MAC: Mines and Communities

Vedanta casts more oil on troubled Indian waters

Published by MAC on 2012-05-01
Source: Economic Times, Hindu, PTI, Kractivist

Ever since its triumphant listing on the London Stock Exchange in December 2003, Vedanta Resources has moved several big steps forward, yet suffered several setbacks at the same time.

Last month, the company announced it was exploring for iron ore in Liberia.

This came just as a court challenge was made to Vedanta's take-over of Cairn India, which granted the UK outfit access to the country's most prospective oil field. See: Vedanta set to grab further Indian resources - twice over

Vedanta has also just taken control of a major child nutrition programme in Karnataka, despite accusations that the move is illegal.

It's also been vigorously contested by the very workers responsible for the scheme.

See previous MAC posting: India: New Vedanta protests meet with violent "security" response

Supreme Court seeks Centre's response on PIL against Cairn-Vedanta deal

Economic Times

23 April 2012

NEW DELHI: The Supreme Court today sought the Centre's response to a plea challenging the validity of the $ 8.5 billion Cairn-Vedanta deal and seeking a CBI probe into the reasons for ONGC and government in "not asserting" their legal rights on the issue.

A bench of justices D K Jain and Anil R Dave issued notice to the Centre seeking its reply on the PIL which also sought an audit by the Comptroller and Auditor General (CAG) into the various aspects of the deal.

It also sought the CAG audit of the government's approvals for acquisition of majority stake of Cairn India by Anil Agarwal's Vedanta Resources on the ground that the offer in this regard should have gone first to the state-owned PSU ONGC.

On the PIL, the bench issued notices also to the ONGC, Cairn Energy and Vedanta Resources.

Earlier, on March 2, a bench of justices H L Dattu and C K Prasad had recused itself from hearing the plea.

The PIL filed by a Bangalore resident Arun Kumar Agarwal stated that the ONGC, in an agreement with Cairn group, had a clause that in case the Cairn Group wanted to sell its shares in Cairn India, it would first offer the same to the ONGC.

As per the clause, Cairn could sell its shares to other parties, only after the ONGC refused to buy the stake and the ONGC, thus had the right of first refusal (ROFR), it said.

It alleged that the decision on the deal had been made on "extraneous considerations" and without taking into account the relevant aspects.

The petition said had the ONGC, which was Cairn India's joint venture partner, been offered its ROFR for Cairn India's shares and had it exercised its right, the exchequer would have benefited by over Rs one lakh crore.

Cairn Energy, however, signed a deal with the Vedanta group to sell its shares in Cairns India, without making an offer to the ONGC, the PIL said.

Anganwadi workers to protest against Vedanta's finger in ICDS pie

Staff Reporter

The Hindu

Thousands of anganwadi workers across Chickballapur and Bangalore Rural districts [Karnataka] will boycott work on May 4 to protest the entry of mining-major Vedanta into the Integrated Child Development Scheme (ICDS) in the State.

Around 3,000 anganwadis in Hoskote, Magadi, Doddaballapur, Devanahalli, Nelamangala taluks and those in Chickballapur district will demand the nullification of the memorandum of understanding signed with Vedanta Foundation, a non-governmental organisation funded by Vedanta, said S. Varalakshmi of the Karnataka State Anganwadi Workers' Association. The decision was taken after talks with the local administration failed.

Though the protest is against privatisation of the ICDS, the association is vehemently opposed to the mining company. "The company has made a lot of money through mining activities, some of which is against the law of the land. We feel their entry into the ICDS is only to change their image across the country," she alleged.

According to the MoU signed by the Vedanta Foundation and the Department of Women and Child Development (DWCD) on April 10, the foundation would "help" the district administration of the four districts - Bangalore Rural, Bangalore Urban, Chickballapur and Ramanagaram districts - by providing supplementary nutrition, and help in capacity building of anganwadi workers.

Incidentally, Member of Parliament from Chickballapur is Union Minister of Corporate Affairs M. Veerappa Moily. "The MoU states that a supervisor selected by Vedanta would oversee our work. We oppose this strongly. If at all the government needs the funds or resources, the company should hand them over to the DWCD, who should then supervise the work," said Ms. Varalakshmi.

Other demands

The association had also written to the Chief Minister to oppose the proposal to introduce village committees to supervise work in anganwadis. "As members of the proposed village committees would be selected by local representatives, we feel that the committee would become politicised. The members would then be selected only from the party which is in power in that constituency," said Ms. Varalakshmi.

Vedanta to adopt, support 2,635 anganwadi centres

Press Trust of India

10 April 2012

Bangalore: Vedanta through its foundation today signed an MoU (memorandum of undersanding) with the District Administration of Chikkaballapura, Bangalore Urban, Bangalore Rural & Ramanagara in Karnataka to adopt and support 2,635 Anganwadi centres being run under the Government-sponsored ICDS (Integrated Child Development Service) programme. The MoU was signed between Mr Ravi Krishnan, Chief Executive Officer, Vedanta Foundation, and CEOs of the four districts, Vedanta said in a statement.

