MAC/20: Mines and Communities

Sold down the river

Published by MAC on 2006-02-13


Sold down the river

by London Calling

13th February 2006

London Calling finds the British fourth estate in quite an abject state

A whale loses its way and flounders in the River Thames. Thousands of citizens turn out, urging it back to sea. The media has a right royal blow-out. London’s leading daily, the Evening Standard, splashes four pages on the mammal’s struggle and eventual demise. (That’s about as much as it would devote to an English World Cup victory over Brazil). So, was January’s news coverage really excessive? Isn't compassion for this icon of the oceans what sets us Brits a moral peg above those harpoon-crazy Japanese and Norwegians?

Ponder this, however: not a million miles away from the stranded leviathan were a posse of other endangered species, and hundreds of offended tribal people, whose own rivers and territory have been usurped by another alien beast. For almost three years, this malign homunculus has poached and encroached, in flagrant violation of the national law - and it’s British. Yet, has any UK journalist touched it with a pen or camera? Not a one – or hardly any one.

Medialens, a group monitoring the integrity of the UK press, recently described a typical UK journalist as one who “consistently traces a path around the issues that would land them in trouble with owners, parent companies, advertisers, potential future employers, and key news sources...Even normally honest and rational British journalists find fault with the American press, but not with the British press. Or they find fault with the right-wing but not the 'liberal' media. Or they find fault with the BBC but not their own newspaper.”

Take Robert Fisk who's widely recognised as one of the bravest and most objective of our reporters. He declares that his own newspaper, The Independent, is “.the British equivalent of what the Washington Post should be.” According to Fisk: “… people in Pakistan, India, Bangladesh, South Africa, the United States, Canada and many other places, are finding that a British journalist can write things they can't read elsewhere, but which must have considerable basis in truth because otherwise it wouldn't appear in a major British paper.”

Apart from being highly patronising, Fisk’s assertion just isn’t true.

Let’s confine our comments to mining (and for the moment leave aside the current, craven, pro-US British press condemnation of Iran).

Last year, The New York Times weighed-in strikingly against Freeport-Rio Tinto’s exploits in West Papua. Yet the latest British condemnation of Indonesian oppression in the territory doesn’t mention either company (and this was in The Independent). The Bangladeshi press has carried demands to halt London-based Asia Energy's vast Phulbari coal project - but not been a squeak from the British media. Close readers of this website will be familiar with several Indian reports implicating Tata Brothers in January’s Kalinganagar massacre. This massive Mumbai-based conglomerate also controls Tetley - literally a UK household word, as the bestselling brand of teabags. Tata might as well be filling samovars in Siberia for all the attention Fleet Street has paid this appalling event.

But these omissions seem mere pecadillos compared to the willful refusal of the “street of shame” (traditional synonym for Fleet Street) to take on Vedanta, the City’s newest mining enterprise. Ironically, one literal translation of this sanskrit name is “the end of knowledge”: so far as British print journals are concerned, basic intelligence gathering hasn’t even started.

Two years back, London Calling was the first news medium, outside of India, to trace the guile and deceit of India’s Sterlite Industries as it morphed itself into Vedanta Resources plc on the London Stock Exchange. Last month, this shady vehicle for the numerous plays of multi-millionaire Anil Agarwal and his family released its third quarter results. They were spectacular: Vedanta now seems headed for a listing on the elite Financial Times 100 index, and a doubling of consolidated earnings over the previous nine months.

Readers needing to refresh their minds about the company’s exploits can do so on this website (http://www.minesandcommunities.org/Company/company.htm#V). We have no reason to modify the damning appraisal of Vedanta, made by “Ravages through India” in August 2005 by a number of Indian and UK analysts and activists. If anything, the outlook is now worse. Agarwal and his fellow directors have dismally failed to refute virtually all the accusations made in this detailed report.

