Church sells its shares in mining company

Financial Express, Feb 7, 2010
By Amy Kazmin in New Delhi


The Church of England said yesterday it had sold its shareholdings in the London-listed mining company Vedanta Resourcesbecause of concern over the company's treatment of tribal villagers near a controversial planned bauxite mine in east India.

The Church said it had decided to end its investment in the Indian mining company after an intensive, six-month dialogue with Vedanta's management and a November visit by the church's ethical investment advisors to some of Vedanta's project sites in the eastern Indian state of Orissa.

"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," John Reynolds, chairman of the church's ethical investment advisory group, said in a statement.

After the visit to Vedanta's Lanjigarh alumina refinery, Edward Mason, secretary of the ethics panel, felt that villagers living near the refinery project sites had not been treated responsibly.

The ethics panel also felt that villagers near the controversial Niyamgiri bauxite mine site - a mountain sacred to the 8,000-strong Dongria Kondh tribe - were also at risk unless the company took a different approach towards local communities in its project areas.

As a result, Mr Reynolds said, it would be "inconsistent" with the Church of England's investment ethics policies for it to hold shares in the company.

The Church of England's £3.8m holding in Vedanta, which has been sold already, was small compared with both the size of its holdings elsewhere and the size of Vedanta.

However, the church's decision is an embarrassing setback for the Indian miner, which has come under intense criticism for the way it deals with the impoverished communities in its remote project areas.

Vedanta said it was "disappointed" with the Church of England's decision, but would try to address the concerns that had been raised.

"Vedanta remains fully committed to pursuing its investments in a responsible manner, with respecting the environment and human rights," the company said in a statement.

Survival International, an activist group that has been lobbying institutional investors to sell their holdings in Vedanta, urged other shareholders to follow the example set by the Church of England.

"The church's unprecedented and very welcome decision sends a very strong signal to companies that trample on tribal people's rights," Stephen Corry, Survival International's director, said.

Among other moves, the Church of England's ethics advisors urged Vedanta to establish "externally facilitated communications mechanisms" with communities affected by the Niyamgiri mine to discuss issues such as how development funds would be spent.