Vedanta at centre of many stormsPublished by MAC on 2006-08-05
Vedanta at centre of many storms
5th August 2006
It's said that a picture is worth a thousand words. If true, seven photographs circulated to shareholders at Vedanta Resources' third annual general meeting, held in London last week, were worth a volume of stinging criticism.
They conclusively backed "dissident" shareholders' claims that the company has flagrantly violated several key orders imposed by committees of India's Supreme Court. Vedanta has failed to reduce vast waste piles at its Tuticorin copper smelter in Tamil Nadu (and indeed actually increased their height). It's illegally starting site clearance and construction for its aluminium smelter/power complex in Orissa. At its massively-oppposed Lanjiargh alumina refinery in the same state, it's positioning toxic "red mud" ponds right on the banks of the region's most important river. And its been employing contract labour in demeaning conditions, for more than a year, at a bauxite mine in the state of Chhattisgarh.
For the first time in its two and a half year history as a London-listed company, Anil Agarwal's 54%-owned outfit faced the ire of Indians at its annual meeting. Despite banning the press from attending (an act amost unprecedented for a major UK-listed public company) their outrage was registered by some of the British press.
Meanwhile, back in his country of birth, Agarwal is facing further accusations of corruption - not just with Orissa's chief minister, but also the central government's finance minister, P Chidambaram.
Location of the proposed Red Mud Pond and Ash Pond of 1 MTPA
Alumina Refinery near Lanjigarh Bauxite Deposit Kalahandi, Orissa
'Favouring' VAL: Government under fire
The New Indian Express
5th August 2006
BHUBANESWAR: The State Government on Friday maintained in the Assembly that the Supreme Court judgment on the Vedanta Alumina Limited's (VAL) project should be awaited even as the Opposition launched a scathing attack on Chief Minister Naveen Patnaik for allegedly 'showing undue favour' to the company.
Referring to the reports of the Central Empowered Committee (CEC) and the Wildlife Institute of India (WII), Opposition members demanded that the Chief Minister should resign over the issue.
The CEC observed that the State Government has shown undue favour to the company and WII warned that mining on the Niyamgiri hills would lead to environmental and ecological disaster, Leader of Opposition J B Patnaik said and demanded further discussion on the matter.
The issue cropped up through an Opposition-sponsored adjournment motion. Pressing for the demand of Chief Minister's resignation, Lalatendu Bidyadhar Mohapatra (Cong) alleged that Naveen laid the foundation stone for the project before the Centre gave its clearance. Alleging that the company to set up its plant at Lanjigarh felled thousands of trees, Mohapatra said the State Government took no action against it for violation of the Forest Act.
Arun Dey (OGP) created a flutter by referring to the book 'Vedanta's Millions' in which it has been mentioned that the company has distributed $2.5 million as donation to political parties. There were loud protests from the ruling parties when Dey alleged that the Chief Minister and BJD leaders were recipients of the company's donation. Dey claimed that the company has been blacklisted in many foreign countries.
Claiming that many top leaders across political parties have joined hands with the company's owner Anil Agarwal, the OGP leader alleged that Naveen is one of them. However, Finance Minister Prafulla Chandra Ghadei took exception to a remark reported to have been made by Dey on the Chief Minister during his speech and wanted it to be expunged. Naveen, who was not in the House, rushed in and dared Dey to prove his allegations? 'You take 20/30 years but prove it,' Naveen said.
Tara Prasad Bahinipati, Jaydeb Jena and Nalini Kanta Mohanty (all Cong) criticised the Government for entering into a deal with VAL, which is against the interest of the State and also questioned the Government's decision to provide 8000 acres land to the company for setting up a university. Nowhere in the world universities are set up on so much land, Mohanty said. BJD members Kalpataru Das and Atanu Sabyasachi, however, blamed the Congress for entering into an agreement with the company in 1997.
