Vedanta Resources and its ambiguous attitude in India

"My family supports my decision that 75 per cent of our wealth, which we gain as economic benefit, should be returned to society”. That’s what Anil Agarwal declared three weeks ago when celebrating the tenth anniversary of Vedanta Resources’ listing on the London Stock Exchange. If the decision of Vedanta’s CEO looks really generous, we can’t close our eyes on the company's behabior. Indeed, the Indian firm has faced several controversies in the past: human rights violations, CSR, environmental issues… Problems are numerous and deserve to be highlighted.

Vedanta Resources is a mining company, created in Mumbai in 1976. Since that year, the company has raised about € 23 billion, and most of it has been invested in India. Unfortunately, this amount is far from having been earned properly. Here are some reasons to explain my allegation.

Human rights issues and mining project in Orissa

In the late 2000s, Vedanta had two projects in India: extending its refinery in Orissa and the exploitation of a bauxite mine in Niyamgiri (also in Orissa region).

In the same way that Rio Tinto (more details here), there is a huge gap between the official communication of Vedanta and what really happens on the fields. In 2012, Amnesty International pointed out the many omissions in Vedanta's Perspective, a report only made to reassure investors. In this report, there was nothing about human rights issues in Orissa, an Eastern Indian State. In order to cons-attack, the NGO also published a report, called Vedanta’s perspective uncovered: Policies cannot mask practices in Orissa.

Amnesty International specifically criticized:

- During 2011 and 2012, Vedanta developed a human rights and sustainability policy framework which it claims are aligned to international standards and best practices. According to Amnesty, the company did not consult the representatives of Dongria Kondh, an indigenous tribe threatened by bauxite mine and alumina refinery projects in the region.

- Vedanta pretends that it cares about what the indigenous people want but the company only answers to the easy claims and simply ignores the important ones. In addition it doesn't pay attention to some investigations led by Indian organisms, like the India's National Human Rights Commission.

Finally, thanks to the daily work of associations and the population, the Indian Government rejected the two demands (see the video below).     

It is also relevant to say that Vedanta already faced serious critics in India in 2005. More details available here. So, maybe Anil Agarwal gesture is very generous, but we shouldn't think that Vedanta is an ethical company so far. 

In addition, the company is also involved in problems today. Recently, the company has been involved in a conflict with one of its furnisher in Zambia. Over there, Vedanta owns a subsidiary called Konkola Copper Mines (KCM) which produced 160 000 tons of copper. Since April 2014, KCM refuses to make payments for electricity it consumes, i.e. € 35 million. By doing so, the company hopes to push for lower prices. Fortunately Copperbelt Energy Corp (the supplier) did not yield despite its need of cash. Better, it decided to restrict its power supply, provoking a slowdown and important losses to Vedanta. I agree that a slowdown implies less employment but I think that's great to see a Zambian company stand up to a pretentious and immoral company like Vedanta.

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Comments

[Obat Wasir]

Nice website full of quite interesting and informative posts, so must keep on good working!

[Jay]

This company is such a shame. If you want want daily information about it you can follow this page on fb

https://www.facebook.com/FoilVedanta