Corporate responsibility

The modern world relies on steel for its road, rail and energy infrastructure, its buildings, its household products, its packaging and its vehicles. Steel is a vital part of the world we live in, and it has an important role to play in helping us forge a more sustainable future.

Transport

Steel makes railways and bridges stronger and lighter, helping to reduce emissions during construction and provide durable weather-resistant infrastructure for many years to come. It is also a vital component in trains,ships and planes, and innovations like our iCARe™ range of electrical steels are enabling the automotive industry to develop light and efficient electrical motors which can run for longer on a single charge. Our ‘S-in motion’ solutions showcase our ultra high-strength and advanced high-strength steels, which are specifically designed to help car-producers reduce weight and cut emissions, while safeguarding both safety and performance.

Safety

Steel is a natural choice when it comes to safety. We have helped develop a new type of safety barrier which is up to 25% lighter than conventional versions, saving both money and CO₂ for our customers, and significantly reducing transportation and installation costs. Steel has also played a key role in a challenging construction project to build major new flood defences in Buenos Aires, and we have supplied around 164,000m² of steel for a state-of-the-art containment structure for the Chernobyl nuclear power plant site in Ukraine.

Energy

In 2012 we supplied over 3.5 million tonnes of steel to the energy infrastructure industry. This ranged from hot rolled coils, specialty plates, tubular products, and long steel products for the oil and gas energy sector to heavy plates for wind turbine towers, electrical steel for generators, and innovative coated steel for solar power plants. Using steel helps reach high safety and efficiency standards, thanks to its performance in strength, its ability to withstand tough and severe environments, and thanks to innovation. The future demand in this sector will be driven by sustained demand in mature markets and stronger growth in the emerging markets.

After another challenging year in the global steel market, with few signs as yet of a substantial economic recovery, we asked chairman and CEO Lakshmi Mittal about the issues the business is facing, the priorities for its corporate responsibility strategy, and the agenda for the coming year.

How does a responsible approach to business support the company’s strategy?

Being responsible is vital to a company’s long-term success. I have always believed this. Because being responsible not only has benefits for society, it has clear benefits for the business. Let me give you 2 examples. First, our success in reducing our own CO₂ emissions has cost benefits. Secondly, in developing new and innovative products to help our customers improve their environmental performance, we maintain our market leading position.

You have repeatedly said that health and safety is your number one priority, and that zero accidents, zero fatalities and zero occupational illnesses is your goal. How did the business perform in this respect in 2012?

We have made a lot of progress over the past five years. In 2012 we reached our lost-time injury frequency target of 1.0 per million hours worked a year earlier than we were targeting. So this is a good result. But I will always be concerned about health and safety until we reach a place of zero accidents and zero fatalities. There were a number of fatalities again in 2012 and this is not only tragic but not acceptable. We have to remain dedicated to addressing this problem. I want our senior leaders to lead by example. That’s why I have asked my colleagues on the GMB (Group Management Board) and the MC (Management Committee) to spend more time on the shop floor and promote increased training and awareness for both our employees and our contractors. This is how we will drive further improvement.

In addition to this relentless management focus on implementing our fatality prevention standards, investments in safety improvement remain a priority.

Where do you think ArcelorMittal can make the most contribution to society as a whole?

I believe steel has a vital role to play in achieving a lower carbon economy, while ensuring that the world can continue to grow and prosper. The success of our business is directly linked to the advancement of society - steel is the fabric of modern life. We are supporting transport infrastructure, making cars lighter and more fuel efficient through innovative solutions such as S-in motion and iCAR^TM for electric cars. Our steel makes construction and buildings more efficient and supports the domestic and industrial equipment that homes and business need. ArcelorMittal is also the world’s biggest recycler of steel. In 2012 we recycled around 29 million tonnes of steel, saving 36 million tonnes of CO₂.

It is not only through our products that we contribute to development. Our industrial presence spurs growth in local businesess and job opportunities. Through our responsible sourcing programme we engage and support our suppliers both big and small to adopt international standards, be it in health, safety, anti-corruption, human rights or environmental management.

