Mining the Mountain: corruption and ‘cultural genocide’ brought by Vedanta Resources Ltd

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Richard Whittell’s research on the role of DFID in India outlines the department’s complicity in creating reforms which opened up the north-eastern province of Orissa to multinational mining companies, such as Vedanta, POSCO and Tata. Though a lucrative business opportunity for multinational corporations, and in India closely bound to the country’s rapid economic growth, mining is one of the most destructive industries around. Orissa is feeling the effects of the environmental degradation, land appropriation, intimidation and government corruption connected to it, whilst Vedanta Resources Ltd. has emerged as a particularly bad example over its plans to construct an open case bauxite mine on Niyamgiri mountain.

Vedanta Resources Ltd, a FTSE 100 listed company, is one of the largest and most controversial mining companies in the world. Through its subsidiaries Vedanta Aluminium, Sterlite and BALCO, Vedanta Resources operates copper, zinc, iron, coal and aluminium mining in India, Zambia and Australia. With a keen eye trained upon the 2.3 billion tonnes of bauxite (aluminium ore) in India, a figure which ranks it 6th in a list of the world’s reserves, Vedanta Resources has been speedily establishing itself in Orissa, which has over 50% of India’s total bauxite reserves, since 2003. Complex aluminium alloys are essential to the arms industry, guaranteeing large and steady returns. With an aluminium refinery operating in Lanjigarh since 2006 (which it plans to expand six fold), an aluminium smelter under construction in Jharsuguda, and recently announced $7.8 billion investments for further aluminium smelting capacity, Vedanta expects to become “Asia’s largest and among the top 5 integrated producers of aluminium worldwide.”

Since 2004, through its subsidiary, Sterlite Industries, which has applied in joint venture with the state-owned Orissa Mining Corporation, Vedanta has been attempting to gain permission to construct an open cast bauxite mine on Niyamgiri mountain. It plans to extract over 1 million tonnes of bauxite each year to supply the refinery in Lanjigarh, which it built before gaining any permission for the mine. In July 2009, that permission was granted by the Indian Supreme Court. On its website, Vedanta proudly boasts that its “excellent track record of executing projects ahead of time and at low capital costs, make it ideally placed to lead the development of [Orissa’s] abundant bauxite and coal reserves.” However, it has hardly been plain sailing for Vedanta in Orissa, with its plans hampered by international condemnation and direct action from the local population.

The Dongria Khond, one of India’s most isolated tribes, have been fighting hard against Vedanta’s plans to mine bauxite on Niyamgiri Mountain. They are fighting against the destruction not only of a mountain they consider sacred, but of an ecology which allows them to be self-sustaining and from which they draw their distinct culture and identity. The Indian author Samarendra Das has termed the threat posed by the Niyamgiri mine to the Dongria Khond ‘cultural genocide’. The Dongria Khond call themselves Jharnia – ‘protector of streams’. This is a reflection of how crucial the Niyamgiri hills are for the provision of water to thousands of people in the surrounding area, with more than 30 streams and two large rivers flowing from them. Vedanta’s aluminium refinery in Lanjigarh has already had severe environmental and health impacts on the local community, whilst its construction saw the removal of over 100 families. Reports of tuberculosis have risen sharply in the surrounding area, as ash from the refinery causes problems of toxic dust, filling the air and covering the crops. Government environmental inspectors have reported contamination of the ground water by seepage from the ‘red mud pools’ of toxic waste produced by the refinery. It has been shown that the local population were not given information about these impacts, instead convinced with false promises of ‘development’ and employment, and with compulsory acquisition of the land ordered by the Orissa government. One-off compensation payments were handed out to a few, but, with the appropriation of their land, all have lost their livelihoods. Vedanta has constructed a compound to re-house 100 of the people whose homes were lost to the refinery. Referred to locally as the ‘rehab colony’, surrounded by barbed wire fences and made up of concrete houses without the inclusion of farmland, its former farmer inhabitants have the choice of either labouring for Vedanta or relying on hand-outs. Vedanta’s CSR-filled webpages fail to take note of this co-option.

