The Church of England announced this morning that it has sold all its shares in the international mining company Vedanta Resources because of concerns over the corporation’s human rights record.
Campaigners have been pressurising the Church to sell its £2.5m shares in the FTSE 100 company which is currently in the process of building a controversial bauxite mine and alumina refinery in the Indian state of Orissa.
Environmental and anthropological campaigners claim the mining operations will damage local ecosystems and displace a large number of Dongria Kondh, an animist tribal community that lives in the Niyamgiri Hills where the mine is situated.
The company is owned by the Indian billionaire Anil Agarwal but is listed on the London Stock Exchange.
Members of the Church’s Ethical Investment Advisory Group (EIAG) visited the mining site in November and met this week to discuss whether the Church should disinvest.
In a statement released this morning John Reynolds, the EIAG’s chairman, said the Church had now sold all its shares in Vedanta because the company had not shown “the level of respect for human rights” that the Church expects.
“I am a passionate advocate for engagement with companies when we have ethical concerns,” he said. “We are grateful to Vedanta’s senior management for making themselves available to meet us on a number of occasions. However, after six months of engagement, we are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities that we expect of companies in whom the Church investing bodies hold shares.”
He added: “In these circumstances the Ethical Investment Advisory Group advised that it would be inconsistent with the Church investing bodies’ joint ethical investment policy for the investing bodies to remain invested.”
The announcement was welcomed by Survival International, which has campaigned alongside the Dongria Kondh for the mining operations to cease.
Stephen Corry, Survival’s director, said today: “The Church’s unprecedented and very welcome decision sends a strong signal to companies that trample on tribal peoples’ rights: we will not bankroll your abuses. Anybody that has shares in Vedanta should sell them today if they care about human rights.”
The Church is not the first organisation to disinvest from Vedanta on ethical grounds. In 2007 the Norwegian government sold its US$13m stake, saying “there is little reason to believe that the company’s unacceptable practice will change in the future.” Martin Currie Investments also sold their £2.3 million stake last year, while the BP’s pension fund reduced its holdings in Vedanta due to “concerns about the way the company operates.”
Vedanta’s mining in Orissa has attracted the ire of a number of high-profile bodies as well as a series of ongoing court cases in India. The UK’s National Contact Point for the OECD Guidelines for Multinational Enterprises, a government body, said last year that Vedanta had “failed to put in place an adequate and timely consultation mechanism fully to engage the Dongria Kondh, an indigenous community who would be directly affected by the environmental and health and safety impact of its plans to construct a bauxite mine in the Niyamgiri Hills.”
Vedanta has strongly denied the allegations. It insists that its work in Orissa abides by international environmental standards and that any Dongria Kondh who has had to move has been adequately compensated. The company is currently waiting to get approval from the Indian government to begin mining bauxite from March.
This afternoon Vedanta released a statement which read: "We are disappointed by the Church of England’s decision to sell their holding in Vedanta. Vedanta remains fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights. We work with a number of NGOs and with the authorities in India, the world's largest democracy, ensuring all our projects are conducted in compliance with the law and international best practice. We will continue to engage closely with the Church of England to address the concerns they have raised.”
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