Stealing Vedanta's limelight: a report of the 2009 AGMPublished by MAC on 2009-09-01
It's been thirty years since "dissident" shareholders first bought token shares, then piled into the annual general meeting of a mining company, to take its board to task.
Some campaigners have begun to doubt the effectiveness of this "annual pilgramage."
But, few who participated in last month's Vedanta Resources AGM seemed to doubt that the opposition stole the limelight.
- Even if, at the end of it all, executive chairman Anil Agarwal - with the majority of the company's stock under his control - was bound to win.
Technically, that is.
Concerns raised at the Vedanta plc AGM, Monday 27 July 2009
London Mining Network
24 August 2009
The following is a summarised version of notes taken at Vedanta's annual shareholders' meeting by a member of London Mining Network. It is intended only as a guide to what happened at the meeting, and should not be considered a verbatim record. Questions and responses in this summary are grouped thematically and are not recorded in chronological order.
This summary does not attempt to convey the atmosphere of the meeting, which was extremely lively. Many of the Board's comments were greeted with derisive or incredulous laughter or groans. There was much heckling and a number of well-informed interruptions from the floor. There were loud complaints when it was clear that the Chair was dodging a question. There was applause for criticisms of the company's behaviour. At one point, members of the Board were themselves talking over one another as they attempted to defend their record.
Sitaram Kulisika, a representative of Dongria Kondh communities opposed to Vedanta's plan to mine in the Niyamgiri Hills, said (through an interpreter): "Last year in this meeting you promised that you would not mine Niyamgiri without permission of the Kondh community there, the indigenous people living there. And my people, in thousands, they have sent me to tell you that we are not going to leave Niyamgiri at any cost and we want to continue in that area, living in Niyamgiri. And I appeal to all of you to support us in our struggle and help us to protect our living god Niyamgiri and our community that has been living in their homeland for generations. Thank you."
The company gave no response (after having responded to an earlier more general question on the issue of the protest outside the building).
Bianca Jagger said that she had read the commitment that the company makes to sustainable development. She said she was attending the AGM because she is concerned for the rights and indeed survival, of the Dongria Kondh people. She was concerned about the environmental impact of the proposed mine. She noted that the Central Empowered Committee of the Indian Supreme Court had said that mining in a sensitive forest area should not be allowed. She said that the company must understand the importance of perennial water sources. Removing the bauxite from where the water is collected will have a massive effect on the availability of water for drinking and irrigation. Niyamgiri is a pristine ecosystem with extraordinary biodiversity. Why would the company go ahead with a mine in the Niyamgiri Hills and destroy a pristine forest? With challenges to the environment globally, including climate change, would the company commit not to mine there?
Company Chairman Anil Agarwal said that the project would bring benefits to the area, including employment, and that mining had not yet begun and could not begin until the relevant permissions had been granted. He said that the company believed in the Government of India and challenged critics to accept Indian sovereignty. He said that India had experienced double-digit economic growth, and asserted that such activities were required as economic growth must continue.
Stephen Corry, Director General of Survival International, asked why the company had not responded to the complaint which Survival had brought against it to the OECD (Organisation for Economic Co-operation and Development). For the Board, Naresh Chandra suggested that Mr Corry wanted Orissa to be administered from the UK. He said that the best legal brains in India had made the arguments for and against the project and that the project had an Environmental Impact Assessment. He said that one of the people who had evaluated it was a Nobel prize winner. He said that the project would bring jobs and electricity, that the area was very backward and that the people are poor. The Government of India had taken up the matter with the OECD (after discussion with the company). It was a matter for the Indian Government, not for a foreign body.
Mining researcher Roger Moody pointed out that Vedanta is a British registered company and that Mr Chandra was deliberately confusing the issue. The company has a Board in Britain and is regulated by the British Financial Services Authority. Mr Chandra answered that the project was subject to environmental clearance from the Indian authorities, not the British.
Agrotosh Mookerjee, an actuary, said that the financially quantifiable costs of the deforestation which the project would cause are far greater than the economic benefits mentioned. He also called on the company to comment on the recent criticisms of the project by Amnesty International and the decisions by the Norwegain Government's Sovereign Pension Fund and the Martin Currie Scottish Trust Fund to withdraw investments from the company because of human rights concerns.
The company responded that it is following all the rules. Some people like the company, some do not. Those who did not were welcome to disinvest. The company was not aware of an Amnesty report and demanded that Mr Mookerjee quote a source. The company would do nothing unless presented with facts.
Peter Frankental of Amnesty International said that corporate best practice involves conducting a Human Rights Impact Assessment. To date, the company has not conducted such an assessment either of its Lanjigarh refinery or its proposed mine on Niyamgiri. The EIA made no mention of human rights. How could the company know that the projects would have no adverse impacts on human rights for the entire life cycle of each project?
For the Board, Mahendra Medha responded that the company's Sustainability Report was very people-focussed. He said that human rights are central to the Indian constitution, that any human rights concerns should be taken up with the National Human Rights Commission in India, and that the company would consider the matter fully if consulted further.
