How The World's Leading Financial Daily Fell Out Of Love With The Truth

How the world's leading financial daily fell out of love with the truth - and into the arms of a liar

On October 19th 2005, the Financial Times published an article based on an interview between its mining correspondent, Rebecca Bream, and Vedanta Resources plc's executive chairman, Anil Agarwal (It was also published, the same day, by the Business Standard in India). The prompt for this story was Agarwal’s announcement of his intention to raise more than U$2 billion on the international finance market for a smelter and power plant in Orissa. The London-based marwari boasted he’d make Vedanta the biggest aluminium producer in the whole of India.

The item completely ignored the fact that – only a month before - the UK company had been condemned by the Indian Supreme Court's CEC, for constructing its Lanjigarh alumina refinery in Orissa, intended to feed the putative smelter. Vedanta had also mendaciously claimed to have obtained "necessary environmental approval for the [Nyamgiri] mine", earmarked to supply bauxite to the refinery. And It had also been indicted by a Chhattisgarh state committee for misappropriating more than 1,000 acres of government land, from which it had illegally topped 50,000 trees. Again, no mention of this salient fact.

In high dudgeon, eighteen individuals and representatives of several leading NGOS from India, the Netherlands, the UK and USA, fired off an Open Letter to the world's leading financial daily, pointing out its errors. The omissions were particularly culpable, said the authors, given Agarwal's transparent ploy to boost investor confidence in his company at this critical stage.

As the signatories pointed out:

"Potential investors, existing shareholders, and those concerned about India’s environment and the rights of its people, deserve to have objective information on the company’s activities and prospects, some of which we have tried to provide." And which the FT clearly had not.

The Open Letter was ignored by the paper for several days. But, on November 2nd, Ms Bream published an article in the FT's special supplement on aluminium. Entitled "Vedanta: Intent on shaking up the industry in India", the piece acknowledged that the company's "...aggressive growth strategy has meant it and its subsidiaries have often been the focus of... opposition." In particular, the Lanjigarh refinery site "... is surrounded by lush, forested hills, which environmental groups argue are a vital habitat for wildlife, including tigers. The area is also home to tribal – or adivasi – communities, whose traditional way of life is protected by Indian law."

Went on Ms Bream: "Vedanta has pushed ahead with the 1.4m tonnes-a-year alumina refinery despite fierce protests from local people and outside pressure groups, and the project is due to be in production in the second half of next year."

According to "Managers...the local community was won over after Vedanta resettled the 100 or so families displaced by the project in high quality housing and paid for various amenities, including a school, a doctor’s surgery and a community centre. Following concerns about the potential environmental damage, managers re-routed access roads to minimise the number of trees that had to be felled."

"But," added Rebecca Bream, "although the alumina refinery seems to have overcome opposition, Vedanta’s plans for a bauxite mine in the hills above the plant remain in doubt. The group has yet to gain final approval from the Ministry of Environment and Forests for the mine, although its has started building some of the infrastructure.. .. The group proposes removing the top section of the Nyamgiri hills, where the bauxite is of the best quality; this would destroy the hills’ biodiversity, say opponents. In September, a report by the Central Empowered Committee to India’s Supreme Court recommended that an alternative site should be found for the bauxite mine, and Vedanta is waiting for the Ministry’s decision. "

Apart from the palpable nonsense that the local community had been "won over" and that the refinery "seems to have overcome opposition," Ms Bream did break a few pieces of fresh ground: this was the first time that a major UK paper had even referred to the widespread revulsion at Vedanta's operations in Orissa. She was also decent enough to call Nostromo Research (which had signed on to the Open Letter and whose address was used as a necessary direct contact for the FT), to discuss the issues further. It was pointed out that key points in the Letter had still not been addressed, but the signatories agreed to make some minor updates in the light of her November 2nd article.

A few days later, this updated version went to the FT Letters Editor who'd earlier "seemed pretty keen" to publish it, according to Ms Bream. After another fortnight's delay, during which an FT lawyer looked the Letter over (he demanded the omission of just one word), it finally seemed ready to go.

But it didn't. On December 9th - more than a month after the Open Letter was first submitted, and with documentary proof of the CEC's unequivocal position now in her hands - Ms Bream said she'd write another article, after confronting Vedanta with the evidence provided. And yes, an article did appear; but it was only a brief news story.

A full-page article - claiming to show how "mining faces up to the cost of presenting a cleaner image to the world" - was published in the FT on January 17th 2006; the author was Rebecca Bream. Any expectation that she would expose the past decade of carefully-plotted corporate conflation between "sustainable mining" and truly sustainable community livelihoods, was dashed.

Not only was Vedanta - surely a prime example of dishonest self-presentation - never mentioned in this major piece; nor were salient arguments, vigorously offered and solidly backed, from numerous communities who've been blasted by recent industry policy and practice.(Only two weeks earlier, there had been the Kalinganagar massacre in Orissa - which the FT also ignored, until a brief mention of it, apropos of Sonia Gandhi's visit on January 11th).

Over the next two days the FT did publish two further items about Vedanta. They barely concealed delight that its third quarter results were now vindicating investor faith in this dodgiest of dodgy UK mining outfits; and that Vedanta was well on the way to becoming a coveted FT-100 company.

Of course the FT doesn't shit in its own stable - and certainly not on a feisty stallion who's now pawing the dust, desperate to lead the field. (Though thoroughbred Vedanta certainly ain't!)

But don't let anyone from the Financial Times (which says it backs readers right to reply) try leading us by the nose in future..