A coalition of environmental and trade union organisations will today step up calls for the EBRD and the IFC to stop lending to ArcelorMittal, the London-listed metals giant with steel and coal plants across Eastern Europe and the CIS, citing ongoing safety and environmental concerns.
“After more than ten years of the company receiving multi-million euro lending support from these institutions, communities and workers continue to suffer from high levels of pollution and unsafe working conditions in several countries,” Global Action on ArcelorMittal, a civil society grouping, said in a statement. “The ‘demonstration effect’, via which the EBRD seeks to justify such loans, has unequivocally failed in the case of ArcelorMittal”
The company has received almost $700 million of loans from EBRD and IFC since 2001.
The EBRD yesterday insisted, however, that it took head of environmental safeguards. “[The Bankpays great attention to issues of occupational health and safety standards as well as pollution levels,” said Olivier Descamps, the bank’s director for south eastern Europe, central Asia and the Caucuses.
In January, 30 miners died in a methane explosion at the Abaiskaya coal mine in Kazakhstan’s Karaganda region. The public prosecutor’s office reported last month that the main reasons for the accidents and high injury rate are poor working conditions that fail to meet health and safety standards and outdated equipment. The Kazakh emergencies minister, Vladimir Bozhko, warned the company could lose its license.
A $100 million EBRD loan extended to the company last year is “specifically aimed at supporting the company’s plans to modernise the [Termitau] plants to bring them in line with international best practice in terms of health and safety standards,” the bank said in a statement.
The EBRD “is working with the company” to speed up the implementation of an environmental action plan. “The loan to Termitau last year was first in a wider EBRD initiative to support improvements to environmental, health and safety practices,” the bank said.
In May 2006 in Kryviy Rih in Ukraine, a trade union presented a list of 10 health and safety measures needed at the plant. As yet, the coalition claims, only two have been partially fulfilled, while only one of five environmental measures have been carried out, despite the steel works having received a $200 million loan from the EBRD in 2006. In January, the Ukrainian prosecutor launched legal proceedings against the plant’s management for violation of Ukrainian environmental regulations.
The company has yet to produce an environmental action plan that formed one of the conditions of a $100 million loan from the EBRD in 2001. Descamps said the plant placed a “The implementation of an environmental compliance plan at the Galati plant is preceding well so far.” Between 2001 and 2006, there were 25 deaths and 254 injuries at the plant.
“While no-one expected overnight miracles, there ought to be some visible reductions in pollution and improvements in health and safety as a result of these loans by now,” said Action on ArcelorMittal in a statement.
The EBRD responded yesterday that it “permanently monitors” environmental issues and encourages “higher standards.”