London Calling - August 7 2005

We call in on Vedanta at its AGM to find it hoisted by its own petards

London Calling August 7 2005

Vedanta's second London annual general meeting (AGM) almost foundered on August 3rd, after executive chairman, Anil Agarwal, dismally failed to pacify irate shareholders with his constant repetition of the mantras: 'We have the best standards', 'We will employ world class agencies' and ' We are helping the people.'

Such interminable repetition, and consistent refusal to answer direct questions, boiled over an hour into the meeting when Agarwal was asked from which site the company's Lanjigarh refinery would source its bauxite 'if and when' it's refused permission to mine the adjacent Nyamgiri hills. 'We are confident we will get all the permits we require', he replied. But if you don't?, persisted the shareholder - five times in succession. Finally, a non-executive Vedanta director rose from the floor to rescue his boss: the company, he said, has an agreement with the government of Orissa to provide whatever bauxite it may require.

The AGM got off on a bad footing from the outset, when the company secretary 'explained' that, since there were bound to be lots of questions about Vedanta's operations, space would be provided afterwards for a discussion. It was a manifest attempt to preclude debate over the Company's Report and Accounts. A shareholder shot to his feet, declaring that this would go against accepted corporate practice. Agarwal hastily relented. 'We're here for you!' he declared. 'Our main concern is the interests of our shareholders'. ('That's you and your family!' one shareholder was heard to comment).

Questions about the company's operations in Tamil Nadu, Chhattisgarh, Orissa, and Zambia followed in quick and thick succession. Preserving throughout the smile of a Cheshire cat and the cool of a well-heeled guru, Agarwal's tried to placate his opponents by sometimes agreeing with what they said.

Konkola

After eye-witness descriptions were provided, by another shareholder, of the company's pollution of a river in northern Zambia, its sequestration of arable land and the unacceptable levels of sulphur dioxide emissions at its Nkana smelter, the chairman replied, 'You are quite right' And yes, the company did inherit an agreement with the Zambian government which protected it from prosecution for environmental and health and safety violations. But, of course, it was doing its best to go beyond the minimum and was bringing a new sulphur dioxide plant on stream.

Graphic evidence had already been presented in the independent counter-report, 'Ravages Through India', circulated to shareholders at the AGM and made available to Agarwal twenty four hours before. Most interventions from the floor relied on material in that report.

Chhattisgarh and Tamil Nadu

What, then, was Vedanta's response to findings by a subcommittee of the Supreme Court of India - reprinted in the report - that the Tuticorin copper smelter in Tamil Nadu had been expanded illegally during the past year? Agarwal: 'This is the best smelter in India, and the best in the world!' Would the chairman care to comment on evidence in the report - backed up by photos - that it doesn't place waste rock from its bauxite mines in Chhattisgarh and Tamil Nadu into special containment areas? And that its Mainpat mineworkers have no basic health facilities and electricity? Ignoring the first allegation, Agarwal turned to the second: 'We have built a colony at this mine which has the best houses.' He didn't explain that this colony is reserved for company staff, not the contract workers who do the dirty and dangerous work on a £1 a day.

Just how will the company address the plight of those families, illegally ejected from their land for the new Bodai-Daldali mine in Chhattisgarh? Even Agarwal's pal, the state chief minister, had recently deplored their treatment and demanded proper compensation. The chairman was mute. He also ignored serious allegations, submitted to the Indian Peoples Tribunal last month, that communities close to its Mettur aluminium operations in Tamil Nadu were suffering from a wide range of occupational disease.

Orissa

Half the question time centred on the refinery which Vedanta is constructing at Lanjigarh in Orissa. Yet another Supreme Court committee has found the company, along with the state government, guilty of violations of forestry protection legislation. 'We have never broken the law,' said Agarwal - a claim blown out of the water when a shareholder pointed out that, just a few days earlier, Vedanta had been fined for chopping down trees in that very area. (See story below).

Further angry probing drove Mr Agarwal into a corner where his defence verged on mendacity. 'Lanigarh is the poorest area in India. There have been deaths from starvation there. We are helping save peoples lives.

