Is this the "world's most hated company"?Published by MAC on 2010-08-02
Source: The Independent, Guardian, WSJ & others
Anil Agarwal and his cronies had it coming.
Their company, Vedanta Resources, last week confronted a far more vocal and aggressive presence at its London annual general meeting than ever before.
For the first time too, a handful of investors stuck their head above the parapet - one of them ( Aviva) going on to vote against three agenda resolutions.
Many knives have been out against this most roguish of UK mining outfits, since it jumped onto the London Stock Exchange in 2003.
Predictably, the 2010 AGM attracted more media attention than ever before.
Nonetheless, the Nyamigiri issue overshadowed all others.
This was despite the fact that Vedanta's allegedly criminal behaviour in Chhattisgarh (where over 40 workers went to their death last September), in Goa and elsewhere were raised by a number of shareholders. See:
Vedanta Resources: the world's most hated company?
Protesters descend on FTSE 100 mining group's AGM - but chief executive describes criticism as 'lies'
By Alistair Dawber
29 July 2010
Vedanta Resources' highly successful financial year, and its annual meeting, were overshadowed yesterday when more than 100 protesters, some dressed as characters from James Cameron's Avatar film, came to object to what they say is the company's shocking human rights and environmental record.
Police stopped protesters storming the meeting, as pressure groups and celebrities lined up to attack the mining group's record over its treatment of the Dongria Kondh tribe, which, they claim, will be devastated if Vedanta's planned bauxite mine in India's Orissa state goes ahead.
But it is all nonsense, says the FTSE 100-listed group, and the Church of England, state pension funds from Norway and the Netherlands, the Department for Business, Innovation and Skills and even BP, whose pension fund trustees have reduced their stake in the miner, are all wrong in their criticism: that Vedanta puts the pursuit of profit ahead of human rights.
In an interview earlier this week, MS Mehta, Vedanta's chief executive, described accusations against the group as "lies and hoax," adding that the planned mine and an alumina refinery in the Lanjigarh region are not damaging to the environment, and, in fact, are good for the people that live in the forests neighbouring the sites.
Pressure groups argue that the group's refinery and the proposed mine in the Niyamgiri mountains, will destroy the local environment and effectively end the way of life of the tribe, which has lived in the region for generations. Survival International, Action Aid and Amnesty International also claim that the mountain that will be mined is sacred to the Dongria Kondh.
Until this week, Mr Mehta and the rest of the Vedanta board had repeatedly rejected requests for interviews. However, faced with yesterday's protests and a move by Pirc, the activist investor group, to unseat several board members, Vedanta has realised its policy of ignoring the criticism is not working. Aviva was one institutional backer to vote against the group on three resolutions at yesterday's meeting.
Issuing a statement to coincide with the AGM, the group said: "Vedanta strongly denies any allegations of pollution of the environment in Lanjigarh or of any violation of human rights. Vedanta is working closely with 2.5 million people spread across 425 villages in India and will be benefiting the lives of another 1.6 million underprivileged children in the coming 2-3 years through its various [corporate and social responsibility] programmes."
Mr Mehta said: "Maybe we've been naive not to talk more in the past, but I would not like to hazard a guess about why Vedanta is targeted in this way. The region is one of the most backward in India. We have provided schools, hospitals and infrastructure for the Dongria Kondh and have offered financial support far beyond the necessary levels." Vedanta says that 3 per cent of the tribe live within 2 miles of the mine, and the, "applied forest area for the mining project is neither a wildlife sanctuary nor a national park nor a biosphere reserve".
Mr Mehta argues that because of the limited drilling involved with bauxite mining, it is considered "eco-mining" and there was "hardly any impact" on the water supply. There is also "no proof that the mountain is sacred," the group says.
Vedanta claims that it has always been open with investors, a point refuted by a number of non-City backers. Earlier this month PGGM, the Dutch health sector pension fund sold its €5.8m stake, saying that efforts to discuss the Orissa project had failed for two years. PGGM's comments echo those of the Church of England, which in February said: "After six months of engagement, we are not satisfied that that Vedanta has shown, or is likely in the future to show, the level of respect for human rights and the local communities that we expect of companies in whom the Church investing body holds shares." The Church also sold its holding in Vedanta.
