London Calling in on Vedanta's tenth anniversary

Published by MAC on 2014-08-06
Source: Nostromo Research, London Mining Network

Will a new broom make for a cleaner company?

Vedanta's fatality rates ‘totally unacceptable' says Vedanta's CEO

Richard Solly

London Mining Network

5 August 2014

It comes to something when a company can make a former Chief Executive of the rapacious Rio Tinto look good. But Vedanta makes practically anyone look good by comparison. And former Rio Tinto CEO Tom Albanese, now CEO of Vedanta, provided a breath of fresh air at Vedanta's AGM on Friday (1 August).

How long he will last if he insists on straight talking is an interesting question. He said that the company's fatality rates were ‘totally unacceptable'. He criticised the company's safety culture, which he said he is trying to address. Under pressure from Samarendra Das of Foil Vedanta, he apologised for company Chairman Anil Agarwal's disgraceful remarks at a conference for young entrepreneurs in Bangalore.

Given Agarwal's oft-demonstrated inability to chair a company AGM, Albanese stepped gracefully into the role, filled by other board members in the past, of trying to prevent the Chairman from straying off on one tangent after another.

The company's critics landed numerous telling blows, but among the most serious were the contributions of Roger Moody and Simon Chambers, who revealed the contents of Judge Bakshi's report into the disaster at the company's operations at Korba in 2010, when at least 42 workers were killed when a chimney which was under construction collapsed, burying them alive.

The company's response to Bakshi's damning report has been to get an injunction in India, preventing its publication. But Roger and Simon brought it to light. CEO Tom Albanese said he had not had the chance to read it. Now he can, as he and the whole board were provided with copies. The report demonstrates Vedanta's responsibility for the workers' deaths. It shows the gravity of the problems which Tom Albanese has set himself to sort out.

The report is to be published, in English, in the near future. We'll see how the company will respond in the UK.

And we'll see how much luck Tom Albanese has, trying to reform this recalcitrant company.

What follows is a detailed account of the AGM and the major points made by the company's numerous, and well-informed, critics.

Company Secretary Deepak Kumar opened the meeting declaring that voting would be by poll on a ‘one share, one vote' basis, which he said was "more democratic than a show of hands". Of course, it also has the advantage that company Chairman Anil Agarwal and his family, who control and absolute majority of shares in the company, can as usual win every vote without any embarrassing demonstration of opposition in the AGM.

Anil Agarwal said that, since listing on LSE ten years ago, Vedanta had grown rapidly. Together with subsidiaries Sesa Sterlite, Cairn India and Hindustan Zinc, Vedanta is the tenth largest resource company in the world, with annual growth of 14%. The acquisition of Cairn India had been a success with an increase in oil production. The company had Invested over $20 billion in mines and other projects. It had operations now in South Africa, Zambia, Ireland, Australia, India and elsewhere. It is one of the highest contributors to Indian government coffers, paying $15 billion in taxes and royalties in the last three years alone. It makes a valuable contribution to communities and has invested millions in community projects. Its priority is to work with communities and civil society. T has committed not to mine bauxite in the Niyamgiri Hills without the explicit permission of local communities. It is Zambia's largest private sector employer and second largest tax payer. It has appointed the ‘highly experienced' Tom Albanese as CEO and the board is delighted to have him. Tom is to focus on operational excellence, cost management, safety of people, sustainability, and directing the way the company engages with civil society. Katya Zotova will be joining as a director, the first woman on the board. Agarwal said he was positive about the future of the assets and the company.

Tom Albanese said that Vedanta was celebrating ten years on the London Stock Exchange. Every one pound invested at the time of its Initial Public Offering had become three pounds. It employs 88,000 people directly or indirectly. People benefit from the company's programmes in health, clean water etc. There had been record production in oil and gas and zinc in India. Aluminium smelters had become more efficient. He hoped that operations would begin again in Goa in the second half of 2015. The company was looking for alternative sources of bauxite to Niyamgiri. The simplification of its structure should align debt with cash flow. There had been a solid year of financial growth. The company had reduced net debt by $700 million.

Tom Albanese said he had officially joined the company as CEO in April 2014. The company was led by dynamic teams and there had been improvements in lost time injury ratios, but fatality rates in Vedanta's operations were ‘totally unacceptable' and he would concentrate on achieving zero harm.

He said that the company needs to find bauxite, resume iron ore production in Goa and improve its operations in Zambia.

