18 May, 2010At an OECD Steel Committee meeting in Paris in May, IMF highlights abuses by giant mining companies and calls for a sustainable future.
PARIS: Trade union participants used the latest Organisation for Economic Co-operation and Development (OECD) Steel Committee meeting to inform governments of the unsustainable practices of the world's largest mining companies. In particular the confrontational way in which Vale, Grupo México, Rio Tinto, BHP Billiton treat unions and employees.
The mining industry is an integral part of the global steel industry and recently industry chiefs have been raising concerns about price hikes in raw materials due to the monopoly enjoyed by these companies. The price hikes come at a time of record profits for the industry and have damaging consequences for the global steel industry. The IMF submission to the committee makes it clear that not only are these companies abusing their unique control over raw materials but also trying to force their employees to do more for less.
In a statement from Risaburo Nezu, Chairman of the OECD Steel Committee, he said, "Concerns about the market structure of some raw material industries and the effects this may have on the stability of the steel and downstream industries have intensified. Delegates also called for improved transparency and a lifting of barriers affecting trade of raw materials to improve the industry's unrestricted access to raw materials. This is an issue that is appropriately addressed by governments and their competition authorities."
Rob Johnston, Director of the IMF Steel Department, believes that governments must do more to protect workers, demanding that, "The prices for raw materials have increased over the last month up to 100 per cent and more. These companies are making enormous profits on our workers' backs and this must stop. Governments have a clear role to play. For example, how can any Brazilian be proud of a company such as Vale which is attacking the very foundations of a community in Sudbury, Canada? This is not good business sense but pure greed. The OECD and its members must intervene and do more to protect our steel industry from these companies."
Participants also heard how the global steel industry was recovering from the financial crisis, but that the strength of the upturn varied across regions. Steel mills are now running at approximately 80 per cent of capacity an increase of nearly 20 per cent since the end of 2008. Trade issues remain a concern for the industry and it is vitally important that markets remain open and fair. The IMF highlighted the need to assess workers' rights as a key element in assessing the standards of any country.