Vedanta claims that representatives of the Church spent 3 days touring the Orissa sites, and that the visitors had been impressed.
Yesterday, the Church said that its comments referred to Vedanta's facilities, and specifically not the social impact of the company's operations. "The Church's Ethical Investment Advisory Group recommended disinvestment from Vedanta Resources after six months of research into the company's operations and several meetings with the company. We took into account both the facilities shown to us by the company and the accounts of villagers affected by Vedanta's operations, during a week-long visit to India," said a spokesman.
"We continue to monitor the company's approach and will be pleased to review our recommendation to the Church investing bodies if the company addresses the issues we raised. To date our concerns have not been addressed."
The actor Michael Palin, and other celebrities, including Bianca Jagger, who delivered a petition signed by 30,000 people on behalf of Amnesty, and Joanna Lumley all made protests at yesterday's meeting. Mr Palin, said: "I've been to the Nyamgiri Hills in Orissa and seen the forces of money and power that Vedanta Resources have arrayed against a people who have occupied their land for thousands of years... The tribe I visited simply want to carry on living in the villages that they and their ancestors have always lived in."
Survival, which Vedanta refused to meet, says it will continue to protest, but despite saying last year that Vedanta had failed, "to put in place an adequate and timely consultation mechanism fully to engage the Dongria Kondh," the Department for Business, Innovation and Skills confirmed yesterday that Vedanta's ethical record will not be discussed during the UK Government's high-profile trade trip to India this week.
Vedanta Meeting Disrupted By Avatar-Inspired Protest
By Alex MacDonald
Wall Street Journal
28 July 2010
Vedanta Resources Wednesday faced mounting pressure about its human rights and environmental record in India as protesters, including celebrities such as Bianca Jagger, swamped its annual general meeting.
Some campaigners came dressed as characters from the film Avatar, as they liken Vedanta to the evil multinational in the movie.
Demonstrators are furious about a plan by the controversial miner to mine in the Orissa region of India. Vedanta is one of the largest mining companies operating in India and plans to create a large bauxite mine in the Nyamgiri Hills, home to the indigenous Dongria Kondh tribe.
Vedanta wants to build a bauxite mine on top of the Niyamgiri mountain, a sacred mountain for the Dongria Kondh who consider it to be the embodiment of their god Niyam Raja.
Jagger, a renowned activist and champion of tribal rights who has visited the site, said the Dongria Kondh are vehemently opposed to the project. She said "they say no amount of money would make them want to leave" the sacred area.
She handed the board of directors a box filled with petitions from more than 31,000 people keen to stop the project.
Vedanta's chairman Anil Agarwal said the planned site for the mine is in an uninhabited area so no one will be displaced and the mine would also play an important role in lifting the poor in the Kalahandi district out of poverty.
"Kalahandi is one of the most underdeveloped districts in India, suffering from child malnutrition, high infant mortality rates and lack of schooling and healthcare.
We are committed and sensitive to the social and cultural aspects of the region and would do whatever is required to meet the needs of local people."
Vedanta CEO MS Mehta said the company has already held extensive consultations with the local community.
Some investors remain to be convinced. Aviva Investors, for instance, denounced Vedanta's lack of engagement with shareholders and its disregard for international guidelines on corporate practices.
Steve Waygood, head of sustainability research and engagement at Aviva, told Vedanta's board that he was profoundly concerned by the company's "complete disengagement with OECD guidelines", adding "you have not engaged in the process [beside] the most cursory reply."
The OECD last year issued a public denouncement of Vedanta for failing to put in place an adequate and timely consultation mechanism to engage the Dongria Kondh.
Vedanta rejected the agency's conclusions, which aren't binding, and insisted that it's in full compliance with the Indian government regulation on such matters.