It has made significant progress on sustainability but there is a lot more to achieve. Scott Wilson was appointed in 2010 as independent assessor of Vedanta's sustainability, including compliance with international standards. His report had made recommendations to improve sustainability performance.

There had been some progress in reducing harm but there were 19 fatalities last year and 3 in the year to date. Vedanta must strive for zero harm and zero environmental incidents. The compamny had created the first zero waste refinery at Lanjigarh. Red mud waste was being turned into solid cakes for building. Vedanta would consult with local communities and will not do anything without their consent. At the hearing in Lanjigarh during the week, the majority had voiced no objection to the expansion of the refinery. The company's intention is to source bauxite from other places and it will not source it without the consent of surrounding communities. The company contributes to society through taxes and jobs. It invests in the social and economic development of the areas where it works. T has reached out to 4.1 million people through social projects and it works with NGOs and academics to ensure it makes a better impact on more people.

Vedanta has a 50 year vision for Africa and wants to help the countires where it operates to develop their economies. It has a diversified portfolio across these countries.

In Zambia, Vedanta took over mines that had a legacy of water pollution and has made good progress in cleaning water.

Tom Albanese said he had visited Balco the week before. There were grievances over water shortages last year. Balco contacted the local water authority and came up with a solution, delivering water from the company's site.

The Lisheen mine in Ireland was acquired from Anglo American. It is to be closed in 2016. Vedanta has rehabilitated some of the tailings, two pads. After care will span 30 years with an 8 to 10 year monitoring programme.

The Chairman then opened the meeting to questions from the floor.

Documentary film-maker Simon Chambers said that the Chief Executive Officer, Tom Albanese, had talked about the company's top priority being safety and zero tolerance and had just returned from Korba. Simon said that for the past five or six years he had asked questions about the chimney disaster at Vedanta subsidiary Balco's operations in Korba in 2009, where 42 people were recorded as having died when a chimney under construction had collapsed.

When Simon had asked questions trying to clarify culpability and help prevent such an accident happening in the future he had been told that an independent inquiry was being conducted and that he should wait for its results. This inquiry was completed in 2012 and Balco lawyers quashed its report. On what grounds had the company quashed that report? Simon had seen it and had with him copies to give to the board. He said that it was very even handed, very thorough, 122 pages long in Hindi and in English. If the company does indeed have a zero tolerance attitude on safety, is it not incumbent on the board to look at the report, take it seriously and act on its recommendations? If not, how could they possibly tell their shareholders that they are taking action on safety?

Simon said that among the report's findings were:

The company started building the chimney without permission from the Korba municipal authorities.

* Balco was in a hurry to build the chimney so its piles were only 21 metres deep instead of the required 44 metres.
* The chimney was built on piles instead of a raft construction
* The cement quality was poor and had lots of ash in it, which weakened it
* The wrong size aggregate was used - 80mm instead of 20mm.
* The walls of the chimney were much thinner than they were designed to be
* The deviation in the verticality of the chimney was two to three times over the permitted deviation
* Metal rebars [reinforcement bars] were not welded together as they should have been, so there was further weakening

Simon said that Balco had stated that the reason they put a stay on this report was that they were not adequately represented in it, but at least 40 pages of the report are dedicated to considering information provided by experts put forward by Balco and Vedanta. Simon asked why the company was not prepared to listed to the reasons why the chimney collapsed, and how the board imagined it could move on to a zero tolerance safety policy. Why did the company continue to say it was a freak action of lightning that caused the chimney to collapse when Balco's own experts have said to the contrary in the report?

Anil Agarwal  returned to one of his favourite themes, one  mentioned many times at the 2013 AGM: India is a democratic country, has an elected government, a strong political and governance system. An accident took place, compensation was paid... So that's all right then.

Simon Chambers  pointed out that compensation was a mere £3000 for each family who had a member who died as a result of working on the chimney. Chairman Agarwal retorted that this was "the best compensation ever paid in India. In England maybe £30,000 is less. We are all part of accident, we all want to do right business in right way, and step by step do the right thing. We are in business of building the chimney, building the power plant, we are committed to safety and zero tolerance. In India we have strong governance. Ministries and we are all involved. I will take report up again with our people and make sure that if someone is found guilty they are punished."

