Church of England sells its shares in Vedanta Resources over human rights concernsPublished by MAC on 2010-02-07
Source: The Independent, Ekklesia (2010-02-05)
Comissioners say UK company isn't likely to change its ways
The Church of England (Anglican church) has finally thrown UK's Vedanta Resources out of its investment portfolio after several months "engaging" with the company in a vain attempt to make it more "ethical".
Although the decision has been welcomed by many Christians, the theological "thinktank" Ekklesia points out that the Church of England (CoE) still maintains an estimated £62 million investment in BHP Billiton, Anglo American, and Rio Tinto.
Norway's Council on Ethics successfully persuaded the country's own huge Pension Fund to disinvest from Vedanta more than two years ago. See: http://www.minesandcommunities.org/article.php?a=8260
The Norwegian Fund also shed its shares in Rio Tinto in 2009 on ethical grounds in 2008. See: http://www.minesandcommunities.org/article.php?a=8809
C of E sells shares in Vedanta after pressure from campaigners
By staff writers
5 February 2010
The Church of England has disinvested from the controversial mining company, Vedanta Resources, after sustained pressure from campaigners, including many Christian groups.
The Church Commissioners and the Church of England Pensions Board announced today (5 February) that they have sold their shares in the mining company on the advice of the Church's Ethical Investment Advisory Group (EIAG).
As a result, none of the three national investing bodies of the Church of England now hold shares in the company.
The thinktank Ekklesia, amongst others, had highlighted over the last three years how Vedanta has been involved in many unethical activities.
This included Vedanta's bid for mining rights in the Indian state of Orissa in 2007 which faced mounting opposition from thousands of Dongaria Kandha tribal people who feared the company's plans would damage the fragile ecosystem of the Niyamgiri mountain forest, on which they depend for their livelihoods. They were also reportedly involved in ‘short changing' Zambia with royalty fees of just 0.6 per cent instead of the 5 to 10 per cent industry average in developing countries.
Most recently there were allegations surrounding their involvement in the supply of materials to India's nuclear missile programme.
Survival International pointed out today that the Church is not the first organisation to disinvest from Vedanta on ethical grounds. In 2007 the Norwegian government sold its US$13m stake, saying ‘there is little reason to believe that the company's unacceptable practice will change in the future."
Martin Currie Investments sold their £2.3 million stake last year, and BP's pension fund reduced its holdings in Vedanta due to ‘concerns about the way the company operates.'
The EIAG advised disinvestment because its engagement with the company had produced no substantive results and the EIAG believed that it would be inconsistent with the Church investing bodies' joint ethical investment policy to remain invested given the EIAG's concerns about the company's approach to relations with the communities where it operates.
It said that allegations about Vedanta's alumina refinery in Lanjigarh, Orissa, and planned bauxite mine in the nearby Niyamgiri hills only came to the EIAG's attention in June 2009. The EIAG said it had been examining the issues carefully since then and has discussed them in a process of engagement with the company. The EIAG Secretary paid a visit to India in November 2009 to see the refinery and mine site at first hand.
The EIAG Chairman, John Reynolds, said: "I am a passionate advocate for engagement with companies when we have ethical concerns. We have an excellent track record of getting our concerns heard and acted upon by the companies in which the Church investing bodies hold shares.
"We are grateful to Vedanta's senior management for making themselves available to meet us on a number of occasions. However, after six months of engagement, we are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities that we expect of companies in whom the Church investing bodies hold shares.
"In these circumstances the Ethical Investment Advisory Group advised that it would be inconsistent with the Church investing bodies' joint ethical investment policy for the investing bodies to remain invested."
The EIAG understands that the Indian government is still considering whether to give final approval for the mine project.
John Reynolds stressed: "We respect the Indian democratic system. Our concern is that a company registered and listed in the UK should conform to the established environmental, social and governance norms expected in the London market - or at least reassure its shareholders that it is committed to the journey."
The EIAG said it will maintain contact with Vedanta. John Reynolds said:
"We will be pleased to review our recommendation to the Church investing bodies if the company addresses the concerns we have raised."
The director of Survival International, Stephen Corry said: "The Church's unprecedented and very welcome decision sends a strong signal to companies that trample on tribal peoples' rights: we will not bankroll your abuses. Anybody that has shares in Vedanta should sell them today if they care about human rights."
Vedanta was just one of a number of investments in mining companies which the Church of England still holds.
Campaigners point out that mining is one of the most polluting industries in the world. It has a disproportionately negative impact on marine-dependent and land-based communities, especially indigenous peoples, and is frequently associated with forced evictions, militarisation, conflict and human rights abuses including extra-judicial killings.
