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An overview of the Vedanta refinery in Lanjigarh, Orrisa. Sanjit Das/ActionAid

An overview of the Vedanta refinery in Lanjigarh, Orrisa. Sanjit Das/ActionAid. Click picture to view more images

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  • Tribal women gather to protest and listen to speeches at Bijepur at a rally organised by the Adim Adhikar Surakshya Manch (a group to protect tribal groups) against the Vedanta plant. Stuart Freedman/ ActionAid
    Tribal women gather to protest and listen to speeches at Bijepur at a rally organised by the Adim Adhikar Surakshya Manch (a group to protect tribal groups) against the Vedanta plant. Stuart Freedman/ActionAid
  • The Tribal resettlement village, Lanjigargh built by Vedanta in return for land. The camp is now largely empty. Stuart Freedman/ActionAid
    The Tribal resettlement village, Lanjigargh built by Vedanta in return for land. The camp is now largely empty. Stuart Freedman/ActionAid
  • Labourers remove boulders from the landscape to make a road surface for the Vedanta plant in Lanjhigargh. In doing so they are causing irrepairable damage to the landscape. Stuart Freedman/ActionAid
    Labourers remove boulders from the landscape to make a road surface for the Vedanta plant in Lanjhigargh. In doing so they are causing irrepairable damage to the landscape. Stuart Freedman/ActionAid
  • A Dongria Kondh tribeswoman, Sinde seperates the tendu leaf she gathered from the jungle and packs it for selling in the weekly market in the neighbouring city of Munigura. The indegenous tribe, Dongria Kondh will be the first to be displaced by the minin
    A Dongria Kondh tribeswoman, Sinde seperates the tendu leaf she gathered from the jungle and packs it for selling in the weekly market in the neighbouring city of Munigura. The indegenous tribe, Dongria Kondh will be the first to be displaced by the mining in Orrisa. Sanjit Das/ActionAid
  • The Vedanta refinery is built right next to the villages in Lanjigarh. People living in these areas suffer from breathlessness, noise pollution and skin diseases. Sanjit Das/ActionAid
    The Vedanta refinery is built right next to the villages in Lanjigarh. People living in these areas suffer from breathlessness, noise pollution and skin diseases. Sanjit Das/ActionAid
  • 17 year old, Almay (3rd from right) dances with other tribal girls during the mass worship in Ijurupa village near Vedanta refinary in Orrisa. Indigenous communities conduct the worship, which is an annual feature, in their respective states, but this yea
    17 year old, Almay (3rd from right) dances with other tribal girls during the mass worship in Ijurupa village near Vedanta refinary in Orrisa. Indigenous communities conduct the worship, which is an annual feature, in their respective states, but this year they travelled all the way to Orissa to express solidarity with people who depend on Niyamgiri Mountain. Sanjit Das/ActionAid
  • Niyamgiri, Vedanta plant. Firoz Ahman Firoz/ActionAid
    Niyamgiri, Vedanta plant. Firoz Ahman Firoz/ActionAid

UK companies linked to devastating Indian mine

Andrew Wasley

19th June, 2009

Plans to bulldoze an Indian mountain sacred to local people were controversial enough... before shareholder data revealed that a raft of UK household names, ranging from Jaguar cars to the Church of England, own shares in the company behind the mine, Vedanta Resources plc. Andrew Wasley reports

'When we bathe the skin itches. When we drink water we get sores in our mouth. It is difficult to breathe. Hair begins to fall.'

They are among the UK's best known high street lenders and iconic companies. Few customers would be aware that they are now at the centre of a major showdown between activists and a mining corporation over allegations of environmental destruction and indigenous rights violations in a remote corner of India.   

But an investigation by the Ecologist has revealed how leading banks, insurance providers, car manufacturers and brewery chains - amongst others - have pension funds or similar schemes invested in a company responsible for a controversial mine in Orissa which threatens, according to campaigners, to devastate a vital forest ecosystem and the homes of an unique tribal community.

Church organisations, charities and local authorities have also been revealed as being shareholders in Vedanta Resources, a UK-registered, FTSE-100 listed company. Many of the investments are managed by third party fund managers.

