MAC: Mines and Communities

ArcelorMittal uses "dirty" tactics against South African workers

Published by MAC on 2019-04-28
Source: Peoples Dispatch, Nostromo Research

The world's largest steel manufacturer - ArcelorMittal, owned by Indian-born tycoon, Lakshmi Mittal - has engaged in vicious, anti-labour tactics that are being vigorously protested by the South African metal workers' union NUMSA.

The company's actions seem to be a form of what might be dubbed "transfer down-pricing" - no less damaging to the workforce than "transfer pricing" has traditionally been to society at large.

[Comment by Nostromo Research]


Workers of ArcelorMittal South Africa demonstrate before the Indian High Commission

Pavan Kulkarni

Peoples Dispatch

27 April 2019

Led by the NUMSA, workers of this corporation, owned by an Indian citizen, have been on strike since March 12 against the company’s misuse of a loophole in the law to avoid making eligible workers permanen.

On April 24, workers affiliated with the National Union of Metalworkers of South Africa (NUMSA) staged a demonstration before the Indian High Commission in the capital city of Pretoria. They were protesting the “abuse of workers, as well as the corruption of the management team of ArcelorMittal South Africa.”

ArcelorMittal, the world’s largest steel producer, employing over 300,000 globally, is owned by the billionaire Lakshmi Mittal, who is an Indian citizen.

The workers employed by this company in South Africa have been on strike since March 12. They have been protesting the company’s misuse of a loophole in the law to refuse permanent employee status to many workers.

As per a landmark constitutional court judgement last year, any worker employed through a labor broker for R 205,000 (USD 14,107) a year or less will be eligible to acquire the status of a permanent employee after three months of work.

However, at least 80% of the workforce at ArcelorMittal South Africa (AMSA), amounting to around 1,000 workers, have been employed through Real Tree Trading and Monyetla Services. NUMSA’s demand that these workers be made permanent employees has been refused by the company, which maintains that these two contractors are not labor brokers but independently registered “service providers”.

“ArcelorMittal has found creative ways to circumvent this ruling, so they can continue to abuse and exploit our members,” Mokete Makoko, NUMSA’s regional secretary, complained while embarking on an indefinite strike.

In a memorandum presented to the Indian High Commission by Sbusiso Namane, the local secretary of NUMSA in Sedibeng, where one of the  ArcelorMittal operations are based, the union explained, “A simple desktop search reveals that both these “service providers” are owned by VESCO, whose entire board is chosen by ArcelorMittal management. These “service providers” use the same headquarters and email address as ArcelorMittal for their day to day work. ArcelorMittal is essentially outsourcing from itself, to itself.. It is obvious that the company is exploiting a loophole in the law in order to avoid making workers permanent.”

The thousands thus employed do the same work as the permanent employees but earn less and do not receive the same benefits. Some of them are paid as low as R 2,640 (USD 182), which the union has termed as “slave wages”. From the beginning of this year, the national minimum wage in the country is R 3,500 (USD 240) per month, which itself is well below R 4170-6340 (USD 287-436), which is the gross living wage of a single adult as of last year.

NUMSA also alleged that the workers are forced to work in unsafe conditions and, fearing dismissal, the contract workers oblige. Some have suffered serious injuries in the process. Deeming this “needless exploitation” as “unacceptable”, NUMSA’s members went on strike.

Declaring that the strike was illegal, the company had threatened the workers, saying “NUMSA members who choose to participate in the unlawful  strike are exposing themselves to both legal and financial risks.”

Three days later, when the industrial action had begun to exert a toll on AMSA’s operations across the country, the South African Police Service,  allegedly “acting on instructions from [the company’s] management”, arrested 10 union members who were on the picket line, on the charges that they violated picket rules. However, the following day, when NUMSA’s lawyers intervened, all of them were released and the charges against them  were dismissed.

The company, in an attempt to negotiate an end to the strike, had offered to hire these workers as permanent employees in three years. But NUMSA
spokesperson, Phakamile Hlubi-Majola, said that this “will result in retrenchments. This is blackmail and we reject it.”

It was after over a month of strike action that NUMSA chose to demonstrate before the Indian High Commission. Its memorandum stated that India,  being a founding member of the International Labor Organization and holding a permanent seat since 1922, “has a responsibility.. to ensure [that] its citizens do not violate the rights of workers, especially when they operate in other countries.”


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