Everyone is in favour of the project.' It took the impassioned intervention of a social anthropologist from Orissa to torpedo the claim.' Thousands of people are opposed to the project,' he affirmed 'and many have already suffered loss of their livelihoods'.

London Calling has attended many mining company AGMs, naively believing we'd already witnessed the full gamut of untruths, obfuscation and obduracy, characteristic of such meetings. We were wrong. None of the dozen or so substantial accusations, levelled at Vedanta on August 3rd were addressed.

'We believe in transparency!' claims Anil Agarwal, perhaps cognisant of that notorious dictum of Josef Goebbels: 'The more you repeat a lie, the more people will come to believe it.'

Beyond Our Ken

Ken Gooding - former mining editor of the Financial Times and now a 'fifth columnist' with the Mining Journal (MJ) was cited in 'Ravages through India' as one of the few journalists ready to take Agarwal to task.

Coincidentally (?) this is just what he did in last week's MJ (August 5) under the provocative title 'And then there were none' That phrase provides the punch line for an old English rhyme about ten disappearing little Indians. Except that, in this instance, it's the Indians who are in the ascendancy, while the British are falling like ninepins.

'Anil Agaral is tearing down the last vestige of the window dressing put up by the investment bank, JP Morgan, to make Vedanta Resources look more like a suitable candidate for listing on the London Stock Exchange'. rages Gooding. He goes on to point out that, before JP Morgan agreed to endorse the December 2003 float, the bank insisted on directors being appointed to Vedanta's board who wouldn't be Agarwal cronies. With the abrupt departure of Peter Sydney Smith as finance director, just over a week ago, there's now the prospect that his replacement will be yet another Agarwal groupie.

Sydney Smith joins former chair Michael Fowle, and high-profile Frenchman , Jean-Pierre Rodier, in the retreat from Agarwal's camp. We've already pointed out that, as head of Vedanta's HSE committee, Rodier must have been alarmed at its lack of good corporate governance and practice Now Gooding confirms that the mild-mannered Fowle was 'eased out to enable Agarwal to become executive chairman,' earlier this year.

Gooding obviously regrets that these shenanigans haven't dented Vedanta's share price. On the contrary, it's currently riding high - perversely increasing after the outrageous behaviour of Agarwal at the AGM European investors obviously follow Queen Victoria's famous obiter dicta, when informed of the misdeeds of one of her citizens.

'He may do what he likes so long as he doesn't do it in the streets and frighten the horses!'

[“London Calling” is published by Nostromo Research, London. The opinions expressed do not necessarily reflect those of any other individual, organisation or editors of the MAC web site. Reproduction is encouraged with full acknowledgment.]

Chief Minister admits that Vedanta contravened FCA, 1980

Statesman News Service

BHUBANESWAR, Aug. 1. 2005 - Thirty Five trees have been illegally felled by the Vedanta Alumina Limited on 'gramya jungle jogya' (village forest) land in Lanjigarh tahsil of Kalahandi district.

The chief minister Mr Navin Patnaik conceded that the company hadillegally encroached over 4.21 hectares of village forest land. Four encroachment cases have been booked against the company and a fine of Rs 11,471 had been collected from the company for illegal breaking of village forest land, he said while replying to a question asked by Congress member, Mr Lalatendu Bidyadhar Mohapatra. The lanjigarh tahsildar had booked four encroachment cases against the company and realised a penalty of Rs 11,471 under the Orissa Prevention of Land Encroachment Act, 1972.

The divisional forest officer, Kalahandi (South division) has also registered a forest offence case against the Company under section 37 of Orissa Forest Conservation Act, 1972 which had been forwarded to the court of sub divisional judicial magistrate for trial. [A] few Opposition members including, deputy leader of the Congress and former law minister, Mr Narasinga Mishra were not satisfied with the chief minister's reply and wanted to know as to why the Vedanta authorities were not arrested under section 379 of the IPC for encroaching the forest land. They alleged that the government was deliberately shielding the company authorities who were guilty of illegal felling of trees and encroachment of village forest land.

The chief minister laid the affidavits filed by the state governmentbefore the Central Empowered committee of Supreme Court. However, the chief minister refused to table the affidavits of the Vedanta Alumina, stating that it would not be appropriate to place these affidavits on the floor of the Assembly.

