Global demos around Vedanta AGM in London, India and AfricaPublished by MAC on 2015-08-04
Source: Statements, Guardian, Mining.com, Hindu Business (2015-08-03)
Vedanta's annual general meetings in London have been a magnet for outraged protest since the company held the first of them in 2004. This year's AGM was no different - in fact the protests were more numerous than ever.
Heading the round-up (below) is a blow-by-blow account of what transpired at the AGM itself, diligently recorded by Richard Solly of the London Mining Network.
It covers some vital issues, not mentioned in other reports,which highlight Vedanta's continuing abject failure to protect its workers, respect indigenous peoples' rights, act responsibly towards impacted communities, and with transparency towards its own shareholders".
Life on Mars – a report on the Vedanta AGM
By Richard Solly, Co-ordinator, London Mining Network
3 August 2015
London - This year’s Vedanta AGM was preceded, as usual, by a vibrant and noisy demonstration organised by our friends at Foil Vedanta – one of a series of demonstrations against the company organised also in India and Zambia.
The company made the task of organising the protest easier this year by arranging a venue – Ironmongers’ Hall – which enabled us all to gather in a circle and greet arriving shareholders in an appropriate – if perhaps not altogether affectionate – manner. Figures wearing face masks of Vedanta Chairman Anil Agarwal and Vedanta Chief Executive Officer Tom Albanese conducted periodic wrestling matches to portray perceived tensions within the company’s board.
Inside the AGM, Anil Agarwal performed to his usual standard, going off on tangents, answering questions that nobody had asked and often failing to answer the question that had been asked. Perhaps he is slipping a little – he did not harp on, as in the past, about how India is the world’s largest democracy – but he did mention repeatedly that there are 1.2 billion people in India, whether or not this piece of information was relevant to the matter at hand.
However accurate his grasp of Indian population figures, Anil Agarwal’s grasp of other aspects of reality – including the negative impacts of the company’s operations and its economic prospects – gave the impression that he is living on some other planet. Mars is just a guess – it might just as well be Pluto, though the travel time to the AGM would, of course, be greater.
Tom Albanese looked much more than a year older than he had at last August’s AGM. The strain of working for Vedanta is showing. Given the man’s demonstrable concern for worker safety and obvious attempts to improve Vedanta’s appalling record, one may almost feel tempted to feel sympathy for him.
Company Chairman Anil Agarwal began the meeting by introducing Ekaterina Zotova, sitting at his right hand, as a new director – the latest person to be persuaded to destroy whatever reputation she might have had by association with this company.
Anil Agarwal used his address to sing the praises of the company. He said that the company will be able to take advantage of the five billion people, a third of them Indians, who will apparently join the world’s ‘middle class’ in the next few years. (He did not speculate about how long the planet can continue to support the consumerist lifestyle of the world’s middle class before ecosystem collapse, rising sea levels, water shortages and extreme weather events lead to the apocalyptic end of civilisation as we know it, but perhaps this is not a consideration for anyone fixated on short-term financial profit.) India, he said, needs many more mineral resource companies like Vedanta to supply its growing economy.
Agarwal said that Vedanta is very supportive of Indian Prime Minister Modi and his government. The company is one of the largest employers in the country. It contributed 4.6 billion to the countries in which it works – he did not say 4.6 billion what, but we can perhaps assume he meant dollars rather than, for instance, cabbages, worker deaths or environmental disasters. He predicted that the company would be strengthened by a merger with Cairn India. This will create significant value for both sets of shareholders. Vedanta is, apparently, bringing economic empowerment and social mobility to four million people. It is well positioned for the next stage of growth. Health, safety and the wellbeing of its 82,000 staff (down from 88,000 last year, according to the figure announced at last year’s AGM) is very important to Vedanta, and the company aims for zero harm. There have been fewer fatalities this year but the company will not be satisfied until zero harm has been achieved. Agarwal thanked shareholders and governments for their support.
Company CEO Tom Albanese then spoke. Albanese began by saying that it was a pleasure to be with us. (Different people derive pleasure in different ways, but subjecting oneself to unfriendly scrutiny, sharp criticism and angry derision seems to me an odd path to pleasure, and I wonder whether there was, perhaps, an element of polite dishonesty in his announcement.) He said that the right teams and assets are in place to achieve well-being for shareholders. Achievements on safety in the past year have been encouraging. But the numbers of injuries and fatalities are still too high. He said that he had been in the mining industry for 35 years, and the industry’s attitude to safety has changed a lot in that time. “Accidents don’t just happen,” he said: “we have the capacity to ensure that safety is at the top of our colleagues’ minds at work every day.”
A year ago, Tom Albanese had been struck by the potential of the company. Progress had been made on priorities over the past year, including simplification and commitment to sustainable development. Sesa Sterlite had been renamed Vedanta Ltd, in response to the workers and shareholders who requested it. The merger with Cairn India Ltd should take place in 2016. There will be benefits from being part of a large group. There is increased financial flexibility to allocate capital and sustain strong developments. Vedanta has continued to create value despite the volatility of the mining and energy industry. Its long life, low cost assets have benefited from investment and now from production increases. It is well positioned to increase growth. The largest zinc mines in the world are at Zinc India – and there has been record production of zinc and lead. Copper India has achieved its highest ever production. There are power issues in Zambia but progress is being made at KCM. Iron ore production has been recommenced at Karnataka and he expected it to begin again in Goa at the end of the current rainy season. He explained the process of safety training in Zambia, which has apparently led to great improvements.
He said that the company is committed to respecting Free, Prior Informed Consent (FPIC) in India. This came as a great surprise to me, as I had formed the impression, perhaps wrongly, that it is doing everything in its power to undermine and circumvent the overwhelming verdict of Indigenous Dongria Kondh communities in the Niyamgiri Hills, who have repeatedly and categorically rejected the company’s plans for mining in the area.