Vedanta subsidiary Sterlite Industries Ltd is poised to begin mining for bauxite - a raw form of aluminium - in the north western part of the Niyamgiri hills, in India's Orissa state. The scheme was given the go-ahead last month by the Indian Supreme Court after a protracted legal battle.

Government reports and research compiled by campaign groups has warned that the mining operation, which will see the extraction of millions of tons of bauxite from some 600 hectares of forest, will result in ecological degradation that could threaten the livelihoods of tribal people who rely on the land for sustaining their traditional way of life.

A nearby bauxite refinery, already constructed by another Vedanta subsidiary, Vedanta Alumina Ltd, to process bauxite from the proposed mine, has been blamed by local people for causing health problems, damaging crops and killing livestock.

The refinery currently handles bauxite brought in from other regions and is expected to be expanded.

Campaigners claim several villages were razed to make way for construction of the Lanjigarh refinery, with up to 100 indigenous families evicted from their land and relocated to 'rehabilitation colonies' where locals claim they feel as though they are living 'in a jail' with little access to land for farming.

Vedanta disputes activists' allegations, maintaining that the company is committed to conducting its operations in and around Lanjigarh in a sensitive and responsible manner, and claiming that the mine will bring much needed economic development to the area.

Household names  

Although the majority shareholder in Vedanta is its billionaire owner Anil Agarwal, documents seen by the Ecologist reveal that a host of UK banks, companies and other bodies are also shareholders in the company.

Halifax Pension Fund, Lloyds TSB Group Pension Fund, Norwich Union Life and Pensions Ltd and Prudential Managed Pension Fund, amongst others, are all named as beneficial shareholders in the controversial mining conglomerate.

Also listed as shareholders are Axa Sun Life Assurance Society, Jaguar Cars Pension Plan, Land Rover Pension Trustees Ltd, Unilever Pension Fund and Coors Brewers Pension Fund.

A number of local and regional authorities - including Suffolk County Council, Havering Borough Council and Hertfordshire County Council - appear in the register by virtue of their pension funds.   
 
The Church of England and the Joseph Rowntree Charitable Trust have also indirectly bought shares in Vedanta.
 
Whilst there is no suggestion that any of the shareholdings are directly bankrolling Vedanta's planned bauxite mine, shareholders could find their links to the company prove embarrassing as campaigners vow to step up efforts to highlight the mine's environmental and social impact.             
 
Two former major shareholders in Vedanta Resources – the Norwegian Government Pension Fund and Edinburgh-based investment broker Martin Currie – withdrew their holdings last year because of ethical concerns.
 
Pressure is now expected to be brought on current investors ahead of next month's AGM in London where Vedanta directors will face questions over the company's operations in Orissa. Activists want shareholders to demand that Vedanta suspends it plans for the mine - and if they refuse, sell their shares.   
 
Meredith Alexander from ActionAid UK told the Ecologist: 'The growing international scrutiny of Vedanta’s activities in Lanjigarh and elsewhere led the Norway Pension Fund to withdraw its investment of $15.6m from the company.  Other investors need to consider if it really is in Vedanta’s best interests to go ahead with the mine.'
 
Survival International accused investors in Vedanta of effectively 'bankrolling' the destruction of indigenous land in the Niyamgiri Hills, and said shareholders had the power to persuade the company to halt the development.

 
Who's behind Vedanta? Click on a silhouette to discover who owns how much in the mining conglomerate...

Contested ground
 
The Niyamgiri Hills are the ancestral home of three distinct 'Khonda' indigenous communities - Dongaria, Kutia and Jharania - who view the land as sacred and rely on it to sustain their traditionally self-sufficient existence. The fertile region is heavily forested and the source of more than 30 springs and two rivers - a vital resource for both local people and myriad wildlife.With as many as 300 species of rare plants, the area is also home to an array of animals including, say campaigners, tigers, leopards, monkeys, deer and elephants. Ecologists have described the Niyamgiri Hills as being of 'great conservation significance', and the area has been proposed as both a wildlife sanctuary and elephant reserve.
 