At the very least, you’d expect the UK press to reference these claims, since they cover “world class” mines and plants across four continents and in three countries formerly under British rule (India, Zambia and Australia).

Not a bit of it. No-one seemed to care when the Armenian government last November indicted Sterlite Gold for a caboosh of contractual, environmental, and health & safety violations. Some financial commentators took the board of HSBC to the cleaners last November, for appointing John Bond its executive chairman in violation of corporate good governance rules. Agarwal had done exactly the same thing earlier in the year, but escaped blot-free. (True, Kenneth Gooding mentioned it in passing in his Mining Journal column, last April: but no one else took it up).

No Guardian angel

In fact, the Vedanta reporting scandal - we defy anyone, after scrutinising the evidence to use a less damning description - dates back to February 2004. It was then that Roger Moody of Nostromo Research returned from a field trip to India where he had inspected two of Vedanta’s enterprises. He found that construction of the Lanjigarh alumina refinery in Orissa involved forcible destruction of two villages (one of which had been “cleared” in front of his eyes), while a putative bauxite mine nearby posed a massive threat to Khond villagers, elephants, tigers and other species. As for the Tuticorin copper smelter in Tamil Nadu, Moody declared that this was one of the most dangerous and polluting he'd ever come across.

Moody’s first port of call, back in London, was John Vidal, environment editor of The Guardian, whose readiness to take on UK mining companies stretches back many years. Vidal’s response on hearing the litany of Vedanta derelictions was immediate: “I’ll fly out there tomorrow!”

Of course, we didn’t expect him to do precisely that - and he didn’t. However, nor would we anticipate a virtual silence lasting a year, interrupted only by one emailed message from Mr. Vidal saying he’d passed the story on to the Guardian's Delhi correspondent, Randeep Ramesh who‘d failed to follow it up (something Ramesh later denied). When Moody was about to leave for a much deeper investigation of Vedanta’s operations in March 2005, John Vidal jumped again: why didn’t Moody himself do a story?

The commission was accepted. Along with Nityanand Jayaraman, one of India’s most experienced environmental investigators, Moody wrote an expose of Vedanta’s operations in Chhattisgarh, Tamil Nadu and Orissa, which was accepted by Vidal in May 2005. Over the following four months, and on three successive occasions, Vidal continued fudging: yes, it was a story that should be told but no, he couldn’t find space for it as yet.

In September, a committee of India’s Supreme Court published a damning report on Vedanta’s Orissa bauxite/alumina project. Soon afterwards Randeep Ramesh phoned Roger Moody from the Guardian’s Delhi office, saying he planned his own investigation. Since then, not a word of criticism has been directed against this most roguish of UK mining companies by the host country’s most respected “liberal” daily.

Silence too, both from Fisk’s Independent and the BBC. Although this “voice of free nations” did commission a short environmental slot on Vedanta from a UK filmmaker last year, she pulled it when the producer refused to have the company named on-air. The one minor exception has been the Financial Times, with partial criticisms of the Lanjigarh project, tucked away in a special aluminium supplement on November 2 2005. However, attempts to get the FT to highlight the issues further have met a wall of apparent indifference.(See below: “How the world's leading financial daily fell out of love with the truth - and into the arms of a liar).

A hidden lack of agenda

Medialens may have a valid point when it attributes the cowardice of UK editors to corporate pressure. London Calling remembers a disgraceful episode during the eighties, also centred on The Guardian. After a particularly fulsome period of slamming Rio Tinto, the newspaper's editor was threatened by the company with withdrawal of its advertising. For several years afterwards hardly anything critical appeared. Nonetheless, it’s surely stretching the point a column too far, to claim that (with the notable exception of Rupert Murdoch’s titles) UK editors are directly dictated to by the ultimate owners. In the case of their abject failure to expose Vedanta, editors rather seem to be following an unwritten set of rules:

If a culprit company sports a well known brand name, then it’s media fair game. If it’s recognisably British (not just registered here), all the better. Let it sell coffee, GM “foods”, cotton goods (or have the potentially corruptible ear of a government servant) and no self-respecting investigative reporter will ignore accusations of corporate malevolence. Should it be rattling the mighty chains of Greenpeace, WWF, or Oxfam, then journalists will fall over themselves to join the critical chorus.