Filling gaps

According to the MoU, Vedanta Foundation would help the administration of the four districts fill gaps between needs and resources in service components of ICDS such as nutrition, pre-schooling, capacity building of workers and empowerment of community, it said.

The scope of the programme covers 1,139 Anganwadi centres in Chikkaballapura, 1,207 in Bangalore Rural, 222 in Bangalore Urban and 67 in Ramanagara.

Over 1,10,000 children in the age group of three to six years will benefit from the programme.

SC says no; but Karnataka govt and Vedanta say yes


27 April 2012

In Karnataka, only babus and cattle enjoy mid-day meals- children dying...

Children are dying of malnutrition, but their supposed saviours are minting money from the ICDS scheme, reports Imran Khan in Tehelka

A PROBE by the Karnataka Lokayukta into the supply of food to the Integrated Child Development Services has found that Department of Women and Child Development officials in connivance with the contractor, Christy Friedgram Industry, were siphoning off funds meant for the mid-day meal scheme. The revelation has come at a time when the state is witnessing close to two-three deaths every day due to malnutrition.

The mid-day meal scheme, which costs the state government Rs 600 crore per year, was meant to provide basic nutrition for children below the age of six. However, DWCD officials and CFI delivered sub-standard food after skimming off funds.

According to sources in the Lokayukta, DWCD Director Shyamala Iqbal used to receive Rs 20 lakh per month as bribe, while Deputy Director Usha Patwari and Assistant Director Muniraju used to get Rs 15 lakh per month from CFI for their tacit involvement. "All department officials, right from the taluk level, would collect money every month from the CFI office in Malleswaram, Bengaluru," the sources say.

"During 2010, we received an anonymous letter detailing the racket, which was duly forwarded to the Lokayukta for investigation," says Nina Nayak, chairperson of theKarnataka State Commission for Protection of Child Rights (KSCPCR). She submitted a report to the government following complaints by gram panchayats about the sub-standard food supplied by CFI. "We received letters from parents who complained of their children falling sick after consuming the food," she says.

The ICDS is the largest programme for promotion of maternal and child health and nutrition not only in India but the whole world. The scheme was launched in 1975 in pursuance of the National Policy for Children. The beneficiaries are children below six years, pregnant and lactating women and women in the age group of 15-44 years. In Karnataka, there are around 54,260 anganwadis, with 33 lakh children entitled to free mid-day meals.

Earlier, the government-owned Karnataka State Agro Corn Products Ltd (KSACPL), which used to manufacture and supply energy foods to anganwadis since 1973, provided mid-day meals. "The KSACPL started making losses in 2001, after the DWCD handed over 50 percent of the energy food supply contract to CFI," says H Subbaiah, the last managing director of the company. Due to insurmountable losses, the company was shut down last month.

Concerned over reports of fraud and tardy implementation of the ICDS scheme, the Supreme Court had issued a directive in October 2004 prohibiting the use of contractors in the supply of mid-day meals under the scheme.

"This is when CFI hit upon a novel plan to counter it," says a middle-level DWCD official, who was shunted out later. "CFI entered into a five-year contract in 2007 with a budget of Rs 600 crore for building the capacities of self-help groups." The company then set up the Mahila Supplementary Nutrition Production and Training Centres (MSNPTCs) in 139 of the 176 taluks.

An employee working in one of the MSNPTCs later wrote to the KSCPCR explaining the way these centres were being run. A copy of the letter, which is with TEHELKA, throws light on the way the DWCD looked the other way when CFI went about doing its business.

In Raichur district, 2,689 kids died due to acute malnutrition in April-August 2011, says official data

According to the letter, "Many of the training centres were not producing the required quantity of energy food. They were procuring ready-to-eat meals directly from Tamil Nadu and dumping it in the training centres. The food was rejected by the locals and was used as fodder for the cattle. Indents given for fulfilling orders were manipulated and illiterate women were hired for the job (according to the agreement, they had to pay a small part of the profit to these women)."

"CFI had set up a parallel channel of giving bribes," say sources in the Lokayukta. "Right from the taluk level, child development project officers would receive around 1 percent of the amount cleared."

This year, on 10 March, Lokayukta officials raided Shyamala Iqbal's house and found 900 grams of gold, diamonds worth Rs 4 lakh, bank deposits worth Rs 65 lakh and a Toyota Innova. They also found documents showing ownership of a commercial complex at Church Street, Bengaluru, a house in HAL 3rd Stage worth Rs 60 lakh and a site in Arkavathy Layout, also in Bengaluru. Shyamala Iqbal did not respond to queries by TEHELKA.

