MAC: Mines and Communities

Indian court orders closure of Vedanta's "polluting" copper plant

Published by MAC on 2010-10-04
Source: The Hindu, BBC, Guardian, Economic Times, others

But justice may still be denied

This website has, for the past six years, carried as much news as can be mustered about the dubious, dangerous, damaging and allegedly illegal practices of Vedanta Resources plc. See our early 2004 posting: Vedanta- the panto! A London Calling Special

Overshadowed by the "Nyamgiri Case" (see: The Nyamgiri struggle may be over) several other attempts to bring the company to account have unfortunately been neglected along the way.

In Chhattisgarh state, relatives of those killed in the Korba disaster of September 2009 still wait to hear evidence that the company was criminally responsible for the disaster.

In Tamil Nadu, opponents of Vedanta's copper smelter (operated by its subsidiary, Sterlite) have struggled for one and a half decades for a recognition of their concerns  about the plant's pollution.

Last month we reported that activists were trying to close down the Tuticorin smelter, once and for all. See: Anti-Vedanta activism hits the spotlight in Tamil Nadu

On 28 September 2010, evidence for a prosecution against Vedanta-Sterlite and its directors was submitted to the Madras High Court in Chennai by four Tamil Nadu plaintiffs.

They also demanded that there be an investigation of, and action taken against," the errant Government officials and agents of the Supreme Court who have permitted these illegalities to continue with impunity".

As a result of these pleadings, the High Court found "the location of the factory within 25 km of the Gulf of Mannar Biosphere reserve to be objectionable, especially in light of express conditions prohibiting such sitting".

The court in addition ruled that "dispensing with the public hearing for an activity of this nature was illegal", and that "a comprehensive EIA [should have] been done, but only a Rapid EIA was done " - something that was illegal "given the nature of the activity".

Vedanta-Sterlite, said the court, had failed to take adequate care to contain the smelter's heavy metal fallout -- particularly of arsenic, selenium etc - thus constituting "a violation of the Pollution Control Board's directions under the Consent to Operate from time to time.

"Based on these recorded violations, the factory has been ordered to be immediately closed, and workers compensated under the Industrial Disputes Act Section 25 (f)(f)(f). The Collector has been directed to provide alternate employment to the displaced workers."

Predictably, Vedanta-Sterlite hasn't taken this judgment lying down.

It proceeded straight to India's Supreme Court to argue that none of the High Court petitions were related to "an actual incident of violation of pollution norms", while "not a single complaint had been filed against the company".

The arguments are to be rehearsed further on October 18th.

Yet a further intolerable delay - this time in Chhattisgarh

September 29th 2010 marked a year to the day when a chimney collapsed at Vedanta's Korba aluminium complex in Chhattisgarh, causing the deaths of at least 41 workers. See: Vedanta accused of illegaly constructing death-dealing Indian power plant

Last week, the company delayed proceedings by the commission set up to sift evidence surrounding  this disaster, by filing a petition before the state High Court, calling for the release of documents in the commission's possession.

A final verdict on who was responsible for the worst industrial calamity in Chhattisgarh's history is now not likely to be given until yet another anniversary of this disaster has arrived and departed.

Meanwhile, the prospects increase that Vedanta will secure a crucial and highly lucrative stake in India's fourth largest oil company, Cairn India. 

Vedanta's money talks, while the voices of its victims fail to be heard.

Or so it increasingly seems.

[Comment by Nostromo Research, 2 October 2010]

High Court order to shut down Sterlite unit stayed

Supreme Court directs matter to be listed for further hearing on October 18

By J. Venkatesan

The Hindu

2 October 2010

NEW DELHI: The Supreme Court on Friday stayed a Madras High Court judgment ordering closure of the copper plant of Sterlite Industries (India) Ltd. at Tuticorin and discharge of its workers on payment of compensation.

A Bench of Justices R.V. Raveendran and H.L. Gokhale stayed the judgment given by a High Court Division Bench of Justice Elipe Dharma Rao and Justice Paul Vasanthakumar on September 28. Senior counsel C.A. Sundaram appeared for Sterlite Industries.

It issued notice to the Union of India, Tamil Nadu government, Tamil Nadu Pollution Control Board and others, who were petitioners before the High Court, and directed the matter to be listed for further hearing on October 18.

In its special leave petition, the company pointed out that the order was passed on public interest petitions filed 14 years ago in 1996, when allegations were made on violation of pollution control and environment norms by it. Between 1996 and 1999, the High Court issued various directions. All were complied with.

The plant was being operated for more than a decade with the consent and approval of statutory authorities without complaints. The TNPCB had informed the High Court that the company had complied with all statutory conditions. The company had a turnover of Rs.13,000 crore, about 2.3 lakh shareholders, 1,100 employees and 2,500 people employed indirectly. It was the largest manufacturer and exporter of copper.