The impact of mining in the region is not to be underestimated. A 2005 report by the Indian Supreme Court's Central Empowered Committee (CEC) said: 'By mining of bauxite deposits at the top of Niyamgiri the water retention capacity of the bauxite deposit will be destroyed. The mining will lead to the flow of mineral overburden into the streams. In the process it will destroy the unique micro-niches along the streams.'

'Any mining in the areas is bound to destroy the biodiversity and affect the availability of water for the local people,' the report concluded.
 
Local people blame the existing Lanjigarh refinery, which generates caustic soda waste, for contaminating groundwater and destroying crops, and making both livestock and people ill.    
 
'During the rains, you can see the full force of the caustic waste water coming from the pipe. The pipe comes out of the factory straight into the river. It is like when you mix cement into water - slurry,' said Balabhadra Hial (an alias), who lives in a village less than a mile away from the Lanjigarh refinery.  
 
'Three, four bullocks have died; the cows have died in my village. We have had cattle for ages, we know the kind of diseases they suffer from [and this is different]. We have stopped drinking that water, since the cattle started dying. I haven't even bathed in it so I haven't had that, but I have seen other people having kind of blisters and kind of boils.'
 
Another local said: 'When we bathe the skin itches. When we drink water we get sores in our mouth. It is difficult to breathe. Hair begins to fall.'
 
A study by the Orissa Pollution Control Board in 2008 found that caustic soda seepage from the site was 'alarming'. The report also claimed that waste from the refinery had been discharged into the River Vanshadhara.

'I didn't know what I was signing...'
 
Those forced out of their homes to make way for the refinery claim facilities in the 'rehabilitation colony' to which they have been relocated are unsatisfactory. They say there is little access to land for farming, and that the process wasn't properly explained.

Suna Majhi (not his real name) who used to live on the site that is now the refinery, says that he didn’t understand what was going on when he signed paperwork agreeing to the relocation.

'I never wanted to give up my land and my house, but someday they asked me to sign on something and I didn’t know what it was and I just signed. They said nothing when they asked us for our signatures, I didn’t know that such a big factory would be built here. I knew there would be a factory, but the government was vacating us so we didn’t protest, we didn’t know how to protest,' he said.

The CEC report noted that, 'the rehabilitation package for the displaced persons given by the user agency is not in the interest of sustainable livelihood of the local communities as no land has been given for grazing purposes, raising agricultural crops and carrying out other income generating activities, etc. The location of the rehabilitation colony has been decided totally ignoring the interest of the conservation of forests… the team saw stumps of freshly cut sal trees in the Niyamgiri forests."

Relocated families say they feel intimidated in the rehabilitation colonies, and claim that they have been watched by 'company people' and warned not to interact with outsiders. Suna Majhi told researchers that 'the whole thing is fenced, it is like a jail - I can't see long distances and things. There is only one entrance to the colony [and] we can't move freely around.'

During the relocations themselves, local people reported an atmosphere of fear and allegations of police brutality.

Whilst is no suggestion that those involved in these incidents were acting on the instruction, or with the approval or knowledge, of Vedanta, the CIC report concluded that 'allegations about the improper rehabilitation and the forceful eviction need to be looked into carefully through an impartial and unbiased agency'.

When approached over the claims of intimidation and force, Vedanta responded - according to ActionAid - that the allegations were 'baseless', and stated that there had not been any forcible evacuations and that no complaints had been made to the local authorities.
In a detailed statement to The Ecologist this week Vedanta said it was 'committed to conducting all of its activities sensitively and responsibly. In common with many large companies with operations in India, we work in partnership with the local authorities and a number of NGOs that are based in India, to ensure that the communities that are based close to where we operate, benefit from and share the economic benefits generated from our activities.'

The company said it did 'not accept' the allegations made by campaigners in relation to the environmental impacts of the project in and around Lanjigarh and its effects on the indigenous peoples that live in the area.

'The planned bauxite mine was the subject of a detailed and intensive examination by the Supreme Court of India. This examination included its environmental impacts, an assessment of whether it had the support of the majority of the local community and the suggestions that have been made about it. Following this examination permission was granted for it to proceed,' the statement said.  
 
Vedanta accused campaigners of ignoring the economic benefits that the mine will bring to the area, and said activists had turned down offers to enter into dialogue over the matter.  
 
