UK Government Urged to Take Action Against London-Listed Vedanta Resources After Protesters Killed

6th June 2018 / United Kingdom
UK Government Urged to Take Action Against London-Listed Vedanta Resources After Protesters Killed in India

By Chloe Farand – DeSmogUKThe UK Government has been urged to take action after a British mining and energy giant was accused of extensive human rights abuse and environmental damage in India.

 

Vedanta Resources, a British-registered company listed on the London Stock Exchange (LSE), is under the spotlight after 13 protesters demanding the shutdown of India’s second largest copper plant in the southern state of Tamil Nadu were shot dead by police. Dozens were injured.

The deadly mass protest is the latest major incident to engulf Vedanta, which has been accused of a series of human rights violations, with campaigners demanding the company be delisted from the LSE.

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Police opened fire on the crowd of unarmed protesters who demanded the closure of the plant citing environmental concerns including pollution of groundwater and the threat to the local fisheries, according to reports.

On the same day, Vedanta reported a 33 percent rise in the company’s profits, with revenues of $15.4 billion in the last year.

 

The LSE told DeSmog UK it would not comment on the events in Tamil Nadu or on the company’s listing.

Human rights groups have called on the UK government to launch an investigation into the events in an effort to hold British companies that use the LSE as “a cloak of respectability” for their dirty business abroad to account.

 

London Stock Exchange used a ‘cloak of respectability’

Miriam Rose, from the UK-based campaign group Foil Vedanta, told DeSmog UK due diligence had not been properly done on the company before it was allowed to list in London.

DeSmog UK previously published a special investigation into the role of London’s exchange in creating a safe space for companies to operate in remote places around the world beyond scrutiny.

 

“The British government should have never given this company the reputation and cloak of respectability by agreeing its listing. Proper due diligence should have been done but instead there was a rush to list this company in London,” Rose said.

 

On Saturday, protesters gathered in front of the Indian High Commission in London demanding the Financial Conduct Authority launch an investigation into last week’s events and delist Vedanta from the exchange.

Rose said a cross-party parliamentary group should launch an inquiry into the matter and demand the FCA investigate Vedanta’s potential involvement in the police actions.

In a statement on the Labour party’s website, shadow chancellor John McDonnell also called for the company to be delisted.

Describing the killing of protesters as “shocking”, McDonnell said “regulators must now take action”. He said:

“This is a major multinational company that for years has operated illegal mining concerns, trashing the environment and forcibly evicting local people.

“Vedanta must be immediately delisted from the London Stock Exchange to remove its cloak of respectability, restore confidence in the governance of the exchange, and prevent further reputational damage to London’s financial markets from this rogue corporation.”

Vedanta has been a major political donor both in India and in the UK.

It was one of the biggest donors to the Congress party and Narendra Modi’s Hindu nationalist BJP party before its donations were ruled illegal by the Delhi High Court.

 

In 2015, Vedanta’s chairman and main shareholder controversial billionaire Anil Agarwal gave close to £100,000 to the Tory party.

 

Plant Closure

On Monday, authorities in Tamil Nadu ordered the permanent closure of the plant following last week’s deadly protestciting concerns over pollution and launched an inquiry into the events.

The plant has been closed since late March after the local pollution regulator said it was not complying with environmental rules.

This comes as Vedanta planned to double its copper production at the plant to 800,000 tonnes per year which sparked more than 100 days of mass protests.

In a statement, Vedanta Resources said the closure of the plant was an “unfortunate development” and that the company will study the government order and “decide on the future course of action”.

In a prior personal address to the people of Tamil Nadu, Vedanta chairman Agarwal said he was “very sad” to hear about the deadly incident, which he called “unfortunate”.

“We are strictly following what the court and government orders are. I assure you I am totally committed to the environment and the people of Tamil Nadu and will abide by the law of the land,” he said, as he asked the local authorities for Vedanta to be able to continue to operate.

 

No Sanctions

UK companies with activities abroad are expecting to operate in line with a number of international organisations to which the country is a member.

This includes the Extractive Industries Transparency Initiative and international standards set out by the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.

Yet, campaigners have warned the UK government it lacks robust mechanisms to sanction British companies operating abroad that breach international standards.

Jo Woodman, senior campaigner at Survival International, an NGO which helps tribal people protect their lives and land, previously led a legal case against Vedanta’s plans to mine for bauxite on the sacred hills of the Dongria Kondh tribe in the eastern Indian state of Odisha.

She told DeSmog UK: “The problem is that there is not really any mechanism for sanctions under the existing system. If there is a British company that is blatantly violating human rights and environmental standards we need to find a way to respond to this. That response does not exist yet and it raises serious concerns.

Woodman said UK officials have been told about the lack of mechanisms to deal with companies breaching the rules but that “the necessary steps to fix this” were not being taken.

Peter Frankental, economic relations programme director at Amnesty International echoed Woodman’s comment.

He told DeSmog UK “the UK government does not recognise that it needs to hold UK companies accountable for their activities abroad”.

“Vedanta has a business model of floating the law and think they get away with it,” he said.

“Vedanta has a great deal of influence and although there is no evidence of them being complicit of the police there are suggestions that this was pre-planned. These things don’t happen spontaneously.”

The Tamil Nadu state chief minister Edappadi K Palaniswami said police were forced to respond after protesters set vehicles on fire and threw stones at officers, “acting against police advice”.

Frankental added that since Vedanta was headquartered in the UK, the government should ensure that victims of its operations in India and elsewhere in the world are able to sue the company in British courts.

A UK government spokesman said: “We are aware of the protests taking place in Thoothukudi and the tragic loss of life, and welcome the investigation ordered by the Tamil Nadu government.”

 

‘Severe environmental damage and systematic human rights violations’

Concerns have long been raised over Vedanta’s activities in India.

In 2016, the council on ethics for the Norwegian pension fund sent a letter to Vedanta CEO Tom Albanese explaining why the fund refused to reinvest in the company.

It stated: “There continues to be an unacceptable risk that your company will cause or contribute to severe environmental damage and serious or systematic human rights violations”.

In 2007, the Norwegian government pension fund, the Church of England and insurance giant Aviva divested from Vedanta over its plans for a bauxite mine in Odisha.

India’s Environment Minister Jairam Ramesh eventually blocked the plan following a damning government report that found the company was illegally occupying the land and was acting “in total contempt of the law”.

NGO Survival International has also filed a complaint claiming that Vedanta breached OECD guidelines for multinational enterprises.

In a statement, the UK national contact point for the OECD guidelines concluded that Vedanta “did not respect the rights and freedoms of the Dongria Kondh” under international law.

At the time, a report by the UK parliament’s joint committee on human rights concluded that “the UK should play a leadership role to ensure that all firms respect human rights wherever they operate”.

The committee concluded that the powers granted to the UK national contact point for the OECD, “still falls far short of the necessary criteria and powers needed” to effectively implement international company standards.

But nearly a decade later campaigners say little has changed to ensure robust sanctions are taken against British companies breaching international guidelines on human rights and environmental damage when operating abroad.

 

Image Credit: Protesters calling on the Vedanta Resources to be delisted gather in front of the Indian High Commission in London on Saturday/ Foil Vedanta 

 

 



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