Rough Vedanta

8/8/2019 Rough Vedanta

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BJD v/s JAIRAM AT THE CENTRE

An unhappy Patnaik also said that Ramesh, Environment Minister, had given no indication ofTuesday's decision not to give clearance to the group's proposed $1.7 billion bauxite miningproject in the state when he met him in Delhi on Tuesday. "He (Ramesh) had never mentioned

on Monday this (rejection of clearance to Vedanta's mining project)," Patnaik told. Askedwhether there was any politics behind the Centre's action, Patnaik said, "I certainly hope there isno politics." Ramesh, on his part, said no politics or prejudice against the Biju Janata Dal-ruledgovernment was involved in his ministry's decision. "There have been no emotions, no politicsand no prejudice involved in the Vedanta's case. The decision is purely on the basis of the properlegal approach," which Ramesh said was based on the Saxena panel report, auditor general'sreport and recommendations of the FAC. Ramesh said he has no prejudices against the Orissa

government as his ministry has cleared an important irrigation project in the state for

which the in-principle approval was accorded on Monday. "While rejecting this (Vedanta)

project, I have also cleared an important irrigation project in the state in which over 1500hectares of forest land is involved," the minister said. He also denied that Congress leader

Rahul Gandhi has played a part in his decision. Patnaik said his government would undertake a'detailed examination' of the Environment and Forest Ministry's refusal to grant environmentclearance to the project. "The state government would undertake a detailed examination of theUnion Environment and Forest ministry's rejection order and would take correct and appropriatesteps on the matter," he said. On the N C Saxena panel finding fault in implementation of forestrights act, forest conservation act and environment protection act, he said the state governmentworked on the directives of the Supreme Court while making progress on the mining project."These investments in Orissa were meant to generate jobs for the people and add to the state's

revenue. Therefore, they should be given go ahead," he said, adding that tribal dominatedbackward district like Kalahandi had never received such a huge investment in the past. Rameshalso dismissed reports that rejection was a sort of deal in lieu of clearance to the Korean steelgiant Posco's proposed Rs 54,000-crore (Rs 540-billion) project in the state. The two cannot beequated as the violations of forest dwellers by the latter at the site were also being investigated,he said.

The government's position is shaped heavily by the report of a committee set up by the Ministryof Environment & Forests to study whether Vedanta had complied with environmental laws andhad therefore passed the test that would give it a "Stage 2" or final clearance from thegovernment. Headed by NC Saxena, the committee submitted a damning report last week inwhich it suggested that the company had broken the law for its mining project as well as itsRefinery plant at Lanjigarh. The Committee suggested that the Vedanta operations endangernearly 750 square km of forest land. The NC Saxena Committee was critical of the Orissagovernment's decision to clear the project; its report stated that government officials colludedwith Vedanta to allow illegal activity including encroaching upon at least 26 hectares of villageforest land within its refinery. From its original plans of refining 1 million tons of bauxite,Vedanta has, Ramesh says, illegally expanded its operations to handle 6 million tons. Rameshhas now said the company must explain why its refinery shouldn't be shut down. In 2004, theOrissa government committed to 150 million tonnes of bauxite for Vedanta's alumina refinery; italso stated that the initial supply - upto 78 million tones - would come from the Niyamgiri mine.In the light of Ramesh's emphatic rejection of that, the company claims ,"In view of the ongoing


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delay in approval of the Niyamgiri Mining, the Government of Orissa is actively consideringallocation of alternate source of bauxite to Vedanta's alumina refinery, from the state ofOrissa." The Chief Minister of Orissa, Navin Patnaik, expressed his disappointment with theunion government's stand. "I certainly hope this is not politics because this has to do with thedevelopment and the progress of the state. After all, when these big investments come, the state's

revenue goes up, our young people get many jobs, infrastructure is built in very backward areas.After all, Kalahandi has never received major investment before this alumina plant." In 2007, aPublic Interest Litigation challenged Vedanta's mining project in the Supreme Court. A yearlater, the court cleared the project, but said the government would make the final call "inaccordance with law".

VEDANTAS REPLY: --- Vedanta has offered in its defense the promise that it plans to mineonly 3.5 square kmeters of the 250-km Niyamgiri Range. The company also says that there isconsiderable local support for the project: 5000 locals helped to build its alumina refinery. InVedanta's estimate, its mine will bring Rs. 1,000 crores to the region every year, and will providejobs for 600,000 locals.

P.R. STRATEGY BY VEDANTA

Charges of environmental damage and human rights violations are forcing Vedanta group tochange. Founder Anil Agarwal has to ensure the changes are more than cosmetic. Controversy isnot new to Agarwal, a 56-year-old businessman from Patna who started his career bringingtogether a variety of family businesses nearly 35 years ago. In fact, he thrives on them, havingbecome known more for running some of the worlds lowest cost producers of various metalsand minerals than for running eco-friendly plants.But with his increasingly globalizing businessnow listed on the London Stock Exchange, he is facing more scrutiny outside his homelandwhere implementation of environmental standards could be lax. At Vedantas head office on 16,Berkeley Street in London, however, the reaction to all the criticism is that it is primarily aperception problem. As a result, Agarwal and his generals have set out to correct theperception with a counter public relations strategy.The stakes are getting higher every day.Agarwal still needs an approval from the environment ministry without which his bauxite projectwould be stalled. A multi-billion dollar fund-raising exercise is on the way. Word is out that afew more investors could pull out of Vedanta, though this remains purely speculative as of now.But more importantly, bad reputation could come in the way of Agarwals dream to makeVedanta one of the top five mining companies in the world. But the big question that Agarwalmust ask himself is if all this enhanced criticism he is facing is just an image problem or does hisgroup need soul-searching on the price it pays for chasing ever lower costs of production. Just a

few weeks after Church of England and three other investors sold their stakes in Vedanta,

Agarwal met Niira Radia, the Delhi-based head of Vaishnavi Corporate Communications,

a leading public relations firm that has Tata Group companies and Reliance Industries as

its clients. Agarwal wanted Radia to handle Vedantas public relations portfolio.

Vaishnavi had successfully handled Vedantas affairs when the legal case on the miningproject was being held in the Supreme Court. Though Agarwal had not felt the need tocontinue with Vaishnavi after he won the case, now he wants them. Now, Agarwal expects theprofessional team to take his message across to the outside world.


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an integrated aluminium plant. Not everyone is convinced it is a good plan. High profileinvestors including the Pension Fund of Norway, and the Church of England, sold their

shareholding in Vedanta citing environmental concerns and human right violations at theupcoming plant. Groups such as Survival International, Amnesty and ActionAid, have poundedthe company with similar allegations.According to activists, the projects threaten densely

forested areas that are home to tiger, Indian bison, bear, and elephant. The affected humanpopulation includes impoverished tribal communities, some of whom charge that Vedantasprojects are illegal, and that the state and central governments are colluding with the company tocircumvent environmental protections.

