MAC: Mines and Communities

Vedanta's Agarwal walks his talk - to little avail

Published by MAC on 2008-08-04

Indian tribe comes to London to attack mining of sacred hills

By Peter Popham

The Independent

1st August 2008

Plans to mine bauxite from sacred hills in the Indian state of Orissa have been angrily denounced at the annual general meeting of the UK company behind the scheme.

The founder and chairman of Vedanta, Anil Agarwal, struggled to explain a commitment to "sustainable development" in the teeth of testimony by village people who had flown to London from Orissa to describe how the company was destroying the environment even before the mining has started.

Vedanta Resources told shareholders of "another excellent year" in which the company earned record revenue for a sixth successive year, with revenues of $8.2bn, 26 per cent up on 2007. But the good news was drowned out by the determination of minority shareholders to force the company to confront the consequences of its adventure in Orissa's Nyamgiri Hills.

The Dongria Kondh, a tribe some 8,000-strong from the Indian state of Orissa worship the peak of the Nyamgiri hills as a god -- and with reason, as the thick layer of bauxite which crowns the hills serves as a huge sponge for the monsoon rains, releasing them steadily throughout the year and guaranteeing the fertility of the forests and crops.

Since 2002, the survival of the hills and of the tribe itself has been thrown into doubt by Vedanta's plans to mine the Nyamgiri Hills for bauxite. A protected forest area, it is home to endangered animals including tigers, leopards and elephants as well as hundreds of species of rare plants and trees.

The company has already built what Mr Agarwal called a "Rolls-Royce quality bauxite refinery" at the foot of the hills, destroying several tribal villages in the process, in anticipation of the arrival of the three million tons of bauxite the area is said to contain.

But despite the signing of a memorandum of understanding between Vedanta and the state government, the mining of the hills has yet to begin. That's because the land is a "Schedule V Area", protected under Section 18 of the Indian Constitution, which means it cannot be transferred to private companies without the consent of tribal people.

Monitors sent by the Indian Supreme Court in Delhi submitted a damning report, leading to a long-running legal case.

Last year the three-man bench ruled that Vedanta could not mine the hills -- but allowed its Indian subsidiary Sterlite to reapply on condition that it plough five per cent of its profits into conservation and tribal development. The Indian court's final verdict on the new application is expected later this week.

Yesterday, in the dignified surroundings of the Institute of Civil Engineers in Westminster, the company strove to underline its commitment to social responsibility and sustainability as well as its success in achieving "industry-leading levels of growth". The bottom line was that India possessed abundant bauxite, the world is crying out for aluminium, and Mr Agarwal is uniquely well placed to supply it.

The pressure resulted in Mr Agarwal making a commitment, for the first time, to comply with international law. "I can only promise that we will only start work if we have complete permission of the court and the people," he told shareholders. The mining of Nyamgiri could be carried out "with a partnership approach". Indian observers at the meeting who claimed to be neutral said the mining of Nyamgiri should not be seen as a win-lose situation from which the tribal people would emerge defeated. Mr Agarwal said: "We have not touched the hill, it is intact."

"What do you mean you have not touched the hill?" retorted a member of the Dongria Kondhs. "You have dragged it to court..."

In fact the identity of the winners and losers in the Nyamgiri Hills is already clear. The Lanjigarh refinery produces up to three million tons of caustic soda waste, so-called "red mud", every year, and people living near the refinery complain that the pollution damages crop yields, kills livestock and causes pollution related illnesses.

If and when the mining gets under way, the damage will be proportionately worse. Vedanta denies that its operations cause damaging pollution and insists that it complies with all relevant regulations.

A report by the Wildlife Institute of India in 2005 predicted that the mining of Nyamgiri would produce massive deforestation, toxic contamination of the water table and would endanger the fresh water source for hundreds of thousands of people in Orissa. And the Dongria Kondhs will be scattered across the earth.

India's green battles

The battle over the Niyamgiri hills is just the latest flashpoint as India struggles to juggle the twin aspirations of economic development and environmental protection.

Of all India's environmental battles none is more famous than the Narmada dam. Opposition to the plan to build more than 30 hydro-electric dams in the state of Madhya Pradesh has been escalating since the 1980s and includes the novelist Arundhati Roy.

The Narmada Bachao Andolan (Save the Narmada Movement) warns that the project would displace more than 200,000 people and damage the fragile ecology of the region.

There are countless smaller protests. In the state of Orissa, activists have recently tried to halt the construction of a steel plant being built by the industrial giant Tata at Dhamra, close to a beach that is used by the threatened Olive Ridley turtles for breeding.

In Sikkim, environmental activists have gone on hunger strike attempting to stop the construction of dams along the course of the Teesta river.

And students in Arunachal Pradesh are protesting against the building ofa dam that will block the river Dibang, which is one of main tributaries of the Brahmaputra.

Lives for aluminium anyone?

KumKum Dasgupta, Hindustan Times

31st July 2008

It ain't over till it's over. This seems to be the guiding spirit of the Dongria Kondhs who are fighting hard to save their 'sacred' Niyamgiri mountains from the UK-based mining giant, Vedanta Resources Plc.