The company, he said, has also set sustainability targets. It creates jobs and supports community projects. It continues to work on human rights, to close any gaps between its performance and UN standards. “It is imperative that we continue doing this in all the communities where we work,” he said. Vedanta will continuously improve its environmental performance, its efficiency and its costs. When the commodity cycle turns, as it one day will, Vedanta will be well placed to take advantage of it.
The first questioner from the floor said that any company has the prime objective of maximising profit. He asked what was the company’s plan. “You did not mention anything about this,” he said. “This should be your prime focus. You have a high debt ratio. Is there any possibility of the company going under administration in the near future? Directors have large shareholdings. Is there any plan to privatise the company in the near future?” (I took the reference to privatisation to refer to the kind of delisting which that other glowing example of corporate probity, ENRC, effected a couple of years ago. Under scrutiny from the UK Government, it decided to cease functioning as a publicly listed company under UK law, and became instead the private property of its controlling shareholders. Anil Agarwal’s family has a controlling shareholding in Vedanta, so there are parallels.)
Anil Agarwal replied that there is no plan to privatise the company. He is fully committed to the company. Regarding profitability, he noted that the oil price is down almost 50%, the iron ore price down 50 to 60%. There is a lack of demand. There is a slowing of prices, but being based in India is an advantage because there are 1.2 billion people and “we are looking forward to how do we make our business better? We will be best operating parameters, best in operating our assets. We are making a reasonable profit and hope in future we will do better. We have debt total of 16.5 billion. That debt is needed. We are seeing if we can pay some of debt in near future.”
Mining researcher Roger Moody was called next. Anil Agarwal said, “Here’s our friend! Nice to see you!” I suspect that this may have been another example of polite dishonesty. In any case, Roger said he could not reciprocate. Roger noted that Tom Albanese had repeated the mantra of ‘no harm’.
Addressing Tom Albanese, Roger said: “No doubt you personally believe that this is the most important objective of this company, and you have done a lot of work, but eight fatalities are eight too many. In the presentation you gave, the first case example was taken from Zambia, claiming that that particular operation has had a reduction in fatalities. But there were three or more fatalities at KCM last year, which does not square that well with your presentation. I would extend zero harm to include zero pollution, and your presentation sits uneasily with the article in The Observer yesterday about Leigh Day and Co presenting a case on behalf of 1,800 people in Zambia for medical conditions that you brought on through polluted water.
“A year ago you made promises in regards to worker safety. If I remember correctly, you said that you plan to link directors’ remuneration to best environmental and safety results. The Annual Report makes no reference to this in the section on remuneration. Please point to the reference if I have missed it.
“You also said that the company was planning to bring a safety officer in from Rio Tinto. Have you done so? Do you plan to do so? When? Last year my colleague and I raised the question of the Korba operations, presented to the board and made available on line a judicial report by a judge in Hindi translated into English in 2012, which held Vedanta directly responsible for the burden of and causes of the Korba disaster. You said you would read it. May I assume you have read it? You deflected our questions on this report by saying you were expecting four further reports from India before you could respond to our questions. Mr Kumar duly sent us those reports, but they were not reports but statements of legal actions which had been launched in the Chhattisgarh High Court. In effect they were statements of cases. Three of these had been taken by the state against the company. The other one was, it would seem, a holding action that Vedanta has been engaged in since the disaster to prevent the allegations being raised in court, and specifically the allegations raised by Judge Bakshi, effectively rendering them sub judice. As I pointed out last year, it is not sub judice in this country. The report has been in your hands in English for a year so there is no excuse for allegations in that report not to be addressed, whatever court action is being taken in another jurisdiction, namely India.”
Roger then explained that an Early Day Motion on the subject of the Korba disaster had been tabled in the UK Parliament in February of this year. EDM 779 had been submitted by JohnMcDonnell MP, who had been at last year’s Vedanta AGM, and signed by, among others, the current front runner in the contest for Labour Party leadership, Jeremy Corbyn. Roger then quoted the EDM in full:
“That this House expresses its grave concern that the London-listed mining company, Vedanta Resources, has yet to account for the circumstances in which at least 40 workers died when an under-construction chimney suddenly collapsed at its Balco operations in Chhattisgarh state, India in September 2009; deplores the fact that Vedanta took steps to suppress publication of the official Indian judicial report into the event, which ascribed primary responsibility for the disaster to Vedanta; and notes that an English version of this report was released in August 2014 and a copy presented to the board of Vedanta at its annual general meeting, but that no response has yet been given by the company to the many serious allegations contained within it.”
Tom Albanese replied, “I respect your views but I hope you respect the fact that we are working very hard to reduce fatalities. Every single senior manager is focused on this. There is an emotional response that everyone has when anyone gets hurt. Eight fatalities is unacceptable. We have over 80,000 people in our care and every one has to come to work with the same attitude, properly trained to do their jobs. For any industrial company this is one of the greatest challenges. We have brought in someone from Rio Tinto to act as safety mentor and safety coach for senior leaders. He worked for me at Rio Tinto. He has done what I said he would do. The journey towards zero harm does not happen overnight. Anyone who has been in any industrial business knows the practical realities of keeping everyone safe. At KCM we had four fatalities last year but there was a complete difference after we put the safety campaign in. Other mines in Zambia had challenges. This tells me that if management puts time into this kind of training it does make a difference, but not overnight. I will work to get zero harm.”
Tom Albanese then said that, with regard to the Leigh day case, it was important to recognise that Vedanta had received a letter about it the previous Friday and had not yet been served notice so it is difficult to answer specific allegations. He could confirm that the company had received a letter on behalf of a number of claimants. Until they received the official notice he could not comment. Vedanta would be seeking further information from Leigh day and their clients, and could respond once that had been received. Until then, any court proceedings are premature. All Vedanta subsidiaries take community well-being and environment seriously. KCM has been around for about 70 years. When Vedanta acquired an interest about 10 years ago, the mine had less than ten years of resources left, and the facilities were outdated. Vedanta had invested in underground facilities and 230 million dollars of zero discharge equipment so that water would continue to be available for agriculture and drinking. The company had invested in new pumps for desilting and slurry. It had made a remarkable difference. It had reduced total solids in discharged water by 75%. It had invested in sulphur capture equipment. It had invested over 530 million dollars in refurbishing decay tanks, resulting in zero discharge from the dam.