Defending the Government decision, Minister for Steel and Mines Padmanabha Behera countered Opposition claims that the tribals of the area do not want the plant to be set up at Lanjigarh. 'In fact, the tribals want the plant there,' he said. Behera defended the agreement reached between the VAL and OMC for mining of bauxite.
House on boil over Vedanta
4th August 2006
A united Opposition today turned the heat on the Naveen Patnaik government, accusing it of "selling away" Orissa's interest in the bauxite deal with Vedanta Alumina.
Arun Dey of the Orissa Gana Parishad alleged that the chief minister and other members of the NDA government had received "political donations" from the company, triggering angry protests from the treasury bench.
The OGP leader claimed that Vedanta had earmarked $2.6 million as payment for politicians.
Tempers ran high when Dey described a majority stake holder of the company as a "fraud" and a "friend of the chief minister" during a discussion on the proposed 1-million-tonne alumina refinery in Kalahandi district's Lanjigarh.
The chief minister, who was away in his chamber, rushed to the House to counter the allegation. "Let him prove it any time in 10, 20 or 30 years," he challenged.
The OGP leader clarified that he called Patnaik's "friend", and not the chief minister, a "fraud".
Referring to the findings of a committee appointed by the Supreme Court to assess the environmental impact of bauxite mining in the Niyamgiri hills, leader of Opposition and Congress leader J.B. Patnaik said the report "virtually indicted" the government by raising serious concerns about the bio-diversity of the area.
Accusing the government of showing undue favour to Vedanta, JB said: "Naveen had laid the foundation stone for the Vedanta refinery in 2004 with undue haste, without studying the environment impact and without obtaining environmental clearance from the Centre. "This proves the soft corner of the government towards Vedanta," he added.
Congress leaders L.B. Mohapatra, T.P. Bahinipati, Jaydev Jena and Nalinikanta Mohanty referred to the recent study of a two-member team from Dehra Dun's Wildlife Institute of India, which said the Vedanta projects would irreversibly alter the bio-diversity of the area.
Defending the projects, steel and mines minister Padmanabha Behera said the agreement signed with the company was in the best interests of the state. The bauxite mines would not be handed over to Vedanta and instead, the Orissa Mining Corporation would operate them, the minister said. He added that the OMC would get consideration money, statutory dues and dividend, apart from royalty. Behera said the latest report did not take into account the proposed wildlife protection measures in Lanjigarh.
Indian villagers pay a high price as commodity boom comes to rural Orissa
By Peter Popham, The Independent
4 August 2006
Villagers in the impoverished Indian state of Orissa, moved from their land to make way for a bauxite refinery, have been thrown a lifeline by India's Supreme Court, encouraging the country's environment movement.
The Lanjigarh refinery, controlled by one of Britain's richest men, the billionaire businessman Anil Agarwal, has swallowed more than 100 acres. An investigation by monitors for the Supreme Court found that villagers have been moved to a site on the fringe of a forest reserve, some of them against their will. They have no land to grow food or to graze their animals.
When Mr Agarwal, one of Britain's richest men, stood in a London conference room this week and told his shareholders of the fantastic bonanza their company, Vedanta, had earned in the past year, he did not allude to the controversy hanging over the Lanjigarh refinery. He also omitted the high social and ecological cost that could be paid for his company's success by some of the poorest people in India.
In Vedanta's new annual report, Mr Agarwal, 53, who began his career as a scrap metal dealer in Bombay, also harped on his firm's commitment to the well-being of the Earth. "Sustainable development," he writes in the report, "is at the very heart of our business strategy. We... recognise the potential impact uponthe environment."
But he did not explain that, while the Lanjigarh refinery is close to a rich source of high quality bauxite, on the peaks of the nearby Nyamgiri Hills, his firm's designs on these pristine peaks have aroused a storm of protest.
Mining in the hills is "on hold", as Vedanta explained to The Independent, and the Indian government has yet to permit it. But the company denies that it has ridden roughshod over villagers' rights to the detriment of the environment.
Anil Agarwal's story began 30 years ago in Bombay, where he set up in business collecting scrap aluminium and copper and reselling it to firms manufacturing wire and cable. He has been moving steadily up the metals industry chain eversince.
