20 May 2021 at 8:44 am
For the third year in a row, environmental justice activists demand accountability for environmental and climate impacts from steelmaker ArcelorMittal SA at its annual general meeting
VANDERBIJLPARK, SOUTH AFRICA: At today’s Annual General Meeting (AGM) of steelmaker ArcelorMittal South Africa (AMSA), the Vaal Environmental Justice Alliance (VEJA) and the Centre for Environmental Rights (CER) are once again demanding accountability for the company’s lack of environmental compliance; its lacklustre approach to transparency; inadequate community engagement; and lack of meaningful commitment to reducing its climate emissions.
AMSA is South Africa’s third largest greenhouse gas emitter. It has a long history of toxic air, water and land contamination as a result of its steelmaking operations in South Africa. Its harmful practices have had far-reaching negative impacts on surrounding communities. In the past 12 months, there have been three emergency incidents at its Vanderbijlpark plant, in which a number of workers died.
During the virtual AGM, CER lawyers and activists from VEJA, as registered shareholders of AMSA, will pose questions to the AMSA board and management. Key questions will be raised about AMSA’s plans for meeting South Africa’s climate ambitions, the trade and export risks for AMSA posed by inadequate national climate ambitions, and AMSA’s commitments to significantly lowering its greenhouse emissions. Questions will again be asked about AMSA’s ongoing air and water pollution, contaminated land, and lack of transparency.
It should be noted that AMSA, a company listed on the Johannesburg Securities Exchange, has refused media access to the AGM and is requiring those requesting minutes of the 2020 AGM to prove their shareholding in order to obtain a copy.
This will be the third consecutive year that activists are participating in AMSA’s AGM as shareholders, and protesting against its continued failure to respect their environmental rights. Leanne Govindsamy, head of the Corporate Accountability and Transparency Programme at the CER says that they have seen little change in the manner in which AMSA handles environmental, social and governance (ESG) issues. “AMSA’s refusal to take steps to address concerns about environmental degradation, severe impacts on human health and well-being as well as its role in the climate crisis, illustrates a company which is inflexible, unresponsive and not living up to its claim of corporate responsibility. The ArcelorMittal Group goes so far to acknowledge and address the concerns raised by local shareholders and activists in its annual report, while AMSA stands by idly.”
AMSA and the climate emergency
Around the world, carbon intensive companies like AMSA are contending with growing financial, reputational and physical risks posed by climate change. “Companies must follow science-based approaches and employ innovative research to design new and bold strategies to mitigate climate-related impacts and risks. Increasingly, major emitters recognise the need and urgency for climate action: significant reductions of emissions are immediately necessary to protect people, planet and profit within the context of the climate emergency,“ says Daiyaan Halim, Researcher at the CER.
In recent years, AMSA’s parent company ArcelorMittal, based in Luxembourg, has been vocal about and started to take steps to address its own climate impacts and risks, and is engaged in testing various low-carbon technologies at steelmaking sites in Europe. “Unfortunately, those commitments and actions have not yet carried through to its subsidiary AMSA here in South Africa,” says VEJA Coordinator, Samson Mokoena.
In 2019, the CER’s Full Disclosure 5 Report assessed AMSA’s public disclosures to determine whether the company reported on the physical and transitional risks posed by climate change, and whether it had a strategy to mitigate them, in line with the Recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). Out of ten top emitters of greenhouse gases, AMSA performed worst: not only did AMSA not disclose its climate-related risks to shareholders, but had no adequate mitigation strategy in place.
This year, in its 2020 Integrated Annual Report, AMSA finally recognises that climate change poses a risk to its operations through extreme weather conditions and energy supply disruptions. However, the company still fails to disclose a strategy to mitigate its climate-related impacts and risks, nor does it have governance and accountability structures in place to ensure an appropriate response to managing climate risk.
AMSA has not reported on its absolute scope 1 or scope 2 emissions (i.e. the direct greenhouse gas emissions from its operations, or the greenhouse gas emissions from the electricity used in its operations, respectively) since 2018. It states that it aims to reduce its carbon intensity, but does not provide any targets or clear timeframes for achieving such reductions. In fact, AMSA reports that, between 2019 and 2020, its carbon intensity increased.
“As a dominant player in the domestic steelmaking industry, AMSA has an important role to play in sustaining and supporting the South African economy while adapting to new industry standards. Shareholders and people affected by AMSA’s operations need to know what the firm can and cannot do, and what its plan is to reduce risks, fines, costs, and harm over the medium- to long-term. AMSA needs to disclose its risks and commit to a long-term emissions reduction strategy, in accordance with science-based targets,” says Govindsamy.
Lack of community engagement
While the AGM is underway, community members from Sharpeville, Sebokeng and Bophelong will 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.
In 2014, VEJA won a court case against AMSA in the Supreme Court of Appeal, in which the court ordered AMSA to release records of its environmental pollution and remedial action to fence line communities at its Vanderbijlpark plant. Despite this court action, communities affected by AMSA’s pollution have very little access to the corporation, and continues to struggle to obtain access to information. “AMSA needs to commit to regular and meaningful consultation with communities in respect of pollution, access to information, environmental compliance and climate change commitments,” says Mokoena.
“Communities living in the Vaal Triangle Airshed Priority Area continue to suffer the deadly environmental effects of AMSA’s pollution, in clear violation of their Constitutional right to a healthy environment. We bear the brunt of AMSA’s pollution of air, water and land and remain in the dark about how they plan to address these issues. The indignity caused by a company which refuses to change despite our various interventions, that’s what is most distressing,” says Mokoena.
NOTES TO EDITOR
Media Release from the Vaal Environmental Justice Alliance
The Centre for Environmental Rights (CER) is a non-profit organisation of activist lawyers who help communities and civil society organisations in South Africa realise our Constitutional right to a healthy environment by advocating and litigating for environmental justice.
The Vaal Environmental Justice Alliance (VEJA) is a voluntary association of non-governmental and community-based organisations that advocates for a healthy environment and sustainable development in “the Vaal Triangle”. This is an area of heavy industry and mining in the south of Gauteng, in which two of ArcelorMittal’s major steel-plants are situated, namely its Vanderbijlpark and Vereeniging sites.
 Climate change is not listed among its most significant risk exposures identified through its Enterprise Risk Management Process, and it has inadequate governance structures in place to manage its climate-related risk response. The Board is not responsible for overseeing climate risk, and the company does not disclose whether remuneration is linked to climate-related performance.
ArcelorMittal South Africa Integrated Annual Report 2020 p39-41