BUSINESS ETHICS REPORT ON PAKISTAN

STEEL MILLS CORPORATION

SUBMITTED TO: MA’AM FARYAL FAHIM

SUBMITTED BY: SAMRA IMTIAZ, HADIQA MURTAZA
& SHAKIR ALI

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Table of Contents
INTRODUCTION .......................................................................................................................... 3
BACKGROUND ............................................................................................................................ 3
OUR VISION.................................................................................................................................. 4
OUR MISSION ............................................................................................................................... 4
PRODUCTS.................................................................................................................................... 4
ETHICAL PRACTICES ............................................................................................................. 5
Health & Safety............................................................................................................................... 5
Environment .................................................................................................................................... 5
Educational Facilities ...................................................................................................................... 5
Recreation ....................................................................................................................................... 5
UNETHNICAL PRACTICES .................................................................................................... 6
CURRENT SITUATION: .............................................................................................................. 6
RECOMMENDATION: ................................................................................................................. 7
CONCLUSION: .............................................................................................................................. 7
REFERENCES ............................................................................................................................... 7

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INTRODUCTION
The real founders of Pakistan Steel Mills are Prof. Niaz Muhammad, Wahab Siddiqui and Russian
scientist Mickhail Koltokof. It was the hard work of Prof Niaz that thousands of scientists and
technical staff got trained by him. His inspirations and innovations got him the highest award from
president of Pakistan and also from Russian Government. The Government of Pakistan has given
him Pride of Performance. His nomination for Nobel Prize was biggest respect of what Pakistan
achieved.
Pakistan Steel is the country's largest industrial undertaking having a production capacity of
1.1milliontonnes of steel. The enormous dimensions of the project can be visualized from the
construction in puts which involved the use of 1.29 million cubic meters of concrete, 5.70 million
cubic meters of earth work (to Tarbela Dam), 330,000 tons of machinery, steel structures and
electrical equipment. It has an unloading and conveyor system at Port Qasim is the third largest in
the world and its industrial water reservoir with a capacity of 110 zillion gallons per day is the
largest in Asia. A 2.5km long sea water channel connects the sea water circulation system to the
plant site with a consumption of 216 million gallons of sea water per day.
The above figures illustrate the massive civil works, intricate erections, in stallations of
sophisticated electrical and mechanical equipment. With the completion of Pakistan Steel, the local
contractors gained the technical ability till then unknown , which they utilized later to undertake
million dollar projects both within the country and abroad especially the Middle East.

BACKGROUND
After independence in 1947, it did not take long for Pakistan to come to the realization that
progressive industrial and economical development would be impossible without the possession
of a self-reliant iron and steel making plan t. The dependence on imports would cause serious
setbacks to the country along with an extortionately high import bill which would be impossible
to support.
In 1968 besides other factors, it was considered by the Government of Pakistan that a basic steel
industry should be established in the public sector, as public sponsorship of the project would
enable integrated development of the steel industry in the country. In light of this, the government
decided that the Karachi Steel Project should be sponsored in the public sector for which a separate
Corporation under the Companies Act be formed. As a result on the 2 n d of July, 1968 Pakistan
Steel Mills Corporation was setup as a private limited company in the public sector in accordance
to the Companies Act of 1913, with the objective to establish and run steel mills at Karachi and
other places in Pakistan.
In January, 1969, Pakistan Steel concluded an agreement with V/O Tiajpro export of the then
USSR for the preparation of a feasibility report in to the establishment of a steel mill at Karachi.
Subsequently in January, 1971 Pakistan and the USSR signed an agreement under which the latter
agreed to provide techno-financial assistance for the construction of a coastal based integrated
steel mill at Karachi.

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The foundation stone for this gigantic project was laid on the 30th of December, 1973 by the then
Prime Minister Mr. Zulfikar Ali Bhutto. The mammoth construction and erection work of the
integrated steel mill, n ever experienced before in the country, was carried out by a consortium of
Pakistani construction companies under the supervision of Soviet experts.
Commissioning of Blast Furnace Number 1 on the 14th of August, 1981 marked Pakistan's entry
in to the elite club of iron and steel producing nations. The project was completed at a capital cost
of Rs. 24,700 million . The completion of the steel mill was formally launched by General Zia-Ul-
Haq the then President of Pakistan on the 15th of January 1985.

OUR VISION
To become a leading steel company in south Asia committed to serving stake holders by offering
quality products through an innovative and cost effective manner in accordance to environmentally
friendly conditions.

