ClientEarth, together with Bankwatch CEE and Global Action on ArcelorMittal, have filed a complaint against the European Investment Bank’s decision to lend €250 million to ArcelorMittal.
ArcelorMittal is the largest steel company in the world; in 2009 it was responsible for approximately 8% of global steel production and made a net profit of $1.1 billion. Lakshmi Mittal, Britain's richest man, owns 43% of the shares in ArcelorMittal and is chief executive officer of the company.
On 21 October 2009 the European Investment Bank’s Board of Directors approved a loan for €250 million entitled ‘Steel product and processing R&D Facility.’ ArcelorMittal are to be the beneficiary of this loan, something the EIB only made clear following specific enquiries from Bankwatch CEE and Global Action on ArcelorMittal.
This loan is intended to be used to improve the environmental performance and energy efficiency of ArcelorMittal’s plants in Europe, resulting in a reduction of CO2 emissions of 8% by 2020. However, the lack of detailed information provided by the EIB makes it very difficult to establish where this money is actually intended to be spent. ArcelorMittal has been identified by some NGOS as having a very chequered history of alleged human rights abuses and environmental damage:
Click to read related documents:
- Complaint document
- Annex 1: Request for information from BankWatch to EIB
- Annex 3: Global Action in ArcelorMittal document
- Annex 4: Fax from EIB
- Annex 5: Letter from BankWatch to EIB
- Annex 6: Reply from EIB to BankWatch
While ClientEarth would support any move by the company to improve its environmental performance, this should not be funded by European public money: the EIB is only authorised to fund projects when funding is not available either in the European Member States in which the project is to be carried out or from other sources (such as commercial loans) on reasonable terms.
When challenged on this point, the EIB has not claimed that ArcelorMittal could not obtain funding for the project elsewhere. With a turnover of $18.6 billion and profits of $1.1 billion in a bad year this is not a company that would struggle either to fund this project itself or obtain funding on the commercial market.
According to the UK NGO SandBag, ArcelorMittal already stands to make windfall profits of over £1 billion from the European Emissions Trading Scheme, having been allocated 80 million permits which it does not need. This is more than four times the loan approved by the EIB and, if used appropriately, would enable the company to make substantial improvements in its environmental and human rights performance.
Frustrated by the Bank’s failure to grasp their statutory limitations, ClientEarth, Bankwatch CEE and Global Action on ArcelorMittal have now made a complaint to the Secretary General of the Bank that, as funding would be available elsewhere for this loan, the Bank is not authorised to approve this loan. Our full complaint is here [link to complaint]. We have asked the Bank to ensure no funds are disbursed to ArcelorMittal before this is thoroughly investigated and expect a response from the Bank by the end of April.
|Published||March 10, 2010|
|Found in||ClimateEnergyRule of law|