Guardian, July 24, 2011
Amnesty International has launched a scathing attack on Vedanta, accusing the London-listed Indian miner of disregarding human rights and failing to protect the environment.
The criticism comes days before Vedanta's annual meeting in London, where campaigners are expected to stage noisy protests about the group's activities on the subcontinent.
Aviva Investors, an influential City shareholder, will oppose the remuneration report, on the basis of doubts about its corporate social responsibility. Aviva says executive bonuses are not adequately linked to meeting internationally approved "green" targets.
Vedanta was unavailable for comment, but in the past, chief executive HS Mehta has rejected criticisms of the firm's record in India, accusing Amnesty of "jumping to the wrong conclusions", and insisting that Vedanta is "very strong on sustainable development".
Vedanta is fighting a ruling from the environment ministry in New Delhi that prevents it expanding an aluminium refinery in the eastern Indian state of Orissa and from digging a bauxite mine on land considered sacred by an indigenous tribe.
Two years ago, an Amnesty report said the Orissa refinery had "polluted local rivers, damaged crops and disrupted the lives of the Kondh tribe".
Amnesty's latest report says Vedanta's legal campaign to overturn the ruling preventing expansion in Orissa should be vigorously opposed. The organisation said: "The company is trying to overturn the environment ministry's decision to block the plans, claiming it has conducted adequate environmental impact assessments. But this is plainly not the case.
"Villagers were given scant and misleading information about the potential impact of Vedanta's proposals. Today they are living with a massive refinery in the middle of their community, the air is choked with dust and huge lorries full of raw bauxite hurtle down the roads. The refinery and its toxic waste pond are right beside the local river, so people are now unsure whether their main source of water is safe to use."
Vedanta villagers were consulted, but Amnesty claims to have found systemic failings in its social and environmental stewardship. Steve Waygood, Aviva's head of sustainability, said Vedanta had made some improvements over the past year but added: "While the direction of travel is good, the speed absolutely isn't."
Shareholders fear the firm's strained relations with Delhi have prompted the Indian government to delay a deal struck 10 months ago, under which Vedanta will acquire Cairn Energy's Indian operations. Vedanta's shares have underperformed its peers in the mining sector by up to 40% over the last year.
Manifest, the shareholder activist group, has questioned Vedanta's decision to pay bonuses following 26 deaths at group facilities in 2010/11. "These payments will be considered wholly inappropriate by many investors," said Manifest. Pirc, another shareholder group, is advising investors to oppose the re-election of the chairman of the remuneration committee.
Vedanta is chaired by its founder Anil Agarwal: he and his family own 61% of the company. The group received a barrage of adverse publicity in 2009 following the collapse of a chimney in the state of Chhattisgarh that killed 40 people. Following the disaster, three Vedanta officials were arrested but no charges were brought. There was more bad news nine months ago, when the Madras high court temporarily ordered Vedanta to shut down a copper smelter that supplies about half of India's total output, citing environmental concerns.
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