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30 August 2010
SRI-Adviser: Vedanta Denied Permission to Mine Sacred Mountain
Source:
www.sri-adviser.com
by Robert Kropp
India's Ministry of Environment and Forests denies permission to mining company for bauxite mine on Niyamgiri mountain in the Orissa region.
In July, EIRIS published a report entitled Improving Vedanta Resources' governance of responsible business practice, which found that found that the company breached international norms in the areas of the rights of indigenous peoples, biodiversity, pollution, safety, and bribery. A focus of the report was Vedanta's controversial plan to build a bauxite mine on top of the Niyamgiri mountain in the Orissa region, one of the poorest areas in India. The mountain is considered sacred by the indigenous Dongria Kondh tribe.
Stephen Hine, the Head of Responsible Investment Development at EIRIS, told SocialFunds.com, "We benchmarked Vedanta against their peers in the mining industry and determined they were doing poorly in responding to the allegations, compared to their peers."
Last week, India's Ministry of Environment and Forests denied Vedanta permission to clear forest for the mining project, effectively rendering the proposed mine inoperable. According to BankTrack, a Netherlands-based nongovernmental organization (NGO) that has campaigned against Vedanta Resources since 2009, "The Indian Minister of Environment and Forest Jairam Ramesh concluded yesterday, August 24 that various laws have seriously been violated, including the Forest Conservation Act of 1980 and the Environmental Protection Act of 1986."
In the aftermath of the August 24th ruling, Vedanta's share price lost 10% of its value, reducing the company's market capitalization by more than $465 million. Addressing the loss in the company's market capitalization, Ian Greenwood, chairman of the UK-based Local Authority Pension Fund Forum (LAPFF), stated, "The Vedanta experience is clear evidence of why laggards ignore these matters at their peril and to the detriment of their shareholders."
"As shareholders increasingly embrace their ownership responsibilities, these sorts of issues are only going to gain more importance," Greenwood continued.
The LAPFF identified Vedanta as an engagement target in 2008, stating, "Specific allegations leveled at Vedanta relate to environmental damage and complicity in human rights violations, including abuse and forced eviction of tribal peoples in the East Indian state of Orissa."
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Sustainable Investment Research Platform
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