The High Court had ignored the fact that order of complete closure was irremediable. It had ignored the very purpose of orders passed involving pollution control - to ensure pollution control norms are followed.

The judgment was based on apprehensions, assumptions and presumptions. None of the petitions related to an actual incident of violation of pollution norms.

Not a single complaint had been filed against the company. Closure would result in irreparable loss and have serious consequences. the SLP prayed for quashing the impugned judgment and an interim stay of its operation.

India court axes Tamil Nadu industrial plant

BBC News

28 September 2010

A court in the south of India has ordered the closure of an industrial plant in the town of Tuticorin on environmental considerations.

The Madras High Court said the copper smelting plant had been "letting out effluents into air and water which is having a devastating impact".

It said enough evidence had been produced before the court to prove that the environment was being polluted.

The closure of the Sterlite Industries plant will affect over 1,000 employees.

The court said the workers were entitled to compensation and ordered the district administration to help them find alternate jobs.

Sterlite Industries is a subsidiary of UK-based Vedanta mining group.

Vedanta suffered another setback last month when the Indian environment ministry rejected its plans to extract bauxite in the eastern state of Orissa.

The project breached environmental protection acts and raised concerns for the rights of local tribes, the authorities said.

Vedanta is owned by Indian businessman Anil Agarwal.

HC orders closure of Sterlite Ind's Tuticorin plant

Economic Times

29 September 2010

CHENNAI: The Madras High Court on Tuesday ordered the immediate closure of Sterlite Industries' copper smelting plant in Tuticorin, dealing yet another blow to the Vedanta Group's operations in the country. Justice Elipe Dharmarao and Justice N Paul Vasanthakumar said that the ongoing activities of the company will result in a rise in pollution levels and affect workers.

Sterlite Industries is 59% owned by the London-listed Vedanta. In August this year, the union environment ministry cancelled Vedanta Group's plan to mine bauxite at Lanjigarh, Orissa to feed its alumina project, throwing a huge spanner in the company's plans to consolidate its position as an integrated aluminium player.

To safeguard the interests of the over 1,050 direct and 1,500 indirect employees working at the plant, the Madras High Court ordered that they be paid compensation under Section 25 of the Industrial Disputes Act.

The district collector of Tuticorin, where the plant is located, has been directed to take all necessary steps to ensure that Sterlite workers are provided jobs in other companies.

In a statement, Sterlites Industries stated that they were "awaiting the full text of the order to decide on necessary recourse measures. The Tuticorin smelter has been operating for more than 12 years and has been in compliance with necessary rules and regulations. It deploys ISA smelt process ,which is considered globally as an environmentally advanced technology."

G Ramapriya, advocate for the National Trust for Clean Environment, which filed the writ petition in 1996, said the Union ministry of environment and forests, Tamil Nadu Pollution Control Board and Sterlite were the respondents in the case. MDMK general secretary Vaiko had also filed a similar writ petition against the project.

Sterlite Industries had set up the copper smelter project at a cost of Rs 1,300 crore. It was originally planned in Maharashtra but did not take off due to opposition from environmental lobbies. Later, when AIADMK chief Jayalalitha came to power in 1991, it allowed the project to come up at Tuticorin. The court order has come at a time when Sterlite had planned a Rs 2,300-crore expansion at Tuticorin to double smelter capacity to 2,400 tonne per day and also set up a captive power plants to tide over the power shortage in the state.

Sterlite's Tuticorin operations include a smelter, refinery, phosphoric acid plant, sulphuric acid plant and copper rod plant.

Sterlite was trading 3.2% down at $15 on NYSE while Vedanta stocks were down 1.35% on LSE at the time of going to press.

Vedanta Resources loses 5% as India orders copper smelter closure

The Guardian

29 September 2010

Another uncertain start for the market as European debt worries persist, with Vedanta Resources leading the losers following an Indian court ruling which ordered a major copper smelter to be closed.

The Madras high court has ruled the Tuticorin plant - the world's ninth largest copper smelter owned by Vedanta subsidiary Sterlite Industries - should be closed on environmental grounds. A petition challenging its environmental clearance and operation was lodged back in 1996 but was finally heard earlier this year. Vedanta says a ruling has now been passed, but it is awaiting the full text before deciding its next move. It could make an appeal to the supreme court.

Meanwhile Tuticorin, which produces almost half of India's total output, has indeed stopped production. Vedanta said the plant had been operating for 12 years and had been in compliance with all the necessary rules, regulations and global standards. Vedanta also fell foul of environmental concerns when the government rejected its plans to mine bauxite in Orissa.