Simon repeated that the company's lawyers had quashed the report. He added, "You personally were asked to appear in the district court in Korba in 2010 for violating the proper use of land where the chimney was built, and you did not appear at court. You are not taking this seriously. It's fine to have fancy language about zero tolerance but I cannot believe it, because you sent bodies back to their homes without any explanation of why they died, and this report, which tries to explain, was quashed. They arrived home in a truck with a sign around their necks with their name. You cannot say that you have done everything in your power to avoid this happening in the future. You are in denial about this because you have tried to stop the report coming out."

Agarwal retorted that the matter was sub judice. Mining researcher Roger Moody called out that it is not sub judice in the UK.

Perhaps sensing a further diplomatic disaster, CEO Tom Albanese stepped in. He said it was a "horrible tragedy". He said that he had visited the site last year and again the week before the AGM. He had looked at how the compensation money had been used by the families involved in the accident. Four independent studies on the disaster had been done. He said he did not want to get ahead of the court process. He had spent time with project managers to find out how materials are now being used differently. He was sure that the report would make clear that there was an extreme weather event at the time of the chimney collapse.

Roger Moody said that he appreciated Tom Albanese's commitment to zero harm. During his time at Rio Tinto, his former employer, he had moved the company to better standards. But Mr Agarwal had not denied that a submission had been made to the high court and that this report, the Bakshi report, had been suppressed, so the conclusions reached by Judge Bakshi have not been revealed to the public in India or shareholders in Britain. He asked if Tom Albanese had you seen the report.

Tom Albanese replied that he had only read parts of it, about the compensation paid.

Roger continued: "I'll quote two paragraphs from the report. There are a number of paragraphs in the report where Bakshi accuses Balco/Vedanta of contravening acts of parliament and numerous Indian standards of construction. It concludes that all three parties involved in the construction, Balco, Sepco and Gannon Dunkerley are guilty of acts of commission and omission. An extreme weather event was not the main cause of the disaster, but it may have been a contributory factor. The main things were poor standards and failure to observe a halt in construction, when this was asked for by a cement batching contractor. The report concludes that it was the responsibility of Balco that construction standards were poor. I quote: ‘Compliance with all the statutory requirements for the construction of the Chimney was the responsibility of BALCO and the responsibility of determining the safety measures was also that of BALCO, because BALCO was the owner of the Project'.

"This is just one example of the conclusions reached by Judge Bakshi. There has been no public protest about them, simply because they have not been published. That is the responsibility of this company. It is a priority to move this company on to zero harm, but if the company cannot admit to past mistakes, you cannot get far towards zero harm."

Tom Albanese said that he had a lot of empathy with the families. He said: "I was the oldest of five kids and my dad was killed in an industrial accident when I was 13. I feel for those families. My commitment is that workers will stay safe. I want to understand what happened five years ago and move forward."

Simon Chambers called out: "You are working with a bunch of colleagues who do not want to address it." Tom Albanese asked him if he would like to see improvement. Simon replied, "Yes, but I would like to have you admit that you have not done this properly to allow public debate and inquiry to take place. Now you say you are going to wait for further reports: this is only because you don't like the report that already exists."

Peter Frankental, of Amnesty International UK, asled Tom Albanese whether, having visited most if not all of the company's assets, he believed that a fundamental shift in the corporate culture of Vedanta is required in order for the company to improve its impacts. He said that the company had a culture of misinformation and concealment of information. Sustainability officers had done all they could to uncover what is going on, and occasionally they had come to Amnesty International asking for information that they could not get internally. How could Tom Albanese make sure that the company's policies were being properly implemented? At Lanjigarh this week, was the meeting really an open meeting where people were not subjected to harassment? Those opposed to refinery expansion were not allowed to speak or were cut short. No summary of views was presented at the end of the meeting, despite this being required by Indian law.

Tom Albanese said he had spent time visiting Vedanta group sites before he joined the company in September 2013. He was concerned at things he had read on the internet. Were these things that needed to be addressed?

After meeting various people, Tom Albanese had decided to join the company. He was negative about its safety culture. In Mumbai and Delhi, he said, you see ‘instinctive safety cultures'. Driving without a seatbelt is a macho thing which needs to be addressed. Vedanta had had safety standards which were not being put in place. Now every meeting begins with a safety discussion. He said he had had to tell the Chairman to wear a seatbelt in the back seat of a car. It was embarrassing.

On the environment, on the other hand, Tom Albanese said he had seen a lot of things he liked and which he had not seen in major mining companies around the world, especially to do with water and waste management. On biodiversity, the company was moving towards net neutral impact. There had been some brilliant studies about Goa and Namibia and the Northern Cape in South Africa, and net neutral impact is an attainable goal.