Mr Agarwal first came to the attention of the British media in 2000, when he threw his digital diary at a senior employee who had had the temerity to cross him, barking: "You have not seen my negative side. I will make sure you do not have a place on this planet." A London employment tribunal awarded the employee the record sum of £805,000 in damages.
But as the years passed, Mr Agarwal has grown bolder, not more circumspect. When a monitoring committee of India's Supreme Court visited a Vedanta-owned copper-smelting plant at Tuticorin in Tamil Nadu, southern India, in 2004, to inspect an expansion of the plant for which Vedanta claims it had full permission, it found a huge copper smelter, a copper refinery and several other units were close to completion, yet none had the government's approval.
An expert committee reporting to the Supreme Court said: "The company has expanded the plant without consent ... and without environmental clearance ...The quantities of hazardous wastes generated [by the expanded plant] would naturally be far in excess of those for which authorisation have been granted."
There are fears that the course of events could be similar at the Lanjigarh site in Orissa. In 2003, construction of an alumina refinery began on the site, to process bauxite ore mined at the peaks of the nearby Nyamgiri Hills. The hills are a protected forest area with a level of bio-diversity rare in South Asia, home to endangered wild animals including tigers and elephants.
But as well as providing habitat, the hills are a precious resource for the local people. The layer of bauxite on the summit acts as an aquifer, soaking up the heavy monsoon downpours and releasing them slowly throughout the year, feeding dozens of steams which provide pure water to the local villages.
Dr Sreedhar Ramamurty, a geologist formerly with India's Department of Atomic Energy, said: "My greatest concern is for the water sources, because the bauxite is a storehouse for water, like a great, thick layer of sponge."
Indian environmentalists claim that 660 hectares of prime forest land will have been destroyed, more than 90 per cent of the total reserve, and up to 100 forest streams could run dry.
In December 2004, two monitors were sent from the Supreme Court in Delhi to investigate. Their report found that while the Ministry of Environment and Forests had given clearance for the refinery, it had given no such clearance for mining in the hills.
The inhabitants of two tribal villages in the path of the refinery had been induced to move, and put in a relocation camp on the edge of the forest. The company said: "There has been no forcible eviction and no single complaint has ever been filed suggesting any kind of forcible eviction from the settlement. All the people at Lanjigarh who have been displaced have been offered full rehabilitation, and compensation for purchased land has been paid out at twice the government rate."
But Supreme Court monitors reported that some of those moved had complained. Some brought their grievances to the company's AGM this week. Vedanta told The Independent: "The new accommodation is close to plenty of grazing land where those who have animals are able to graze them."
But the monitors from the Supreme Court who visited the rehabilitation colony said they were "stunned to see that the colony is in close vicinity to reserved forests of the Nyamgiri Hills. No land has been given to villagers for growing crops."
Vedanta this week denied anything untoward at Lanjigarh. Vedanta "has no suspect designs" on the Niyamgiri hills, the company said, which "have been allotted to the Orissa Mining Corporation with which Vedanta has a joint venture". But Vedanta admitted work was "currently on hold" awaiting permits from the Indian government. The company said it has "neither alienated tribal land nor caused any damage to forests". Yet the court monitors reported: "Thousands of mature trees have been felled by the company in Nyamgiri forests, and it has already started digging the bauxite ore in the garb of test-mining". Vedanta denied it had started mining.
Vedanta's Orissa project faces hurdle
By Sandeep Mishra / TNN
4th August 2006
Bhubaneswar : The Vedanta group's plans to commission its alumina refinery at Lanjigarh, Kalahandi, has suffered a fresh jolt with the Wildlife Institute of India throwing a spanner into its efforts to get access to bauxite mines in Niyamgiri hills.
The Dehradun-based organization has, in a study undertaken at the behest of Forest Advisory Committee, Ministry of Environment and Forests, warned, "The threats posed by the proposed project to this important ecosystem will lead to irreversible changes in the ecological characteristics of the area."