Other example of environmental degradation by Vedanta----- 1)A tribal temple onShervaroyan Peak in the hills of Yercaud in Southern India recently developed several largecracks. Built several centuries ago, the temple has withstood colonization and independence. Butof late, a new mine threatens to destroy this historic site. Vedanta, a fast-growing British

company, owns a subsidiary Madras Aluminium Company Limited (MALCO) that has beenstrip mining this and nearby peaks for bauxite, the ore that yields aluminium used in productsfrom throwaway soda cans to aircraft bodies. Community activists charge that MALCO is aheavy weight player in the local economy and politics, and a significant contributor toenvironmental degradation. Theres a limit to exploitation. Nothing is sacred any more, saysthe president of the local youth federation. Their only botheration is to excavate more and more.Maintaining ecology is not at all an issue. On the banks of the huge reservoir, MALCO operatesa smelter and a refinery complex where locally mined bauxite is converted into aluminium.

2) Social welfare programs have done little to blunt a long history of opposition to Vedanta or tocounter evidence that it has polluted the environment, poisoned locals, and colluded withofficials to bypass environmental protections. In less than 8 years, 139 people have been injuredand 13 killed by accidents or pollution from the Tuticorin smelter complex, according todocumented reports and testimony from workers. Complaints about the company beganmounting in the mid-1990s, when protesters in Ratnagiri in the western state of Maharashtracited environmental concerns to block Sterlite from building a smelter and to force the state torevoke the companys license. Shortly after, a Tamil Nadu government invitation to Sterlite tobuild a plant in Tuticorin sparked massive protests by residents -- particularly fisherfolk.

But the Tamil Nadu project had the blessing of Chief Minister J. Jayalalithaa Jayaram, who laidthe foundation stone for the complex. Less than four months after applying to build the smelter,Tamilnadu Pollution Control Board (TNPCB) granted conditional licenses to construct a 140,000ton-a-year copper smelter and associated plants.

That license stipulated that the unit be at least 25 kilometres from the Gulf of Mannar MarineNational Park in order to protect the regions ecology its famed coral islands and exotic speciessuch as dugongs, sea turtles, and pearl oysters -- from sulphur dioxide, arsenic and leademissions. ABOUT ANIL AGARWAL


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In a country that celebrates its businessmen and politicians that look like film stars, Anil Agarwalhas not been able to make an impression. With his rustic manners that a decade of life in Londonhas not erased, Agarwal doesnt come across as a sophisticated conversationalist. Group insiderssay the perception problem has a lot to do with the stereotyping of Agarwal. Anil Agarwal is amisunderstood person. His only fault is lack of articulation, says a senior official. But nobody

can question the enormity of his success. Over 35 years, Agarwals business empire has grownfrom less than half a million dollars to $6.5 billion. Born in eastern India, he started out as ascrap metal merchant in Mumbai, before moving to London 30 years ago. Agarwals fortunessoared as the small Indian company he set up in 1988 rode the telecom boom, supplying coppercables to telecom companies in India. In the dirt and grime of the mining business, he foughthard and bought old plants to turn them into profitable units. He lobbied with ministers andbureaucrats across four continents to turn hostile situations favourable.When he shifted basefrom India to the high-brow circles of London, hardly anyone gave a chance to this Marwaribusinessman from Bihar speaking halting English. He soon proved his critics wrong achievingthe most rapid growth of his career after the shift.The most incredible thing about Agarwal isthat he prospers in conditions where others wither. Wherever a plant or a mine, universally

declared unviable, came up for a sale at throwaway price, Agarwal would be there to buy. Andmonths later, the plant would begin to thrive in his hands leaving industry peers incredulous.There is no better example for his tenacity than the Orissa project, where he has already managedto put up the refinery, though the mining project is mired in controversies. This is the locationwhere for 25 years, Indian and international behemoths have tried to set up metal productionoperations but failed due to local protests and lack of clearances. But it is also characteristic ofhim to get sucked into environmental debates, protests and controversies.These successes andcontroversies have divided Vedanta observers into two different camps. One set admiresAgarwal for his stupendous success against all odds and for creating wealth for his shareholders.I have known him for almost two decades and worked with Vedanta officials. Agarwal has beenpassionate about growth and fast growth. India is a difficult place to make money for a miningcompany. I defy anyone to show that he is not doing a great job developing his group, saysMichael Rawlinson at the London-based investment bank Liberum Capital, which last monthcame out with statement terming criticism for Vedantas mining project in Orissa unfair,regrettable. The second camp hates him with equal vigour. Vedanta has not shown anyintention to abide by rules. And its ability to carry out projects without bending the rules issuspect. By raising finance in London and operating in India, it is trying to have its way bothways, says Jo Woodman of Survival International, the London-based non-governmentalorganisation that has been in the forefront of protests against the bauxite mining project.Vedanta has got notorious The Orissa project is the most controversial mining project in theworld, Woodman says.In 2007, Norways pension fund sold its stake in the company forenvironmental and human rights violations. Sometime later, Indias Supreme Court clearedVedantas bauxite mining project in Orissa and with supportive administrations at Orissa andcentral governments,Agarwal was assured that the last part of his biggest ever project, theintegrated aluminium plant in Orissa, was now in place.In January this year though, thingsworsened suddenly when four investors including Church of England and the Joseph RowntreeCharitable Trust sold their shares in Vedanta. Within two months, the Indian environmentministry said blamed Vedanta for violating forests laws in Orissa. It looked like Agarwal hadbegun to lose his magic touch with government dealings.If more investors pull out of Vedanta, itwill put pressure on the environment minister, Jairam Ramesh, on the question of clearance for


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the mining project. Ramesh is one of the few politicians in India who hasnt been charmed byAgarwal. Without his clearance, Agarwal will hit a roadblock: His plan to spin off his aluminiumbusiness including the Orissa project into a separate listed company will get stalled; Neither willthe project get the $20 billion valuation that he expects. This is an international conspiracy tostall Vedantas progress. It is common knowledge that the mining project will make Vedanta one

of the lowest cost producers of aluminium and among the top five in the world, says VedantaAluminiums CEO Mukesh Kumar, who is heading the Orissa project. It will be a tough task forAgarwal to convince that the changes he is making are not cosmetic and imply a fundamentalchange in culture. International NGOs allege that the public hearings for its controversialprojects are eyewash.With Vedanta Resources listed on the London Stock Exchange, Agarwalmight also face more calls to take initiatives that would have credence in an internationalaudience. This could include membership of a respected industry responsibility body such asthe International Council on Metals and Mining (ICCM), says Louis Henderson of Church ofEngland. Despite his high level connections, Agarwal has fallen afoul of the law in both Britainand in India where he was accused of collaborating with the infamous stock-market scamster Harshad Mehta. Known as Big Bull" Mehta was notorious for insider trading

and manipulating stock prices. In 1998 while the Bombay Stock Exchange was performingpoorly and Mehta was promoting Sterlite stock, the companys shares rose by 41 percent. Thatsame year, the Securities Exchange Board of India (SEBI) "prohibited [Sterlite] from accessingthe capital market for a period of two years," for insider trading and other offenses. A subsequentexoneration of Sterlite by the Securities Appellate Tribunals left many questions unanswered.