Community relations, however, had been treated as a CSR exercise. Seeing a facility that feeds 25,000 school children every day had impressed him, as none of the mining majors do this. If you go to school in Lanjigarh area you get a midday meal courtesy of Vedanta. But the culture of engagement and empowerment is not as strong as it should be. He said that the company needs not a dependency culture but a culture that enables people not just to accept gifts from company but be able to say what they don't like.

Tom Albanese said that one officer would be responsible for all these issues except safety, and safety would be the responsibility of a new officer being brought in from Rio Tinto.

With regard to the recent community meeting in Lanjigarh, Tom Albanese said that advance notice had been given in writing one or two or three weeks before the event. One shareholder called out, "You read it because you can read English!" Tom Albanese continued that the environmental permit conditions allowed for the processing of one million tonnes of ore per year, and they were running at 92% of this. They would like to move this up towards two million tonnes and then expand up to six million tonnes. He said that Vedanta had said publicly that they will be looking for bauxite wherever they can find it, but in a way that is consistent with environmental regulations and with the consent of communities.

He said that a lot of the bauxite the company was refining in Orissa was being bought in from West Africa. The purpose of the public hearing was the expansion of the refinery. Towards the end of the hearing, a number of people had come in with banners, and all they had said was that they did not want mining at Niyamgiri. Effectively what was then said was that this was a public hearing about expansion at Lanjigarh. This, at least, is what he understood to be the case, and that it was a proper process and the community was in favour of the expansion of the refinery at Lanjigarh. 8000 jobs and other indirect jobs have been created there. He said he was not Indian and could not address Indian sensibilities.

His role was to introduce mining industry best practice. But there are problems of deep poverty in rural areas and good jobs are important. If the community at Lanjigarh wants a refinery, he said, the company has to respect that community. If communities in the surrounding area do not want mining in Niyamgiri that is their non-consent and the company respects that. This a challenge that goes with any project around the world.

Samarendra Das from Foil Vedanta said that he would like to see how Mr Albanese's sensitivities come into play over the next year. He said that the company had got newa agency Reuters to report the meeting at Lanjigarh, saying that it went successfully. Samarendra said that he assumed that Tom Albanese had not seen the whole transcript. If he had seen it all then he would know how hundreds of people stormed into the meeting and tried to raise their concerns. Samarendra then asked the Chairman, Agil Agarwal, to explain what he had said at the Jain International Trade conference in Bangalore when he had been filmed talking disrespectfully about the Zambian President.

Anil Agarwal said that his remarks had been taken out of context: he had spoken about putting in 25 million dollars and getting out 1 billion dollars. He said he was talking about revenue, not profits.

Samarendra said that this was not the case. Foil Vedanta had now referred the speech to the Equalities Commission in the UK as Vedanta is a UK company. They had also given a transcript to Tom Albanese.

Tom Albanese intervened to rescue the Chairman. He said he would make some comments about the transcript as it had had some press coverage in Zambia. He had had discussions with the Zambian leadership. The video was of a motivational speech given by Anil Agarwal to young Indians, encouraging them to take bold risks if they wanted to be successful. It was about Mr Agarwal's own history of taking bold risks. In 2002 the price of copper was extremely low and nobody wanted to invest in copper, especially not in Zambia. The Chairman took a risk in investing in Zambian copper at that time. The speech was designed for a Bangalore audience of young entrepreneurs and has done the company a lot of damage in Africa because of being misunderstood.

Samerendra said that there had been no misinterpretation of the remarks. He said that no one addresses the President of Zambia as "Tu". He went on: "You said, ‘Woh ake mera wagal mein beth gaya' (When I was seated there with my man, the president came and sat by our side.) ‘Tu banayega' (All you make). Is this the way you address the president of Zambia? It was insulting, it's clear on the video. Your own report, Vedanta's Perspective, refers to the tribal people of India as ‘backward'. Your former board member committed to taking these offensive remarks out of the pages and you have not done that. And you mention about ‘Indian sensibilities'. I do not agree with you. This is a racist remark about Indians as well. Indians are not disrespectful of Africans. They are appalled by this behaviour. People may be poor but they have dignity. The language used in the video was racist and perceived as insulting in India as well as Zambia. We want an apology."

Tom Albanese replied, "We have expressed our regrets and I apologise for any damage caused in Zambia."

Samarendra said, "Thank you. That is very much appreciated."