The local population has hardly taken Vedanta’s intrusion lying down. Constructors’ attempts to gain access to Niyamgiri mountain have been repeatedly thwarted by road blockades and infrastructure hit by sabotage. In January 2009, ten thousand people formed a 17km long human chain around Niyamgiri mountain. Pressure from international NGOs has also been large, in particular from Survival International, which launched a legal challenge in India’s supreme court to Vedanta’s plans to mine on Niyamgiri, and also campaigned to get the Church of England to drop its £3.8million shareholding in the company. This proved successful in February 2010, with the Church announcing that, “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.” The UK National Contact Point, an arm of Mandelson’s Department for Business, Innovation and Skills, which is responsible for upholding the OECD’s “recommendations on responsible business conduct”, produced a report in October 2009 critical of Vedanta’s failure “to put in place an adequate and timely consultation mechanism” about the Niyamgiri mine or “consider the impact of the construction of the mine on the [tribe’s] rights”. This report failed to mention the complicity of DFID in bringing Vedanta to Orissa, or of HM Treasury for allowing the Royal Bank of Scotland (of which the Treasury is 84% shareholder) to repeatedly finance Vedanta and Sterlite between 2004 and 2009. Vedanta set yet another record by refusing to provide any evidence, making it the only company ever to refuse participation in an OECD investigation.

Resistance has sparked repressive reactions from Vedanta and the police, who act largely on behalf of the corporation, and who carry out routine harassment and intimidation. Communities are fearful after a number of high profile local opponents of the mine were killed in suspicious circumstances. Samarendra Das reports the death of Sukru Majhi who was “run over deliberately on the newly metalled Lanjigarh-Doikal road on 27th March 2005”. Survival International’s investigators around Niyamgiri mountain have been confronted by gangs of armed men, apparently employed by Vedanta to prevent contact with the Dongria Khond. In addition, Vedanta has appealed to the Orissa government to prevent entry by “foreigners” whose “movement has to be regulated”, as they are “instigating” local people to oppose the Niyamgiri mine, an appeal which was publicly announced by Pavan Kaushik, Vedanta’s head of corporate communications, whilst Survival International’s investigators attempted to gather evidence of the proposed mines impact on the Dongria Khond. At the same time, Raghunath Mohanty, Orissa’s Steel and Mines Minister, announced that the mine would not lead to any displacement as “not a single family of Dongria Khond tribe lived at the proposed mining area, located between Rayagada and Kalahandi districts”. This implied that Survival International had no reason to be there. Government complicity does not end there, with Vedanta’s activities in Orissa exposing the corrupt links between international mining corporations and the Indian state. The Indian Minister of Home Affairs, P. Chidambaram, a vocal supporter of mining, used to be a director of Vedanta, only stepping down a day before becoming Finance Minister in 2004. As Home Minister, P. Chidambaram is responsible for the bloody internal war being fought against ‘Maoist’ rebels in India, a war centred in territories international mining companies want to exploit, and against India’s poorest people who are struggling not to lose their land.

This pro-Vedanta corruption is also evident within the legal system. Orissa campaigners filed a case with the Indian Supreme Court in an attempt to block Vedanta’s ability to mine. The case was heard in October 2009 by Justice S.H. Kapadia, who holds shares in Sterlite, and who granted permission for mining to go ahead despite strong opposition from the Supreme Court’s expert committee – opposition which the judge failed to rebut. With large backing from the Indian state, it is no wonder that Vedanta saw no need to respond to the UK government’s investigation into its non-compliance with voluntary OECD guidelines, or to take seriously calls for proper ‘consultation’ with communities the Indian state shows no regard for either.

With an extensive corporate social responsibility programme, Vedanta seems instead to be carefully constructing an alternative picture on the virtual reality of its website. It asserts that its business is central to the ‘sustainable development’ of India: that exploiting natural resources is the best way to retain the boom in India’s economic growth to the profit of all. The fact that many of their local development programmes – such as the 100 bed hospital in Lanjigarh, which film-maker Simon Chambers revealed to have never become operational in his film Cowboys in India – live a full existence only on their website, reveals that their importance to the company is mostly as part of a larger narrative of justification, emphasising Vedanta’s central role in India’s development. This is a ‘national’ development predicated upon the coercion of India’s poorest people, as at its heart sits the destruction of their livelihoods and dependence for their vital services on the tokenistic CSR practices of the very corporation responsible for that destruction.