However, if it’s just a mining company with a strange title, owned by a benign-seeming Indian gentleman, and ravaging a dimly perceived, far-off territory, then UK correspondents will always find other fish to fry.

One dying whale in the Thames is worth more than a thousand villagers thrust to the limits, or any number of quadrupeds and flighty creatures trembling before bulldozers in eastern India.


How the world's leading financial daily fell out of love with the truth - and into the arms of a liar

On October 19th 2005, the Financial Times published an article based on an interview between its mining correspondent, Rebecca Bream, and Vedanta Resources plc's executive chairman, Anil Agarwal (It was also published, the same day, by the Business Standard in India). The prompt for this story was Agarwal’s announcement of his intention to raise more than U$2 billion on the international finance market for a smelter and power plant in Orissa. The London-based marwari boasted he’d make Vedanta the biggest aluminium producer in the whole of India.

The item completely ignored the fact that – only a month before - the UK company had been condemned by the Indian Supreme Court's CEC, for constructing its Lanjigarh alumina refinery in Orissa, intended to feed the putative smelter. Vedanta had also mendaciously claimed to have obtained "necessary environmental approval for the [Nyamgiri] mine", earmarked to supply bauxite to the refinery. And It had also been indicted by a Chhattisgarh state committee for misappropriating more than 1,000 acres of government land, from which it had illegally topped 50,000 trees. Again, no mention of this salient fact.

In high dudgeon, eighteen individuals and representatives of several leading NGOS from India, the Netherlands, the UK and USA, fired off an Open Letter to the world's leading financial daily, pointing out its errors. The omissions were particularly culpable, said the authors, given Agarwal's transparent ploy to boost investor confidence in his company at this critical stage.

As the signatories pointed out:

"Potential investors, existing shareholders, and those concerned about India’s environment and the rights of its people, deserve to have objective information on the company’s activities and prospects, some of which we have tried to provide." And which the FT clearly had not.

The Open Letter was ignored by the paper for several days. But, on November 2nd, Ms Bream published an article in the FT's special supplement on aluminium. Entitled "Vedanta: Intent on shaking up the industry in India", the piece acknowledged that the company's "...aggressive growth strategy has meant it and its subsidiaries have often been the focus of... opposition." In particular, the Lanjigarh refinery site "... is surrounded by lush, forested hills, which environmental groups argue are a vital habitat for wildlife, including tigers. The area is also home to tribal – or adivasi – communities, whose traditional way of life is protected by Indian law."

Went on Ms Bream: "Vedanta has pushed ahead with the 1.4m tonnes-a-year alumina refinery despite fierce protests from local people and outside pressure groups, and the project is due to be in production in the second half of next year."

According to "Managers...the local community was won over after Vedanta resettled the 100 or so families displaced by the project in high quality housing and paid for various amenities, including a school, a doctor’s surgery and a community centre. Following concerns about the potential environmental damage, managers re-routed access roads to minimise the number of trees that had to be felled."

"But," added Rebecca Bream, "although the alumina refinery seems to have overcome opposition, Vedanta’s plans for a bauxite mine in the hills above the plant remain in doubt. The group has yet to gain final approval from the Ministry of Environment and Forests for the mine, although its has started building some of the infrastructure.. .. The group proposes removing the top section of the Nyamgiri hills, where the bauxite is of the best quality; this would destroy the hills’ biodiversity, say opponents. In September, a report by the Central Empowered Committee to India’s Supreme Court recommended that an alternative site should be found for the bauxite mine, and Vedanta is waiting for the Ministry’s decision. "

Apart from the palpable nonsense that the local community had been "won over" and that the refinery "seems to have overcome opposition," Ms Bream did break a few pieces of fresh ground: this was the first time that a major UK paper had even referred to the widespread revulsion at Vedanta's operations in Orissa. She was also decent enough to call Nostromo Research (which had signed on to the Open Letter and whose address was used as a necessary direct contact for the FT), to discuss the issues further. It was pointed out that key points in the Letter had still not been addressed, but the signatories agreed to make some minor updates in the light of her November 2nd article.