Vedanta's bad press risks undermining its image
By Andrew Hill
28 July 2010
There are many ways to measure best practice in social responsibility, but, as a rule of thumb, if Bianca Jagger, Joanna Lumley, Michael Palin and the Na'avi are against you, you have a problem.
Vedanta Resources says protesters are distorting the facts on the ground in India's Orissa state, where the FTSE 100 group is accused of persecuting the real-life equivalents of Avatar's nature-loving tribespeople. But the facts on the ground at Vedanta's annual meeting in London SW1 on Wednesday demonstrate the company has further to go in explaining itself.
In theory, it should be easy for Anil Agarwal, the company's founder and majority shareholder, to sell the Orissa bauxite project to the Indian authorities. Vedanta, despite its UK listing and head office, is an Indian company. Mr Agarwal's success and wealth reflect glory on his native land, where Vedanta also supports hospitals, schools and local charities. Its expansion plans should directly benefit the fast-growing Indian economy. In practice, Vedanta still faces local opposition.
But the company - with its anomalous governance and growing reputational issues - also has work to do keeping some London-based shareholders happy. Aviva Investors declared at Wednesday's meeting that the miner had not yet done enough to justify an investment by its active funds.
Take sustainable development. The initiative is overseen by a committee chaired by Vedanta's senior independent director. Yet whether it is possible for any of the company's directors to be truly independent remains an open question, given that they serve under an executive chairman - Mr Agarwal - and all board appointments are subject to consultation with the Agarwal family holding company.
For those protesters who object in principle to any exploitation of natural resources, it's a sad fact that money talks. But not all investors adhere to the philosophy of Avatar's evil corporate apparatchik as he threatens the obliteration of the Na'avi's sacred site: "There's one thing shareholders hate more than bad press," he says, "and that's a bad quarterly statement." In fact, most mining companies know that bad press can lead indirectly to a bad quarterly statement. Bad press scares pension fund members and retail investors and, at worst, deters further investment or encourages disinvestment by active funds. That can raise the cost of capital. More important, bad press gets read by regulators and legislators around the world: they have the power to delay or refuse approval for projects on which the future growth of Vedanta depends.
Vedanta hasn't suffered much to date. Its shares have outperformed those of most peers over the past five years. But more enlightened miners have seen the value of engaging with sensible campaigners. If Mr Agarwal wishes to continue reaping the benefits of London's abundant pool of capital, he must do a better job of justifying what Vedanta is doing and how it is doing it.
Question over funds for mine investment
Letter to The Guardian
28 July 2010
Today, shareholders will be attending the AGM of Vedanta Resources, a UK-listed mining company whose operations in Orissa, India, have been the subject of international criticism. An existing alumina factory at the foot of the Niyamgiri hills is alleged to be polluting waterways and damaging crops, while plans to build a bauxite mine at the top of the hill threaten massive disruption to the lives of around 8,000 Dongria Kondh tribespeople. In October 2009, the UK OECD contact point upheld a complaint that Vedanta had failed to respect the rights of the indigenous community.
The Royal Bank of Scotland and its subsidiaries have been involved in financing Vedanta Resources on a number of occasions, including after the bank had received billions of pounds of public money to stay afloat. As taxpayers, we are gravely concerned that public money through RBS could be used again in future to provide support for controversial companies like Vedanta that are alleged to be disregarding environmental and human rights concerns. In February, the Church of England announced that it was divesting from Vedanta. The Treasury should follow suit and impose social and environmental criteria on the recapitalised banks to ensure such destructive projects are not the recipients of public money.
Kevin Smith, Platform
Richard Solly, London Mining Network
Johan Frijns, BankTrack
Louise Hazan, People & Planet
Duncan McLaren, Friends of the Earth Scotland
Deborah Doane, World Development Movement
Clayton Thomas-Muller, Indigenous Environmental Network
Ramamurthi Sreedhar, Environics Trust
Geoff Nettleton, Indigenous People Links
Letter to the Independent (unpublished)
28 July 2010
Vedanta plc holds its AGM in London this Wednesday. A number of major British financial institutions, including banks and pension funds, have investments in this London-based mining company, even though it has rightly attracted widespread criticism for its operations in the Indian State of Orissa - criticism which London Mining Network fully supports. Michael Palin added his voice to these criticisms in this paper recently.
