Should one welcome the decision by the Norwegian sovereign fund to sell off its stake in Vedanta Resources? The answer is an affirmative “Yes.” If globalization can facilitate the movement of capital, goods and services across borders, the same instrument could also be used to build alliances and solidarity with like-minded groups across the borders to resist destructive projects and investment flows. This episode has shown the potential influence of shareholder activism in punishing bad corporations. It has opened up new avenues for grassroot activists and groups to influence corporate behavior.
BY KAVALJIT SINGH*
Contributed to Bulatlat
Vol. VII, No. 49, January 20-26, 2008
On 19 November, the Norwegian Embassy in New Delhi received some unusual visitors. Even the police and security personnel stationed in the heavily-guarded Chanakyapuri area of Delhi where Norwegian and other embassies are located could not figure out the purpose of these visitors. Though they were Indian citizens, ethnically they belonged to a distinct tribal minority group called Dongria Kondh. Dressed in their traditional attire, these tribal representatives came all the way from the remote Niyamgiri hills of Orissa to express gratitude to the Norwegian government for removing UK-based Vedanta Resources Plc from its investment portfolio. What was even more perplexing was that instead of protesting with placards and banners, the tribal representatives quietly met officials at the Norwegian Embassy and handed over a letter of thanks besides gifting them two photographs depicting the natural beauty of their habitat. So, in many ways, their visit was unusual.
Officially considered “primitive,” the Dongria Kondhs are the original inhabitants of Niyamgiri hilly region which extends to Rayagada, Koraput and Kalahandi districts of South Orissa. They largely rely on hunting, gathering and shifting cultivation in the Niyamgiri hills for survival. Given the lopsided nature of state-run developmental projects and schemes in Orissa, Dongria Kondhs have remained isolated and outcasts for decades.
As per the Indian Constitution, Niyamgiri is a Schedule V area which means that tribal lands cannot be taken over by non-tribal individuals and corporate houses. Further, gram sabhas have been empowered to manage natural resources including land, water and forest resources and their approval is required for all developmental projects in the area. Unfortunately, such legal protective measures have largely remained on paper as evident from large-scale forced eviction of tribal communities for big developmental projects.
After decades of seclusion, Dongria Kondhs came into public notice some four years back when they resisted the upcoming $850 million aluminum refinery and bauxite mining project at Lanjigarh in Kalahandi district. The work on refinery has been completed and full commercial production is expected from early 2008, whereas the bauxite mining project has not received environmental clearance from the Ministry of Environment and Forests.
The entire project belongs to Vedanta Alumina Limited, a subsidiary of Vedanta Resources Plc. Though the parent company is registered and listed in the UK, most of its business activities linked to mining and production of copper, aluminium and zinc are located in India. With revenues in excess of $6.5 billion, the company owns a significant market share in several metals and minerals.
The main promoter of Vedanta Resources is India-born business tycoon, Anil Agarwal, who nowadays proclaims to be the “brand ambassador of Rajasthan in the world.” His is a rags-to-riches story with his starting business as a scrap metal dealer in the late 1970s. Mr. Agarwal has always been in the centre of many controversies. The accusations against Mr. Agarwal range from throwing a digital diary at his senior employee in UK to buying state-owned mining company, BALCO, in India at throwaway prices through corrupt means. Of late, Mr. Agarwal has also become visible in charity and corporate social responsibility circles. He recently announced an ambitious plan to set up Vedanta University in Orissa on the lines of Stanford and Harvard universities.
The tribal community is opposed to the project as they fear loss of their livelihoods and traditional culture due to displacement by the mining of bauxite in the Niyamgiri hills. The mining project would lead to displacement of thousands of tribal people and destroy biodiversity and water sources. Niyamgiri hills are the source of Vamshadhara River and major tributaries of Nagaveli rivers – sacred to the Khonds. A large number of wildlife species including tiger, leopards, elephant and mouse deer also abode in Niyamgiri hills. Many of these species are endangered. In the past, efforts have been made by various governmental and non-governmental bodies to declare Niyamgiri hills as sanctuary or reserve area to protect its pristine natural habitat.
The initial local resistance against the project started when the land acquisition process. But because of the poor economic and political clout of Dongria Kondhs, their voices and concerns were ignored by local and state authorities. This is hardly surprising given the Orissa government’s thrust on ‘accelerating economic development’ by handing over rich natural resources to big private companies, both domestic and foreign, for a pittance.
However, the power dynamics changed when campaigners, NGOs, documentary filmmakers, human rights groups, advocacy and support groups from India joined hands with the local tribal community to oppose the project. As a result, greater awareness about the pitfalls of the project was generated in other parts of the country. Later on, several petitions were filed before the Central Empowered Committee (CEC) appointed by the Supreme Court. In these petitions, local people and their supporters had highlighted various violations of environmental laws by the company. After visiting the area, the CED informed the Supreme Court about the negative consequences of this project on the people and environment. In its September 2005 report, the CEC declared that the refinery was illegally constructed and should not be allowed to proceed.
At the international level, the protest action received momentum with the support of well-known mining critic and activist, Roger Moody, as well as Actionaid and others. In alliance with Indian activists and groups, Moody and his colleagues at Partizans, a UK-based campaign group, initiated the campaign against the project at the international level. They also released a report titled, “Ravages Through India,” in August 2005. The Report highlighted evidence of serious violations of human rights and environment laws by the Indian subsidiaries of Vedanta Resources. They were instrumental in informing and activising the shareholders and lenders of Vedanta Resources about the disastrous consequences of the project on the tribal community and natural environment.