Samarendra Das said that in the last five years a number of the company's opponents had been killed, including Sukru Majhi in 2005. Names of those murdered should be made public. The company said that it could not answer questions on murders. Samarendra pointed out that there had been a protest of 300 people against the company three days before the AGM and that earlier in the year up to 10,000 people had formed a human chain to protest against the company's operations.
Other speakers urged that the company not mine in the Niyamgiri Hills without the permission of local people. The company chairman's response was always that the company had not started mining, that there had been public hearings and would be more of them, and only after those would mining start. They insisted they followed Indian laws.
Film-maker Simon Chambers said that he had seen children loading lorries with bauxite by hand at other operations of the company. Three weeks before the AGM he had seen fly ash dumped in the jungle near the Lanjigarh refinery. He had seen houses and crops covered in white dust from the refinery. None of this was mentioned in the company's sustainability report. Anil Agarwal said that this was new to him. Simon pointed out that he had told him about the child labour at the AGM three years ago and that Mr Agarwal had promised to look into the matter after being shown photographs, but had not done so. Anil Agarwal said that dumping of fly ash was not company policy and that he would look into it. Naresh Chandra said that any company employee found responsible would lose their job.
Felix Padel said that there had been numerous complaints against the company by the Orissa State Pollution Control Board (OSPCB) for violations of the law by the company's Lanjigarh refinery, and at its aluminium smelter construction site in the state. He said that many of the company's critics at the AGM had the highest regard for Indian law but that implementation could be poor. He said he was shocked that the company was denying that there was forest at the top of the mountain which it wished to mine, and that even a Supreme Court judge had denied that the Dongria Kondh had any part in the matter, when it was clear that the Dongria Kondh hold the mountain sacred and protect its forest by not cutting trees there. The voice of the Dongria Kondh was not being heard.
Anil Agarwal replied that he was very offended that the Chief Justice of India was being criticised. He implied that the criticism was racist. He said that the OSPCB had inspected the operations at Niyamgiri and given clearance in May. This point was contested.
In response to a representative of Action Aid, Anil Agarwal said that the Government of India had asked the company to devote 5% of annual profits to benefit local people.
One shareholder noted that the company had illegally built a road in the protected forest. Anil Agarwal suggested that a complaint against the company could be lodged in Indian law.
Two shareholders claiming to be from the region stated that there used to be problems in the area but Vedanta had brought hope by bringing development such as medical care, education and the promise of jobs.
Dr Sreedhar Ramamurthy explained that the company's operations in Goa had caused serious flooding in villages near the company's mine wastes. He passed around photographs showing the damage done and asked what remediation the company had undertaken. Would there be continuity of management and what commitments would the company make regarding the impacts of its mine?
Anil Agarwal said that he did not know about the flooding. He promised to investigate. He said that India had large reserves of bauxites and was only mining 5 - 10% of it. He said that Vedanta was a FTSE company, that it would emulate international best practice and put the best people on the job.
Dr Ramamurthy said that it was very sad that the Chairman of the company did not know about the flood that had affected the villages in Goa and that it caused him pain that the company management was so ill-informed about the impacts of its operations.
Another shareholder pointed out that the Indian Supreme Court's Expert Advisory Committee (EAC) had found that among the 260 or so families displaced by the company's Bodai-Daldali project, 189 families had not been resettled. Families without clear legal title had not been compensated, even though the sums of money involved are tiny compared to the company's resources. The EAC had ruled that the project should not be expanded until these matters were resolved. Roger Moody, directly citing the EAC's June 2009 final report, added that expansion should in any case not happen, that he had raised the matter several times at company AGMs and that he wanted a commitment that the company would not expand its Bodai-Daldali operations.
Mahendra Medha replied that this showed that the Indian regulatory system does its job and that the company's critics should trust it. The company would not mine without permission (which was not being given here), but it was important to mine to bring prosperity to India's backward adivasis.
Roger Moody pointed out that the company had mined without permission in the Kolli Hills in Tamil Nadu. This was why the company had had to close the mine. Mahendra Mehta responded that the company closed the mine because it did not need it, and that it was seeking permission to reopen it. Roger Moody asked why the company was seeking permission to reopen a mine that it did not need. It was clear that the company had had to close it because it was mining without permission.
Simon Chase of ACTSA (Action for Southern Africa) pointed out that the company had boasted of cost savings at KCM in Zambia. He said that the company had been making wholesale job cuts and was not protecting the livelihoods of sacked workers. At the same time, the company was saying that it hoped to develop another mine at Lyuanshya and was protecting workers and communities. Is this a ploy to get the Government to renege on its policy of increasing corporate taxes?
Anil Agarwal claimed that the company was doing professional work there, increasing production and reducing costs through new technology as well as supporting education projects in local villages. He said that Lyuanshya had now been bought by other companies.
Independence of the Directors
Andy Whitmore of Indigenous Peoples' Links pointed out that the company, though listed on the London Stock Exchange, was in fact a family run company. What would the Board do to ensure that it is independent?
Naresh Chandra stated that there was nothing wrong with family run companies, and that people fixated on Mr Agarwal, whereas no-one complained about, for instance, Bill Gates. This led to further arguments over the company's claims to work to the highest standards, when even the company's own report on corporate governance noted only some of the potential conflicts of interest.