10,000 jobs at risk as ArcelorMittal withdraws from contract

ILVA. Photo credit: Il Tempo

 TARANTO – Steel giant ArcelorMittal have announced that they would be terminating their contract and withdrawing from the Ilva plant in Taranto, putting at risk over ten thousand jobs, said business sources Tuesday.

 The company has announced that it will start shutting down the plant and hand it back within thirty days.  ArcelorMittal is technically the tenant of the plant, which is actually owned by an extraordinary administration comprising Ilva Ardito, Danivo and Lupo.  The withdrawal removes ArcelorMittal’s management and hands the plant over to the commissioners, in practice to the Italian state, said Il Sole 24 Ore.

 The reasons given for the withdrawal, set out in a six-page letter signed by CEO Lucia Morselli, include the end of the legal immunity which had protected the company from prosecution.  In particular, the Ilva plant is alleged to be highly dangerous for the environment, and has been blamed for hundreds of cancer-related deaths in past years, according to business sources.

 The decision to remove the legal shield was passed in the Senate in October and it came into effect on Sunday.  It was particularly pushed by the Five Star Movement, with one argument given against the immunity being injustice to locals whose health could have suffered because of the plant.

 The removal of immunity made the management of the plant according to regulations and the terms of the contract impossible, said the company.

 Other reasons given for the company’s reversal were issues relating to blast furnaces, in particular Blast Furnace 2 at Ilva, where there was a fatal incident in June 2015.  ArcelorMittal has said that Blast Furnace 2 “must be switched off.”

 Finally, the company cited the “general atmosphere of hostility” as making the management of the plant impossible.

 The situation is being treated as an emergency by the government.  When satellite activities are included, the number of jobs at risk is close to 15,000, reported La Repubblica.  Many of these are linked to the Taranto plant, situated in southern Puglia, which has a very high unemployment rate.

 Furthermore, again according to La Repubblica, the closure of the Ilva plant would knock 1.4 per cent off Italy’s gross domestic product.

 The government held an urgent meeting at Palazzo Chigi at which Prime Minister Giuseppe Conte was present, and has scheduled another meeting there for Wednesday, with ArcelorMittal.

 “The government will not agree to the closure of Ilva.  There are no legal requirements for the withdrawal of the contract,” said Stefano Patuanelli, Minister for Economic Development.

 “For this Government the Ilva question has maximum priority… We will do everything to protect productive investments, employment rates and to follow the environmental plan,” said the prime minister in a tweet.

 “No motive that could justify the withdrawal exists.  The law on legal immunity was not in the contract and cannot be invoked,” said Conte, quoted in La Repubblica.

 Trade unions have strongly condemned both ArcelorMittal and the government.  Francesca Re David, general secretary of the Fiom-Cgil trade union, said in a note that ArcelorMittal’s decision was “unacceptable” and that first granting and then withdrawing immunity (the first under the previous government, also led by Giuseppe Conte) were “contradictory and unacceptable.” 

 “Don’t diffuse an environmental bomb and put together a social bomb,” wrote Marco Bentivogli, leader of Fim-Csil trade union.