In North America, 11 ArcelorMittal facilities are located directly adjacent to the Great Lakes, an area of great natural significance, which supports many habitats and species. For many years, we have worked in various public-private partnerships and spearheaded stakeholder engagement to ensure the Great Lakes region is a global leader in land and water conservation.
Our key partnership is with Sustain Our Great Lakes (SOGL), a consortium of regulatory agencies and government environment services dedicated to the conservation of the region.
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Why this is important for ArcelorMittal
The concept of the ‘good corporate citizen’ is changing. Twenty years ago it was about philanthropy; ten years ago, it was corporate responsibility; now the focus is on social risks, social impact and ‘shared value’. We’ve been actively engaging with our communities – and investing in them – for many years, so what we do has to evolve too.
Understanding our impacts
The first thing we need to do is understand in detail what our community impacts are, both positive and negative – from land and water use, and air pollution, to taxes paid, and employment provided. The important point here is that our impacts will vary at different stages of a plant’s operations, and we need to plan for that. One obvious example is ensuring that a mining site leaves a positive legacy when it finally closes, both in economic and environmental terms.
We also need to think about risk in different ways. Traditional approaches to risk management don’t always pick up unforeseen social and other more intangible risks, like human rights issues, though these can have a huge and sometimes overwhelming impact on a company’s reputation, assets and licence to operate.
From investment to shared capital
Our approach to community investment needs to change too. We need to shift from focusing on the money we invest in projects, to looking at our activities in terms of shared social ‘capital’. In other words, investments that minimise the negative (like work to reduce dust or noise pollution), and maximise the positive (like the development of local skills and using local suppliers). In the long run, after all, our business will only be resilient and thriving if our communities are too.
Open and continuous communication
We need to adapt the way we engage with our stakeholders to make sure that we are developing trusted, two-way communication which encourages local stakeholders to tell us their concerns, and gives them confidence that we will listen. We need to do this continuously, not just when an issue arises, and if we make commitments, we need to keep them. There are many good practice guidelines in this area, and our investors and other stakeholders are increasingly insistent that we comply with them.
Across the group we have developed an excellent volunteer work culture that brings our employees and our host communities very close, building trust and friendship. These types of initiatives also enable us to use our skills to serve our communities.
This outcome is sponsored at group level by Bill Steers, general manager for communications and corporate responsibility for North America. He will drive and champion the shift to a more strategic approach to community relations.
The contribution we made to the ‘social capital’ of our local communities in 2015 was substantial: we employed 209,000 people across the world, many of them in highly skilled jobs, and often in remote communities where there are very few other employment opportunities. We employed a further 46,000 as contractors. We spent over $46 billion on procurement, which includes not just large commodity suppliers but thousands of local firms in the 60 countries where we operate. And we paid $936 million in income and local taxes, supporting public spending and economic growth. In our mining operations alone, we contributed $73 million in royalties.
Dealing with stakeholder concerns
Yet our stakeholders have some very real concerns. It’s become increasingly clear that it doesn’t matter how much money companies spend on community projects if they don’t get the basics right: in other words, we need to reduce the negative impacts that have an adverse effect on people’s lives and erode their trust in us. The reputation surveys we ran with our stakeholders in eight countries in 2015 reinforced this: people make a clear distinction between community investment and community relations. They value the latter more, and therefore it has more impact on our reputation.
So in dealing with issues such as community air quality at sites like the Tubarão mine in Brazil, and the Zenica steel plant in Bosnia & Herzegovina, the way we communicate is vital – namely being open about negative issues and our approach to finding a solution. An important practical component here is an effective grievance mechanism that’s easy to use, gets prompt responses, and is equally accessible to every member of the community. We published community grievance guidelines in 2015, and we expect our local sustainability reports to include information about how these are being used by the end of 2016.
Community land use
We are committed to respecting best practice in community land use and protecting indigenous peoples' rights. This is part of our human rights policy. Our mining activities in Liberia have affected many local people through our use of land, and for this we have set up a resettlement and livelihood restoration programme. To ensure there is independent oversight of the compensation process, and any mediation that might be necessary, we have established a Mine Resettlement Coordination Committee, which includes representatives from our company, local authorities, civil society and local communities. Through our Community Liaison Department, we are talking directly to affected farmers about the company payment system, and helping reduce pressure on them. We have quarterly meetings with the Mine Resettlement Coordination Committee to ensure any grievances are dealt with properly. In 2015, we continued to compensate those affected by our mining activities for the loss of crops and land in Grand Bassa and Nimba Counties.
In addition, we have provided 300 farmers with initiatives to restore their livelihoods on alternative farming land, with demonstration projects and the distribution of improved seed varieties. We have also enabled 145 people to develop both their academic and their vocational skills; supported 100 children with access to education; and launched a literacy and financial numeracy and Village Savings Loan Association benefiting approximately 50 people.
All these initiatives are carried out in partnership with local NGOs, and we believe this will bring greater strength to the transparency and long-term effectiveness of the programme.
Employee volunteering and community investment
Investing in our communities by supporting local projects is a vital part of our identity wherever we operate. In 2015, we spent a total of $18.5 million on community projects and science-based education programmes, benefiting a total of 1.1 million livelihoods. There are more details on this in the segment sections of this report, and in our local sustainable development reports.
Employee volunteering is a great example of shared value: it allows our own people to develop new skills while doing something that matters to them, and it makes a real contribution to local organisations. In 2015, 60 employees took part in our long-standing ‘solidarity holidays’, working with local employees and other residents on community projects. In the future, we want to focus as much as we can on skills-based volunteering, with sustainability in mind, where our people share their know-how and help develop those skills in other people and for future generations.
Strengthening community relations
Taking all these issues into account, in 2015 we developed this outcome to focus on strengthening community relations. We looked specifically at our impacts and how we identify and manage them, and how we can do this better, shifting our focus away from project funding and towards the development of social capital and shared value. This outcome covers issues like safe and reliable jobs, community wellbeing, air quality, the criteria for good community consultation, and how we can contribute proactively to local economies.