But it is not only in Orissa that Vedanta's behaviour has come under heavy fire. An Indian court ruled against the company for its unsafe mining practices in Goa last September. Three employees of Vedanta's subsidiary, Balco, have been charged with culpable manslaughter after the collapse of a chimney under construction at Korba in Chhattisgarh in September 2009, which buried alive at least 42 workers. Concerns have also been raised about Vedanta subsidiary Hindustan Zinc's responsibility for a number of cases of silicosis among employees.
Last week, PIRC (the Pension Investment Research Council) published a damning critique of Vedanta's corporate governance, and advised investors to vote against the company's Board on a number of key issues to be discussed at the AGM.
Among those criticising the company's ethical record have been several major investors, such as the Church of England, who concluded that engaging with the company had no effect. They decided to disinvest rather than be associated with a company with such cavalier attitudes. We hope that other investors will do likewise.
Co-ordinator, London Mining Network,
c/o PIPLinks, 225-229 Seven Sisters Road, London N4 2DA
PIRC's report is available at http://www.pirc.co.uk/sites/default/files/Vedanta%202010.pdf
A summary of other concerns is to be found at http://londonminingnetwork.org/2009/11/vedanta-risks-to-banks/
For an extensive list of articles questioning the company's record, see http://www.minesandcommunities.org/list.php?r=831
The London Mining Network (LMN) is an alliance of human rights, development and environmental groups. Members include ACTSA (Action for Southern Africa), CATAPA (Comite Academico Tecnico de Asesoramiento a Problemas Ambientales), Colombia Solidarity Campaign, The Corner House, Corporate Watch, Down to Earth (the ecological campaign for Indonesia), ECCR (Ecumenical Council for Corporate Responsibility), Forest Peoples Programme, LAMMP (Latin American Mining Monitoring Programme), Partizans (People Against Rio Tinto and its Subsidiaries), PIPLinks (Philippine Indigenous Peoples Links), TAPOL (the Indonesia human rights campaign) and the Society of St Columban. LMN's twelve observer groups include leading human rights, environmental and development organisations. LMN works to expose the key role of companies listed on the London Stock Exchange, London-based funders and the British Government in the promotion of unacceptable mining projects around the world.
Anti-mining protesters ambushed Vedanta's AGM
KumKum Dasgupta, Susanta K Mahapatra
29 July 2010
New Delhi, Lanjigarh- For the fourth year in a row, anti-mining protesters ambushed the Annual General Meeting (AGM) of Vedanta Resources, a London-based FTSE 100-listed company. The AGM was held in London on Wednesday evening. While in the last three years, Dongria Kondh (tribals from Orissa) representatives protested against the mining of their sacred hill in the state, on Wednesday it were blockbuster Avatar's aliens, Na'vi, and fashion icon Bianca Jagger.
At the heart of this cross-continental row is the bauxite-rich Niyamgiri hill in the Lanjigarh area of dirt-poor Kalahandi district. While Anil Agarwal-promoted Vedanta Resources wants to mine the hill through its subsidiary companies for its aluminum refinery in Lanjigarh, located 500 km southwest of Bhubaneshwar, and "develop the backward area," tribals and activists feel that it will displace thousands and leave them without any livelihood opportunities.
"There were 25-30 protesters at the AGM from different groups. I apprised the shareholders that public consultation has been done in the 11 Gram Sabhas around the area according to the law," Mukesh Kumar, COO of Vedanta's Lanjigarh refinery, told Hindustan Times.
Meanwhile, in India, the Kondhs themselves, and not ‘outside' activists, for the first time have challenged the bauxite-mining project before the National Environment Appellate Authority (NEAA).
The key violations, according to the Kondhs, are the two Environment Impact Assessment (EIA) reports done for the project: one was prepared in 2002 by the TATA AIG Group and second one by Vimta Labs in 2005.