This latest news has sent Vedanta shares down 113p to £21.48, making it the biggest faller in the FTSE 100. Copper has pushed through the $8,000 a tonne barrier for the first time since April, also helped by dollar weakness on the grounds of more quantitative easing in the US.

Overall the FTSE 100 has fallen 15.36 points to 5563. 08, on continued talk of the scale of the Irish bank bailout - and its effect on the country's economy - and a possible downgrade of Spanish debt by Moody's.

A year after chimney collapse, Balco probe remains muddled

By R Krishna Das / Kolkata/ Raipur

Business Standard

29 September 2010

The day when the workers in the Vedanta-controlled Bharat Aluminium Company Limited were commemorating the first anniversary of the chimney disaster, the company was busy engaging the judicial commission constituted to probe the incident.

While the chimney disaster that claimed 41 lives in Balco's under-construction power plant in Korba completed one year today, the company and the Chinese firm SEPCO filed a petition in the Chhattisgarh High Court on Wednesday against the one-member judicial commission headed by Sandeep Bakshi.

The Balco and Sepco filed a petition in the High Court yesterday seeking documents that the commission had collected, member secretary of the commission P Nihalani told Business Standard.

The state government had constituted the commission to probe the biggest industrial accident in the state. The under-construction chimney at Balco's power plant that Delhi-based Gannon Dunkerley and Company Ltd (GDCL) had been constructing collapsed on September 23 last year. 41 contract labourers died in the mishap.

The GDCL had bagged the contract from Chinese firm Shandong Electric Power Construction Corporation (SEPCO) that had been awarded the work to build the 1200-Mw power plant. The commission was supposed to submit its report in three months, but it was given six month's extension as alleged non-cooperation from the companies concerned had been stalling the proceedings.

The companies had earlier sought the documents from the commission. "Since the documents were meant for our references and were the property of the commission, we refused to give it against which Balco and Sepco moved the High Court," Nihalani said.

The commission had started the cross-examination of the witnesses. Now, the proceedings would be affected following the petition filed in the High Court.

Nihalani said they would wait for the court order to resume the proceedings.

Meanwhile, the way the Balco management commemorated the first anniversary of chimney disaster has come under sharp criticism from the trade unions.

The management had issued a circular asking the officials and workers to observe silence for two minutes at their respective work places and not to attend any programme, General Secretary of Aluminium Kamgaar Sangh B L Netam said.

Govt seeks law ministry's advice on Vedanta deal

By Ajay Modi & Jyoti Mukul

Business Standard

25 September 2010

The Cairn-Vedanta deal has taken a new turn, with the Union ministry of petroleum and natural gas referring the issue to the law ministry, which has sent it to the Solicitor General (SG).

The reference was made following government-owned Oil and Natural Gas Corporation (ONGC), Cairn India's partner in three producing fields, seeking an opinion from the petroleum ministry.

"We have received a reference," Gopal Subramanium, the SG, confirmed to this newspaper on the proposed deal, that will see the Anil Agarwal-promoted Vedanta group taking up to 51 per cent in Cairn India.

Cairn has written to the petroleum ministry twice on the deal, after its chairman, Bill Gammell, was asked to apply for approvals under the various production sharing contracts the company signed with the government.

Ever since the deal was announced on August 16, the petroleum ministry and ONGC had been asserting it could not go through without their approval. The Edinburgh-based Cairn Energy Plc decision to sell stake in Cairn India to the Vedanta group for $8.6 billion to $9.5 billion saw ONGC asserting its pre-emptive right on the blocks the two companies manage along with companies. "ONGC's decision to assert its right and send a letter to the stock exchange is part of informal advice given to it by government lawyers," said a senior official.

Though any chance of a counter-offer being made by ONGC has been ruled out, its chairman and managing director, R S Sharma, had yesterday told a news conference that the company would take any decision based on legal and commercial considerations.

In its letter to ONGC, Cairn had said the deal did not trigger any pre-emptive right or requirement for ONGC consent, as "the contract with Vedanta Resources Plc is at shareholder level of Cairn India, involving sale of shares - (and) there is no change to the Participating Interest in any of the PSCs to which the Cairn India Group is party".

And, while the government asked Cairn to apply for permission under various PSCs, Cairn only "responded" for the Barmer, Ravva and Cambay blocks, the three assets producing 175,000 barrels of oil equivalent daily. It sought permission for only the remaining seven blocks, that are in still in exploration stage.

The next two weeks are crucial for the deal, with the mandatory open offer from Sesa Goa, a Vedanta group company, expected to start on October 11. Market regulator Sebi is yet to give its approval for the offer, which is proposed to be made at Rs 355 a share, not including a Rs 50 no-compete fee per share that Vedanta is paying to Cairn Plc.

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