Rio Tinto poisons steel industry sustainability

05.06.2012

At the latest meeting of the OECD Steel Committee workers' representatives voiced concerns over the sustainability of the steel industry when major suppliers such as Rio Tinto continue to abuse workers' rights and ignore public warnings.

FRANCE: Government and industry delegates from OECD and non-OECD economies attended the 72nd session of the OECD Steel Committee from May 31 to June 1. The Committee has 33 members as well as a number of observers and accounts for around 76 per cent of the world exports of steel. The Committee acts as a unique platform where multilateral steel problems can be discussed and political solutions can be found.

One such problem facing the industry is access to raw materials and in his last statement the Chairman of the OCED Steel Committee drew attention to the importance of this issue. The Committee highlighting the question of raw materials in steelmaking has resulted in governments and industry giving the issue increased attention. The International Metalworker's Federation (IMF) also shares these concerns and in its latest submission questioned the sustainability of the industry when major suppliers such as Rio Tinto continue to be poor corporate citizens.

About 70 per cent of the iron ore trade in the world is accounted for by three companies: BHP Billiton, Vale and Rio Tinto. Iron ore is a principal raw material for steel and an integral part of the steel supply chain. It is true that the steel industrial cannot consider itself sustainable or socially responsible unless it also accepts responsibility for its supply chain. The track record for these major suppliers is not good: Vale was voted as the 2012 Public eye choice award for world's worst company.

Rio Tinto also has a poor reputation as a corporate citizen and is currently conducting an illegal lock out of workers in Alma, Quebec. Rio Tinto's reputation is so bad that local community groups and unions are working together to prevent its US$12bn investment in India and are also conducting an Off The Podium campaign at this year's 2012 Olympic games. Rio Tinto has been the subject of allegations and reports about human and labor rights abuses, and about environmental devastation around the world, including in Papua New Guinea, Indonesia, China and elsewhere.

During the meeting the IMF called for governments and policy makers to act to break up the mining monopoly or to adopt policy solutions that would force companies like Rio Tinto to become good corporate citizens. Unions argue that unless action is taken the steel industry will remain tarnished and unable to take action against bad suppliers due to a lack of options.

Rob Johnston, IMF Executive Director commented, "The steel industry should be able to say to companies like Rio Tinto improve or we will walk away, but if limited supply means you can't do that the solution has to be oversight and regulation".