workers at the Vedanta-controlled Bodai-Daldali bauxite mine in Chhattisgarh, India
Wealth won by others’ poverty – Not such be mine! Let me be blest Only in what they share with me and what I share with all the rest.
I am afraid this hymn had a rather profound impact on my spiritual and political development and hobbled me with an inability to grasp how a human being can listen to a catalogue of suffering and destruction caused by his investments and still be concerned only about how much money he is extracting from them. But it takes all sorts to make a world, doesn’t it? The shareholder concluded his remarks by saying that a lot of shareholders had left the AGM because they get bored hearing about these issues when they want to hear about how their investment is going. There were cries of “Shame! Shame!” (though not from me – I was too busy taking notes). The Chairman of the Remuneration Committee attempted an explanation of the size of Mr Albanese’s bonus, but it did not satisfy the shareholder. He asked further about the share price reduction, and Tom Albanese answered, but I failed to register it. What about the tax? Another shareholder observed that a lot had been said about problems and challenges, but “we have gone through one of the worst years for the mining industry but most experts agree that we are at bottom. Vedanta has tier one and assets and tier one management,” he opined. He asked whether there was a target for reducing debt within three or five years? (I don’t know why he didn’t mention four. It reminded me of the Holy Hand Grenade episode in Monty Python and the Holy Grail.) What level did the board think would be acceptable? With regard to the merger with Cairn India, would the outstanding tax issue affect the timetable envisaged, and is the board contemplating taking over any possible liability that Cairn Energy may have with regard to tax? Anil Agarwal, clearly delighted to be asked about money, replied that the debt level was “comfortable compared to our peers” (it sounded like a form of supportive underwear popular in the House of Lords) but that Vedanta had a target of reducing debt. With regard to tax liability, Cairn plc was working on arbitration with the government, and Agarwal believed it would all soon be resolved: “We will not be affected by retrospective tax, as that is between Cairn plc and the government. India’s slaves to stone, part 2 Mining researcher Roger Moody stood to ask a question and the Chairman exclaimed, “Ah, it is our old friend!” Roger retorted, “I may be old, but possibly not a friend.” He went on, “I am glad that the CEO put you in your place for saying that Balco is not directly governed by the ethics of the Vedanta corporation in the context both of the huge disaster at the Korba plant in 2009 and in terms of the continuing small disasters affecting thousands of people at the Bodai Daldali mine.” He asked Mr Agarwal if he had seen the film about the mine put on You Tube in February. Anil Agarwal replied that he had seen it but that he was not sure of its authenticity. He then said, rather oddly, “Whatever you ask, I am going to answer the same thing.” Roger said that seven years ago he had asked about bauxite operations in Chhattisgarh, including the fact that children were working in the mine. The reply had been that Mr Agarwal needed to check. Roger explained that he had visited the Bodai Daldali mine with a film-maker colleague and made the film in February of this year. The mine is peculiarly dangerous. Roger had returned two weeks ago. An Indian journalist had visited shortly afterwards. In February, Roger and his colleague had been able to enter the mine and had free movement around the whole site On the more recent visit, with an Indian companion working for Dalit rights in state of Chhattisgarh, they had been stopped at the entrance to the site. Permission had to be obtained from the Corporate Affairs Office. Roger and his companion had left the site not having checked whether conditions were the same as in February. He had explained that he would be at the AGM to report back and that he would stop and interview workers returning from the site. Those recordings will be available soon. Roger said that conditions did not appear to have changed much expect that women have been told they should wear helmets. One interviewee was a village elder who said there had been a serious accident with a woman slipping and breaking her leg as she tried to load a lorry. Working conditions, lack of benefits and lack of medical care appeared not to have materially changed. In preparation for Vedanta’s own corporate video showing the Bodai Daldali mine, in anticipation of the filming, workers told Roger and his colleague that they were told not to turn up for work that day. Roger continued, “You may say this is a hand operation under Balco, but at the same time you have to take cognisance of the fact that the people employed are people whose land it was that was usurped in order to serve the Korba and later Lanjigarh smelters. They were resettled and are not happy with the conditions of resettlement, and they are working at the only job now available to them for wages only just above the minimum wage in the state. Conditions are not acceptable under Indian law on the conditions of operation, and are surely not acceptable to the board of Vedanta. I’ll be back next year to challenge you on this and other operations.” Tom Albanese replied, “I have a lot of respect for the fact