Roger said that, according to the Observer report, Canadian engineering company SNC Lavalin was employed to advise Vedanta, and the engineers’ report recommended 17 actions to be taken. He asked which of these had been taken. Had Tom Albanese received the report?
Tom Albanese replied that when the company had been served notice of the legal case, he could answer the question.
Roger said that the question was whether the company had received the report from the engineers that it commissioned to look into the practices at KCM.
Tom Albanese repeated that when the company received notice, they would look into it. He then moved on to the questions about Korba. He said that there are four different findings which are before the Indian High Court and that Vedanta had to respect Indian judicial proceedings.
Film-maker Simon Chambers called out that Vedanta was not helping the process by repressing the findings of the Bakshi report.
Roger pointed out that Vedanta is a British company. If another British company had experienced such a disaster… But at this point, Anil Agarwal interrupted him, saying that he had visited the families of everyone killed in the chimney collapse. There was then an argument, Anil Agarwal speaking over Roger Moody and making it impossible to hear what was being said. At last, Roger was able to make himself heard again, and asked whether the company had made any response to the Early Day Motion in the UK Parliament. Had any respect been shown to the concerns of the MPs?
Anil Agarwal said, “We’ll come back to you.”
Tom Albanese said that Roger had also asked about directors’ remuneration on issues of safety. He passed this question on to Euan Macdonald, chief of the Remuneration Committee. Euan Macdonald said that the Remuneration Report notes that part (15%) of executives’ bonus potential relies on safety and sustainability, and part of the bonus is forfeited if a fatality occurs. “We consulted with major shareholders about what these measures should be,” he said. “The calculation of the bonus takes into account fatalities in different areas.” Roger asked whether shareholders could see this. “No,” replied Euan Macdonald, “because the exact proportion will change each year, but we undertook to include safety performance in bonuses and we did.” (So, if I have understood correctly, the life of a worker is worth 15% of the relevant executive’s bonus. I’ll just repeat that, in case I didn’t understand it correctly: the life of a worker is worth 15% of the relevant executive’s bonus. Which would mean that, should, for example, four workers die in any one financial year, eachlost human life would be worth 3.75% of the relevant executive’s bonus. I am open to correction here.)
Another shareholder said that the share price had come down below the flotation price. Why was this happening? Vedanta is suffering more than other companies. Despite financial problems, Vedanta had invested 42 million in community programmes. This was essential. But how did the company do it? Did it give money to other organisations or did it have its own foundations? How is the money monitored?
Anil Agarwal replied that the company’s Corporate Social Responsibility programme was very close to their heart. “We look after women and children around our operations,” he said. “Livelihood is very important and we want people around us to support us. We are a very healthy company. We made a healthy profit and we paid around 4four billion dollars in tax. Commodity process are down but we run zinc business very well, largest in the world. In India, only three companies produce oil. We are second largest producer of oil and gas. We always make a profit. This year we will make a decent profit. The share price is still two and a half times the listing price. We believe … if you look at other Indian resource companies… Rio Tinto produces iron ore in Australia; Vale produces in Brazil. They list in different places. We are an Indian company. This is very important to us. We are very transparent and we are very proud that we keep our value on the top of it. We are all committed to take this company forward.”
Another shareholder complained that every year there was “some pressure group outside or inside. Is this because some competitor is financing them?” he asked. “Human rights organisations should not come and take up investors’ time,” he asserted.
I found this intervention extraordinarily unpleasant. Shareholders at some AGMs express genuine concern at the human rights issues raised – and these concerns are not (though this was dealt with publicly later) being raised because anyone is being financed by the company’s competitors, but out of a sense of solidarity with fellow human beings suffering as a result of corporate operations. And as far as I know, none of us critics was being paid by anyone to be there!
Anil Agarwal replied that India has the largest deposit of bauxite in the world and only produces two million tonnes per year, while China produces more. India is running at 25% of capacity. It should provide its own resources. (I was not clear how this answer related to the mean-spirited question that had been asked, but he does have a tendency to go off on strange tangents from time to time.)
The next questioner said that the company gets a lot of negative press. There is also concern about the company’s ability to service its debt. He asked what the board proposed to do about press coverage and about debt? He said that the share price had dropped 80% in the last four years, much more than other mining companies. What steps would the board take in the next twelve months to protect share value?
Anil Agarwal replied with one of his favourite themes. “India has 1.2 billion people,” he said. He went on, “We only have import and import. We need to produce minerals in India. This is the first AGM where we are talking about share price. I am very pleased this question has been asked. We like these challenges. We have someone to deal with media. I am the original shareholder and I have not sold a single share. This is the company that will take our country on to a different level. Credibility of our new government, new Prime Minister, will make effort to take things forward. Things will change. You asking this question will help us to focus going forward. Each of our businesses will do better. Share price will do better. We will not leave anything unturned to make this the best company.”
Someone sitting in the body of the hall at the front, who I took to be the company’s Media Officer, added, “In India and Africa we have been working towards creating a new Vedanta brand. We are creating value and co-operation with the media. We reply to any questions that come. We are not hesitant to talk to media. This is the journey forward. Media will look at the organisation. It is a good start, transforming the brand.”
I should say at this point that acoustics in the lofty Ironmongers’ Hall are poor, and I was sitting right at the back, and there were interventions which I found a trifle difficult to hear clearly. It may be that I misheard what was said. But, as I understood it, we were being told that changing the colour of the company’s logo from orange and blue to green and blue was a good start to transforming the company’s image in the media. Never mind spillages, worker deaths, multiple law suits or any of the concerns being raised with such tenacity, year after year – we’ve got a new logo, and it’s got some green in it, so that’s alright, then. I will refrain from further comment.