John McDonnell, Member of Parliament for Hayes and Harlington, referred to page 142 of the company's Annual Report and Accounts, which related to Goa. He said, "I am an MP and have a number of constituents of Goan origin. The Supreme Court of India (in Writ Petition (Civil) 435 of 2012) has ruled that all of Sesa Sterlite's mines in Goa were illegal from 22 November 2007. Under law, the minimum liability would be to return the amount illegally mined to its owners, the people of Goa. Penalties may also be leviable. As per statistics of the industry body, the Goa Mineral Ore Exporters Association (GMOEA), for the four full financial years from April 1, 2008, till March 31, 2012, the Sesa Goa group exported 61.44 million tons of iron ore from Goa (note that some months of 2007-08 and of 2012-13 are not included).

At an estimated fob price of US$60 per ton, the amount payable to the people of Goa would be US$ 3.687 billion. However, all that Note 2(B) to the financials (Critical accounting judgement and estimation uncertainty, page 142) says is that no impairment is required - though the carrying value of the assets is only US$1.045 billion. Surely $3 billion is materially more than $1 billion? What is the amount and the final sale value of the iron ore that was extracted after 22 November 2007 from Goa? What is the profit that was earned on this ore after 22 November2007? Why isn't there a complete disclosure of these amounts as liabilities and not contingent liabilities, since the offence has been decided at the Supreme Court of India? Why isn't a full impairment required?

"Secondly, the Ministry of Environment and Forests (MoEF) had appointed an Expert Appraisal Committee (EAC) to examine the Environmental Clearances (ECs) issued for iron ore mines in the state of Goa. A summary of the EAC Report was placed before the Supreme Court in the same case. The EAC found a number of ECs needed to be revoked. In certain instances, it recommended punitive action against the project proponent due to misleading information. Are any of Sesa Sterlite's environmental clearances in either of these categories?"

Tom Albanese said that, as an MP, John McDonnell was in a serious position of authority. In 2007, the leases Sesa Goa had and most other mining leases in Goa were coming up for expiry. Vedanta applied for expansion and paid stamp duty for lease extensions and in accordance with standard practice these were deemed approved for lack of government actions. The Government of India then said that the ‘deemed approvals' process was inadequate. Officials of the state of Goa have said this was due to inaction by the state, not inaction by the company.

The state now needs to look at what action it should take given its failure to extend the leases. This also happened in Orissa, and the steel industry had to rely on imported iron ore. The government has to put a new mining law into effect, working with companies and communities. In the Supreme Court hearing there was a recommendation that the Government of Goa should take ownership of stock piles and sell them at auction at market value. The government will also take a 10% royalty, which will probably be near 50% of the total value. The state government has to take action on the basis of the Supreme Court decision. But Vedanta made applications, paid fees and felt it could continue mining as this had been the practice to date. There will also be restrictions to mining to protect wildlife.

John McDonnell said that the Sesa Sterlite Chief Financial Officer had stated that the information would be provided in the public accounts. John had asked for some very specific information. Could the company make it available?

Tom Albanese said'Yes#. There had been a series of leases close to sensitive wildlife areas and now there is a discussion about creating a buffer zone of 1 to 3 kilometres around mines. Vedanta's leases are not in that area.

John McDonnell asked, "When the EAC ruled that certain licences needed to be revoked, it did so because individual companies had provided misleading information. Was this company one of those that were within that category?"

Tom Albanese replied, "To my knowledge, no."

John McDonnell asked him to investigate and let him know.

Francesca Carnavella of Share Action asked about sustainable development. She said she was concerned that according to the company's annual report and its sustainability report, the company had not achieved its goal on worker safety: there had been 20 fatalities a year since 2008 despite its commitment to zero harm, and little or no information was provided about how and why these fatalities were happening. How did the company explain its failure and would it publish a detailed action plan in the next six months?

Tom Albanese replied, "I hope I made myself clear about my own concern about fatalities. Maybe chairman of remuneration committee can explain its policy on fatalities."

Euan Macdonald said that the board had been looking at these things for a long time and had a plan which was to be submitted for shareholder approval that day. The plan included how much is to be paid to various people with responsibility for safety - a reduction of performance leads to breaches in safety. The board takes this very seriously. The first question considered by the remuneration committee is safety. He asked that Francesca look at performance in the future.

Francesca asked whether the company would do this in the next six months. Would reduction of the pay of individuals not shift responsibility from the company to individuals?