ABOUT VEDANTA

Sterlite Industries India Ltd and Vedanta Alumina Ltd are Vedantas two most significantbusinesses in India. Vedanta groups Indian subsidiaries include:

1. Sterlite Industries India Ltd: Copper business. 80 percent holding2. MALCO Ltd: Aluminium business. 80 percent holding3. Vedanta Alumina Ltd: Alumina business. 94 percent holding between SIIL and VedantaResources plc.4. Hindustan Zinc Ltd: Zinc business. 52 percent held by SIIL.5. Bharat Aluminium Co. Ltd: Aluminium business. 41 percent held by SIILVedanta is a vertically- integrated behemoth with an impressive international portfoliocomprising copper, bauxite (aluminium), zinc, lead and gold. It has raised almost $1 billion onthe London Stock Exchange and has started to snap up mines in Zambia and Australia.In India, which remains its production base, the company runs a giant copper smelter in the

coastal town of Tuticorin in the southern state of Tamil Nadu, and aluminium smelters in thecentral and east Indian states of Chattisgarh and Orissa. According to the companys annualreport, it plans to start a massive captive mine in the Niyamagiri hills of Orissa, a smelter innearby Lanjigarh, and a refinery also in Orissa. The companys share price slid by 10% lastweek wiping 300m off its market capitalization following an Indian government body

ruling against a controversial mining project.Initial concerns about the Orissa mine project


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had developed into disquiet about the companys corporate governance policies and managementof shareholder relations with long-term investors.

.

In 1995, ignoring the TNPCBs instructions, Sterlite erected the smelter complex includinga mothballed smelter scavenged from the U.S. 16 kilometres from one of the protectedislands. Rather than act on the violation, the pollution board granted the company anoperating license to manufacture up to 40,000 tons of blister copper.

In 1996, local resistance came to a head when fisherfolk used an armada of small boats toprevent ships carrying Sterlites raw material copper concentrate from entering the

Tuticorin harbour. But resistance waned after the government conceded to one of theprotesters demands: to prohibit disposing the effluents at sea.

Within two years a spate of accidents and gas leaks from the factory spurred the MadrasHigh Court to commission a report on pollution by Sterlite. NEERI a nationalenvironmental engineering laboratory faulted the company for discharging dangerouslevels of pollution into the environment and recommended the companys closure. Barelythree months later, the same court reversed itself, cleared Sterlite, and recommended itsreopening.

Occupational Injuries and Deaths at

Sterlite.

Sterlite denies that many of the incidentsdescribed below (gathered from communitysources) were caused by the company.

Date Description of Injury/Fatality


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1997Killed: Explosion at the plant. 2persons reduced to charred bone; 2 workersmaimed. July 1997 Injured: Toxic gas leakfrom Sterlite. 120 people exposed. 45 (42women and 3 men) hospitalized. Incident

reported by women workers at a neighboringcut-flowers factory.

(Agarwal told the media: "The incident hasnothing do with our factory and there was noleakage of any kind of gas from our plant.")

August 1997Exposed: Workers at nearbyTamilnadu Electricity Board substation sufferheadache, coughing and choking due tosmoke emanating from Sterlite.

August 1997 Killed: Two contract workerskilled, one injured.

April 1998 Killed: Two employees killed,four injured.

March 1999 Injured: Sterlite Gas Leak 9employees of All India Radio hospitalised

September 2000 Injured: Two workers

sustain acid burn injuries.

November 2000 Sterlite pumps toxiceffluents into village pond. Villagers detainfactory employees.

July 2001 Killed: Worker trapped underGypsum load.

August 2003 Killed: Lorry cleaner killedduring loading

August 2003 Killed: Lorry cleaner killedwhile loading Rock Phosphate

December 2003 Killed: Welder succumbsto a fall


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2003 Killed: Electrician killed. Anotherworker injured.

May 2004 Killed: Worker dies after fallfrom lorry

September 2004 Killed: Contract workerrun over by crane

Source: Sterlite workers and ex-workers,2005.

Then, weeks after the facility re-opened, nine employees of a neighbouring radio station whowere hospitalized, blamed a gas leak at the factory.

By September 2004, when a Monitoring Committee (SCMC) empowered by the SupremeCourt visited Sterlite, the plant was churning out four times the allowed levels of pollutants,according to the Vedantas Annual Report 2004.

In the face of this record, some environmental and human rights activists are confident thatlocal resistance will gain strength. The [anti-Sterlite] campaign is bound to pick up becauseof [Agarwals] arrogant expansionism, says T.S.S. Mani of Human Rights TamilnaduInitiative, a Chennai-based voluntary organisation.

Other activists remain sceptical.I dont know how we are going to succeed given the level of [government] collusion,Fatima Babu says. Even now, they are going ahead with illegal expansions and business asusual.

That cynicism is fueled by the fact that all the new construction in Tuticorin has occuredwithout the environmental clearances legally required by both the central and stategovernments,and that other illegal construction at the Orissa site continues. At the time of the SupremeCourt monitoring committees 2004 visit to Tuticorin, Sterlite had nearly completedconstruction of a 300,000 ton-per-year copper smelter, a 127,000 ton copper refinery, apower plant, and several other units. None had government approval.

Nonetheless, barely a day after the committees visit, the central government gave post-facto

clearance to the already constructed plants despite the fact that Sterlite had never gotten thepollution boards consent to built them. The board approval came in April 2005 when thefactory was ready for production. According to a July 2005 Supreme Court Committee reportthe TNPCB claimed that it consented afterthe Central Ministry ordering it to do so.

Senior TNPCB officials declined to comment. Ill get into trouble if I speak to you. Pleasedont ask me anything, said R. Ramachandran, member secretary (acting) of the board. A


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faxed letter seeking clarification on the reasons for TNPCBs failure to force compliance,elicited a cryptic response from Surjeet K. Choudhary, secretary to the Tamilnadugovernment and temporary board chairman. Board is taking necessary action, he wrote.