that you went to India and looked into conditions. You should also appreciate that there should be controls, that people cannot just wander into an industrial operation. I was called in the evening and asked if you could go in and suggested you go the next day, but you were travelling elsewhere. I will visit the site myself now. I share your concern that this should receive proper management attention. I will follow up.” Roger remarked, “We did not give notice, first, because we got in the first time without let or hindrance, but also because if you want to inspect something you don’t warn people that you are coming.” Mobilisation and militarisation in Niyamgiri Samarendra Das of Foil Vedanta said that there had been a big protest in Niyamgiri (in Orissa/Odisha, in India) and they had raised serious issues for Vedanta to address. Students from Niyamgiri had said that wherever the company operates, massive human rights abuses are taking place. Opponents of the company had been put in prison or brutally murdered. There had been massive militarisation where the company operates. There had been a statement in the press saying that the company would lobby for mining in the Niyamgiri hills, despite the expressed opposition of the people. What was the company’s current stance on mining in Niyamgiri? Anil Agarwal said that the Niyamgiri mine had been given back to the government. Vedanta had no control over it and had nothing to do with these mines. “We have said we will start this mine, but we have no ownership of that mine, which belongs to the government,” he said. “It is a very important thing for India. China produces 32 million tonnes of aluminium, India only three. It is very important. The Government of Orissa controls the mine and you have to ask them what they are going to do with it. We need bauxite and are working with them on other mines but as far as Niyamgiri is concerned, we have given it up.” Living in hell: smelting in Zambia, refining in India Samarendra then said he had spent a month and a half in Zambia. He said there were people living next to the company’s polluting smelter, and that some having were serious health problems. He had spoken with the President of Zambia for 40 minutes about what the company is doing in Zambia. “People gave us statements in writing and on You Tube, “ he continued. “People cannot walk, some cannot raise their feet. There is ongoing malnutrition. I shared your CSR report with villagers and they told me that the report was not true. Villagers had not all been given cows, only a few people had been. Someone is quoted who does not exist in the village. How can you make claims in your reports and not give the report to villagers, who deny them?” He said that villagers were suffering from pollution caused by the smelter. There was a lack of warnings about problems. Villagers had asked Samarendra to raise these questions and he would also put them to the new President of Zambia after the change. The company was polluting rivers in India and Zambia and failed to address the problem. Samarendra added that in 2003 the company had placed an advert for the position of Manager of the refinery at Lanjigarh saying it had secured rights to build the refinery before it had in fact secured the right to build it; and it had never given up hope of mining Niyamgiri. Anil Agarwal replied that in 2003 the company did have the right to mine Niyamgiri. What was Samarendra’s concern? Samarendra said that people there were neither living in peace nor receiving justice, despite the company’s stated intentions. The company claimed it had spent $37 million at Nchanga, but villagers had seen none of it. “They say they have been living in hell for the last eleven years. You have let these people down,” he said. Anil Agarwal replied that, with regard to Niyamgiri, Vedanta had not taken anything out of there, it had given back the mine to the government, and the government had control of that mine. He said that the company was talking with the government about other mines, other bauxite, but this mine was with the government. Regarding the job advertisement in 2003, if Samarendra would like to give him something in writing, he would find out. Shareholders would get bored to hear about an advert in the newspaper in 2003. Regarding Zambia, the mine had been there for 60 years, the smelter for 30/40 years. All the gas was going through the chimney. When the smelter was built all the sulphur went into the air. Seven years back Vedanta had built a brand new smelter with the best modern technology and shut down the old smelter because it was throwing sulphur into the air. Vedanta had invested $1.4 billion. It was now a world class smelter. Tom Albanese added that the former plant had only 50% sulphur capture and now it is 90+%. There is now no acid rain because of the strong pollution control regime. The company measures emissions and these had been below the legal limits. The company was measuring noise as well. “I was at KCM two weeks ago,” he said. “We spent a lot of time talking with the board on pollution.” Samarendra responded that two months ago there had been an emergency and people had had to evacuate. Could people really live only fifty metres from the smelter? “People are saying they need to be relocated. They need a promise from you.” Tom Albanese said that the company had seen Samarendra’s materials a year ago and had been taking action. He had not heard about the request for relocation. Samarendra