Both the Church of England and the Methodist Church hold shares in Anglo American, BHP Billiton and Rio Tinto, despite the fact that the Catholic aid agency CAFOD, War on Want, Anglican bishops and the Catholic Bishops' Conference of the Philippines, amongst others, have previously condemned the companies for their actions. The combined Church of England shareholding in these three companies was valued at £62 million in the last annual report of the Church Commissioners.
BHP Billiton in particular has faced allegations of human rights abuses and widespread environmental destruction. Campaigners (The London Mining Network) recently published an ‘alternative report' into its activities.
It outlined the negative impact of many of the company's operations - in Australia, West Papua, Papua New Guinea, the Philippines, South Africa, Canada, Colombia and Chile.
The report involved the work of organisations from many countries working with directly impacted communities, including church groups. It catalogued abuses of human rights, particularly of affected communities, issues of worker health and safety, livelihood and food security, and environmental problems. It also raises issues around climate change and BHP Billiton's commitment to the increased extraction and promotion of both coal and uranium for power production.
Jonathan Bartley co-director of Ekklesia which last year produced a report examining the ethics of the Church's investments said: "This is welcome news that after several years of campaigning, the Church of England has finally realised that the activities of Vedanta are incompatible with its ethical stance on a number of issues.
"But questions must now be asked about the other mining companies in which the Church also has substantial shareholdings. At a time when the Church is seeking to 'green' its churches and campaign against climate change, not to mention human rights abuses, there is a clear conflict if it is seeking to make money from companies involved in environmental destruction and the abuse of vulnerable people."
Church of England sells its shares in Vedanta Resources over human rights concerns
By Jerome Taylor, Religious Affairs Correspondent
5 February 2010
The Church of England announced this morning that it has sold all its shares in the international mining company Vedanta Resources because of concerns over the corporation's human rights record.
Campaigners have been pressurising the Church to sell its £2.5m shares in the FTSE 100 company which is currently in the process of building a controversial bauxite mine and alumina refinery in the Indian state of Orissa.
Environmental and anthropological campaigners claim the mining operations will damage local ecosystems and displace a large number of Dongria Kondh, an animist tribal community that lives in the Niyamgiri Hills where the mine is situated.
The company is owned by the Indian billionaire Anil Agarwal but is listed on the London Stock Exchange.
Members of the Church's Ethical Investment Advisory Group (EIAG) visited the mining site in November and met this week to discuss whether the Church should disinvest.
In a statement released this morning John Reynolds, the EIAG's chairman, said the Church had now sold all its shares in Vedanta because the company had not shown "the level of respect for human rights" that the Church expects.
"I am a passionate advocate for engagement with companies when we have ethical concerns," he said. "We are grateful to Vedanta's senior management for making themselves available to meet us on a number of occasions. However, after six months of engagement, we are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities that we expect of companies in whom the Church investing bodies hold shares."
He added: "In these circumstances the Ethical Investment Advisory Group advised that it would be inconsistent with the Church investing bodies' joint ethical investment policy for the investing bodies to remain invested."
The announcement was welcomed by Survival International, which has campaigned alongside the Dongria Kondh for the mining operations to cease.
Stephen Corry, Survival's director, said today: "The Church's unprecedented and very welcome decision sends a strong signal to companies that trample on tribal peoples' rights: we will not bankroll your abuses. Anybody that has shares in Vedanta should sell them today if they care about human rights."
The Church is not the first organisation to disinvest from Vedanta on ethical grounds. In 2007 the Norwegian government sold its US$13m stake, saying "there is little reason to believe that the company's unacceptable practice will change in the future." Martin Currie Investments also sold their £2.3 million stake last year, while the BP's pension fund reduced its holdings in Vedanta due to "concerns about the way the company operates."
Vedanta's mining in Orissa has attracted the ire of a number of high-profile bodies as well as a series of ongoing court cases in India. The UK's National Contact Point for the OECD Guidelines for Multinational Enterprises, a government body, said last year that Vedanta had "failed to put in place an adequate and timely consultation mechanism fully to engage the Dongria Kondh, an indigenous community who would be directly affected by the environmental and health and safety impact of its plans to construct a bauxite mine in the Niyamgiri Hills."
Vedanta has strongly denied the allegations. It insists that its work in Orissa abides by international environmental standards and that any Dongria Kondh who has had to move has been adequately compensated. The company is currently waiting to get approval from the Indian government to begin mining bauxite from March.