The adverse report comes at a time when Vedanta Alumina Limited, a Sterlite group subsidiary, has almost completed construction work and is planning to commence trial production from September by procuring raw materials from outside the state, company sources said. Incidentally, the company, which has also planned a smelter unit at Jharsuguda, has been struggling with controversy ever since proposing mining in the eco-sensitive Niyamgiri area, with the matter being examined by the Supreme Court's central empowered committee. The Government of India agency, in its "studies on impact of proposed Lanjigarh bauxite mining on biodiversity", has pointed out various kinds of "environmental degradations" such as geomorphologic changes, landscape changes, loss of forests and loss of flora and fauna if mining activities are conducted in Niyamgiri hills.
"The mining plan (for Vedanta Alumina Limited's one MTPA refinery proposes excavation of 8 tons of ore and 17.9 tons of overburden. During the restoration process, the gap in material created by extraction of the bauxite ore will create a void for backfilling and restoring the original topographical level of the mining sites.
It is estimated in the mining plan that present topographic level after restoration will be lowered by 10 to 15 metre. This will bring changes in the geomorphology of the area and enhance several other consequences leading to soil erosion and impact on drainage and forest productivity," the 17-page report says. On the impact on wildlife habitats, the report states: "Bauxite mining in Niyamgiri plateau will destroy a specialized kind of wildlife habitat, dominated by grasslands and sparse tree communities. These sites are breeding habitat of many herbivores such as barking deer and four-honed antelopes."
According to the report, mining activities during night will induce disturbance due to illumination of the area and pose disturbance to wildlife species specifically the nocturnal animals. "This situation will eventually reduce elephant movement across Niyamgiri massif to Karlapat and Kothagarh wildlife sanctuaries and ultimately affect the population structure and thereby its genetic diversity," it observes.
Tribal activists carry Indian mining protest to London*
Marianne Barriaux, The Guardian
3rd August 2006
Vedanta Resources faced a wave of protest at yesterday's annual meeting as activists travelled to London from the Orissa region of India to challenge the mining group's chairman Anil Agarwal on his company's human and environmental rights record in the country. In a meeting described as "cooly cordial", Mr Agarwal and his chief executive Kuldip Kaura faced a barrage of questions from aggrieved shareholders and activists. Reporters were banned from attending.
The FTSE-100 company has faced criticism about its £400m project in the Lanjigarh area of Orissa, where it is developing an aluminium refinery and where it plans to build a bauxite mine.
Activists such as Bratindi Jena, who represents the Dongria Kond in Lanjigarh, one of India's most traditional tribes, say the local communities are being displaced as a result of the project - a move that will destroy their way of life. The project has been disrupted by clashes between local tribal people and security forces. Vedanta has established a big relocation programme, housing the tribes and giving them schooling and jobs. But Ms Jena said: "These communities are indigenous and if all of a sudden they are put in something we think is modern they cannot take it because it is not their way of life."
At the annual meeting, she asked Mr Agarwal why the tribal protests at Lanjigarh were not mentioned in the group's annual report, but she says he did not answer the question.
A spokesman for the company said: "As with all large developments, there are controversies, but the company has experienced a limited amount of protests which are not disrupting the operational environment of the company."
When challenged with the fact that tribal people were denied employment because of their lack of qualifications, Mr Agarwal said the company would try to lower qualifications required if it could.
"They were not able to give any answers," Ms Jena said. "I don't think they're going to do anything about it. I'm going to go back to India and share this experience with the local community. The questions were from them, not from me."
The Indian supreme court has condemned the Vedanta project. There is a decision pending about whether the state government and Vedanta have broken environmental laws through their activities in the area.
Mr Agarwal said the company had followed all rules and regulations. He added that Vedanta would accept any decision made by the court.