replied that they had told local management but perhaps Mr Albanese had not heard of it. Tom Albanese said he would look into this. Obtaining consent, or not – part 1 Tom Albanese then spoke about Orissa and bauxite. “We will not mine bauxite or buy bauxite from OMC [the Orissa Mining Corporation] unless it has gone through a process of Free Prior Informed Consent [FPIC],” he said. He said that Vedanta was in the forefront of change in the mining industry towards acceptance of FPIC. FPIC processes varied from place to place, but in India the appropriate decision-making body is the Gram Sabha in each adivasi/tribal community, and if the Gram Sabha says a mining project is okay, “then you’ve got consent.” Girls are good Rumana Hashem rose to speak again. Anil Agarwal said to the person with the roving microphone: “Give this to the girl, this young girl here.” Rumana said, “Thank you for giving me the microphone again.” Anil Agarwal smiled at her and said, “You are welcome. I like girls. Girls are good.” Rumana said, “I am not a girl any more.” Anil Agarwal said, “Oh, I know. You are not a girl. You are a lady.” Rumana said, “Actually, I am a woman. I am quite old, indeed!” Anil Agarwal, Tom Albanese and Deepak Kumar laughed. Anil Agarwal said, “Oh, you are old?” Rumana said that if he wished to flirt, he would have to flirt with an old woman. He changed the topic and said, “You are an academic. I like academics.” Rumana said, “I am a researcher and a community activist.” Anil Agarwal said, “Yes, yes, researcher. Research is good profession. You are from Bangladesh, right?” Rumana said, “Yes, that’s correct.” Anil Agarwal said, “I love Bangladesh. I am very fond of Bangladesh. Bangladesh is a nice country. It is rich in natural resources. It has gas, oil, coal and other mineral resources.” Rumana said, “Indeed, yes. But you are not welcome to Bangladesh. I am not inviting you to visit Bangladesh. We don’t want your company to go there to extract our natural resources in Bangladesh. We are rich in natural resources but we don’t want to disturb the soil and the nature by smuggling coals and gas. We don’t want any multinational corporation to exploit us by destroying our natural resources. We have been fighting multinational corporations and we have put a decade long halt to a massive open cast coal mine in Bangladesh that you might have heard about. I am co-ordinating a community activist group, called the Phulbari Solidarity Group, which is working to prevent further aggression of multinational companies in Bangladesh. We will be celebrating ten years of resistance in Phulbari this year, on 26th August. You can come to our protest to be held in London, if you like. You can also come to visit my home in the UK, and I will cook for you if you wish to have a Bengali dinner. But you are not welcome to Bangladesh.” Back to Niyamgiri? Rumana continued, “My question is related to dissident shareholder Samarendra Das, who has given us some extremely important information which I found immensely useful. Unlike you, I was not bored. I am rather grateful to him for providing us this useful information that enriched my data. As you said to Mr Das that you don’t have anything to do with Niyamgiri, will you do a fresh press statement on this by clarifying that Vedanta will never go back to Niyamgiri in future? Can you put an official statement on your website saying what you have just said here? Can you confirm that it is not in your interest and there will be no future interference from Vedanta in Niyamagiri?” She continued, “You have claimed that you will respect the decision of the people who rejected the mine, yet the new Mines Minister, Piyush Goyal, has been making statements about pushing the project through. What are your intentions regarding the Niyamgiri mine? Are you still lobbying the Odisha government to overrule the democratic decision and force the mine through? When will you close down Lanjigarh refinery which has now been operating at a loss for too long due to lack of raw material? Free and open discussion, or not Rumana continued, “I would now like to respond to a senior shareholder who appeared to have been advocating for an ill process to be practised in the Annual General Meeting of the company. The shareholder behind me has said we should only raise questions based on the Annual Report produced and distributed by the company executives. He suggested that we should not comment on anything else, and that any discussion beyond the Annual Report should be discussed outside the AGM and in private. He thought that we were having a dialogue with you which he suggested to do in private. He also claimed that shareholders were bored by many questions that some of us have been raising in the AGM today. “I would like to object to his suggestions. I think that we should develop appropriate ethos that enables an environment to discuss complicated issues and complex truth openly. Multinational corporations must practice transparency and the Vedanta board should be accountable to all shareholders rather than only producing an Annual Report distributed to us. The company should follow ‘good’ corporate ‘ethics’ which would allow space for any discussion related to the company to take place in the same room where the AGM is taking place so that all shareholders and people involved in the company can be aware of what is happening in reality. “The shareholder who found our questions and comments are ‘dialogues between you (the