Finance Minister Colm Imbert said yesterday ArcelorMittal was under no legal obligation to pay its workers severance benefits which would be allowed under T&T laws as the company is seeking to voluntarily wind up its operations rather than retrench its workers.
“Legally, right now, they can avoid the severance benefit liability by dissolving the company, which I assume is why they are doing what they are doing,” Imbert said at a wide-ranging news conference at the ministry’s 20th storey conference room at the Eric Williams Finance Building, Independence Square, Port-of-Spain, yesterday.
Imbert said he met with both the union representing the 644 steel workers and the company on Friday and was told by ArcelorMittal that the steel workers “would have been entitled to” about US$30 million ($198.6 million) if they had been retrenched “but the company has not retrenched the workers, they are dissolving the company.”
He said because ArcelorMittal had started a process of the voluntary winding up of its Point Lisas operations, the law did not mandate the company to settle its severance obligations.
“Unfortunately, with our present law—and as Minister of Finance, I have to look urgently at the Companies Act and the insolvency legislation. When a company winds up, as they are doing, there is no requirement for severance benefits to be paid. Obviously, the workers are very worried about this,” Imbert said.
“What would happen is that the assets would just be sold to meet outstanding liabilities and severance benefits would not be one of those liabilities, according to the law,” he added.
He said the board of ArcelorMittal Point Lisas had passed a resolution in accordance with the Companies Act for voluntary winding up of the company.
“The next step is to advertise that resolution in the Gazette, appoint a liquidator, meet with its creditors and dissolve the company,” Imbert said.
The minister said ArcelorMittal indicated it was looking at ways and means of paying the terminal benefits to the workers from the sale of the plant’s assets, which are worth an estimated US$80 million.
“That is not in writing and it is not a legal obligation on their part,” said Imbert, adding that he “certainly hoped that if it came to this and they are able to realise the amount of money they think they would, that they use the funds to pay their workers”.
He said the company told him that its indebtedness was now about US$450 million (TT$2.93 billion), which is the amount of money that a pre-winding up purchaser would have to assume, compared with about US$80 million for all the plant, equipment and inventory after dissolution.
Imbert said he was also told ArcelorMittal Point Lisas was subjected to 25 per cent countervailing duties on its exports to the US because of the “level of support” it received from T&T.
This support, he said, included electricity costs from T&TEC that were “considerably lower” than the price the commission was paying TGU Unlimited and natural gas that was “very close” to the price the National Gas Company purchased the commodity from bpTT.
He said he was told by the company that the steel complex would not be able to survive, even if it was debt free, because its market was being “overwhelmed by cheap Chinese imports.”
Given the subsidised electricity the plant was receiving and its market difficulties, Imbert said ArcelorMittal’s future at Point Lisas “does not look good,” and he is now focusing on ensuring the workers get their terminal payments and their pension arrangements.
He said he had instructed an officer of the ministry to get the facts on the adequacy of the company’s pension plan as a result.
Asked if the Government would be willing to purchase the plant, Imbert said: “It does not appear that it makes sense for the Government to purchase the plant at this time.”