Vedanta Harmed Environment In India -Environment Group
By Jackie Range
Of DOW JONES NEWSWIRES,
2nd August 2006
LONDON Environmental campaigners Wednesday will raise allegations at miner Vedanta Resources PLC's (VED.LN) annual general meeting in London that the company harmed the environment and committed permitting violations at some of its Indian operations, they said.
The allegations relate to the company's closely watched Orissa aluminum and alumina and Tamil Nadu copper expansion projects, Roger Moody of Nostromo Research, a community consultancy and campaign group on mining, told Dow Jones Newswires.
When asked to respond to each allegation Wednesday before the meeting, Vedanta denied some of the claims and contested others. Successful delivery on the expansion projects is seen as a key test for Vedanta's growth plans, analysts said.
Activists Wednesday said they would show photographic evidence, which they said shows Vedanta is building the foundations of a power plant at Jharsuguda, Orissa, and conducting a land-clearance program, without approval from India's Ministry of Environment and Forests, Moody said. Vedanta said it has specific approval from the Ministry of Environment and Forests to clear land at Jharsuguda.
"No construction work" is taking place at the site, said a company spokesman.
Nostromo's Moody also alleged that Vedanta has constructed part of a conveyer belt and proceeded with the construction of an alumina refinery, which he alleged was deemed illegal.
Vedanta said its alumina refinery has all permissions required and that the alumina refinery conveyer belt isn't being built outside the plant or into the Nyamgiri hills.
India's Minister for Environment and Forests, A. Raja, wasn't immediately available to comment.
Nostromo's Moody also alleged that Vedanta hasn't conformed to conditions laid down by the Tamil Nadu Pollution Control Board, an Indian state agency, which had asked the company to reduce the size of its phospho-gypsum pile. Phospho-gypsum is a waste material from copper smelting.
The agency had ruled that the pile should be smaller than 9 meters, said Nostromo's Moody, but he alleged that it has grown as large as 25 meters over the last year.
A Vedanta spokesman wasn't immediately available to comment on the phospho-gypsum.
The company said it would not allow journalists to attend the annual general meeting Wednesday.
The Tamil Nadu Pollution Control Board couldn't immediately be reached for comment.
Chidambaram must quit, demand SP, AIADMK
Special Correspondent, The Hindu
3rd August 2006
NEW DELHI: The Rajya Sabha was abruptly adjourned on Wednesday as slogan-shouting members of the Samajwadi Party, the Telugu Desam Party and the All-India Anna Dravida Munnetra Kazhagam trooped into the well, demanding the resignation of Finance Minister P. Chidambaram over certain references made to him in a book on stocks scam.
Raising the issue during zero hour, Samajwadi Party and AIADMK members waved the copies of the book, demanding a CBI probe into the allegations. For the probe to be fair, Mr. Chidambaram should resign, they said. Much of what the agitated members said was lost in the din, but Deputy Chairman K. Rahman Khan said a notice had been received for a discussion.
"The notice has been sent to the Minister for his comments."
Not satisfied, the members trooped into the well, raising slogans leading to the adjournment till the beginning of the post-lunch session. An official spokesperson on Wednesday said Mr. Chidambaram would not respond to any matter sought to be raised during zero hour.
Reacting to the furore over references to Mr.Chidambaram in the book, the spokesperson said if the Finance Minister received a notice from the Honourable Chairman of the Rajya Sabha, then he would immediately respond to it.
FM resignation sought
EXPRESS NEWS SERVICE
New Delhi, Aug 2: The Samajwadi Party, backed by TDP and AIADMK, on Wednesday asked Finance Minister P. Chidambaram to step down until the completion of a CBI inquiry into his alleged association with the Vedanta Resources, which was said to be involved in financial irregularities.
Speaking after the Rajya Sabha reassembled at 2 p.m. following a brief adjournment over the issue during the zero hour, Samajwadi Party leader Amar Singh said that Chidambaram should uphold the Congress tradition set by his predecessor T. T. Krishnamachari who had resigned over the Mundhra affair in 1958, the first financial scam in independent India.
