Trade union: Arcelor Mittal Kryviy Rih owner not meeting investment commitments

Kyiv, April 6 (Interfax-Ukraine) – The owner of OJSC Arcelor Mittal Kryviy Rih (former OJSC Kryvorizhstal) in Dnipropetrovsk region has not fully met the investment commitments it undertook when acquiring a 93.02% stake in the enterprise, says the committee of the company's trade union.

In particular, ArcelorMittal is underperforms in meeting its social commitments, Chairman of the committee Yuriy Bobchenko said at a press conference at Interfax-Ukraine on Tuesday.

"Out of the 19 points in the social sphere, the commitment to create a non-state pension fund at the expense of the owner's funds remains unfulfilled," he said. "They say its term is not due yet. Some points concerning an increase in wages and the construction of housing are also unfulfilled."

According to the estimates announced at a press conference, pursuant to the conditions of the acquisition agreement, the average wages at the company by 2010 should have hit UAH 6,417, while they are UAH 3,778 today. At the same time, Bobchenko acknowledged that "no one said how wages should be calculated correctly."

The trade union's committee opposes attempts by the company's administration to change the system of payment at the enterprise.

The trade union also considers the amount of housing for the company's employees insufficient, saying that between 2000 and 2005 a total of 1,187 flats were commissioned, whereas between 2006 and 2009 a mere 144 flats were commissioned.

Bobchenko also says that the enterprise's employees do not have enough protective clothing and means of protection, which results in injuries at work.

The committee's chairman also criticized the State Property Fund's statements that the owner of OJSC Arcelor Mittal Kryviy Rih was meeting its commitments. "What is more, they are changing the investment commitments amid the crisis. This is not the State Property Fund, this is a transnational investor's fund," Bobchenko said. "I believe that for the failure to meet the commitments the transnational investor should be fined in tenfold amounts and [the funds should be] sent to the national budget."

Bobchenko said that he does not support a change of the enterprise's owner, but that there is a need to make the investor meet the investment commitments.

The trade union does not plan any rallies presently, he said. "It's not hard to rally people, and it looks like it might happen," he added.

As was reported, Ukraine's State Property Fund confirmed the fulfillment of the investment commitments at OJSC Arcelor Mittal Kryviy Rih for 2009 after the March inspection of how the conditions of the acquisition agreement were met.

The SPF press service said then the result was achieved during the economic crisis only thanks to the joint actions of the fund, the enterprise's administration, its owner and the trade union central committee.

Arcelor Mittal Kryviy Rih is Ukraine's largest producer of rolled stock made of steel in Ukraine.

The Mittal Steel corporation bought 93.02% of stocks in OJSC Kryvorizhstal at an open tender on October 24, 2005, for UAH 24.2 billion with the starting price fixed at UAH 10 billion, after which the enterprise was renamed Mittal Steel Kryviy Rih, and later Arcelor Mittal Kryviy Rih.