We take our corporate responsibilities very seriously and contribute actively to the debate on issues such as human rights and climate change. We support the United Nations Global Compact and we re-confirmed our commitment to cut our global CO₂ emissions and to improve our health and safety at the Rio+20 UN Conference on Sustainable Development in June 2012.

What were your corporate responsibility highlights for 2012, and where would you have liked to see more progress?

We achieved our lowest ever injury frequency rate, and supported community activities to the value of $41 million through the ArcelorMittal Foundation. Also, by the end of 2012, over 85% of our employees had completed formal human rights training – this is more than 200,000 employees. In addition, I was very pleased we became the sector leader of the Dow Jones Sustainability Index.

However, 2012 was a challenging year for the steel industry, with demand in Europe 30% lower than in 2007, and we had to make some difficult restructuring decisions in units such as in Florange in France and Liège in Belgium. These were not made lightly, and we are engaging with trade unions and employee representatives to find common ground. Of course, sometimes these relationships and discussions are tense, but we are committed to continuing this important dialogue.

And as I mentioned before, workplace safety is the most obvious area where we still have a lot more to do.

What are your priorities for the future?

Our goal of zero accidents remains the highest priority. We have also set a target to cut our CO₂ emissions by 8% by 2020, compared to 2007, and we are making progress. We will continue our employee relations activities and human rights programme. We will also continue our community engagement activities. The progress and prosperity of our local communities is important to our success.

Our investment in Liberia’s mining and transport infrastructure is helping Liberia to rebuild its economy after years of civil war. ArcelorMittal’s revitalisation of Liberia’s mining industry shows how responsible and transparent business practices and investment can bring long-term economic and social benefits to an emerging market.

Liberia mines again

“Government cannot, by itself, achieve the vision for Liberia that is enshrined in our poverty reduction strategy. We need the participation of the private sector – one that will bring in sustainable investment and promote good corporate citizenship.”

Ellen Johnson Sirleaf, president of Liberia

The small nation of Liberia, on the west coast of Africa, was devastated by two civil wars between 1989 and 2003, during which time its economy and infrastructure were destroyed, creating a serious challenge to the post-war government to rebuild the country and create jobs for the unemployed – the vast majority of the working population.

The new Liberian government was keen to ensure that the country’s natural resources were used to provide direct and tangible benefits to Liberians. Attracting responsible foreign investment was deemed vital for urgent reconstruction and long-term development – and it was against this backdrop that ArcelorMittal entered the country.

Prior to the wars, Liberia was a major exporter of iron ore; ArcelorMittal’s investment focused on rebuilding the country’s mining and exporting industry. Soon after the war, ArcelorMittal signed a Mineral Development Agreement with the Liberian government in which we committed to strengthening the country’s mining industry and transport system and investing heavily in its social infrastructure, such as schools and health clinics.
The project saw the reopening of abandoned mines in the Nimba mountains. The 240km of abandoned railway running through Nimba, Bong and Grand Bassa to the port in the coastal town of Buchanan was refurbished, with bridges and service roads rehabilitated. Road networks were also improved and the port in Buchanan was redeveloped to make it suitable for international shipping, which involved strengthening the iron ore quay and dredging the harbour.

Thousands of jobs created

Since 2006, ArcelorMittal Liberia has provided nearly 500 jobs directly, as well as created indirect employment for 2,100 Liberians through foreign and Liberian-owned contractors. During the construction phase over 5,000 temporary jobs were created.

In 2011, the first shipments of iron ore left our mines near Yekepa – the first time ore had been mined in the country for 20 years.

Social and environmental impacts are far-reaching in a country where other opportunities are scarce. Using international codes of best practice has enabled us to address these issues decisively andopenly. The Corporate Responsibility Forum for Liberia, which ArcelorMittal set up in partnership with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) – the German government’s international development body – promotes effective corporate citizenship and good business practice among domestic Liberian companies and other multinationals planning to invest in the country. Our company is also a member of the multi-stakeholder steering group of the Liberia Extractive Industries Transparency Initiative (EITI).