There was some further discussion about share price, assets and bankers. My attention wandered. Then a shareholder as big-hearted as the one who had suggested that the company’s critics were being paid by its competitors (actually, it could have been the same man…) said crossly that shareholders should not be allowed to ask too much about human rights.
How splendid it is that the UK Government believes that, rather than loading companies with too many unwelcome regulations, it should encourage shareholders to exercise greater vigilance over the companies which they partly own! With shareholders like these, the market could then really rip! Just stop people from asking inconvenient questions about worker deaths, Indigenous Peoples’ rights or polluted water!
Samarendra Das, from Foil Vedanta, said that he wanted to repeat a few questions that the board had said it would answer last year about Goa. He said: “You were accused of taking too much iron ore. We understand that not all the Goa iron ore leases have been renewed. Can you tell us how much reserves and annual production has not been renewed so far?
“The Supreme Court judgement on Goa had ruled that all leases expired on 22nd November 2007, and any mining after that was illegal. Mining stopped on12th September 2012, implying nearly five years of illegal mining. The mining law in India provides for recovery of the full value of the mineral, plus 24% interest. What is the potential liability on this account? The lease renewals have been challenged. If the renewals are struck down, what is the potential additional liability?
“You’ve said there are 1.2 billion people in India. And you say that you have invested 60,000 crore rupees in aluminium projects. Did you think about what people in the area wanted? Because you have not conducted due diligence, that is why the company is in difficulty. You have not taken the consent of the people, and while you floated your IPO on the London Stock Exchange you lied to the press that you had secured the Lanjigarh deposits. There are conflicts in all the places you operate.”
Anil Agarwal kept interrupting.
Samarendra continued: “People in Goa are having their land destroyed by your operations. Beerulal Meshawal in Matoon has had to deal with the waste dumped on his land where he used to sow wheat and he is fighting for compensation. In Kanhei Pahad, Dangadeuli Dalits and Adivasis are fighting for their mountain. They do not need your compensation. Lodo, Dadhi, Bari, Haribandhu Kadraka, Raj Kishore and Lingaraj Azad are raising their concerns with one voice. Two thousand of them marched today in Muniguda. In Tuticorin, Rai Kishore is suffering from acid spillage. Rai Kishore has acid burns from Sterlite Tuticorin and is paying for his own treatment in the AVM private hospital. Why are all your victims invisible? All I hear is about share value, debt and profit. Do you really care? Many people marched against the company in Goa and elsewhere. Take their concerns seriously!”
Tom Albanese replied that the Indian Supreme Court ruling on mining in Goa was that the ‘deemed approvals’ by the Goan state government in 2008 were not acceptable. There needed to be an actual approval process. Since the last Vedanta AGM the Mumbai court had said that the state needs to deal with this and that the approvals could last till 2027. Vedanta had sent in applications and paid stamp duty payments so it had taken the action it needed to take, and state the government had not taken the action it needed to take. The state government has now taken active action to approve the deemed leases and extended them to 2027. The government reserves the right to re-auction them at that time. With these approved leases in place, Vedanta is going through an approval process which would enable it to mine from October, up to 5 million tonnes a year, which is within the court-imposed cap. Tom Albanese had been to Goa twice in the last two months and it was clear to him that the people of Goa were looking for jobs and looking forward to a resumption of mining, but in a more controlled way.
Samarendra said, “Please respond to what I asked about the victims. Not a word for them!”
Instead of any word of support for the victims, there was then a further interchange between various shareholders and board members about share price valuation and bonuses. Anil Agarwal said that it was very good that people were asking about the share price. He said that the simplification of the company should lead it to a better situation: costs would come down.
I suppose it is so much easier to deal with questions about money than these pesky, irritating questions about human rights and environmental destruction.
Simon Chambers moved on to this very matter, answering the question raised earlier by the shareholder who seemed to think Vedanta’s critics are all being paid by its competitors. Simon said: “We are not paid by competitors.” He explained that we raise questions at the AGM “because we are asked to do so by people in India and Africa who cannot come to the AGM to ask questions on their own behalf.” He then said that he wanted to come back to the question of the Korba disaster.
Anil Agarwal immediately interrupted him: “We are going through a difficult time,” he said, “and millions of people rely on us, and we are only running at half capacity. The accident has happened and we will do whatever we can do, but the matter is sub judice and we will do whatever we can. Ask your question!”
Simon replied that he was trying to ask it. “There are many people in Chhattisgarh who do not believe you have done whatever you can do,” he said. “You have suppressed the Bakshi report. Last year Mr Albanese said there were four other reports pending, but they are not reports, they are court cases against Vedanta, so it feels to me as if there has been a bit of a misrepresentation to the shareholders’ meeting. These are not reports but accusations against Balco, including against employees who are accused of culpable manslaughter. Have any verdicts been reached on these cases that Mr Kumar gave me details of earlier this year? You have spoken about being transparent and about dialogue. Are you aware of the new boundary wall in Korba as part of the project where the chimney fell down? It has gone up illegally and taken over 38 acres of farmland from local people without permission from local government or the state government. These things give Vedanta the reputation you are all fighting against. Is it that people on the board don’t realise what is going on on the ground and there is no chain of information, or is it that you do know and are pretending that you don’t?”
Tom Albanese said that there had been a 20% reduction in aluminium pricing (actually, he called it ‘aluminum’ pricing, but that’s okay…) so Balco needs to work very hard to stay viable. Vedanta needs to make sure it can survive. Chinese aluminium was being exported to India and undercutting Indian production. It is a struggle for business survival for Balco. It will have a huge effect on the community if the company does not get this right. The board wants to make sure the business can survive in whatever conditions the market throws at them. The land that Balco has acquired is the same land that was there at the original privatisation. There has been illegal land encroachment over that ten years. Vedanta did receive permission from the authorities for the expansion. Balco has been around for several decades and developed a huge legacy of relations between the business and the community.
Simon said he was not sure they were talking about the same wall. Tom Albanese asked him to send a map. Simon said the company was also dumping dry ash on what is known as common land. That is illegal, and there are industry standards about dumping it under water and producing dry ash ponds. Hard times in the industry are not an excuse.