He noted that Chidambaram had earlier quit as Commerce Minister in the P. V. Narasimha Rao Government in 1993 over his alleged involvement in the scam-tainted Fairgrowth Financial Services, which was reportedly involved in the multicrore Harshad Mehta scam.
Amar Singh's demand was met with protests from the treasury bench, and he could proceed only after Rehman Khan, who was in the chair, clarified that the member had been permitted to speak.
Earlier, waving copies of the book "Vedanta's Billions" written by Rohit Poddar on the functioning of the Anil Agarwal owned Vedanta Resources and Sterlite Group (which has bought Balco after a controversial deal), the Samajwadi Party members said the book contained references to Chidambaram's links with Agarwal and demanded a discussion on the matter.
Drawing attention to the rule book, Minister of State for Parliamentary Affairs Suresh Pachouri rose to clarify that the matter could not be discussed under rule 38 (a), 124 and 158 under which notice has to be given to a member against whom the allegation was being made. "Prior intimation should be given to the individual or minister concerned," he said.
V. Narayanswamy and P.J. Kurien (Cong) urged the Chair to expunge Amar Singh's remarks. The Chairman said that any references to the book or any allegation made would be expunged.
Earlier, the House was adjourned during the zero hour when the members sought the resignation of Chidambaram on moral grounds.
Vedanta’s alumina deal intensifies duel in Orissa
Union minister Srikanta Jena wrote a letter to the chief minister alleging the deal would result in a loss of Rs 50,000 cr to the exchequer
DILIP BISOI, The Indian Express
31st July 2006
BHUBANESWAR: An interesting duel between the Naveen Patnaik government and former Union minister and Congress leader, Srikanta Jena, is going on over Vedanta Resources’ 1.4 million tonne alumina project in Kalahandi’s Lanjigarh. While Jena smells a stink in the deal, the BJD-BJP government asserts that the deal is as transparent as ever.
It was Anil Agarwal’s announcement of setting up a world class university, Vedanta University, in the state early this month that prompted Jena into action. At a press conference, he said the proposed university was a ploy to divert the attention of the people from the murky deal between Patnaik and Agarwal on the Lanjigarh refinery project.
Pitching for Patnaik in the battle, state steel and mines minister, Padmanabha Behera, issued an official release which said “the Congress always tries to divert the attention of the people of Orissa whenever the state government takes progressive steps for establishment of projects for the greater interest of the state.” The duel became bitter last week when Jena shot off a letter to Patnaik alleging that the deal would result in a loss of Rs 50,000 crore to the exchequer. Disapproving the government’s signing of the agreement with Vedanta Aluminium Ltd (VAL) unilaterally, Jena suggested that Orissa Mining Corporation (OMC) could have gone for the global tender route for exploitation of bauxite mines. He questioned the rate at which bauxite will be available to VAL for the Lanjigarh project.
Behera, a simple tribal leader from Phulbani district, showed his grit and slapped a reply. Reminding Jena that the deal with VAL (Sterlite Industries Ltd) was signed during the Congress regime in 1997, he questioned why the then JB Patnaik government did not opt for the global tender route to select a partner for OMC. “Our government has decided to keep the mines with OMC against the Congress government’s plan to transfer the entire mine to VAL”, he pointed out.
Countering Jena’s allegation that OMC, which is selling iron ore and chromite through tender route, is maintaining double standards when it comes to bauxite sale, Behera said the market dynamics of bauxite were quite different from iron ore and chromite. Nowhere in India do the alumina/aluninium industries purchase bauxite through the tendering process. Grant of bauxite mines is the normal practice in the country as in the case of Nalco in Orissa, Hindalco in Uttar Pradesh, and Balco in Chhattisgarh. “The bauxite raised by the OMC-VAL joint venture company shall be purchased by Vedanta by paying OMC an amount which will comprise raising cost, royalty payable to the government of Orissa, consideration money equivalent to royalty, and dividend on its 26% free equity, besides any other statutory dues”, he clarified.
As the duel rages, clearly, the last word on the deal is yet to come.