A few days later, this updated version went to the FT Letters Editor who'd earlier "seemed pretty keen" to publish it, according to Ms Bream. After another fortnight's delay, during which an FT lawyer looked the Letter over (he demanded the omission of just one word), it finally seemed ready to go.

But it didn't. On December 9th - more than a month after the Open Letter was first submitted, and with documentary proof of the CEC's unequivocal position now in her hands - Ms Bream said she'd write another article, after confronting Vedanta with the evidence provided. And yes, an article did appear; but it was only a brief news story.

A full-page article - claiming to show how "mining faces up to the cost of presenting a cleaner image to the world" - was published in the FT on January 17th 2006; the author was Rebecca Bream. Any expectation that she would expose the past decade of carefully-plotted corporate conflation between "sustainable mining" and truly sustainable community livelihoods, was dashed.

Not only was Vedanta - surely a prime example of dishonest self-presentation - never mentioned in this major piece; nor were salient arguments, vigorously offered and solidly backed, from numerous communities who've been blasted by recent industry policy and practice.(Only two weeks earlier, there had been the Kalinganagar massacre in Orissa - which the FT also ignored, until a brief mention of it, apropos of Sonia Gandhi's visit on January 11th).

Over the next two days the FT did publish two further items about Vedanta. They barely concealed delight that its third quarter results were now vindicating investor faith in this dodgiest of dodgy UK mining outfits; and that Vedanta was well on the way to becoming a coveted FT-100 company.

Of course the FT doesn't shit in its own stable - and certainly not on a feisty stallion who's now pawing the dust, desperate to lead the field. (Though thoroughbred Vedanta certainly ain't!)

But don't let anyone from the Financial Times (which says it backs readers right to reply) try leading us by the nose in future..


APPENDIX:

The "offending" Open Letter which never made it into the Financial Times:

Nostromo Minerals Research
41 Thornhill Square, London N1 1BE
United Kingdom
Tel: +44-207 700 6189

To: The Editor
Financial Times
London

November 3 2005

From Mr Roger Moody and Eighteen Others

Re: VEDANTA PLC

On October 19th you published an article (“Vedanta ready to invest $2bn in aluminium plant”), followed in your November 2 Aluminium Supplement by a further examination of some activities of UK mining company, Vedanta Resources plc (“Intent on shaking up the industry in India”).

The first article was based on an interview with Anil Agarwal, Vedanta plc’s executive chairman and 54% share-holder. It conveyed a strong impression that the company will shortly embark on construction of an aluminium smelter in the Indian state of Orissa, and do so without let or hindrance. In fact, the official Public Hearing into this project, scheduled for October 20 2005, was postponed without a new date fixed. This is because a 20 MW coal-fired power plant, integral to the project, was left out of the Environmental Impact Assessment and .because the smelter is directly linked to a refinery and putative bauxite mine in Orissa. Your correspondent,. Rebecca Bream, rightly says that the Nyamgiri mine has been condemned by the Central Empowered Committee (CEC) of India’s Supreme Court. However her statement that the refinery “seems to have overcome opposition” is incorrect.

On September 21 the CEC recommended an immediate cessation of work on the refinery, accusing Vedanta of falsifying vital information, destroying part of a protected forest, and commencing construction work without receiving legal clearance. The Supreme Court is expected to deliver an order on both the refinery and mine within the next two months. If it takes the CEC’s emphatic advice, Vedanta will effectively have no aluminium project in Orissa - at least in the foreseeable future. The Supreme Court of India has a record of making pro-environment judgments.