Tom Albanese said that the government had laid down standards about fly ash. Vedanta has developed the capacity for dry ash to be used in concrete for road building. It is working on proper recycling of waste products.
Simon asked whether any verdicts had been reached on any of the four Balco cases? Tom Albanese said no.
A representative of Share Action asked a further question about occupational health and safety. She said she was pleased to see a fall in accidents from over 20 to eight, and congratulated the board on this even though, she said, it was far from acceptable. She repeated that the board had spoken about zero harm and said she was concerned about reports in the Observer and Reuters over the weekend about contamination of Zambian water supplies, and also about the protests outside the AGM. She noted that Vedanta had been ordered by the Zambian courts to pay fines over water pollution. How would the company manage the spiralling costs of legal action and how would the board answer the claim in the Observer that its policies are good on paper but not in practice? It was worrying if the board thinks that protest groups and human rights activists are being funded by competitors.
Tom Albanese pointed out that nobody on the board had said that. This was not the position of the board and the company. “Regarding fatalities,” he said, “we have said quite a bit about the steps we are taking. We respect cultural differences in different countries, we are strengthening contract management systems. We will not achieve the zero fatality aim this year. I cannot add anything more. In the Observer article regarding KCM, a claim was filed on Friday and we have not even received the claim, so I cannot comment, but we will review it and get back to the law firm about specific allegations.”
It was pointed out that the case was based on a report that Vedanta had itself commissioned – but there was no further response.
I then asked about the company’s Sustainability Report on page 36 of the Annual Report. This has a section on ‘highlights’ which notes that the company produced 40 million tonnes of CO2 equivalent in the past year as opposed to 37 million tonnes the year before. I said that I assumed that ‘highlights’ were aspects of the company’s record that it saw as good. In what way was an increase in carbon emissions good?
Tom Albanese explained that the increase in carbon emissions had been due to coal use in energy generation. He said that the company was committed to reporting on things whether they make it look good or bad.
I congratulated the board for the fact that, compared to all the other mining companies whose AGMs I attend, Vedanta is far ahead of all of them in making itself look bad.
That actually raised a bit of a laugh, which may have been a blessing in the context of such an utterly dire AGM. But it is of no comfort to the many people suffering as a result of Vedanta’s operations. The struggle must continue!
Eight global demos against Vedanta in Afrika, India and London
3 August 2015
Angry protests were held today, and over the weekend, at global locations in India and Africa opposing the activities of British-Indian mining company Vedanta while Vedanta’s AGM at Ironmongers Hall, Barbican, London was mobbed by a loud rally organised by Foil Vedanta, accusing the company of pollution, human rights abuses and financial mismanagement. In London a comical staged boxing match between Vedanta’s 69.6% owner and Chairman Anil Agarwal and new CEO Tom Albanese, revealed the company’s debt problems and internal dynamics while protesters chanted ‘Corporate criminal, shame on you!’ and drummed loudly. Vedanta’s share price has slipped 61% this year to 377p, and continues to dive as Q1 results show increased debt, and Cairn India minority shareholders oppose their attempt to merge with the oil and gas subsidiary to gain access to its $2.6 billion cash reserves for debt servicing.
In the Zambian copperbelt, communities living around the mines and smelters of Vedanta’s copper subsidiary Konkola Copper Mines staged two days of protests in Chingola town over the weekend. They decried KCM’s continued pollution of the River Kafue and local streams, which have left the water devoid of life, and communities with long term health problems. Most of the protesters are also victims of the major pollution of the river Kafue by Vedanta in 2006, which affected up to 40,000 Zambians and was covered by a major expose in the Observer newspaper on Sunday. KCM was finally confirmed as guilty by the Supreme Court of Zambia in April this year, though $2 million compensation earlier awarded to the claimants was retracted under pressure from company lawyers. The claimants have accused Vedanta of corruption and bribery in the case.
Joseph Sibezulu, one of the protesters, from the Mambwe tribe in Northern Province of Zambia, said:
“Zambia’s environment has been polluted and destroyed by the so-called foreign investors including Vedanta. People are suffering health problems and the companies don’t even help us with medical expenses. We as Zambians say no to these looters.”
KCM was earlier indicted in Zambia when evidence emerged of major tax evasion and transfer mispricing.
A parallel event also took place in the capital Lusaka, organised by the pressure group Power Zambia, who issued a press statement highlighting the poor working and health conditions of KCM’s workforce, including the impacts of high arsenic-tainted copper concentrate, which was recently being imported by KCM from Chile, but was banned from processing in Zambia by the government in July 2015, as it endangered workers and the environment.
2000 people from indigenous communities (adivasis), dalits and farmers took to the streets in Muniguda, Odisha, today calling for the de-commissioning of Vedanta’s Lanjigarh refinery. The spokesperson of Niyamgiri Surakshya Samiti, Lingaraj Azad reported over phone :
“Protest against Vedanta by about 2000 Dongria people was held today at Muniguda. The refinery pollution is depleting the environment. Fly ash and other harmful gases from the refinery are causing productivity and vegetation loss and burning leaves.Fruit bearing trees and agriculture are adversely affected due to the polluting unit. Leaching chemicals from the ash & tailing ponds are causing serious health hazards to local people. As there is no chance of getting the Niyamgiri mineral reserve, there is no point in keeping the factory here and polluting the environment, harassing the people, flora and fauna of the region.”
A demand letter was submitted with the local BDO, addressed to the Governor of Odisha, demanding the immediate dismantling and removal of the factory, and distribution of Bhudan Land among the landless people of the region.