The company said the recent decision to allow the mine to go ahead would enable it 'to address some of the critical problems that have affected the area for a very long time. These include very high levels of preventable diseases [notably malaria], little or no employment or training opportunities, a particular lack of opportunity for women, little or no educational or medical facilities and a general lack of economic infrastructure.'

The statement highlighted several Vedanta initiatives aimed at eradicating malaria in the region, and providing 30,000 schoolchildren with regular, nutritionally balanced food. Relocated villagers say that the company has helped with education and provided financial assistance.  

Pressure builds

Campaigners remain defiant: 'The Kondh tribal people believe that allowing the mine to go forward will destroy their way of life.  No offer of compensation is sufficient to make up for what will be lost,' said Meredith Alexander of ActionAid UK.
 
Survival International's Jo Woodman said: 'Vedanta Resources has proved itself to be a company disdainful of tribal peoples' rights. It has not even informed the Dongria Kondh of the fate that awaits them and their sacred mountain, let alone consulted them meaningfully or sought their consent. The company has dismissed the Dongria's vociferous protests against the mine.'

Despite its legal victory enabling mining to begin, the company faces further challenges.

The presentation of a prestigious 'Golden Peacock' award to Vedanta for its environmental management was this week delayed after campaigners highlighted the pollution connected to the Lanjigarh refinery.

And later this month the Organisation for Economic Co-operation and Development (OECD) - which investigates whether companies are breaking international guidelines for multinational enterprises - is expected to publish the results of its own inquiry after receiving an complaint from Survival International claiming that Vedanta pushed ahead with the mine's development without properly consulting tribal communities.  

Additionally, the Ecologist has learnt that several London law firms are currently considering privately-brought actions in the British courts to secure compensation for people affected by Vedanta's operations in Orissa.

A fair share?

Many of the shareholders contacted about investments in Vedanta declined to comment.

A spokesman for Insight Investments, which manages some investments for the Halifax Pension Fund, confirmed they do hold shares in Vedanta on behalf of retail investors, but said this was 'just a fraction of 1% in this business'. Halifax is now part of the Lloyds Banking Group following a enforced, Government-backed merger in 2008.   
 
Don Hume, Director Corporate and Government Affairs for Jaguar Land Rover, said: 'Since both the Jaguar and Land Rover Pension Funds are administered by independent trusts, it is not our place to speak for them. However, I can tell you that, as is normal for pension funds, they both hold broad portfolios of investments in FTSE 100 companies, which fulfill their legal requirement as trusts to achieve the best possible return on investments.'

Suffolk County Council said: 'The County Council takes its responsibilities as a corporate shareholder seriously. The County Council’s Pension Fund Committee will be advised on the situation in relation to Vedanta’s activities in Orissa at its forthcoming meeting.'
 
A Havering Council spokesperson said: 'We ask that our investment managers consider a companies social and ethical codes as part of  their investment processes. However, the day to day management of our funds are the discretion of the investment manager. The pension fund's policy is set out in our statement of investment principles, which is available on our website.'
 
Ben Wilson, Church of England communications officer, told the Ecologist: 'Church of England investing bodies do hold shares in Vedanta, which is not part of any of any investment category excluded on ethical grounds. The Church's Ethical Investment Advisory Group engages with companies on behalf of the Church's investing bodies where it has concerns or questions about aspects of companies' activities.
 
'Disinvestment is the last resort and we would rather use the Church's influence as an investor to get any shortcomings in corporate responsibility addressed. We do engage with a mining companies about the effects of their operations on local communities.'
 
The Joseph Rowntree Charitable Trust confirmed that it is a beneficial holder of shares in Vedanta Resources. The trust said that after it became aware of allegations - which 'threw up very serious questions about the company’s approach to environmental issues, including biodiversity, and human rights' - it approached Vedanta over the claims, but that the company has failed to respond. The trust said it would be reviewing the situation in September.

Andrew Wasley is a journalist with the investigative agency, Ecostorm.

To download the spreadsheet of Vedanta shareholders, click here.

To watch videos on the situation in Orissa see:

Action Aid

Survival International

For more information:

Action Aid

Survival International

Vedanta Resources

 

 

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