"The second report does not mention the first one. In fact, the Ministry of Environment and Forests (MoEF) affidavit states that it is not aware of the 2002 report," says an environmental activist who did not wish to be named. "Why are there two reports for the same project?"
Second, they allege that the EIA report was never made public. The EIA report of Vimta Labs was done in 2005 and the public hearing took place in 2003. Activists say that this only show that the project that was approved was never shared with the intended ‘beneficiaries'.
Plus, no Comprehensive EIA was done, which involves the collection of data of four seasons. Only a rapid EIA was done. In fact, in a letter dated 12-7-04, the MoEF had clearly directed the project proponent to prepare a comprehensive EIA report.
However, the company denies these allegations and any wrong doing on their part. "The exact mining area will be around 355 hectares and there is no habitation there and since it is hard rocky area, there's no plantation there," said Kumar.
He added that the bauxite available in the east coast of India is of very high grade and this area can become a hub for the aluminum industry. "It is unfortunate that while shifting cultivation is allowed to spoil 5,000 acres every year, yet an industry which can give livelihood opportunities to tribals have to face such opposition."
Tribals, however, are not convinced. Tribal leader and a petitioner at the NEAA, Kumuti Majhi said that the tribals are doubtful that such "non-transparent and rapid industrialization, the false commitments of the company and the dubious attitude of state government will leave them without any livelihood.
Some fissures have developed within the community as well. Jitu Jaka Sika, a BBA student in Bhubaneswar, was an anti-Vedanta tribal activist even two years ago. But now he has a different view of the issue. "I was against Vedanta because I was given wrong information by politicians and NGO's. Now, I understand that because of the company, the development of the district has become possible".
Vedanta meeting disrupted by demonstration
H S Rao
PTI, Business Standard
29 July 2010
London - Accusing the Vedanta mining company of destroying the Niyamgiri mountain worshipped by indigenous Dongria tribes of Orissa, around 250 supporters of a campaign group 'Foil Vedanta' held a vociferous demonstration during its annual general meeting here.
The demonstrators last evening carried placards saying 'Anil Agarwal, Blood on Your hands', 'Who killed Arsi Majhi? Vedanta, Vedanta'. They claimed that Agarwal, Chairman of Vedanta, was a "Wanted Criminal".
Despite police efforts to keep the demonstrators away from the Institute of Civil Engineer, in Westminster, London, where the annual meeting was held, the protesters moved partially into it with a large banner proclaiming 'Vedanta plc: Stop the killings! stop the destruction!' Inside the AGM, many shareholders expressed their unhappiness about Vedanta's activities.
Agarwal chaired the meeting and Naresh Chandra, a Vedanta Board Member took all questions.
They were faced by a barrage of questions from shareholders critical of Vedanta, centering mainly on the destruction of the Niyamgiri mountain.
Vedanta tried to counter this by showing a power point presentation by Mukesh Kumar, the Chief Operating Officer of the Lanjigarh refinery, in which he made a number of claims about improvements in the quality of life of Dongria's since the arrival of Vedanta in their region.
He claimed that the Niyamgiri mountain was no longer worshipped by the Dongria and that they welcomed Vedanta's intervention.
These claims were challenged by Samarendra Das, author of the recent pathbreaking book "Out of this Earth", about the Aluminium industry who was attending the meeting as a shareholder.
Das, himself from Orissa, with years of experience of working with Dongrias accused Kumar of misleading the shareholders and asked "How much do you know about the Dongrias? Can you even tell us the name of their God. Tell us if you know it!"
Kumar was unable to answer and admitted that he did not know.
After the meeting, two European banks announced that they were to disinvest in August this year and a representative of Aviva, the insurance company, said his company was also considering disinvesting.
Vedanta's very embarrassing silence
30 July 2010
Imagine it: a room full of suits in London's austere and business-like Institute of Civil Engineers, engaged in a passionate debate about religion. That was the scene on Wednesday at the annual general meeting of the London-based and LSE-listed mining company Vedanta, which has been trying for years to get permission to mine bauxite on Nyamgiri, a mountain in the east Indian state of Orissa.