Protesters at Vedanta’s AGM in London focused on the company’s $9.1 billion net debt crisis and desperate attempt to merge with oil and gas subsidiary Cairn India to gain access to its $2.6 billion cash reserves. Vedanta has ‘insufficient operating cash flow to fund capital spending and dividend payments’ according to analysts. and with $2.4 billion in debt servicing payments are due in FY 16/17 Vedanta is desperate to get hold of cash reserves from it’s wealthier subsidiaries to meet the demands.The targets are Cairn India’s $2.6 billion cash reserves, which it could access by merging newly named conglomerate subsidiary Vedanta Ltd (formerly Sesa Sterlite) with the oil and gas business, and Hindustan Zinc’s $4.6 billion cash reserves, for which it has long been trying to buy the state’s remaining 29.54% share in the subsidiary, mired by opposition by trade unions.
Cairn India’s major minority shareholders Life Insurance Corporation of India (LIC) (9.06% stake) and UK oil and gas firm Cairn Energy (9.82% stake) are opposing the deal claiming their shares are undervalued and cash will be depleted, though this is denied by Vedanta’s Tom Albanese. Minority shareholders are still smarting from the $1.25 billion related party loan to parent company Vedanta Resources in July 2014, which was not agreed by shareholders and is being questioned for corporate governance and cash utilisation issues.
According to one analyst report viewed by Foil Vedanta, which compared return on equity and assets over the last four years; Vedanta Ltd (formerly Sesa Sterlite) and Vedanta Resources, both have negative return on equity, at – 24.69% for Vedanta Ltd, and -64.08% for Vedanta Resources, compared to Cairn India which has positive return of 7.70%. On assets Vedanta Ltd and Vedanta Resources are also negative on return at – 5.62% for Vedanta Ltd, and -9.20% for Vedanta Resources, compared to Cairn India which has positive return of 6.76%. In other words, the merger with oil and gas subsidiary Cairn India is crucial for Vedanta’s survival.
Vedanta’s Q1 financial results released on 29th July revealed $500 million increased debt and impairments. The share price has now slipped to an historic low of 377p. Dissident shareholders warned Vedanta’s shareholders inside the AGM that the company may follow the pattern of Indian energy corporate, Essar – bleeding subsidiaries of their assets, de-listing them, and incurring huge debt write-downs, if they continue on their current trajectory.
Miriam Rose from Foil Vedanta says:
“Vedanta has been increasingly restructuring its toxic debt into Indian public banks, putting the taxpayer at risk of major losses if the firm goes bust. The high risk, high debt operating style also puts its 82,000 employees in a very insecure position, as jobs that were touted as ‘developing’ their communities are being lost overnight, leaving communities polluted and devastated without livelihoods.”
Vedanta recently announced ‘drastic’ job cuts across its Indian aluminium business, which it claimed was due to cheap imports from China and low aluminium price.
In Rajasthan, India, retrenched miners from Matoon Mines Mazdur Sangh (Matoon Mines workers union) protested alongside local villagers polluted by phosphate dumps on 3rd August in Matoon. Ninety miners were dismissed by Vedanta subsidiary Hindustan Zinc Limited in December 2014 with only 1 month’s advanced pay. Berulal Meghwal, Dalit farmer and Matoon mines trade union activist said:
“Vedanta have flooded this area with money and bribes, and flooded my fields with phosphate mine-waste. They have acquired grazing land for phosphate dumps which is illegal under Rajasthan law as of April 2014. No-one was compensated for loss of grazing land.”
Kumari Bai, a local resident living beside the phosphate dumps in Matoon said:
“I have been sitting in & protesting & going to meetings but nothing happens. They tell us to leave and say they’ll close the mine and then within a few hours they start again. They got scared that women are gathering to complain so we took our kids as well. See it with your own eyes and then you’ll know. There are cracks in my house now and our animals can’t graze. Dust is flying in. Every time you have to sweep the house. We can’t afford to build another house. We want compensation for the loss.”
In Korba, Chhatisgarh, India, a rally took place on 2nd August, demanding accountability from Vedanta’s aluminium subsidiary BALCO for constructing a boundary wall and expanding ashponds without permission, as well as several other illegal construction plans which are encroaching on common land and destroying livelihoods.
Ramayan Singh from Rukbahari, Chhattisgarh, said:
“We are protesting on behalf of the ten villages where BALCO is trying to set up an ash pond for its power plant and acquire our 30.68 acre of fertile land. Vedanta officers have tried to allure in the past and taken land by promising jobs. We have not received any fair compensation nor jobs. Now we are hearing that they are cutting jobs for low price of aluminium. Why would we believe them?”
Chamra Singh from Rukbahari, Chhattisgarh said:
” Forest and land is our life. How many days this compensation will last? We have been using this land since generations. It is our source of life and we wont give it at any cost. Company is spreading lies that outsiders are instigating us.”
The protesters also demanded justice for the victims of the 2009 chimney collapse which killed between 40 and 100 people. Last year the Sandeep Bakshi Judicial Commission report which holds Vedanta guilty of negligence in the incident, and was suppressed by Vedanta in India, was released by activists.
In Delhi a ‘funeral of Vedanta’ rally took place on 3rd August outside the Reserve Bank of India (RBI) headquarters, warning the Indian taxpayer and the public banks that they may lose loans and investments in Vedanta due to its high debt and high risk operating style. 22 protesters were arrested and held at Parliament Street Police Station.
A statement from the protesters said:
“We stand in solidarity with affected communities around the world and call upon the Ministry of Finance and the RBI not to extend life support to floundering Vedanta by refusing to approve any public credit or bid to bail out Vedanta. This is in line with RBI Governer Raguram Rajan’s own warnings about the major crisis of bad debt facing India today and his resolute call for punishing defaulting corporations that “freeload”.
At Hyderabad University on 3rd August around 60 students attended a rally in solidarity with Adivasis, Dalits and Bahujans who lost land for the refinery at Lanjigarh. Students from Odisha Scholars for Social Justice released this statement:
“The demands of the Land Looser Association for compensation for their agricultural lands taken away by Vedanta in 2002 have yet to be fulfilled. They were promised Rs 3 lakh compensation, but given only 25k to 1 lakh rupees. They have petitioned to the Chief Minister, the Governor, and Prime Ministers Manmohan Singh and Modi. Their lives are destroyed and not one villager has been given a job in the refinery.”
