Church of England sells Vedanta stake over human rights concerns

02/05/2010 (3 d 1 h ago)

Controversial plans for open-cast mine on Niyamgiri mountain in Orissa, India, force church to abandon shares worth £3.8m The Church of England said today that it has sold its £3.8m stake in Vedanta Resources, the controversial mining company, over concerns about its human rights record. The church has been under mounting pressure over the past year to disinvest in the FTSE 100 company after it continually refused to back down on its plans to construct an open-cast mine on Niyamgiri mountain in Orissa, India . Activists believe it will destroy the area's ecosystem and threaten the future of the 8,000-strong Dongria Kondh tribe, who depend on the hills for their crops and water and who believe the mountain and surrounding forest to be a sacred place. "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," said the church in a statement, adding that maintaining investments in Vedanta "would be inconsistent with the church investing bodies' joint ethical investment policy". Although Vedanta was the second biggest riser on the FTSE 100 index last year, it has been hit by a succession of public relations problems. In June, an environmental award was withheld at the last minute when details of the mine in the eastern state of Orissa were brought to the jury's attention. The following month, protesters including celebrities such as Bianca Jagger picketed the annual meeting in London over the Orissa project and the campaign to force the church to disinvest began in earnest. In August, India's environment minister admitted the project should never have been approved. Stephen Corry, director of the charity Survival International, 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." Meredith Alexander, head of trade and corporates at ActionAid, said the church's announcement was a "massive setback" for Vedanta. "Vedanta's planned bauxite mine in the holy mountain of Niyamgiri is a social and environmental disaster. It will destroy the sacred homeland of the Kondh tribes and ruin a pristine environment forever. "The Kondh tribes who live around the mountain have been doing everything they can to stop the mine, but it hasn't been enough. They have now found a powerful ally in the Church of England. I hope that the Church's decision helps Vedanta to make the right choice and drop plans to mine." The church is not the first organisation to disinvest from Vedanta on ethical grounds. In 2007 the Norwegian government sold its $13m stake, saying: "There is little reason to believe that the company's unacceptable practice will change in the future." In addition, Martin Currie Investment Management sold its £2.3m stake last year, and BP's pension fund reduced its holdings in Vedanta because of "concerns about the way the company operates". A Vedanta spokesperson said: "We are disappointed by the Church of England's decision to sell their holding in Vedanta. Vedanta remains fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights. We work with a number of NGOs and with the authorities in India, the world's largest democracy, ensuring all our projects are conducted in compliance with the law and international best practice. "We will continue to engage closely with the Church of England to address the concerns they have raised." Vedanta Resources Anglicanism India Mining Ethical business Mining Kathryn Hopkins guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

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