Phone calls and emails to Secretary to the Union Environment Ministry Prodipto Ghosh and

to public relations chief Maria Doss went unanswered.

Deforestation and Evictions

The controversies have apparently not affected the companys bottom line. The man behindVedanta/Sterlite, Anil Agarwal, reported that attributable profits for year ending in March2005 were up 66 percent to $120 million."This has been an exceptional period for metalprices driven by strong demand from China," as well as for "increased foreign investmentand the potential [for India] to become a major regional manufacturing hub," he said inVedantas annual report. Agarwal acknowledged that the company had benefitted from thepolitical climate. The Congress Party, elected in May 2004, "has maintained a policy of

growth and liberalization" favorable to his company, he reported.

That growth is in no small part a consequence of Agarwals ability to work the system.Indias commerce minister P. Chidambaram was on the Vedanta board until his partyassumed power in New Delhi last year. His replacement, 70-year old Naresh Chandra, is aformer cabinet secretary and senior advisor to the prime minister of India from 1992 to 1995,and Indian ambassador to the US from 1996 to 2001.

A cartoon in Business India depicts the Vedanta/Sterlite founder squeezing himself throughan hour-glass saying In India, you must have patience. Everything will come through.Many concede that the London-based billionaires understanding of Indias decision-makers

is frighteningly accurate.

Ritwick Dutta, a Supreme Court lawyer who has brought Vedantas violations in Orissa tocourt, says that the company adopts a time-tested strategy: They dont go for smallviolations. They go in for massive violations, bring it to light and then get post-factoclearance after payment of an insignificant fine. In Orissa, they chopped down trees on 58hectares, and gladly paid the fine of Rs. 30,000 or so ($650). Now, they have gone ahead andclear-felled another 1,000 hectares of forests in Chattisgarh.

On September 21, another Supreme Court monitoring committee, this time the CentralEmpowered Committee (CEC) on Forests, recommended revoking Vedanta Alumina Ltds

environmental clearance for a 1 million ton aluminium refinery in Lanjigarh, Orissa. TheCEC found that Vedanta had falsified information, destroyed 58 hectares of forest land andbegun construction without the required clearances.

The refinerys viability is dependent on mining the nearby Niyamagiri hills which are in areserve forest. But the company failed to disclose this while seeking permission for therefinery, says Dutta. Their strategy is to quickly invest money and build the refinery andthen plead with the authorities that their investment nearly Rs. 3500 crores ($780 million)


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would be rendered unviable if the mine is not cleared. The Lanjigarh plant is nearingcompletion, while the mining proposal has yet to secure approval.

Company head Agarwal brushed aside these concerns in his annual report. "There have beensome public interest submissions to a Supreme Court of India sub-committee, regarding the

environmental clearances for the bauxite mining and these are currently being addressed.

Some activists suspect that the ways the company is addressing the problem is not toameliorate damage, but to work its special relationship with government officials. Accordingto Dutta and the CEC, the situation at Orissa throws the integrity of the authorities inquestion.

Indeed, the CEC hints at complicity between the company, the Union Ministry ofEnvironment and the Orissa government. In its report, the committee writes: The casualapproach, the lackadaisical manner and the haste with which the entire issue of forests andenvironmental clearance for the alumina refinery project has been dealt with smacks of

undue favour/leniency and does not inspire confidence with regard to the willingness andresolve of both the State Government and the MoEF to deal with such matters keeping inview the ultimate goal of national and public interest.

Besides the clear cutting, there is the issue of demolition of tribal villages on the land thatSterlite wanted to occupy, says Dutta. In 2004, two tribal villages were razed, and theresidents were forcibly relocated to resettlement camps. Since then, two more villages havebeen evicted with help from the state police and company-sponsored goons, according totribal rights activist Prafulla Samantara.

As of November 10, armed police stationed around Lanjigarh were preventing tribals and

activists from congregating at the plant gate to protest the Vedanta projects illegalconstruction, said Samantara. Police have detained several tribal leaders and their supporters,he said, and a cordon around the village was keeping him from protest site.

The non-profit Peoples Union of Civil Liberties investigated the human rights violationsreported by Lanjigarh residents and concluded: It is hard to believe that [the area] is a partof the same India that the elite continuously brags about having catapulted into twenty-firstcentury. ...The people are terrorised, and believe (perhaps rightly) that their attackers enjoythe support of the police. This apprehension of the people is reinforced by the fact that theattackers admit in public that they have attacked the agitating villages.

Nityanand Jayaraman is a Chennai-based journalist investigating and reporting oncorporations

What is the problem?


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Official reports suggestthatmining Niyamgiri will result in massive deforestation,

destruction of local ecosystems and threaten water sources. Ifthe land thatthe Kondhtribalpeopleare reliant on for their livelihoods is destroyed, it will betheend ofa way of lifethat

has existed for centuries.

Therehas already been widespread criticism ofVedantas toxic wastemanagementatthe

refinery. People living nearby have complained that pollution has reduced crop yields andpoisoned livestock and caused health problems. TheOrissa State Pollution Control Board

Report in 2008 found that caustic soda seepagefromthe site was alarmingand that

ambientair quality was not conforming to standards.

Who is Vedanta Resources plc?

Vedanta Resources Plc is a UK metals and mining company. It operates throughouttheworld, but particularly in India. It produces aluminium, copper, zinc and lead.Sterlite

Industries, a subsidiary ofVedanta, is currently setto startmining for bauxite (a raw form

ofaluminium)fromthe Niyamgiri Hills in the State ofOrissa. A refinery has already beenbuiltatthe base ofthehills by another Vedanta subsidiary, Vedanta Aluminium Ltd. The

refinery is already operational with bauxite being brought in from other mining sites.

What is the planned Vedanta project?

The Niyamgiri Mountain is rich in amineral called bauxite which is the raw form ofalumina.

When alumina is refined it becomes aluminium a cheap metal that is used the world overto produceeverything from saucepans to aeroplanes.

Sterlite wants to build an open pitmineto extract bauxitefromthetop ofthemountain,which would then betransported down to the refinery atthe base ofthemountain.

Who is affected?

The Niyamgiri hills is theancestral home ofthreetribal groups the Dongria Kondh, Kutia

Kondhand the Jharania Kondh. Thesetribal groups are supposed to be protected under

Indias Constitution as their distinctive way of lifeand culturemakes them one of Indiasmost vulnerable indigenous groups.

For generations thethousands of people living in small groups across themountain havedepended upon itfor their lives. The perennial springs provide water and thefruitand

animals providetheir food as well as their medicines and livelihoods. They also worshipNiyamgiri Mountain as their living god.

Themountain is also a pristineecosystem rich in biodiversity, whichtheWildlife Institute of

India states has great conservation significance. It is theabode o

fmany endangeredspecies, suchas tiger, leopards and elephants

Whatare we calling for?