Indigenous groups stopped bauxite mining at the Niyamgiri hills behind the refinery in 2013, and are now campaigning to decommission the refinery, which Vedanta still plans to expand sixfold according to their 2015 Annual Report, despite lack of raw materials. Lingaraj Azad, General Secretary, Samjawadi Janparishad and Niyamgiri Surakshya Samiti says:
“Pollution from the plant has affected both the size and quality of fruits growing in these hills. They have shrunken in size and don’t taste the same anymore. Sound and air pollution and the glow of halogen lights have driven out birds and animals from these hills and leaves are covered with a thin film of ash and other pollutants released into the air by the refinery. Since it hasn’t got mines, the factory here should be shut down. We are mobilising this August 9 for a “Quit Vedanta” rally.”
Sammi Sikoka, a Dongria woman member of Niyamgiri Surakshya Samiti (Niyamgiri Protection Council) says:
“The factory should go. Niyamgiri is our heart. We wont allow him (Vedanta) to take it. Why do not you understand what we said before? Refinery amoro dorkar nahin. (We do not want your refinery)”
Vedanta have thus far failed to get bauxite from other sources, but were awarded a prospecting license at Malimunda-Kanhai hill, where adivasis (indigenous people) and farmers recently demonstrated against the company issuing this collective message from the villagers of Masipur, who have formed Malimunda-Kanhai Hill Surakshya Samiti (MKHSS):
“No company can take a handful of soil from this mountain while we are alive. If government creates rift amongst the villagers, then the consequences would be detrimental and the government would be responsible for it. The government should have taken the opinion of the villagers before awarding the mining lease to the company. But, nobody has come to us till date. The government is trying to sell our Danga Deulo hill without consulting us. We would starve if our Danga Deulo hill would be sold. Where would our cattle graze and drink water?”
Meanwhile, Vedanta boss Anil Agarwal has re-launched his contentious plans for a Vedanta University in Puri, Odisha, which were stopped in November 2010 due to illegal land acquisition. In another publicity stunt Agarwal told The Times he wants to give away £1.4 billion of his personal wealth to charity, though the Sunday Times Rich List 2015 assesses he is only worth £1.1 billion, and another industry estimate suggests he may have lost his billionaire status altogether as Vedanta’s share prices have fallen more than 61% in the last year.
In Goa, India Vedanta is hoping subsidiary Sesa Goa (now part of Vedanta Ltd) will be able re-start iron ore operations under the rules of India’s new Mining Ordinance after a four year ban due to revelations of large scale illegal mining. But activists and local residents claim the companies are yet to pay their due for environmental, social and financial losses to the state by illegal mining during the iron ore boom years and note that no-one has been tried or arrested for the Rs35,000 crore ($5.5 billion) scam in which Sesa Goa (Vedanta) is one of the main culprits. Ramesh Gauns, Advisor to Bicholim Mines Affected people, who have issued a list of demands for the AGM, notes that Rs14,000 crore ($2.2 billion) is owed to the state by Vedanta. He said:
“Vedanta was found by the Supreme Court to have been mining illegally in Goa from 2007 to 2012, thereby destroying people’s livelihood and environment. Instead of retrospectively regularising its mines, the Government should ask the company to pay compensation for loss to the people of Goa and India, and Anil Agarwal should personally be brought to trial for breaching the laws of a foreign country.”
Surendra Velip, a farmer from Caurem, Goa, claims mine waste dumps, are still being looted by companies as they are auctioned off:
“They are auctioning 1 lakh and taking 2 lakh. All the dumps and ore have now been proven to be illegal but the companies continue to claim it as their property. Mine dumps should be reclaimed using some of the money mining companies looted and owe to us.”
In Tuticorin in Tamil Nadu, trade union leader M.Esakkimuthu (Diver Coordinator for Anna Sea Divers Association), claims Vedanta subsidiary Sterlite Copper (now Vedanta Ltd) have been toxic waste into the sea near their plant.
“Sterlite is dumping waste into the sea. When you dive near the coast you see a yellow layer covering the coral reefs. Up to 10km away from the coast the fish are contaminated. People are eating that fish and I suspect a lot of birth deformities we see in this area are caused by this.”
UK mining firm faces pollution allegations in Zambia
2 August 2015
London-listed Vedanta Mining will be in court to defend itself against claims by hundreds of Zambian villagers that its copper mining operations polluted a water source and farmland.
Law firm Leigh Day initiated proceedings on Friday at the London High Court on behalf of 1,800 villagers. The villagers are suing Vedanta over claims that the firm, along with Zambia-based Konkola Copper Mines, poisoned water and land used for farming. Vedanta has a controlling share in Konkola Copper Mines.
In a statement, Leigh Day alleges that "since the take-over in 2004 Vedanta Resources mining operations have been continually spilling sulphuric acid and other toxic chemicals into the rivers, streams and farmland near to where the communities live and farm." The lawyers say the pollution primarily stems from the tailings leach plant.
"The communities, Shimulala, Kakosa, Hippo Pool and Hellen claim that polluted water is affecting their health and causing illnesses and permanent injuries. Without piped water from the mains supply, their primary source of water for drinking, washing, bathing and irrigating farms are these waters," the statement continues.
Along with health effects, the pollution has also devastated crops and greatly affected fishing, thus impacting the earnings of the local people, according to Leigh Day.
“These communities have been suffering greatly for the last ten years with nothing being done to assist them or to stop the pollution," said senior partner Martyn Day.
A spokesman for Vedanta said it will investigate the allegations and is seeking additional information from the plaintiff's lawyers, before providing a full response.
"All Vedanta's operating subsidiaries take the health and safety of their employees, the wellbeing of surrounding communities and the environment very seriously," the spokesman was quoted by Reuters.
Former Rio Tinto CEO Tom Albanese took the helm of Vedanta, a major metal and oil producer, in March 2014. The company has operations in India, Zambia, Namibia, South Africa, Liberia, Ireland and Australia.