Euan Macdonald said that the plan was designed so that people who have particular responsibilities are held responsible for fulfilling them. This goes right to the top. The CEO's own pay is subject to the same things.

Maire Mayne said that she had recently become interested in how companies operate. Safety is not just for workers but for everyone in the environment. Is Vedanta genuinely concerned about this or just concerned to make it look as though it is concerned? Maire was shocked at what is happening in Zambia - poisoning of water, taking of land, not enough taxes being paid. Vedanta had made more profit than has been declared. She said, "When you talk, I don't feel safe. I don't feel honesty and integrity. As a shareholder I want a viable future. If we make a profit at all costs, doing damage to land and the earth, what is the point? How many people could read those newspapers in India saying there would be a public meeting? Have you gone around to communities to check that there has been no intimidation? You talk about school meals but people used to have land and could bring their own food and did not need free school meals."

Anil Agarwal said that the company had invested 3 billion dollars in Zambia and had not taken money out. Vedanta had eliminated malaria. People had told Mr Agarwal not to invest, "but I took the challenge to invest in Africa. My heart felt for people. We have opened hospital, school, cleaned water, because of Zambian copper. Three billion dollars we invested. In my speech to students I said, ‘you should do the same. Go somewhere, put your things and stay, I have created this, you can create something like it.' I will never do any business if it does not help society."

Maire said that this was very good to hear, but that the people she knows from Zambia had given a totally different story from the ground. If there is a good intention it is important to carry it through and not be taken in by people not telling the truth.

Pradeep Chan, investor and investment advisor asked about changes expected as a result of the recent Indian election.

Director Deepak Parekh said that the BJP had been elected with an unprecedented majority. The party had a clear commitment to the ease of doing business, so companies will get a quicker yes or no to business proposals. He was hopeful that the new government would make significant change in India. He hoped things would get better, approvals faster, bureaucracy less.

Tom Albanese added that Vedanta would need to get its bauxite assets to work so it could get aluminium production improved.

Carmen Miranda asked about Goa. She said that one of the rulings of the Supreme Court was to impose a cap on the amount of iron ore to be extracted in the future. When production stopped it was 65 million tonnes and it had come down to 20 million tonnes. There are many mining companies in Goa. Would it still be profitable for Sesa Goa to operate in Goa?

Anil Agarwal said that the company [Sesa Goa] was 60 years old and had seen many ups and downs and is responsible for 35,000 people. It had the capacity to run the business in the right way.

Tom Albanese added that he thought that the mining rate was actually about 40mn tonnes before cessation but the cap now is certainly 20 million tonnes. As some of the mines are excluded because of buffer zones, Vedanta would see its capacity reducing to around 60% of its former level. Part of the Supreme Court ruling was to put a cap in place, but the cap would be reviewed from time to time.

Mining researcher Richard Harkinson said to Mr Albanese: "I wonder about your role and relations with the board, because you came from a company with difficulties with the acquisitions of Alcan and Mozambican coal. Write downs of $40 billion led to your exit from the company. How much of your future performance is linked to the six-fold expansion of Lanjigarh? Is there a real basis to that and are you transparent about that?"

Richard then spoke of the performance share plan. Next year, Mr Albanese may or may not have reduced remuneration if he did not fulfil key performance indicators. Richard said that shareholders had only been told about a key performance indicator on safety. In the world of modern mining, there are a lot of other key performance indicators that could be introduced. He said that Mr Albanese had mentioned a 75% reduction of pollution in the Kafue Rivier in Zambia. He had not mentioned that the poisoned water had for over 7 years toxified the surrounding land and destroyed people's livelihoods. The company could introduce a key performance indicator on water use and pollution. What Key Performance Indicators would it introduce and when?

Euan Macdonald said that he had been referring to the year just ended. A whole new set of objectives, financial and sustainability, including health, water, fatalities, the environment and communities, had been drawn up, and these would be put before shareholders at this AGM. When the board had the shareholders' approval for this, they would give shareholders the metrics.

Richard queried this wording: he said it sounded as though shareholders were being asked to approve a plan before being told what it was.

Euan Macdonald replied that what is included in the non-financial Key Performance Indicator metrics is all that Richard had talked about. These will be published next year - rthe esults will be shown at next year's AGM, what kind of rewards will be put forward, and the use of metrics made clear.

At this point, Chairman Agarwal closed discussion of the Annual Report and Accounts and moved on to the resolutions. Most of the company's critics left the meeting and joined the demonstration outside.