ArcelorMittal South Africa (AMSA), a subsidiary of Lakshmi Mittal’s global steel empire, owned by the Indian born entrepreneur Lakshmi Mittal is facing the wrath of the South African government. The charges against him are breach of environmental pollution laws. According to reports, population of the entire town where the company runs its major operations are affected by environmental degradation. AMSA’s environmental manager has been served a subpoena to appear in the Vanderbijlpark Regional Court on June 26. The violation of environmental rules is a criminal offence under the South African Air Quality Act.
Vanderbijlpark is a steel town and the entire population dependant on the AMSA for livlihood. AMSA is a rebirth of the former state-owned steel enterprise Iscor. The company fell into bad times and Mittal was roped in to bail it out, which he turned around. During a routine inspection at the Vanderbijlpark facility undertaken by authorities, non-compliance of certain rules were found, which led to a criminal investigation. According to authorities in the environmental department, the operations of the steel plant were under the close scrutiny of the authorities for quite some time. Three inspections were made prior to serving subpoena to the company officials – November 2008, October 2012 and August 2014 -respectively. A number of enforcement interventions followed those investigations. The company had been granted over a decade to ensure legal compliance. Despite that, elevated pollution persisted in the area. Once the criminal offense is proved, the company will face a fine of 15 million South African Rands or imprisonment for the responsible person/s. There are also massive protests by the local environment activists, which the government cannot overlook that easily. Their complaint is that the residents have been affected by both air pollution and water contamination, due to effluents discharged from the steel plant. The AMSA version is that the problems are due to legacy issues. These problems were there during the acquisition of the company twenty years ago. They maintain that in the preceding two years, the company spent around 460-million South African Rands on various environmental projects. It also had committed to spend one billion Rands over the next four years on green projects. Everyone is keenly looking forward to the outcome of the June 26, 2019 hearing, which will have ramifications not alone on AMSA but the whole range of companies. It is also important to note that the issue is coming up at a time, when the South African government is looking forward to reform the running of the public sector companies including utilities. Any harsh action on AMSA may not go well with the private sector suitors, which the government is wanting to attract for taking over of these companies.