The Indian Governmentto recogniseand protectthe constitutional rights of indigenous peopleto their ancestral

lands. "We will not leave Niyamgiri. Without our mountain, our god, there is no lifefor us," says 36 year old Mali Majhi fromthe Kondhtribe.


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Tribal communities in Orissa, India, are living in fear for their future dueto the development

ofa combined bauxitemining and alumina refinery project in theheart oftheir ancestralhome by a subsidiary ofthe UK mining and metals company, Vedanta Resources plc.

Until Vedanta camealong, generations of indigenous peoplefromthe Dongria Kondh, Kutia

Kondhaand Jharaniatribes lived in theforests of Niyamgiri mountain, Orissa, foraging for

food, raising chickens and growing vegetables and rice.

Now tribal members say they've been involuntarily displaced fromtheir homes and refused

compensation for their lost land. They arealso concerned aboutthe impact ofmining on

Niyamgiri mountain, from whichthey derivemany ofthe religious beliefs and culturalpractices that definetheir tribal identity.

History

Orissaand Sterlite Industries (India) Ltd, a subsidiary ofVedanta Resources plc have signed

a 'memorandum ofunderstanding' withtheOrissa governmentfor establishing a bauxite

mine on the plateau atop Niyamgiri and a refinery atthefoot ofthemountain.

The company plans to mine over one million tonnes of bauxitea year from reserveswithin Niyamgiri mountain.

Official studies have suggested thatthis is likely to lead to massivedeforestation on theslopes, the destruction ofprotected local ecosystems rich in biodiversity, and thedisruption of key water sources that supply springs and streams on the surroundinghillsides and feed two rivers which irrigate largeareas offarmland in southeastOrissa.

Protests aboutthethreatthe project poses to theforests local people depend upon for their

livelihoods have been repeatedly ignored by officials and the company.

After athree year casefull oflegal controversies, the Supreme Courthas given clearancefor Vedantato go ahead.

Ifmining is to be permitted, lawyers say two of India strongest Consitutional guarantess will

be overturned: theright to life and human dignity (article 21)and theright toreligious practises and beliefs (article 25).

The cost

Bratindi Jena ofActionAid is helping build supportfor the Kondhs struggleto savetheirmountain. She says the cost ofmining would be phenomenal:

"Niyamgiri bauxite would come at the cost of clean water and pristine forest in anotherwise drought-hit district. It also represents an outright assault on the cultureand religion of the indigenous people who live there."

"Permitting mining would pave the way for persecution of a minority communityand deny legal protection for their religious beliefs," sheadds.

In the words of 36 year old Malari, "For us this is a life and death fight."


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A huge thank you to everyone who has supported the Vedanta campaign to stop amine being built on the Kondh tribal peoples home.

Your

Read a very interesting article in the Guardian on Saturday (26 June), whichhighlightedthe plight of indigenous tribes fromacross the world, as they fightto hang on to their land

and way of life.

Across the globe, corporations likeVedantaare greedy to dig up the wealth ofmineralsthat lie beneath indigenous land. This is ahuman rights emergencyfrom South Americato

South India.

Butthecommunities are fighting back. In Niyamgiri there is continuing activism, astribal members continueto peacefully protestagainst Vedanta construction workers.

Only this morning there was another piece ofexcellent news: Last week, Vedanta was

trumpeting how they had bagged the prestigious Golden Peacock Environmentaward that is

instituted by theWorld Environment Foundation (WEF). Since protests fromactivists aboutVedantas environmental record atthe Global Convention on Climate Security, WEF are now

saying thatthey are rethinking the decision.

Vedanta is not invincible. Every small win is importantand reminds themthatthis battle is

far from over.

Wemustsupport the Kondhtribes struggleto stop themineand send amessagethatcorporations cannot ride roughshod over peoples lives.

y .

Various aspects of the it- the latest landmark decision of the Centrerejecting environmental clearance to the Vedanta groups $ 1.7 billion bauxite mining project inOrissas Niyamgiri hills with Union Minister of State for Environment and Forests Jairam

Ramesh citing serious violations of the Environment Protection Act 1966, Forest CounservationAct 1980 and Forest Rights Act 2006 by both the Orissa Government and Vedanta in this regard.

The four-member committee headed by N.C. Saxena should be congratulated for exposing themany illegal and unethical aspects of Vedantas proposed Niyamgiri Mining Project in Orissa.However, it needs to be pointed out that the illegality of this project was well-established evenbefore this panel submitted its report. This is evident from the report the Central EmpoweredCommittee (CEC) (constituted by the Supreme Court) submitted in 2005.


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In its observations and conclusions the CEC drew attention to several important aspects of thisproject and its execution. In the notice dated June 6, 2002, issued for the land acquisition for thealumina refinery project by the Collector, Kalahandi, it was mentioned that

lands for compensatory afforestation shall be provided at other places in lieu of 118 acres of

existing village forest coming inside of project area.

On this basis the CEC had drawn attention to the fact that the State Government even at thatearly date was aware about the involvement of forest land in the project. Yet in the applicationdated March 19, 2003 filed by Messers Sterlite (parent company of Messers Vedanta) forseeking environmental clearance for the project it was stated that nil forest land is required forthe alumina factory and that within a radius of 10 km of the project site there is no forest, whichis not correct.

Later though a proposal for the use of 59 hectares forest land for this project was pending beforethe MoEF, the environmental clearance for the alumina refinery was accorded by it on

September 22, 2004 stating that the project does not involve diversion of forest land.

In the words of the CEC,

Had the guidelines issued by the MoEF been followed, or the environmental wing of the MoEFhad taken cognisance about the involvement of the forest land in the Project or if MessersVedanta had furnished the correct information in its application for the environmental clearance,the construction work on the alumina refinery would not have been started at all.

Pointing out another serious distortion in the environmental clearance of this project by theMoEF, the CEC had stated that normally this is accorded after assessing the environmental

issues associated with the linked mining project. Initially the MoEF had stated explicitly that itllfollow this normal procedure, but later, following a request by Messers Sterlite, the MoEF wentout of its way to in effect delink the alumina refinery project and the mining project by grantingthe in-principle environmental clearance for the refinery project.

Criticising this decision the CEC said:

Such delinking is objectionable because the alumina refinery project has been located inLanjigarh because of its proximity to the proposed mining site at Niyamgiri Hills, Lanjigarh. Inthe event, for the mining component the environmental clearance and/or the forest clearance isrejected, the expenditure of about Rs 4000 crores being incurred on the protect will become

infructuous.

