C of E sells shares in Vedanta after pressure from campaigners

C of E sells shares in Vedanta after pressure from campaigners

By staff writers
5 Feb 2010

The Church of England has disinvested from the controversial mining company, Vedanta Resources, after sustained pressure from campaigners, including many Christian groups.

The Church Commissioners and the Church of England Pensions Board announced today (5 February) that they have sold their shares in the mining company on the advice of the Church’s Ethical Investment Advisory Group (EIAG).

As a result, none of the three national investing bodies of the Church of England now hold shares in the company.

The thinktank Ekklesia, amongst others, had highlighted over the last three years how Vedanta has been involved in many unethical activities. This included Vedanta’s bid for mining rights in the Indian state of Orissa in 2007 which faced mounting opposition from thousands of Dongaria Kandha tribal people who feared the company’s plans would damage the fragile ecosystem of the Niyamgiri mountain forest, on which they depend for their livelihoods. They were also reportedly involved in ‘short changing’ Zambia with royalty fees of just 0.6 per cent instead of the 5 to 10 per cent industry average in developing countries.

Most recently there were allegations surrounding their involvement in the supply of materials to India's nuclear missile programme.

Survival International pointed out today that the Church is not the first organisation to disinvest from Vedanta on ethical grounds. In 2007 the Norwegian government sold its US$13m stake, saying ‘there is little reason to believe that the company’s unacceptable practice will change in the future."

Martin Currie Investments sold their £2.3 million stake last year, and BP’s pension fund reduced its holdings in Vedanta due to ‘concerns about the way the company operates.’

The EIAG advised disinvestment because its engagement with the company had produced no substantive results and the EIAG believed that it would be inconsistent with the Church investing bodies’ joint ethical investment policy to remain invested given the EIAG’s concerns about the company’s approach to relations with the communities where it operates.

It said that allegations about Vedanta’s alumina refinery in Lanjigarh, Orissa, and planned bauxite mine in the nearby Niyamgiri hills only came to the EIAG’s attention in June 2009. The EIAG said it had been examining the issues carefully since then and has discussed them in a process of engagement with the company. The EIAG Secretary paid a visit to India in November 2009 to see the refinery and mine site at first hand.

The EIAG Chairman, John Reynolds, said: “I am a passionate advocate for engagement with companies when we have ethical concerns. We have an excellent track record of getting our concerns heard and acted upon by the companies in which the Church investing bodies hold shares.

“We are grateful to Vedanta’s senior management for making themselves available to meet us on a number of occasions. However, after six months of engagement, we are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities that we expect of companies in whom the Church investing bodies hold shares.

“In these circumstances the Ethical Investment Advisory Group advised that it would be inconsistent with the Church investing bodies’ joint ethical investment policy for the investing bodies to remain invested.”

The EIAG understands that the Indian government is still considering whether to give final approval for the mine project.

John Reynolds stressed: “We respect the Indian democratic system. Our concern is that a company registered and listed in the UK should conform to the established environmental, social and governance norms expected in the London market – or at least reassure its shareholders that it is committed to the journey.”

The EIAG said it will maintain contact with Vedanta. John Reynolds said: “We will be pleased to review our recommendation to the Church investing bodies if the company addresses the concerns we have raised.”

The director of Survival International, Stephen Corry said: "The Church’s unprecedented and very welcome decision sends a strong signal to companies that trample on tribal peoples’ rights: we will not bankroll your abuses. Anybody that has shares in Vedanta should sell them today if they care about human rights."

Vedanta was just one of a number of investments in mining companies which the Church of England still holds.

Campaigners point out that mining is one of the most polluting industries in the world. It has a disproportionately negative impact on marine-dependent and land-based communities, especially indigenous peoples, and is frequently associated with forced evictions, militarisation, conflict and human rights abuses including extra-judicial killings.

Both the Church of England and the Methodist Church hold shares in Anglo American, BHP Billiton and Rio Tinto, despite the fact that the Catholic aid agency CAFOD, War on Want, Anglican bishops and the Catholic Bishops’ Conference of the Philippines, amongst others, have previously condemned the companies for their actions. The combined Church of England shareholding in these three companies was valued at £62 million in the last annual report of the Church Commissioners.

BHP Billiton in particular has faced allegations of human rights abuses and widespread environmental destruction. Campaigners (The London Mining Network) recently published an ‘alternative report’ into its activities. It outlined the negative impact of many of the company’s operations – in Australia, West Papua, Papua New Guinea, the Philippines, South Africa, Canada, Colombia and Chile.

The report involved the work of organisations from many countries working with directly impacted communities, including church groups. It catalogued abuses of human rights, particularly of affected communities, issues of worker health and safety, livelihood and food security, and environmental problems. It also raises issues around climate change and BHP Billiton’s commitment to the increased extraction and promotion of both coal and uranium for power production.

Jonathan Bartley co-director of Ekklesia which last year produced a report examining the ethics of the Church's investments said: "This is welcome news that after several years of campaigning, the Church of England has finally realised that the activities of Vedanta are incompatible with its ethical stance on a number of issues.

"But questions must now be asked about the other mining companies in which the Church also has substantial shareholdings. At a time when the Church is seeking to 'green' its churches and campaign against climate change, not to mention human rights abuses, there is a clear conflict if it is seeking to make money from companies involved in environmental destruction and the abuse of vulnerable people."

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