In its half yearly statement, published on October 13, Vedanta plc willfully misrepresented the current situation. It not only announced that construction of the refinery is "progressing on track" and " currently 60% complete", but that "the process of obtaining the necessary environmental approval for the mine will now move forward". The opposite is likely to be the case.

Your correspondent additionally referred to Vedanta opening a new copper smelter at Tuticorin earlier this year. In fact, the company has operated a smelter on this site since the late nineties. In April it doubled the plant’s capacity to 300,000 tonnes: an expansion which another committee of the Supreme Court (the Hazardous Wastes Monitoring Committee) has declared to be illegal.


As Ms Bream points out (November 2) yet a third expansion is now nearing completion - that of the Korba aluminium smelter operated by Vedanta’s subsidiary, Balco, in the state of Chhattisgarh. This too has been the subject of an indictment, first by a local government committee in February and, on October 20, by the CEC, which found that the company had “encroached 1000 acres of land in complete violation of the Forest (Conservation) Act, 1980” and cut down “about 50,000 trees.“

Vedanta is now trying to raise a substantial amount of new investment. Potential investors, existing shareholders, and those concerned about India’s environment and the rights of its people, deserve to have objective information on the company’s activities and prospects, some of which we have tried to provide here.

Yours etc. (in alphabetical order of first name):

Aman Namra, Delhi
Amit Srivastava, India Resource Center, USA
Andrew Whitmore, Concerned Shareholders of Vedanta plc, Nottingham UK
Ashish Fernandez, The Ecologist, India
Bidulata Huika, Orissa, India
Debaranjan Sarangi, PSSP, Orissa
Dr Felix Padel, social anthropologist, UK
Gerard Oonk, Director, India Committee Netherlands
Hemant Badgandi, Association for India’s Development (Tucson Chapter), USA
Kundan Kumar, India
Madhumitta Dutta, Corporate Accountability Desk, The Other Media, Chennai
Madhu Sarin, India
Manshi Asher, India
Nick Mole, London, UK
Prasad Boddupalli, India
Roger Moody, Director, Nostromo Minerals Research, London, UK
Samit Kumar Carr, India
Sidharth Naik, Convenor, Kalahandi Nagarik Sacheta Manch, Bhawanipatna, Orissa
Theo Bouma, Programme Director, Oxfam Novib, Netherlands


Sources: The stranded “London” Whale: all UK news media, 21-22/1/2006; London Evening Standard: 23/1/2006 ; Robert Fisk US interview: Justin Podur, 'Fisk: War is the total failure of the human spirit,' December 5, 2005; http://www.rabble.ca/rabble_interview.shtml?sh_itm=a37c84dbd62690c4c1abb1a89 ; Robert Fisk on The British Media: www.medialens.org, January 12 2006; New York Times on Freeport-Rio in West Papua: 28/12/2005, 29/12/2005; The Independent on West Papua: 8/1/2006; critique of Asia Energy plc: The Daily Star Bangladesh 26/9/2005; Vedanta’s rise over past nine months and US$2.1 billion smelter/power project in Orissa: Financial Times (Lex column) 19/1/2006; see also FT 20/1/2006; Agarwal’s failure to rebut accusations at Vedanta AGM: London Calling, 7/8/2005; Indictments of Sterlite Gold in Armenia: Mineweb 17/11/2005; controversy over HSBC’s executive chairmanship: Times-on-line 20/11/2005; Comment by Kenneth Gooding on Agarwal as executive chairman: Mining Journal 1/4/2005

[London Calling is published by Nostromo Research. Opinions expressed in this column are not necessarily shared by editors of the Mines and Communities website. Reproduction is welcomed, with full accreditation to Nostromo Research, London.]

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