The illegality of the way the work on this project has proceeded will be evident from a reading ofpara 4.4 of the guidelines laid down by the MoEF: Some projects involve use of forest land aswell as non-forest land. State Governments/Project Authorities sometimes start work on non-forest land in anticipation of the approval of the Central Government for release of the forestlands required for the projects. Though the provisions of the Act may not have technically beenviolated by starting of work on non-forest lands, expenditure incurred on works on non-forest


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lands may prove to be infructuous if diversion of forest land involved is not approved. It hastherefore been decided that if a project involves forest as well as non-forest land, work shouldnot be started on non-forest land till approval of the Central Government for release of forestland under the Act has been given.

Examining the execution of this project in the light of these guidelines, the CEC concluded:

The Alumina Refinery construction work has started and continued in blatant violation of theabove stated guidelines.

Later when this was exposed, quick-fix actions were initiated by Messers Vedanta (who saidthey dont need 59 hectares of forest anyway for the refinery), the Orissa Government and theMoEF (who then gave the go-ahead to Messers Vedanta). All this was accomplished within fivedays, showing that vested interests work most efficiently when they have to cover-up theirillegalities. It is another matter that all these desperate actions still left behind a trail of illegalacts. Among other things, it was pointed out by the CEC that 10.41 acres of the said land was

found to have been encroached by Messers Vedanta by way of land breaking and levellingactivities for which forest offence cases have been registered and show-cause notices have beenissued by the Orissa Forest Department.

The CEC also summarised various objections filed by the applicants: As per the applicantsNiyamgiri Hills forms the source of the Vamsdhara river and a major tributary of the Nagvalli.Thirtysix streams originate from within the mining lease area. Most of these streams areperennialdue to springs originating just below the bauxite escarpment. These are used forirrigation as well as a source of drinking water by the people living in the adjoining villages. Bymining of bauxite deposits at the top of Niyamgiri the water retention capacity of the bauxitedeposit will be destroyed. The mining will lead to the flow of mineral overburden into the

streams. In the process it will destroy the micro-niches along the streams.

...As per the applicants the location of the pond for the red mud, which is a mix of highly toxicalkaline chemicals and contains a cocktail of heavy metals including radio-active elements, andthe Ash Pond on the Vamsdhara river may cause serious water pollution. The breach of the redmud and the ash pond may cause severe damages downstream. The potential for such anoccurrence has not been properly assessed.

Finally, the CEC recommended:

The CEC is of the considered view that the use of the forest land in an ecologically sensitive arealike the Niyamgiri Hills should not be permitted. The casual approach, the lackadaisical mannerand the haste with which the entire issue of forests and environmental clearance for the aluminarefinery project has been dealt with smacks of undue favour/leniency and does not inspireconfidence with regard to the willingness and resolve of both the State Government and theMoEF to deal with such matters keeping in view the ultimate goal of national and public interest.In the instant case had a proper study been conducted before embarking on a project of thisnature and magnitude involving massive investment, the objections to the project from


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environmental/ecological/forest angle would have become known in the beginning itself and inall probability the project would have been abandoned at this site.

Keeping in view all the facts and circumstances brought out in the preceding paragraphs it isrecommended that this Honble Court may consider revoking the environmental clearance dated

September 22, 2004 granted by MoEF for setting up of the Alumina Refinery Plant by MessersVedanta and directing them to stop further work on the project. This project may only bereconsidered after an alternative bauxite mine site is identified.

BAUXITE mining and aluminium extraction is generally known for its numerous adverseenvironmental impacts. Particularly troublesome is the disposal of alkaline mud (or red mud).Other problems are related to the release of caustic soda (used to extract alumina from rawbauxite) into the ground water, increasing sodium concentration in the water of wells.

Learning from the experience of a previous project, Felix Patel (an authropologist) andSumarendra Das (a senior journalist) wrote recently: This type of refinery is highly polluting. Tocomprehend the impact it would have on the local environment one has only to visit Damanjodi,150 kms. away in Koraput district. This is Nalcos refinery, next to its 20 km. long bauxite mineon the mountain of Panchpat Mali. The area for miles around already resembles a desert, and thetribal villages have faced cultural genocide. Among the worst pollutants of such factories are thefumes and the highly toxic waste product known as Red Mud, full of heavy metals, whichinvariably has a highly damaging effect on water sources.

In the case of the present project the possibilities of ecological and cultural disruption as well asadverse impacts on livelihood are all the more accentuated because of the sensitive ecology of

the Niyamgiri region, the special cultural niche of the area and its very close integration with thelife of the tribals and also because of the large-scale, mechanised open-cast mining involved inthe project.

The Niyamgiri hills in the Eastern Ghats region have a very special place in the life and legendsof Dongria Kondhas (a primitive tribe) who live here. The very identity of being a DongriaKondha is linked up with residing and possessing land here and passing it on to posterity.

Along with Dongria Kondhas, the Niyamgiri hills are homes of Kutia Kondhas and JharaniaKondhas, all primitive tribal groups famed for their horticulture. They live in about 200 villagesscattered throughout the hill range. All of them, as well as the Majhi Kondhs who live in theplains below, regard the Niyamgiri as sacred home, as their place of origin.

A report prepared by Environmental Protection Group on the ecological importance of thisregion says:

The rare indigenous tribes in Niyamgiri have developed, practised and nurtured their life andlivelihood patterns with forest and wildlife forming a formidable system of mutual dependence.


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The livelihood of Dongria Kondhas is closely related to the Niyamgiri forests. They collectvarious types of forest products and sell these at nearby weekly haats. Around 40 to 50 per centof their annual income is obtained from the selling of forest products like siali leaves,myrobalans, amla etc. They grow fruits like pineapples under the thick forests. They arent at allknown for hunting. The census for 2001 revealed that the total population of this tribe is 7952.

The cultural aspects are no less important. The Niyamgiri hills are highly valued for the religiouslore associated with these. The proposed mining area at the top of the Niyamgiri hills is anextremely sacred place for Dongria Kondhas. Hence hunting or cutting trees on Niyamraja rangeis taboo for them. But if this area is blasted for mining then this will be a great cultural shock forthese simple people.

It is very important to keep in mind this economic, ecological and cultural importance of the

Niyamgiri hills iLanjigarh is a village situated in thehilly landscape of Kalahandi District in Orissa. Today Lanjigarh issynonymous with Vedanta Aluminium Ltds projectthat consists ofa state-of-the-art Alumina Refinery and proposed

Niyamgiri bauxiteminethat was identified for mining by the Government ofOrissaall the way back in the late 1970s, well

beforetheformation of Vedanta Resources. In the late 1990s, Sterlite Industries India Limited (SIIL), a Vedanta

subsidiary, signed a Memorandum of Understanding (MoU) withtheOrissa Mining Corporation (OMC)for development of

Bauxite Mines and setting up ofan Alumina Refinery at Lanjigarh. Only after extensive studies ofthe impactthe project

would have on theenvironment, wildlife, and most importantly the people living in thearea, did Vedantamoveahead with

actual construction ofthe refinery in 2004. Consultation was conducted withthe local inhabitants in line withthe rules and

regulations ofthe country.