While a four-year-old case for mining the bauxite-rich mountain is in its last stage in the Supreme Court, the Dongria Kondhs, with the help of civil society groups, have taken the fight right to Vedanta's doorstep. Last year, ActionAid, an NGO, had protested against the company's plans at its annual general meeting.

This year, it managed something more dramatic: on Thursday, it put in an application to the London authorities requesting the "demolition" of the city landmark, St Paul's Cathedral. The point? Just as Londoners won't allow the demolition of St Paul's to make a quick buck, the Kondhs too won't allow their treasured mountain and forests to be destroyed.

Vedanta's subsidiary, Sterlite, is currently awaiting permission from the Supreme Court to mine bauxite, the raw material for aluminium, from the Niyamgiri mountain.

But what has surprised many is what went on inside the court room on July 25, when the SC reserved its final judgement. The discussion was mainly around "financial profit and loss", with Vedanta, the Orissa Mining Corporation, the Ministry of Environment and Forests, and the Orissa government all arguing in one voice for the project. While all this is important in the overall perspective of the case, there were a few equally, if not more, contentious issues that failed to elicit any clarification from the judges.

* No clarification was given on the Supreme Court-mandated Central Empowered Committee's 2007 report that stated that mining the Niyamgiris would lead to deforestation, destruction of ecosystems and dry up water sources.

* An Orissa Pollution Control Board report had observed that already there is clear indication of groundwater contamination thanks to the seepage from waste ponds. This, it added, is expected to further deteriorate when the plant goes into full production. The capacity of the existing Vedanta plant has now been increased four-fold even as the company fights a legal battle. When the pollution report says that the existing plant is polluting, why this tearing hurry to scale up? If mining is permitted here, according to lawyers fighting against mining operations, two Constitutional guarantees will be overturned: the right to life and human dignity (Article 21), and the right to religious practices and beliefs (Article 25).

* A strange link is being drawn between education and mining. On July 29, Vedanta's lawyer painted a picture of a welfare-oriented education project rather than a large-scale mining operation. He stated that India needs this project because it will lead to the education of the people of Niyamgiri. Education is a fundamental human right and the government is duty-bound to deliver it. Is loosing your home, land, livelihood and religion the price of education? Since when did education get caught in an either/or barter?

* Experts point out that bauxite is a strategic reserve and this project makes no economic sense for India. Existing 'brown field' (already mined) bauxite deposits are well able to meet India's projected aluminium needs.

In the end, Vedanta's mining project in the Niyamgiris and the questionable decision-making process will only give development a rotten name.

St Paul's demolished

In Focus

31st July 2008

The destruction of St Paul's: A stark indication of overdevelopment in London or a charity's publicity stunt?

Fortunately for residents of the capital and overseas tourists it is the latter.

The computer-generated image of the iconic cathedral being destroyed has been released by ActionAid to highlight the plight of the Kondh tribe in eastern India.

The international development charity has lodged an official request to destroy St Paul's Cathedral to mine for minerals and process its roof into drinks cans and foil for chocolate bars.

According to ActionAid the request is comparable to that of London-based Vedanta Resources' wish to construct a strip mine to extract Bauxite from the Niyamgiri sacred mountain in Orissa.

The mountain is worshipped as the home of Niyam Raja, the god of the 8,000-strong tribe.

As Vedanta prepares to hold its AGM at the Institution of Civil Engineers on Thursday, ActionAid is calling on shareholders to block the plans.

"This is a David and Goliath struggle. We've applied to knock down St Paul's to raise awareness of Vedanta's outrageous plan to destroy the Kondh's spiritual home," said campaign Brendan O'Donnell.

ActionAid claims the mine plans will lead to massive deforestation and the destruction of protected local ecosystems and key water sources.

"Just as Londoners wouldn't tolerate the demolition of their cathedral to make a quick buck, so the Kondh people won't allow their treasured mountain and forests to be destroyed," Mr O'Donnell continued.

"Vedanta's investors should be appalled that their money is backing the desecration of a sacred Indian site and the destruction of forests on which people rely for food, clean water and a living."

Shareholders hold UK company to account for multiple violations

London Mining Network


30th July 2008

"Vedanta's violations against the environment and human rights ... are recurrent at all the subsidiaries subject to investigation and have taken place over many years, indicating a pattern in the company's practices where [they] are accepted and make up an established part of its business activities."

Norwegian government's Pension Fund Council on Ethics, report published November 2007


In November 2007 the Norwegian government's Pension Fund disinvested all its shares in Vedanta Resources, acting on advice from its independent Council on Ethics which declared:

‘"The allegations levelled at [Vedanta] regarding environmental damage and complicity in human rights violations, including abuse and forced eviction of tribal peoples, are well founded. The company seems to be lacking the interest and will to do anything about the severe and lasting damage that its activities inflict on people and the environment."