OUR MISSION
Pakistan Steel is committed to be a leader in steel industry by:
1. Greater response to customer's present & future needs.
2. Focus on productivity and Quality.
3. Facing Challenges of free Market Economy
4. Ensuring higher rate of return on invested capital
5. Developing Human resource and motivating employees through. empowerment and hard
consequences.
6. Safe Working and Environment friendly conditions.
7. Minimizing process wastages, rejections and recycling wastes.
8. Good Governance
9. Fulfilling Social Obligations
10. Improving Corporate Image

PRODUCTS
Pakistan Steel billets, hot rolled carbon steel coils, sheets, strips and plates, Galvanized products,
Pig iron, Metallurgical Coke, Granulated Blast Furnace Slag

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 ETHICAL PRACTICES

Health & Safety

Pakistan Steel adheres to a strict, health and safety policy. We are committed to providing a safe
and healthy working environment to all our employees and work continuously to incorporate safety
in design. Our drive in the achievement of a safe working environment with safe working practices
has recently awarded us with OHSAS 18001 accreditation. We however, endeavor to continue our
work in the field of safety and continuously push safety practices and safety education and training
across the whole workforce.

Environment
In the past two years Pakistan Steel has followed an active reforestation program within and
exceeding its 20,000 acres of responsibility. We our continuously setting new targets for waste
reduction and pollution prevention. We have carried out extensive work in water recirculation and
treatment and have improved the treatment of fresh water supply feed to lakes and reservoirs for
the benefit of our local communities.

Educational Facilities
Pakistan Steel actively contributes towards the promotion and advancement of learning and
education. We manage a large number of educational institutions from primary school to college
level including a cadet college, a degree college, an intermediate college, 4 high schools and 2
primary schools. In addition to this we operate the two following institutes.
 Metallurgical Training Centre
 Institute of Computer Science (ICS)

Recreation
Pakistan Steel places great importance, in the welfare of its workforce and community. It has
invested highly in insuring the availability of state of the art facilities for our workforce and their
families. Recognizing that sports and leisure are imperative to the wellbeing of our people, we
actively promote the participation of health related activities at all level.

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 UNETHNICAL PRACTICES

there are three unethical issues that can identified in this case:
the people who are controlling PSMC are not loyal to their firm and are not running it in the way
which is best for the company but are looking for their own benefits. The employees PSM Care
not observing their duties to the firm and taking bribes and gift. Extortions are also common in the
functioning of PSMC. All these are prevalent in PSMC that give a bad name to PSMC and can be
classified as unethical issues.
Similarly, the second unethical issue in the above case was how government ministers abuse their
power for their benefits. Instead if they would have used the power to make PSMC a better
organization it would have not only benefitted them in the long-run but would have been beneficial
for the entire nations.
Thirdly, the privatization issue resulted in the sacking of Chief Justice of Pakistan. This shows the
hunger and greed of some people in the government of Pakistan. These people were prepared to
take any action in order to sell PSMC, at a price which benefits them. This is unethically because
these people are representative of people and are civil servants and their duty holds that they work
for the betterment of the organization they are assigned to rather than using unfair means which
involves harming the organization to fill their own pockets.

CURRENT SITUATION:
The good news has now starting going off from Pakistan Steel Mills according to latest reports,
the production capacity of PSM has touched 45 % out of total capacity at present. This drastic
improvement has been seen ever since Government appointed Major General (Retd) Zaheer
Ahmed Khan as CEO, who is in charge of PSM since April 7, 2014. The notable thing is that
national steel mill was working at 1.4 % of its total production capability – at the time Major Gen
Zaheer took over.
Moreover, the authorities are also claiming that this vital national asset will soon become profitable
again in April, 2015 eyeing the present enhancement in its production capacity. This proves that if
right people having the will to evolve any sector deployed on right positions, no one can stop
Pakistan to progress towards its due place on World’s map.

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RECOMMENDATION:
 First we give the basic Funds to run PSM.
 Remove all illiterate and corrupt management & hire the new one who have knowledge
about PSM, make sure all employee will hire with the base of merit instead of political
ground or political pressures.

CONCLUSION:
After the examination of the above issue, one can easily relate it to the course that we are
studying, Business Ethics. We can quite clearly see that Steel Mills is far from being a
Rational Organization and currently its structure can be best described as being near to
Political Organization. The benefits that result from it being an unethical organization are
there such as Job Discrimination, Selection on the basis of Political Affiliation than on
Merit, PSMC is far away from being a right-sized firm which hinders its efficiency.
However, the unethical issues in PSMC are more than that occur due to firm being a
political organization. These issues involve, Unethical Behavior of the workers of PSMC,
Political Corruptions and Controversies, In stable Policies and corruption from the level of
janitors to the Chairman. All these give a bad name to PSMC and are hindering its
development process.
However, in the midst of dismal conditions under which PSMC is operating, there is some
silver lining as well. The firm is fully aware of its Corporate Responsibility which can seen
from the initial part of our reports which talks about the environment, training, education
and employee’s responsibility statements that PSMC talks about.
All of this shows that though PSMC is a firm which needs right-sizing, right structure, right
management and right attitude of the employees. If all these rights get incorporated in
PSMC, we ca n be sure that this firm will make big progress in the development of not only
PSMC but also in the development of Pakistan.

REFERENCES

 Dawn Newspaper
 Pulse magazine
www.pakistansteelmills.org.pk