The allegations against it come after a federal judge in June ruled that two mines owned by the second-largest U.S. coal producer, Alpha Natural Resources in West Virginia, illegally polluted streams.
Protests mark Vedanta Resources annual general meeting in New Delhi
Hindu Business Line
3 August 2015
New Delhi - In what is becoming an annual occurrence, Vedanta Resources Plc's annual general meeting day was marked with protests.
As the company hosted its AGM in London, protesters gathered outside the Reserve Bank of India in New Delhi to raise their voice against public sector banks lending to the various subsidiaries of the natural resources major.
Organised by activist group Foil Vedanta, 22 persons gathered for the protest outside the RBI office were detained by the Delhi Police and taken to the Parliament Street Police Station.
Similar protests were held around the world over the weekend, including Udaipur, Korba in Chhattisgarh, Chingola and Lusaka in Zambia, London and Hyderabad.
The protests from activists’ groups come at a time when Vedanta Resources is drawing flak from minority investors of Cairn India and Vedanta Ltd.
Vedanta has been accused of giving a raw deal to the minority investors by offering a 1:1 swap ratio for the proposed merger of Cairn India into Vedanta Ltd.
Cairn India shareholders will also get a redeemable preference share of the merged entity for each share of Cairn India they hold.
If the merger is successful, Vedanta Ltd will have access to Cairn India’s cash reserves of over R21,000 crore with which it will be able to manage its debt of R77,000 crore.
Zambian villagers take mining giant Vedanta to court in UK over toxic leaks
Fears of environmental catastrophe as report finds ‘constant contamination’ of streams around copper mine while locals report health problems and failed crops
1 August 2015
Chingola, Zambia - A London-listed mining giant has been polluting the drinking water of villages in Zambia and threatening a wider health disaster, the Observer has found.
Leaked documents and a confidential internal report commissioned from Canadian pollution control experts show that Vedanta Resources’ giant mine in Zambia’s Copperbelt region has been spilling sulphuric acid and other toxic chemicals into rivers, streams and underground aquifers used for drinking water near the mining town of Chingola.
The result, say people in four villages living near the giant 12 sq mile mine owned by Vedanta subsidiary KCM, is stomach pains and illnesses, devastated crops, loss of earnings and permanent injuries. The claims of villagers living near one of the largest copper mines in Africa are backed by a leaked letter from a KCM doctor stating that water collected for testing from Shimulala village in 2011 was unfit for human consumption. “The water is acidic and the copper and iron levels exceed permitted levels,” the doctor wrote. “The impurities … can cause cancer in the bloodstream and unhealthy conditions in internal organs. The people in that village should be advised to stop using the same water.”
London law firm Leigh Day has issued proceedings in the high court in London on behalf of 1,800 people who claim to have been affected by the company’s pollution. “The case could take three years to resolve,” said Leigh Day senior partner Martyn Day, recently returned from Zambia, where lawyers and paralegals have been taking witness statements from people living near the rivers and the company’s operations.
A Vedanta spokesman said: “All Vedanta’s operating subsidiaries take the health of their employees, the wellbeing of surrounding communities and the environment very seriously. Our subsidiaries are committed to ensuring they operate in a safe and sustainable way.”
But a scientist who worked for more than 15 years with KCM said there has been little maintenance of critical equipment since Vedanta bought the mine, despite production of some 10,000 tonnes of copper and 300 tonnes of cobalt a year. He accused Vedanta of releasing more acid than it has authority for. “There have been heavy spillages and massive leakages. Acid has been leaking all over the place. The pollution control pond is handling too much material. No effort has been made to correct this scenario. Only one of four [waste] pipelines is running – the rest are in disrepair.
“Degraded equipment, leaking pumps, pipes, thickeners and settling ponds have [resulted in] excessive spillages. Water overflowing into the Mushushima river and subsequently the Kafue river poses a possible environmental catastrophe downstream,” he said.
“The company has very good plans on paper that have not materialised on the ground for the last 10 years. It is absolutely clear that there is a massive problem. Because the river Kafue feeds into the Zambezi river, which provides drinking water for much of Zambia, the pollution could affect hundreds of thousands of people downstream, he said. “A disaster is very likely. It has the potential of affecting people hundreds of miles away. Water supplies could be damaged and aquatic life would die.”
A leaked report by the Canadian engineering company SNC-Lavalin, which in 2010 was employed to advise Vedanta/ KCM on how to control continuing pollution, says that solids, dissolved copper and acids are being spilled. It refers to “constant contamination” of streams, and says the main pollution control dam is often full to capacity. It adds that reservoirs overflow and there are leakages from pipes and a lack of spare parts. The engineers’ report calls for 17 major and minor actions to stop the spillage of polluted water into the environment.
Aviva Investors opposes Vedanta Ltd takeover bid for Cairn India
5 August 2015
LONDON: Fund firm Aviva Investors said on Wednesday it opposed a $2.3 billion plan by Vedanta Ltd to buy out minority shareholders in Cairn as the deal failed to deliver sufficient value.
Aviva's UK equity team has a 4.3 per cent stake in Cairn Energy, the original owner of Cairn India and still its largest minority shareholder. Its emerging market equity teams, meanwhile, both own stakes in Cairn India, it said.
"As long-term investors, we believe that the timing of this deal is opportunistic and materially undervalues Cairn India, its current reserves and future prospects," Aviva Investors, part of insurer Aviva Plc, said in a statement.
It said a low oil price, tax litigation and uncertainty over the long-term ownership structure of Cairn India had all weighed on the share price.
"We are also concerned there is a risk of the Vedanta Group misallocating capital should its integration of Cairn India prove successful," it said.
"With high levels of debt and an aggressive capital expenditure programme, we fear the Vedanta Group would prioritise its immediate needs over the long-term potential we believe exists at Cairn India."
Vedanta Ltd, the Mumbai-based subsidiary of London-listed Vedanta Resources, said in late July it was engaging with all minority shareholders in an effort to get the approval of more than half of them which it needs to succeed.