The Vedanta Alumina Refinery is a greenfield refinery withan existing capacity of 1 mtpa, which will beexpanded to5mtpa. It is thefirst Alumina Refinery in Indiato adoptthe Zero Discharge System, i.e. no water or effluent is discharged

externally fromthe refinery. The plant is located ata distance ofapproximately 3 kmfromthemain streets ofthe

Lanjigarh village. Large industrial projects require land leading to someamount of displacement. Vedanta designed this

projectto minimize displacement ofthe people who lived in thearea. In thealumina refinery project, about 121 families

were displaced after extensive consultation withthem, and only after they gave consentto be displaced and rehabilitated.

Thereare stringent rules and regulations in Indiaaround displacing people, and Vedantafollowed these regulations. These

families have been successfully resettled in amodern housing colony that was built by Vedanta, just 1-2 kmfromtheir

original homes, so thatthey would still continueto live in the sameareathatthey have been living for generations.

Whilethe refinery has commenced operations, themining has not yet begun. The proposed bauxitemine is located just 5

kmfromthe refinery, thus minimizing the carbon footprintthat comes fromtransporting raw materials over large

distances. In mining operations, movement ofmaterials by truck can cause disturbanceto local communities. In the case

ofthe Lanjigarh project, the bauxite will betransported to the refinery by an environment-friendly, covered pipe conveyor

system, thus minimizing noise, dustand vehicleexhaust. Further, the proposed bauxitemines are located in an

uninhabited area, so no families will be displaced fromthemining area.

Vedantahas projects in various states of Indiaand is committed to thehighest standards of Health, Safety, Environment

and Community Engagement. Vedanta Aluminium Limited (VAL)has been conferred witha number ofawards suchas the

British Safety Council Award 2009, Green Business Leadership Award 2009 and the St. John Ambulance Annual Award

2008. The CEO ofVedanta Aluminium Ltd. was awarded the Global Ethical Practices award in January 2010. Vedantas

Alumina Refinery at Lanjigarhalso holds certifications of Quality management system-ISO 9001-2008, Environmental

Management System- ISO 14001-2004 and Occupational Healthand Safety Management System-OHSAS-18001-2007.

The Lanjigarh Alumina Refinery Operational Since 2007The Vedanta Alumina Refinery at Lanjigarh currently has a refining capacity of 1 mtpaand plans to expand its capacity

upto 5mtpa. The plantemploys state-of-the-arttechnology and environmental practices. Spread across an area of 2060

acres, the plant symbolizes industrial progress and development in the region.

Salient Features:

y Close proximity to the raw material (5 kmfromthe Bauxite Mine), and well connected rail and road network inaddition to easy access to ports.

y Zero Effluent Discharge Technology no water or effluent discharged externally fromthe refinery.y Use ofenvironment-friendly pipe conveyor systemto transport bauxitefromthe Mineto the Refinery.y High Concentration Slurry Disposal technology for Red Mud and Ash i.e. pumping athigh solid concentration

ranging which requires low water usage.


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The Proposed Niyamgiri Mine Mining not yet commencedThe bauxite depositthat is identified to supply bauxiteto the Vedanta Refinery is located on onehill in the Niyamgiri Hill

Range. Out oftheapproximately 250 sq km Niyamgiri Hill range, only a 4-5 sq kmarea of onehill will bemined.

The deposit lies between latitude levels of 19-38to 19-41N and longitude levels of 83-22to 83-24E -atan altitude of

1,050 meters to 1,306 meters abovemean sea level. The bauxite is located in localized pockets up to amaximum depth of

30-35 meters.

The distance between themining areaand the Refinery is approximately 5 km. Themining o

fbauxite will be carried out bythe state-owned Orissa Mining Corporation (OMC), under a joint venture with Sterlite Industries. Themined bauxite will be

transferred to the Refinery througha quietand efficient pipe conveyor. Concurrently, a sustainable back-fill and

reclamation sequence will be implemented thatfacilitatethe green belt development. The proposed mining area is

uninhabited and no families will be displaced.

All compliances required for mining as per Government rules and requirements have been complied with, and thefinal

clearance is awaited. There was a Public Interest Litigation (PIL)filed in 2004 in the Supreme Court of Indiaagainstthe

mining project. The Supreme Courtexamined all aspects ofthe project in detail and cleared the project in 2008. The

Supreme Court directed SIIL to plough back thehigher of5% ofthe profitearned fromthe project, or Rs. 100 million

(c.USD 2 million) on the development ofthearea, which SIIL will fully comply with. This is being implemented throughthe

Lanjigarh Project Area Development Foundation (LPADF) a special purpose vehicle (SPV)formed by the Government of

Orissa, Orissa Mining Corporation and Sterlite Industries. Rs.200 million (c.USD 4 million)for 2007-08 and 2008-09 has

already been deposited withthe SPV. Besides, Rs.122 million (c.USD 2.5 million)havealready been submitted for tribal

development with CAMPA (Compensatory Afforestation Fund Managementand Planning Authority).Development Projects

worth Rs.170 million (c.USD 3.6 million)have been identified and approved by the SPV in thefirst Board meeting held inOctober 2009.

Salient Features

Mine Lease Owner Orissa Mining Corporation

Capacity of Mine 3.0 mtpa Bauxite

Mining Lease Area 721.323 ha

Geological Reserves 88.7 mt

Mineable Reserves 77.7 mt

Method of Mining Opencast

Project Approval Procedure

Indiahas stringent rules and regulations with regards to Mining. Multiple processes and procedures are in placeto assess

themerit ofevery project. Vedantas Lanjigarh projecthas been putthroughexhaustive scrutiny and after satisfying

outcomes, theauthorities, including the Honorable Supreme Court of Indiahave given the go aheadto the project in

principle, along withmandatory guidelines. The refinery has commenced operations after receiving all approvals, whilethe

mining has not yet commenced as itawaits final forest diversion clearance.

New projects are granted approval by Indias Central Ministry of Environmentand Forests (MoEF)as per prevailing

guidelines ofthe Government of India which involves thefollowing steps:

1.Application is submitted to the MoEF for grant of site clearance.2.Preparation of Environment Impact Assessment (EIA) reporttaking into account datafor thefollowing:

(i) Resettlementand rehabilitation study, ifapplicable

(ii) Hydrology and hydrogeology study(iii) Ground water/surface water withdrawal permission

(iv) Details offloraand fauna in thearea

(v) Details ofthe impact of project on air, water and ground topography

3.Submission ofthe EIA reportto the State Pollution Control Board witha requestto conductthe PublicConsultation process.

