MAC: Mines and Communities

UK safety organisation makes an appalling error

Published by MAC on 2010-09-05
Source: Financial Times, The Observer

London Calling indicts BSC's failure to watch Vedanta

The British Safety Council (BSC) is one of the world's leading safety watchdogs. It employs 90 staff members and operates in 50 countries including India.

Yet, late last month, it claimed not to "be aware of" the deaths of at least forty workers, following Last September's collapse of a chimney which was being constructed for UK-listed Vedanta's Balco in the Indian state of Chhattisgarh.

This was the worst disaster of its kind in the country' recent history, and it was widely reported in the international media, including by the BBC - which featured some graphic photographs.

In the weeks following the tragedy, three Vedanta officials were arrested and charged with "culpable homicide". See: Vedanta officials charged with culpable homicide over Indian disaster

Despite this, The Observer newspaper claims that, only when it recently reported the dire safety record of UK-listed mining companies, did the BSC withdraw a Safety Award  previously granted to Balco.

In fact, the Council has actually dispensed two accolades to the Vedanta subsidiary -  something that this most deceitful and delinquent of major mining outfits proudly boasted to advance its credibility among investors.

More questions than answers

Did some BSC staff indeed know about the Balco tragedy at the time, but hoped the issue would "blow over"?

Because Vedanta employed two sub-contractors to build the fatal chimney, did  they consider the company to be out of the frame? If so, that's a gross mis-interpretation of Indian law - as evidenced by the police crackdown on Balco's management.

At the very least, the BSC should now conduct an investigation into how this appalling "oversight" occurred - and sack those responsible.

But this mustn't be an end to the matter.

At its topmost level, the Council has grievously erred. It has left the impression that, where non-British people work and die in pursuit of UK corporate ambitions overseas, their lives may be discounted.

At the very least, the BSC should proffer an unqualified apology to the families of those who last year "died for Vedanta".

[London Calling is written by Nostromo Research. Views expressed in this column do not necessarily represent those of anyone else, including the editors of the Mines and Communities website. Reproduction is welcomed, provided full acknowledgment is given to Nostromo Research and sources quote.]

Editorial note: According to The Observer, the only major London-listed mining company to achieve its "zero fatality" target last year was Mexico's Fresnillo plc.

Inevitably, Vedanta had the highest death toll (67 workers) followed by Anglo American with 20, Kazakhmys with 17 and ENRC with 12.

Vedanta stripped of safety awards in light of Indian site disaster

British Safety Council steps in after Observer notifies it of undisclosed chimney collapse that killed 40

By Simon Bowers

The Observer

29 August 2010

Mining group Vedanta Resources has been stripped of international safety awards amid concerns that it won without declaring that a chimney collapse at one of its sites had killed at least 40 workers last September - one of the worst industrial tragedies in India's recent history.

Awards to Vedanta have been immediately withdrawn by the British Safety Council (BSC) in response to findings thrown up by a broader Observer analysis of deaths of workers at all FTSE 100 mining groups.

The analysis found that 154 work-related deaths have been disclosed by London's largest multinational miners in their latest annual reports and other shareholder filings.

This death toll is believed to be the highest since fatality disclosures to shareholders became commonplace four years ago.

The rising trend is in part down to a gradual influx of overseas mining groups seeking access to the London equity market. But even in long-established FTSE 100 groups, executives have struggled to tackle fatality rates.

All 12 London-listed firms have "zero fatality" targets, but only Mexico's Fresnillo achieved this last year. Vedanta had the highest death toll, with 67, followed by Anglo American with 20, Kazakhmys with 17 and ENRC with 12.

Countries where the deaths occurred were not disclosed by all companies, but estimates suggest they were most common in those resource-rich regions where labour costs are lowest. An estimated 67 occurred in India, 29 in Kazakhstan and 25 in South Africa.

Despite the global focus on the dramatic survival of 33 miners still trapped in the San Jose mine in Chile, eight other Chilean miners were killed at operations nearby last year while working for London-listed Xstrata and Antofagasta. Their deaths were not exceptional enough to merit mention beyond the mining industry press and local media.

Despite operating considerable mining interests in several resource-rich first-world countries, FTSE 100 mining companies recorded no deaths in North America and just seven in Australia.

Without the collapse of Vedanta's 240-metre part-built chimney in Korba, in the state of Chhattisgarh, the 2009 death toll among London's blue-chip miners would have been more in line with recent years.

The BSC, which with the support of the Health and Safety Executive oversees the annual International Safety Awards, told the Observer it had stripped Vedanta of its honours because it was necessary to protect the integrity of the awards.

Last month, Vedanta's chairman, Anil Agarwal, had told a shareholder meeting in London that the episode at Korba was an "unfortunate accident". Despite three officials from a Vedanta subsidiary being charged last November in India with what police described as "culpable homicide not amounting to murder", Agarwal told the meeting: "Investigations have revealed that [the incident] was caused by severe thunderstorms and lightning."

He added that one of the group's alumina refineries had received a 2009 award from the BSC at a ceremony in May this year.

The subsidiary receiving the award was Bharat Aluminium Company (Balco): a second International Safety Award from the BSC was received by a Balco captive power operation believed to be located at the Korba site.

It was attempts to expand the site which led to the chimney collapse.

In a statement this weekend, the BSC said: "We are grateful to the Observer for bringing this matter to our attention and we have with immediate effect withdrawn the awards from both Vedanta and Balco pending the outcome of inquiries by the appropriate authorities into these tragic deaths."

The episode is embarrassing for the BSC which, despite widespread media coverage of the tragedy, seems to have been oblivious to the Korba disaster.


Vedanta safety award is withdrawn

By Philip Stafford

Financial Times

29 August 2010

Vedanta Resources has had a prestigious international safety award withdrawn on concerns it failed to declare the deaths of 41 workers in an industrial accident in India.

The British Safety Council, which promotes health and safety in the workplace around the world, said it had not been aware of the deaths in 2009 when it awarded Vedanta its honour. It withdrew the award on Friday.

The BSC yesterday said that it was normal procedure to withdraw the award pending an investigation. Vedanta declined to comment.

The collapse of a power plant chimney during a storm almost a year ago at Vedanta's Korba complex killed 41 construction workers and was one of the most serious industrial accidents in India in years.

Indian police subsequently arrested an executive and two other officials from the Indian subsidiary of Vedanta for alleged negligence.

Vedanta has said in the past that Bharat Aluminium Company (Balco), in which it holds a 49 per cent stake, was not responsible for the collapse at the site, which is in the remote, mineral-rich eastern state of Chhattisgarh.

Sterlite Industries India, the Vedanta subsidiary that owns 51 per cent of Balco, has said that the collapse was apparently caused by "excessive rains and lightning".

The collapsed 330ft power chimney was part of a 1,200MW power plant being built for Balco by China's Shandong Electric Power Construction Corp (Sepco), which employed at least 80 Chinese citizens at the project.

The chimney's construction was outsourced to another Indian engineering group, Gannon Dunkerley.

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