From Bhopal to Niyamgiri: A lesson for the corporate world

Updated: Sep 01, 2010, 16:56 PM IST

Anil Kumar Satapathy

‘Save the real Avatar tribe’ – read a poster held by weirdly dressed, blue painted protesters in London earlier this year. Dressed up like the Navi tribe in James Cameron’s Hollywood blockbuster ‘Avatar’, the protesters demanded scrapping Vedanta Resources’ mining project in Orissa’s Niyamgiri, a bauxite-rich hill which is home to thousands of tribals.

The protest marred Anil Agarwal-owned Vedanta’s Annual General Meeting (AGM) and the company had a harrowing time taking its shareholders in confidence about its mining projects. Vedanta wants to mine bauxite from the Niyamgiri hills in Orissa’s Kalahandi district for its alumina plant, located in the adjacent Lanjigarh village.

Critics say the ecological and cultural sacredness of Niyamgiri is threatened by the proposed bauxite mining by Vedanta. Notably, the hill is the source of Vamshadhara river as well as major tributaries of Nagavali river. Moreover, its flora and fauna is considered as rare. Inhabitant Dongria-Kondh tribes also believe the hills to be a sacred place. Like the Navi clan in Cameron’s movie, the Dongria-Kondh tribe has been protesting against the mining giant over years.

There were accusations that the ruling BJD-government in Orissa is hand-in-glove with the London-listed Vedanta. The company, on the other side, doesn’t have a very good track record of protecting and respecting nature. It had been criticised in the past by Amnesty International, as well as by the Church of England for its raw handling of nature and affected people.

The strongest blow to the project has come from the central government, which has refused to grant it environment clearance. Adding to Vedanta’s worry, heir apparent Rahul Gandhi visited the proposed mining site and declared solidarity with the protesting ‘Avatar Tribe’.

The mainstream media was unequivocal in its response welcoming the ban. The industry too was cautious in its approach.

However, the Financial Express, arguing against the ban said, “You can’t possibly hope to get 9- 10% growth rates without serious investments, and without huge acquisitions of land for just basic dwelling.”

True we can’t aspire for a China-like growth rate without conceding some ground. Without displacing some, we cannot build factories.

Sullied Past

"Vedanta Aluminium Ltd`s (a subsidiary of Vedanta Resources) alumina refinery has led to water and air pollution, seriously undermining the quality of life and threatening the health of nearby communities," an Amnesty International report said earlier this year on the Lanjigarh project.

In 2007, the Norwegian state pension fund sold its shares in the company, saying being an investor would present an “unacceptable risk of contributing to severe environmental damage and serious or systematic violations of human rights”.

There were also allegations that Sterlite Industries, another subsidiary of Vedanta, lets out gallons of effluents into the sea in the southern seaside town of Tuticorin, Tamil Nadu. Vedanta had also been driven out of Ratnagiri, Maharashtra, on environmental grounds 13 years ago.

In 2009, in a deadly accident in Balco’s Chhattisgarh plant, 40 people were killed creating uproar all over the world about the company’s safety record. Moreover, the Madras High Court had in 2008 stayed Malco, another Vedanta firm, from mining in Tamil Nadu’s Koli hills.

Change in Corporate Behaviour

The Niyamgiri episode has coincidentally come weeks after the court verdict in the Bhopal gas tragedy. There is a correlation between the two.

In both the cases, multi-national companies are involved - with a very poor record for preserving environment and respecting people’s rights.

The Vedanta episode will serve as a wake up call to all those corporations which are planning major investments in India – the era of back door clearances is over. They now have to undergo legal procedures, irrespective of the volume of investment they bring in, and take the affected people into confidence.

Things do change over years. In 1980s, not many raised concern over a government action against Dow Chemicals in the Bhopal gas tragedy case, saying such a move would hamper FDI flow into the country. Today also many minds think the Vedanta episode would hit the wealth flow into India.

What they forget is that the drive for industries without considering the environmental issues is not sustainable. Corporations should rise up to expectations of a ‘sensitive economy’. In other words, the term ‘good corporate behaviour’ is increasingly gaining currency in a globalised world.

British Petroleum learnt it the hard way after Gulf of Mexico oil spill. Following criticism, it went to the extent of abandoning exploration of oil from the Arctic. Another oil giant, Swedish Lundin is under investigation for alleged complicity in Sudan war crimes. Swiss banks are also being slammed for covering up the details of people with black money.

Making profit is not a bad thing, but earning it at the expense of environment and others’ life is certainly very bad.

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