The Church of England is seeking to profit from a mining group involved in the supply of materials to India's nuclear missile programme.
Bauxite mined by Vedanta Resources from an Indian mountain considered sacred by many local people, will be used to produce components for the country's military, the Guardian newspaper reported yesterday.
The Church has a £2.5m stake in the company.
The revelation comes after the Church’s investments in a number of oil and mining companies have come under the spotlight in recent months for the alleged human rights abuses and environmental destruction in which the companies are involved.
The thinktank Ekklesia proposed in a recent report that the Church of England should take a more integrated view of its £5 billion investments and see them as integral to its mission rather than something which funds its activities.
A spokesman for Vedanta told the Guardian newspaper yesterday that bauxite from the mine would be supplied to its Balco subsidiary but insisted that the company was only involved in the production of metals for the weapons, rather than the weapons themselves.
"What these guys sell is the refined aluminium which can then be used for all sorts of things, they are not actually involved in manufacturing weapons," he said.
Balco supplies 90 per cent of the aluminium used in India's nuclear-capable Agni, Prithvi and Akaash missiles.
Vedanta's plan to mine at Niyamgiri in the eastern state of Orissa was featured on yesterday’s BBC Radio 4 Sunday Programme and has prompted a barrage of criticism from environmental activists, who claim it will displace the 8,000 strong Dongria Kondh tribe and wreck the delicate ecosystem of the area. The hill is regarded as sacred by the tribe.
Last week, activists including Bianca Jagger targeted the British company's annual meeting, hoping to persuade shareholders to force the company to abandon plans for the mine.
The Church of England has promised that its Ethical Investment Advisory Group [EIAG] will hold talks with the company's management over the mining plans. It has not however, commented on the company’s links to India’s nuclear weapons programme.
The church has a policy of not investing in companies whose business is the supply or manufacture of armaments.
In a policy document, the EIAG states that "the church has historically avoided armaments where these constituted the main business or focus of any company. However a policy review resulted in new criteria being adopted that provides for the complete exclusion of armaments."
Until last year, the Church invested in the company Caterpillar which makes bulldozers used by the Israeli military in the destruction of Palestinian homes. It said that it sold its shareholding for financial, rather than ethical reasons.
The Church sold its £20m shareholding in arms company GKN eight years ago following pressure from campaigners.
The EIAG is planning to take up an offer from Vedanta to visit Lanjigarh in Orissa, where the firm has a bauxite refinery, to look at its operations.
Campaigners opposed to the mine said the company's involvement in the production of nuclear missiles was further reason to oppose the project.
Meredith Alexander, head of trade and corporates at ActionAid said: "Vedanta's commitment to sustainable development becomes ever more laughable. The news that Vedanta provides raw materials for weapons systems is outrageous.
"This is just another reason why investors should take a hard look at their holdings in Vedanta. The Church of England, for example, state that they will not invest in defence companies. Vedanta's involvement in missile production surely makes their investment even more controversial."
The Church justifies many of its investments in controversial companies on the grounds that it allows it to exercise influence. Critics suggest that the only example it can cite was the Church’s role in changing the uniform policy of British Airways staff following the public row over whether cabin crew should be able to wear gold cross jewellery.
Campaigners also suggest it is naïve for the Church to claim influence on such large multinational companies with comparatively small shareholdings and that the Church’s shareholdings have the effect of giving a false legitimacy to unethical behaviour.
The aluminium alloys needed for India's Agni, Prithvi and Akaash missiles were developed by Balco, purchased from the Indian government in 2001 by Sterlite Industries – which is owned by Vedanta Resources. According to its most recent company report, Vedanta has an alumina refinery at Lanjigarh, where from next year, bauxite mined at Niyamgiri will be processed.
Once that happens, the company plans to continue supplying part of Lanjigarh's output to Balco, which states on its website that one of the key clients is the Indian missile programme.
Earlier this year, the Church’s £33.2 million shareholding in Xstrata group, of which Xstrata Copper is a part, and a £47.5 million shareholding in BHP Billiton, were highlighted in a report ‘Philippines – Mining or Food’. The report provided evidence that their mining was causing large-scale ruin of island environments and people’s livelihoods, in particular undermining food production and sustainability.
Last month, an Amnesty International report said that the company in which the Church of England has its biggest shareholding of £103.7 million – Royal Dutch Shell - was responsible for bringing impoverishment, conflict, human rights abuses and despair to the majority of the people in the oil-producing areas of the Niger Delta.