The whole network was managed by CFI employees Kumaraswamy and SS Mani from the state level. "Earlier, the money was given to the officials wherever they were located. After a dispute, it was centralised at CFI's Malleswaram office," says the officer. Interestingly, a faction of the pro-Kannada outfit, Karnataka Rakshana Vedike, was roped in for proper distribution of the bribe money. All the officers would come in the first week of every month to collect their share.

Responding to TEHELKA's queries, CFI general manager (administration) Shivanandan said, "The matter is sub-judice and an inquiry is going on. It is too premature to comment on anything now."

According to information obtained under RTI, more than 21 lakh children in the state are mildly malnourished and 12 lakh moderately malnourished. More than 70,000 suffer from severe malnutrition.

Even if one goes by the official data, the rate of deaths is quite alarming: almost two-three deaths per day due to child malnutrition. According to the DWCD, between April and August 2011, 2,689 children have died due to acute malnutrition in Raichur district alone.

Hunger Pangs

THAT THE state cannot afford to be complacent on the child nutrition front is obvious from Karnataka's 11th rank in the India State Hunger Index. According to the findings of the third National Family Health Survey (NFHS) in Karnataka, the infant mortality rate is 43 deaths per 1,000 births (before the age of one) and 55 deaths per 1,000 births (under the age of five).

The NFHS study also says that infant mortality in rural areas is 28 percent higher than in urban areas. The study also reveals that more than half the women in Karnataka (52 percent) have anaemia, including 63 percent of pregnant women with mild anaemia. The recently released state Economic Survey report of 2012 reveals that poverty in Karnataka continues to be the highest among the southern states.

As the CFI battles to clear its name, the government is unlikely to renew its contract.

However, it has inked a deal with mining giant Vedanta to fill in CFI's shoes. On 10 April, Vendanta entered into an MoU with the government to provide mid-day meals to two lakh [200,000] kids in four districts. Not only is this Rs 12 crore deal in violation of law (as the SC ruling of 2004 mandates no middlemen), it is being seen as part of Vedanta's PR exercise in the wake of controversies surrounding its mining operations in Odisha and elsewhere.

R Manohar, head of programmes at South India Cell for Human Rights Education and Monitoring, says he can't understand why the state is showing urgency in signing the deal, when there is already a PIL in the Karnataka High Court challenging the involvement of middlemen. "We have seen how CFI functioned. We don't want another private company playing with the children's lives," he says.

Imran Khan is a Senior Correspondent with Tehelka.


Sesa Goa to begin exploration in Liberia mines this week

Liberia mines estimated to hold 1 bn tonne reserves

Press Trust of India

26 April 2012

New Delhi - Vedanta group firm Sesa Goa will begin exploration at its Liberian iron ore project, later this week, that is estimated to hold reserves of over 1 billion tonnes, a top company official said.

Last year, the company had acquired 51 per cent stake in Western Clusters Ltd, that is developing the project for about $90 million (Rs 411 crore). This was the first overseas acquisition of the Vedanta group miner.

"We have got the licences for all the three blocks. First rig arrived last week and exploration will begin later this week," Sesa Goa Managing Director P K Mukherjee said.

He added the company has completed the aeromagnetic survey of the Liberian iron ore reserves and Sesa Goa's capital expenditure plan for the project will be known in next 2-3 months.

"We are bullish on it... Exploration is about to begin and we will get the idea about the reserves in 2-3 months," Mukherjee said, adding that "we would come to know the broad contours of the capex only by then".

Two days back, the Goa-based miner had said the resource base at the mines are much more than earlier estimated 1 billion tonnes.

Stating that the company is maintaining its guidance of first shipment from the project by March, 2014, Mukherjee said that investments in Liberia will be spread over 2-3 years.

Excluding Liberia, the company has kept a capex of Rs 600 crore for its existing and expansion activities in the current fiscal.

Besides, the iron ore miner has kept a production and sales guidance of 15 million tonnes (MT) from Goa in the current fiscal, the Sesa Goa MD said.

He, however, declined to put any numbers for Karnataka, where the company has a 6-MT mine in Chitradurga district but operations are closed due to an apex court imposed mining ban in the state.

"It all depends on what directions we get from the Supreme Court," Mukherjee said, adding that company can begin productions immediately as and when it resumes in the state.

Last year, the company added 68 million tonnes of reserves and resource, thereby taking its total mining reserve base to 374 MT.

"This was higher ever accretion for us and at our production capacity of 21 MT, this resource base can be sustained for 17-18 years," he said.

The iron ore miner's profitability was hit by the ban on mining and increased export duties, among other issue in last fiscal, where it reported a 36 per cent decline in its net profit to Rs 2,695.50 crore. Besides, its revenues were 10 per cent and production was down 27 per cent in FY'12.

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