London Calling! December 6 2004

London Calling! December 6 2004

London Calling Urgent Alert: Outrage in Orissa, as unarmed protestors attacked: British, Canadian, companies implicated

Four years ago three unarmed Adivasi (Indigenous) protestors against a mining project called Utkal, based at Kashipur in the Indian state of Orissa, were shot dead by police. A government commission declared the attack to be unprovoked and named those allegedly responsible, but no redress has been made. News of the killings reverberated around the world, leading Norway's biggest company, Norsk Hydro, to quit the venture. Meanwhile, Hydro's former partner, the Canadian company, Alcan, increased its stake in Utkal as did its Indian partner, Hindalco. Earlier this year, the joint venturers pledged that the project would proceed. Shortly afterwards, the world's biggest "natural resources" company, BHPBilliton announced that it too had a major interest in exploiting bauxite and iron ore in the state, having formed a joint venture with South Korea's steel company, Posco.

Last December, a new corporate enterprise was launched in London. Its sights were even more firmly fixed on Orissa. For, unlike its competitors and putative collaborators, Vedanta has a huge operating aluminium smelter, just across the border in Chhattisgarh state. Vedanta had not only staked out claims in the Orissa district of Kalahandi (not far from Kashipur), but actually started construction of its alumina refinery and made inroads into the bauxite deposits on the sacred Nyamgiri hills, a few kilometres away. Over the past two weeks Vedanta has enlisted the uncritical support of three of the world's leading investment banks - ABNAmro, Barclays Capital and Deutsche Bank - in raising funds to rush this project into production next year.

The banks are promoting Vedanta at precisely the same time as opposition parties in the Orissa state assembly began claiming that the company has trespassed on protected forests, and may be corruptly involved in an illegal deal with the Orissa Chief Minister, Naveen Patnaik. Last month, the Orissa High Court delivered a judgement that Patnaik had given the go-ahead to another illegal mining and minerals deal, with the chromite company IDCOl; IDCOl must now issue fresh tenders.

That's the background. Now for the foreground. In the past seven days Patnaik decided to open up an approach road to the Utkal lease, and lay the foundation stone for a police station in Kashipur. This was clearly intended to intimidate local people (and there are many thousands of them) opposed to the mining, who will gather on December 16th to commemorate the fourth anniversary of the Utkal killings. Several hundred of those who rallied to protest the laying of the stone were brutally attacked by police; some are now in prison. According to reports, the area around the prospective plant has been shut off to independent observers. On December 7th there will be another rally when - judging by recent events - even more brutality may be meted out to protestors.

For nearly a decade the Utkal project has been the subject of numerous news reports and several studies, in which many "outsiders" have voiced their views on whether the local communities accept or reject the mine and refinery. In a pervading atmosphere of intimidation, the understandings and views of villagers closest to the project have become difficult to ascertain. Nonetheless a very substantial number do fear for their future livelihoods. That almost all the villagers in the Vedanta project area also oppose the British company's operations is in no doubt. Naveen Patnaik's BJD-BJP government - backed by the World Bank and Britain's Department for International Development (DFID) - has, at the very least, a prima face case to answer for corruption, favouritism, and violation of Indian laws protecting the rights of indigenous peoples and forests.

Leaders of the mining industry often criticise opponents for irresponsibly bringing their own biases into community politics, and manipulating local people into anti-mining views. But who are the real outsiders in this parlous and potentially bloody situation? And who is currently acting with the greatest degree of irresponsibility? The answer must be obvious.

Whether they care to acknowledge it or not, the global mining companies, Vedanta, Alcan, BHPBiliton and their backers - directly ABNAmro, Barclays Capital, Deutsche Bank; implicitly the World Bank and DFID - now have a stark choice. Either they can announce an immediate halt to all their mining-based designs and commitments in Orissa, at least until an independent public enquiry reports on the extremely serious allegations against the Patnaik administration.

Or they can kiss any pretence of corporate social responsibility a final goodbye.