board) and us (as community representatives) is wrong. We are not here for a dialogue with you. We are here to report the abuse that your company has done to people in various countries. We are here to place oral complaints on behalf of the communities. We are here to question you about why you are overlooking these important issues. There is nothing to get bored about. The shareholder who complained that other shareholders have left the room because they were bored by our allegations against the company did not notice that two people behind me left the meeting during his speech. I have an eye witness here [indicating the security guard/peer who sat in front of her] who noticed this and exchanged a smile with me as the shareholder appeared mistaken. “People can leave a meeting room for many reasons. Sometimes they might be busy and may have other commitments and appointments that make them leave the room. Other times they might be bored. It is possible that people were bored by the senior shareholder’s speech. It is also possible that some people did not like what we are discussing here. But we have to continue raising all of these issues right here.” The shareholder being referred to stood and interrupted Rumana at this point with shouts, pointing at her disapprovingly. He was asked by board members to allow her to finish her remarks. Rumana noted that she was speaking with permission of the board and representing several communities. She shouted, “Damn your pointing fingers. Do not raise your pointing fingers. I can also show you a finger back. Put your fingers down now. I have the right to speak about everything that is related to the company. We ought to do the interrogation right in the AGM, not outside the room. I do not want to have a private meeting about these general issues which all other shareholders have the right to know. I am here to not only speak to the board members but also to share information with shareholders present in the room. I will speak to all shareholders on behalf of the communities in Odisha and Zambia, and I will speak with permission of the board.” Tom Albanese and Anil Agarwal said that they wanted to continue the practice of discussing things openly in the AGM. Obtaining consent, or not – part 2 Tom Albanese said that it was important to recognise that communities are diverse. “If you are building or not building a mine or a parking lot there are people with strong views and we have to respect the entire perspective of views. Part of our job is to respect views. FPIC means the community has to speak. We have heard about a demonstration in Delhi and a gathering in the capital of Odisha yesterday saying, ‘we want development’, and we have to allow that debate to happen. We cannot say that we will do or not do something that a future generation may feel differently about. We have to respect FPIC and we will find a place where the community wants us to be and if we cannot find a place in Odisha we will get bauxite from elsewhere.” Living in another world Another shareholder, Maire Mayne, said, “The world you portray with zero harm sounds really good, and then there is another world I hear about from people who have gone out there. What matters is what is happening to people and the environment. There must be a way of objectively measuring zero harm. I have never heard of a mining company doing zero harm because mining is toxic. You say you create jobs, but you also destroy livelihoods. When people talk about people they have met, it does not sound like what you say. Maybe one of you should go with Mr Das and meet people who take a different view. It should not be just about shareholders’ profits when people are dying and seriously ill. You make it sound squeaky clean but that’s not what people form the communities are saying. From all that I hear from other people, it does not sound as though you are doing zero harm. Is it possible to get an independent group of people to oversee these things?” Still courting King Coal Mining researcher Richard Harkinson noted that in its Annual Report the company said that its “Entire power portfolio of 9 GW [or 9000 MW] is now operating” [p02]. Despite references to hydro power by the CEO during his speech, Richard noted that this is basically coal-generated power, although Tom Albanese had stated that the company was also considering burning oil to increase power generation in Zambia. Richard said that a coalition of investors called Aiming for A had been engaging with larger mining companies asking for more transparency and better reporting on carbon emissions. Vedanta had coal concentrated in India and its 9GW power output was the equivalent of a small developing country. It seemed that the company did not even have a ‘supercritical’ (2) plant, so how did it meet investors’ and others’ concerns about increasing carbon emissions? Tom Albanese replied that the company was “very conscious of the shift in sentiment about the effects of carbon on the world’s climate.” It also recognised that in the Indian government there was a recognition that responses are different in a poor country. He said that Vedanta’s largest plant, in Rajasthan, is supercritical. Most of the company’s plants are Chinese and superior to European and American plants. What if you lose? Richard asked, “Why hasn’t Vedanta Resources included in its latest annual report and financial statements as a contingency (3) what has been referred to by Cecil Gutzmore and what you’ve agreed