With a current share capital of just under £5 billion the London-listed company is ruled by its London-based founder and 54% shareholder, Anil Agarwal. Vedanta is India and Zambia's biggest copper producer, one of the world's largest producers of lead and zinc; and last year bought up 51% of Sesa Goa, India's largest exporter of iron ore.

Although the international media has centred its attention on Vedanta's bid to mine the Nyamgiri hills in Orissa, the company has been accused of numerous abuses elsewhere.

Activist shareholders will demand that chairman Anil Agarwal answer these accusations at Vedanta's Annual General Meeting, to be held at The Institution of Civil Engineers, 1 Great George Street, Westminster, London SW1, at 3pm on July 31 2008.

Contamination and contempt • Vedanta last year applied for permission for a six fold expansion of its Lanjigarh alumina refinery in Orissa, India. However, in November 2007, the Orissa State Pollution Control Board found the plant's waste water to have contaminated the Vansadhara river - the largest in the area - as well as groundwater vital to neighbouring villages. Two months later, the company had done little to address the problem and had "not complied (with) the...directions issued by the Board." (1) Nor had the situation been ameliorated by March this year.

• The Orissa Pollution Control Board also reported that the plant's red-mud (toxic caustic soda) pond had not been constructed as per design specifications, producing "alarming seepage...expected to further deteriorate", when the plant goes into full production. Although it does not have permission for any extension, the company is also constructing a second red-mud pond, for which it wilfully felled a major stand of old-growth trees (1).

Callousness and Coercion

• Vedanta's aluminium subsidiary, BALCO also wants to quadruple its bauxite mining capacity in Chhattisgarh state (no doubt to meet a shortfall, should India's Supreme Court reject Vedanta's attempt to exploit the Nyamgiri hills). But, in October 1007, the Indian Ministry of Environment and Forest (MoEF) hammered BALCO for its "deplorably callous and casual attitude" to an environmental appraisal of such expansion, and banned the company from carrying out its plans (2)

• In January 2007, Delhi's renowned V V Giri National Labour Institute, affiliated to India's Labour ministry, concluded that BALCO had flouted most of the labour-related provisions in a shareholders agreement between the government and BALCO had been flouted since the company took over this public enterprise in 2001. Employees had been "coerced" into opting for voluntary retirement scheme (VRS); when staff at the New Delhi office protested against their transfer to Chhattisgarh, their salaries and allowances were stopped and remained unpaid for more than seven months (3).

• At the end of 2007, the Indian government confirmed that BALCO had failed to follow correct practice when offering compensation to its permanent employees under the VRS. Moreover, said Labour Minister Oscar Fernandes, the company had then resorted to contract labour. BALCO had further failed in its obligations to provide power and regular water supply to areas adjoining its huge smelter complex in Chhattisgarh (4)

• Further indictments of BALCO's labour practices in Chhattisgarh were published by an Indian researcher in June 2007. He recorded that few, if any, workers received benefits mandated under the company's own employment rules. Workers had not received housing, pregnant women workers had not been given medical and delivery payments; children had not enjoyed educational facilities to which they were entitled. (5)

Gross negligence

• Following the burst of a waste pipeline in November 2006, the Environmental Council of Zambia (ECZ) found Vedanta guilty of "significantly pollut[ing]" several major water sources "causing serious effects on human life and the environment" through the operations of its KCM subsidiary in Zambia's Copperbelt. Although Vedanta dismissed the disaster as "an accident", an official ECZ inquiry found the company to be "grossly negligent" and recommended prosecution. In the 18 months since, Vedanta has adopted some remediation measures, but sulphur dioxide pollution from its copper smelters continues to be well above the permissible limit. (6)

• In October 2007, three UK development charities, backed by three Zambian Trade Union organisations, examined working conditions at KCM. Although acknowledging that conditions for employed workers were better than at some other mining companies in the region, they described KCM's treatment of sub-contracted workers as 'draconian'; some employees claimed to be paid as little as £37 per month - against the minimum of £151 which an average Zambian family needs to meet its basic needs (7).


1) "Orissa pollution board has found that the company's waste water has contaminated the Vanshadhara river as well as local groundwater", Padmaparna Ghosh, Livemint (Wall Street Journal), Delhi, 19 April 2008 . Inspection of the second red mud pond at the Lanjigarh refinery was performed by two UK researchers in March 2008

2) "Govt rejects Balco expansion plans Environment & forests ministry calls company deplorably callous in responding to concerns; Balco plans to reapply", Padmaparna Ghosh, Livemint, Delhi, 31 December 2007

3) "Balco staff coerced into VRS" Times of India, 25 January 2007

4) Balco resorts to Contract Labour" Press Trust of India, 5 December 2007 (New Delhi)

5) Neeraj Agarwal: "How Green was my mountain" in "Caterpillar and the Mahua Flower", PANOS South Asia, Delhi, June 2007, pps 103-113]

6) "Undermining development? Copper mining in Zambia", ACTSA, Christian Aid, SCIAF, London and Glasgow, October 2007, pps 13-14 7) "Undermining Development?" ibid, page 17

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