The Joseph Rowntree Charitable Trust has sold its £1.9 million stake in blue chip Indian mining company, Vedanta, due to "serious concerns" about its approach to human rights and the environment, particularly in the Indian state of Orissa.
Other investors which follow the Trust’s ethical policy, including the Marlborough Ethical Fund and Millfield House Foundation, have also sold their shares, taking the total divested to £2.2 million.
The 77,600 Rowntree shares were sold following nine months’ engagement over the company’s actions.
It follows a similar move by the Church of England who announced two weeks ago that they had also sold their shareholding in the company .
Vedanta plans to mine bauxite from a mountain in Lanjigarh and the Niyamgiri Hills, in the state of Orissa, which are sacred to the Kondh tribal people who live in the area. The company has already built a refinery at the foot of the mountain and the bauxite project is reported to be causing severe environmental damage at the expense of the local people.
The FTSE 100 company argues the plant would bring economic benefits to the area but several reports by organisations, including one most recently by Amnesty International, say that livelihoods and sacred land will be destroyed.
Susan Seymour, Chair of the Investment Committee at the Joseph Rowntree Charitable Trust, said: “As a responsible shareholder we have serious concerns about Vedanta. We have heard first-hand about Vedanta’s environmental and human rights abuses in Orissa and believe Vedanta is pushing industrialisation to the detriment of the lives and lands of local people and at great risk to its own reputation. This behaviour may be legal but it is morally indefensible. We have therefore decided to sell our entire stock in Vedanta.
“Although the company defends itself as an Indian company and talks of the importance of development in India, with which we would not disagree, it has chosen to raise capital in the UK and this implies being expected to meet the standards applied to all companies listed in the London market.
“We were not convinced Vedanta was addressing shareholder concerns quickly enough to avoid destroying people’s lives and creating irreversible damage to the environment. The company must realise that unless it makes significant changes soon, shareholders will continue to lose confidence in the company.”
The Trust acquired the Vedanta shares in October 2008 and wrote to the company in May 2009 expressing concern over its treatment of tribal communities living in the Indian state of Orissa. As well as engaging directly with the company, in July last year it met with a tribal leader from the area brought to the UK by ActionAid.
In 2009 the British government ruled that Vedanta, a London-registered company, had failed to respect the human rights of the Kondh, and said an "immediate change in the company’s behaviour" was "essential".