Vedanta has long been criticised by activists for what they claim is its cavalier attitude to environmental protection, worker safety and other issues at its operations in Africa and India, and every AGM since it was listed on the London Stock Exchange has been punctuated by protests. But as the Indian government comes close to issuing its final verdict on the mine, the protests have become noisier and more impassioned. Vedanta argues that it's not infringing human rights and that it's bringing wealth to the region.
Nyamgiri is regarded as a god by the Dongria Kondh tribe that lives on it, so for them and their supporters, tearing the peak of the mountain apart for bauxite would be sacrilege. In their effort to spike this argument, this year the company rolled out the top manager at the company's nearby bauxite refinery, Mukesh Kumar, who claimed that the tribe no longer worship the mountain and welcome the mine's arrival. Music to shareholders' ears - but was it true? You could only pronounce with confidence on the question if you were yourself a Dongria Kondha, or at least on pretty familiar terms with the tribe. Did Mukesh Kumar pass muster?
This was the point seized on by Samarendra Das, an Indian research scholar and activist from Orissa, who rose from his seat to ask Mr Kumar a simple question: by what name do the Dongria Kondh refer to Nyamgiri, their holy mountain? The silence was deafening - until filled by the boos and catcalls of the activist-shareholders at the meeting, which from that point onwards went down hill.
Shareholders need to trust the companies they invest in - to turn a profit, but also to tell the truth. Yesterday's headline in the Financial Times - "Vedanta's bad press risks undermining its City image" - was clear enough evidence that Vedanta's trust is now in jeopardy.
The obvious problem with mines, from the point of view of the people who live in their path, is that once they have been dug, nothing is ever the same again. However nicely dressed up for public consumption, the devastation they wreak is absolute.
I have just returned from a holiday in Cornwall, which is emerging from the process which now menaces Nyamgiri. It's a lovely place in many ways, but there is a kind of haunted emptiness at the heart of it which is the unmistakeable sign of a region that has been raped for its minerals: in Cornwall's case principally tin, but also silver, lead, copper, arsenic and much else.
The ancient Cornish are supposed to have sold tin to the Phonenicians and carried on digging it for many more centuries. It was much the most important mining region in the country - coal being the only obvious lack - and a local saying goes that you won't find a mine in the world without a Cornishman at the bottom of it. But as a source of pride and identity, mining only lasts as long as the stuff that's being dug up, and that's pretty well history now. What remain when it's gone are desperately low levels of education, employment and GDP compared to the rest of the country, and giant holes in the ground.
Clever people like Tim Smit may succeed in turning a worked-out china clay quarry into an Eden Project, but while the income and the jobs are welcome, it won't give Cornwall its countryside back.
When Charles Darwin encountered the tribal people of Terra del Fuego he called them "the most abject and miserable creatures I have anywhere beheld" and as existing "in a lower state of improvement than in any part of the world".
"These poor wretches were stunted in their growth, their hideous faces bedaubed with white paint, their skins filthy and greasy, their hair entangled, their voices discordant, and their gestures violent ... one can hardly make oneself believe that they are fellow creatures and inhabitants of the same world."
But attitudes to other races are as subject to evolution as anything else, and the unquestioned conviction of the superiority of European civilisation that rings through those appalled, disdainful words is one of the attitudes we have thankfully begun to shed since Darwin's time. There is perhaps no better symbol of that change than Dr Felix Padel, the anthropologist who happens to be Darwin's great-grandson, and who was among the shareholder-activists witnessing Vedanta's discomfiture this week.
Padel has lived among the tribals of Orissa for years, and in his new book, Out of this Earth, co-authored with Samarendra Das and launched in London last night, the techniques by which mining giants set about breaking the resistance of tribal people who happen to be in their way through fraud, forcible occupation, corruption and intimidation, are documented in painstaking detail.
Charles Darwin lamented the inability of "primitive" people like the Fuegians to rise to our level. Padel by contrast laments our refusal to leave people like the Dongria Kondhs in peace.