Anti-Vedanta youths sneak into Assembly

By InsightOrissa Bureau, Bhubaneswar

Tuesday August 09, 2005

Legislators in Orissa Assembly were for a surprise on Tuesday when leaflets rained from unexpected skies and voices from uncalled for and un-Parliamentary sources interfered the House proceeding.

Legislators in Orissa Assembly were for a surprise on Tuesday when leaflets rained from unexpected skies and voices from uncalled for and un-Parliamentary sources interfered the House proceeding. Five youths, identifying themselves as Kalahandi Nagarika Sachetana Mancha, sneaked into the visitors’ gallery of the Assembly and started raising slogans against Vedanta Alumina project in the midst of a discussion on the State’s law and order situation.

These youths did not limit themselves to sloganeering; they even threw leaflets containing anti-Vedanta statements. The House appeared shocked over this unexpected breach of Assembly sanctity even as security forces rushed in to drag these youths out of the Assembly premises. It took quite a few minutes for the Assembly to regain its composure. The youth were later let go.

But, Speaker Maheswar Mohanty took the matter seriously and suspended the discretion of sanctioning visitors’ pass of the three MLAs including CPI’s Narayan Reddy pending inquiry.

This rare incident has raised questions over the efficacy of intelligence wing of the State Police, as it failed to gather information that activists of anti-Vedanta campaign were unto affect the House sanctity.

Youths disturb House

Statesman News Service

BHUBANESWAR, Aug. 9 — Five youths of Kalahandi district created a flutter in the Assembly today by suddenly raising slogans against the Vedanta Alumina company and flinging papers from the visitors’ gallery. The security personnel quickly whisked the youths away and covered their mouths to prevent them from shouting slogans. The Speaker, Mr Maheswar Mohanty, directed the security staff to enquire how the youths had entered the gallery with the papers.

It may be noted here that the proposed alumina plant to be set up in Kalahandi district has generated several environmental concerns. Presently the proposal is under judicial scrutiny with several legislators submitting petitions to the Central Empowered Committee formed by the Supreme Court. The committee has in turn sent teams to conduct on-the-spot assessment and the hearing is in progress.

The youths told the reporters that they belong to the Kalahandi Sachetan Nagarika Manch and were out to voice their protest in a democratic non-violent manner. Nayan Das, Jayanta Nayak, Satyanarayan Mahar ,G Patra and Trilochan Panigrahi said they had failed in their repeated attempts to draw the attention of local ministers and the MLA’s towards the issue.

These youths alleged that the ministers have their own vested interests. They said this in the presence of the ministers who had come to the security room to talk to them. The plant’s mining operations will not only uproot the tribals, rob their livelihood but also destroy the ecological balance of the Niyamagiri hills, they added.

Later, the Speaker, Mr Maheswar Mohanty, informed the House that the youths had availed entry pass on recommendation of the three MLAs Mr N Surin ( JMM), Mr Md Rafique (BJP) and Mr Narayan Reddy (CPI). The youths were released after brief detention but the privilege of recommending passes has been withdrawn from these MLAs added the Speaker.

Youths cause flutter in Orissa Assembly

Chennai Online

Bhubaneswar, Aug 9: Five youths caused a flutter in the Orissa Assembly today when they raised slogans against the establishment of a private sector alumina plant in Kalahandi district and threw leaflets into the House.

Soon after the question hour, the youths suddenly rose from their seats in the visitors' gallery and raised slogans taking the security personnel by surprise.

They were immediately overpowered and whisked away by the securitymen even as they chanted 'alumina plant in Kalahandi will not be allowed'.

The youths, who were detained by the security personnel, later told newsmen that they had come to oppose the setting up of the private sector Vedanta Alumina Ltd at Lanjigarh in Kalahandi district.

Nayan Ranjan Das, who claimed himself to be the convenor of the Kalahandi Sachetan Nagarika Manch, an outfit agitating against the project for the protection of environment and opposing displacement of tribals, said they had decided to stage the demonstration inside the House to draw the attention of the people and the legislators to the issue.