 

Furthermore, while AMSA has said a great deal about the importance of decarbonisation to ensure economic and environmental sustainability, over the last year it has failed to comply with a number of environmental standards and has continued to seek the postponement of compliance with minimum emissions standards for air pollution.  

For the fourth year, activists from VEJA and CER lawyers, as registered shareholders of AMSA, will pose questions to the AMSA board and management during company’s 2022 annual general meeting (AGM).  

Communities demand transparency  

Community members from Sharpeville and Bophelong had planned to gather outside AMSA’s main plant in Vanderbijlpark to protest AMSA’s pollution in Vanderbijlpark and surrounding areas, and to hand over a memorandum of demands to AMSA management, but another protest – organised by striking employees of the steelmaker – will be taking place on the day of the AGM. As a result, community members will have to postpone their gathering to a future date.  

“Communities affected by AMSA’s pollution continue to struggle to obtain access to information related to AMSA’s operations while the company hides behind outdated COVID mitigation measures as a justification for lack of engagement,” says Samson Mokoena, VEJA coordinator.  “Nothing has progressed over the years and AMSA continues to put profits before people and the environment.  The company plays dirty tricks to hide information, refusing to meet communities to engage on the ongoing pollution and to rehabilitate its unacceptable underground water pollution and waste disposal sites” Mokoena added.  

Failure to disclose  

Beyond the focus on environmental violations and continued lack of community engagement, a central concern for activists remains AMSA’s failure to disclose a detailed strategy to mitigate its climate-related impacts and risks. 

“Around the world, carbon intensive companies like AMSA and its Europe-based parent company ArcelorMittal are faced with growing financial, reputational, and physical risks posed by climate change. ArcelorMittal has recognised and embraced new and cleaner technologies in the steel making process and have made revised commitments to improve on its emissions reductions by 2030 but AMSA has only recently published its own commitments, with very little detail on the implementation of these commitments. In addition, AMSA does not have board level governance and accountability structures to ensure an urgent response to managing climate risk,” says Avena Jacklin from groundWork, Friends of the Earth South Africa.  

According to independent energy research consultant Hilton Trollip: “Despite AMSA’s commitments in its ESG report, and in the light of ArcelorMittal Group’s announcement of a 1.6Mt Green steel plant in Spain, and potential for competitive exports of green iron to the EU with substantial benefits for SA and EU, there is a lack of attention to green iron and steel production in SA.”  

“In respect of even basic compliance with environmental standards, AMSA has failed dismally. It is surprising that, although AMSA’s revenue was two-thirds higher than that of 2020, it reduced its environmental spend from R151 million to R64 million for the past financial year. This is very worrying in light of AMSA’s historical pollution and ongoing environmental non-compliance.” says CER attorney Leanne Govindsamy. “Although we note that AMSA plans to increase its environmental spend going forward, any financial commitments must be accompanied by meaningful and sustainable measures to address these issues.” 

“Environmental non-compliance and inadequate measures to address climate related financial and other risks expose the company to regulatory, governance and legal risk, something which it should not take lightly, says Govindsamy” 

Key Information: Tackling Climate Change: The Role of Green Steel Industry in South Africa 

END