August 28, 2012 6:50 pm
Vedanta besieged by protesters at meeting
Vedanta’s annual shareholder meeting was again besieged by angry protesters, as institutional investors and campaign groups peppered the London-listed Indian miner’s board with questions regarding its patchy record on community relations, corporate governance and the environment.
Outside London’s Lincoln Centre, protesters from regions where the FTSE 100 miner operates shouted “Vedanta out!” and covered the building’s steps with red paint.
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At the meeting, Aviva Investors called on the miner to improve its sustainability efforts, while Standard Life said the company needed to strengthen its board.
Vedanta investors passed the company’s resolutions at the meeting. But those voting expressed their dissatisfaction on some measures, with about 13 per cent withholding their support for the directors’ pay report and 16 per cent failing to back an employee share ownership plan, in which Standard Life said the performance conditions were not clearly set out.
Vedanta has a chequered history in India and has been dogged by allegations of flouting environmental laws, trampling over local communities and proceeding with projects before obtaining the necessary permission.
Stephanie Maier, from Aviva Investors, said Vedanta had made “considerable progress” since the shareholder in 2010 highlighted its concerns over the miner’s attempts to mine bauxite from the sensitive Niyamgiri hills in Orissa, including a mountain sacred to an indigenous tribe, the Dongria Kondh.
But she called on Vedanta to link board pay to sustainability measures, arguing that the miner’s share price, which has fallen almost 30 per cent in the past year, had underperformed thanks to mismanagement of these issues.
The campaigner Bianca Jagger, attending Vedanta’s shareholder meeting for the third time with Amnesty International, said she had received reports from local people that a “red mud pond” of waste was expanding in Orissa.
Anil Agarwal, Vedanta’s founder and executive chairman, told the sometimes-hostile crowd that sustainability was the “topmost priority” for the miner.
But in the latest blow to the company, pollution control authorities in India’s south-western state of Goa told Reuters news agency on Tuesday that they have ordered the temporary closure of the 280,000 tonnes-a-year metallurgical coke unit run by Vedanta subsidiary Sesa Goa after pollution complaints.
Last week, the pig iron plant covered a 1.5km area in black dust, according to pressure group Foil Vedanta.
Carmen Miranda, who in 2010 founded the Save Goa group to campaign against mining in the region, protested at Vedanta’s meeting on Tuesday. “It covered villages, agricultural land, food, water, the lot,” she told the Financial Times.
Labour MP John McDonnell, who last month called for a House of Commons debate on the damage being caused in Goa, joined protesters outside the meeting and said Vedanta needed to “raise its game and tackle the environmental abuse they have inflicted on the developing world”.
Vedanta’s projects have run into trouble with Indian authorities before.
The miner’s $1bn Lanjigarh alumina refinery, in Orissa, is running at only a fraction of its capacity and may have to suspend operations due to an acute shortage of bauxite.
The company built the refinery in 2007 – and subsequently invested another $1bn towards a $2.2bn expansion – in expectation that it would get permission to mine from the Niyamgiri hills.
But in 2010, India’s environment ministry rejected Vedanta’s plan to mine, leaving the company without any secure source of raw material. Vedanta has appealed to the Supreme Court to overturn the decision, but faces the process of protracted legal proceedings.
The company has long sought to obtain the government’s residual stakes in Hindustan Zinc and Bharat Aluminium, but Vedanta has been tied in long battles with New Delhi.
With India’s government under huge financial pressure to reduce its fiscal deficit and Mr Agarwal offering a higher price, analysts say New Delhi could finally be persuaded to give the go-ahead.
Meanwhile, Vedanta’s Tuiticorin copper smelter, in the southern state of Tamil Nadu, has also been tied up in litigation for the past two years, with allegations of pollution by the smelter.
On Monday, the Supreme Court ordered state and central government pollution control authorities to investigate the plant’s effluent treatment and emission controls measures.