represents simultaneous litigation in the UK and in Zambia by people affected by the pollution of the Kafue River caused by your operation in Zambia? You have been defeated in the UK courts on your arguments against forum here, and so there is a real threat to shareholders’ interests in a court judgement with damages. You are continuing to pollute the Kafue river, you are facing litigation, and I don’t think you are making provision for losing litigation. Richard noted that the company reported impairments (4) or write-downs in asset values of almost $5 billion, most of this being with oil. How did it measure impairment of its copper assets, particularly in Zambia? Tom Albanese said the company had no impairments in copper. What’s happening to the water? “You describe Konkola mines as ‘one of the highest-grade large copper mines in the world’, and say that you own 80% of it [p04]. You say [p28] you plan to close Nchanga deep mine in the third quarter of 2016. You will need to de-water that. Presumably you plan to treat that water before discharging it into the Kafue River?” Tom Albanese replied that Nchanga was closed. There had been less than five years of resource left when Vedanta took over mine but 350 people were still working on care and maintenance and dewatering, and the company wants to rehire when the moment is right. The company was losing 7000 kwacha per tonne of production there. At Vedanta’s last two AGMs slides had been shown demonstrating a significant reduction of suspended solids going into the Kafue River. The company reports to the government on solids going into the river as Vedanta recognises its importance to agriculture. The company had increased its use of tailings to recapture metal. Richard said that Vedanta had stated [p79] that it is the company’s priority to build a ‘reliable tailings leach facility’. How did the company manage a leach site near the Kafue River which leaks, as most leaching plants do, through seepage? How did the company manage waste water treatment? What clean-up standards did it seek to use and to comply with, and what independent verification of testing results did it have? Tom Albanese replied that tailings were heated to improve the yield. He said that Richard had seen the video shown two years ago about how clean the mine’s water discharges in to the Kafue river are. The company treats waste water to Zambian standards before discharging and we report testing results to the Government of Zambia. All over bar the shouting After this, Anil Agarwal invited people to vote (as laboriously explained by Deepak Kumar at the beginning) and pronounced the AGM closed. And then it was all over, bar the shouting. That continued outside as protesters gave a noisy reception to the company’s board as they left the building.
Notes 1 “A leaked report by the Canadian engineering company SNC-Lavalin, which in 2010 was employed to advise Vedanta/ KCM on how to control continuing pollution, says that solids, dissolved copper and acids are being spilled. It refers to ‘constant contamination’ of streams, and says the main pollution control dam is often full to capacity. It adds that reservoirs overflow and there are leakages from pipes and a lack of spare parts. The engineers’ report calls for 17 major and minor actions to stop the spillage of polluted water into the environment.” https://www.theguardian.com/global-development/2015/aug/01/vedanta-zambia-copper-mining-toxic-leaks 2 ‘Super-critica’l means that the thermal efficiency is raised to approx 38-40% through pressurising the combustion chamber. There are measured and agreed thermodynamic principles, the Otto and Rankine cycles, which show that fossil fuel burning processes to raise steam to move turbines will utilise about 35% of the chemical energy contained in fuels. Vedanta’s approach to fossil fuel use accords with India’s unambitious Intended National Determined Contribution on carbon emissions to the United Nations Framework Convention on Climate Change to 2030. See http://climateactiontracker.org/countries/india.html 3 UK publicly-listed companies must record in their annual financial statements explanation of commitments, guarantees and contingencies. See section 38 of Vedanta’s 2016 Sustainable Development Report at http://sustainabledevelopment.vedantaresources.com. As an example of a guarantee, Vedanta paid $75 million dividends to Anil Agarwal’s holding company Volcan, and provided a $17.3 million guarantee against the Government of India’s continuing tax disputes with Volcan.
4 Vedanta’s impairments: in section 38 of its Annual Report, Vedanta recorded ongoing disputed levies in Tamil Nadu, Rajasthan, Orissa and Chhattisgarh; elliptical accounts of disputes with the Indian Revenue which centre on its acquisition chain from Mitsui of Sesa Goa Iron Ore via their subsidiaries Richter, Westglobe and Finsider, and the Government of India’s retrospective legislation to charge withholding tax on capital gains. See http://profit.ndtv.com/news/corporates/article-retrospective-tax-5-deals-in-litigation-over-capital-gains-305295. Vedanta has a similar dispute about its Cairn India acquisition. Both of these they expect to win. See http://www.corpwatch.org/article.php?id=16084. Other disputes concern contractor claims over thermal power plant building at Jharsuguda, and with Punjab State Power Corp. Then there are various large-scale sales taxation disputes totalling $1.1 billion, for which Vedanta considers that it can mitigate risks.