4.Obtaining permission fromthe District Collector regarding the place, dateand nomination oftheir representativeto attend the Public Consultation.

5.Publication ofthe notice of public consultation in two newspapers, one national and another atthe local level witha 30 day holdover period for comments, ifany in the Englishand local languageand also inform peoplethrough

word ofmouthand through local community leaders.


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6.Conducting the Public Consultation witha presentation to theattendees and recording oftheminutes ofthemeeting by a State Pollution Control Board Official. Italso involves consulting the Gram Sabha or the council

of local villagers wherethe project is situated.

7.Incorporation ofthe issues raised in the Public Consultation process along with replies to each such issue in theEIA reportand submission to MoEF withall the study reports.

8.Issue of No Objection Certificate (Consentto Establish) by the State Pollution Control Board.9.Filing application to the MoEF along withthe No Objection Certificate, for grant ofenvironmental clearancefor the

project.

Vedantas Lanjigarh Project has passed through all these stages of Project Approval, before it was grantedpermission to proceed.

Chronology of Events for the Lanjigarh Project

y April 1997: An MOU was signed between SIIL and OMC for development of Bauxite Mines and setting up ofAlumina Refinery at Lanjigarh.

y February and March 2003: A Public Hearing was conducted at Lanjigarhand Munigudafor grant of No ObjectionCertificate (NOC). This was followed by filing ofapplication along withthe EIA, to MoEF for environmental

clearance

y May 2003: The NOC was granted for the Project by the State Pollution Control Boardy June 2003: An MOU was signed between SIIL and the Government ofOrissafor setting up the Alumina Refinery.

y September 2004: The Mining Lease of Lanjigarh was granted in favour ofOMC and Environmental Clearanceforthe 1 mtpa refinery.

y December 2004: Site inspection was carried out by thefactfinding team of CEC (Central Empowered Committee)that was appointed by the Supreme Court of Indiato look into the petitions filed in relation to the Project. The

CEC submitted its reportto the Supreme Court of India in September 2005.

y June 2005: An Application was filed by OMC for the grant of Environmental clearancefor the projectalong withEIA.

y March 2006: Based on CEC observations, the Supreme Court directed MoEF to appoint subjectmatter experts.The MoEF appointed WII (Wildlife Institute of India), Dehradun and CMPDI (Central Mine Planning and Design

Institute Limited), Ranchi to conduct studies relating to biodiversity including wildlifeand their habitat, soil

erosion, hydrogeological characteristics and flow of natural water sources.

y September 2007: MoEF was directed by the Supreme Courtto presenta report on impact of bauxitemining onflora, faunaand tribal habitation in Kalahandi and Koraput Districts ofOrissa.

y October 2007: MoEF submitted the report on the impact of bauxitemining on flora, faunaand tribal habitation inKalahandi and Koraput Districts and an order was passed by the Supreme Court, directing theOrissa

Governmentto submita detailed report on the same.y November 2007: Disposal ofapplications filed by Vedanta Aluminium Limited (VAL). Subsequently, Court ordered

SIIL (an Indian subsidiary of Vedanta Resources plc)to filean application for grant ofmining clearance ifSIIL,

OMC and the Government ofOrissa wereagreeableto the Rehabilitation Programme suggested in the order.

y December 2007: An Application was filed by SIIL to the Supreme Court complying withthe directions ofthecourt. A joint venture was formed between OMC and VAL, whereby the joint venture company would minethe

bauxite on behalf ofOMC and OMC to continueto remain as the Lessee.

y August 2008: The Supreme Court passed a Final order, clearing the project, and approving theforest diversionproposal for 660.749 ha offorest land to undertake bauxitemining on the Niyamgiri Hills in Lanjigarh.

y December 2008: Receipt of Stage-I approval by Government of Indiafor diversion of 660.749 Ha of land requiredfor the Mining Project, followed by OMC submitting thefinal Mining Plan to IBM (Indian Bureau of Mines)for

approval which gotapproved in January 2009.

y February 2009: SPV Agreement was executed between OMC, SIIL and Government ofOrissaas per the SupremeCourtOrder.

y April 2009 : Environmental Clearance granted for Mining Project by MoEF.y

April 2009: Receipt of Stage-I approval for diversion of 33.73 Ha offorest land for construction of conveyor andMine Access Road for themining project. Followed by the grant ofenvironmental clearancefor the Miningproject by MoEF.

Stage-II Forest diversion clearance is awaited for themining project in order to commence operations.

n order to understand the disruptiMetals giant Vedanta Resources Indian subsidiary haslaunched an unprecedented attack on Survival International, apparently to drive its researchersout of an area where the company is planning to mine.


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The mining company has falsely accused Survival of forcedly interacting with the DongriaKondh tribe who live around the area earmarked for mining, and of causing unrest. Vedantahas prompted a police investigation into Survival, with officers making a late night visit to ahotel where they believed Survival researchers were staying.

Survival researchers were in the Niyamgiri area of Orissa, east India, to talk with members of theDongria Kondh community whose future is threatened by a proposed Vedanta mine on theirsacred mountain.

Pavan Kaushik, Vedanta Groups head of corporate communications, wrote to journalistsalleging that foreign NGOs including Survival International are provoking innocent tribals todefame the government and the company. In the letter, he attacked foreigners for freelymoving in the region and alleged that they were circulating false information. The letter alsoinvites journalists to contact the regional Superintendent of Police, who is named as available forinterview.

In September the British government ruled that Vedanta had repeatedly failed to respect thehuman rights of the Dongria Kondh, demanding a change in the companys behaviour. Thegovernment asked Survival to report back on what steps Vedanta had taken to implement theseessential changes before the end of the year.

Gordon Bennett, a London barrister who represented the Kalahari Bushmen in their historic winover the Botswana government, has been acting on behalf of the Dongria Kondh in theircomplaint over Vedantas behaviour, and accompanied the Survival researchers.

He said today, We have not circulated any false information about Vedantas mining activities.All the information we have given the Dongria has been culled from Vedantas own mining plan,

which it has never troubled to discuss with the Dongria itself. We have not forcedly interactedwith the Dongrias: on the contrary we have been warmly welcomed by all those we have beenable to meet.

We have not provoked innocent tribals to defame either the government or Vedanta. It is trueto say however that feelings run high in Niyamgiri and that many Dongria regard Vedanta withsuspicion and distrust. They believe that their way of life is under serious threat.

We have done nothing to create misunderstanding. It is Vedanta which has done this, both byits refusal to meet with us, and more importantly by its repeated failure either to consult theDongria about its plans for their sacred hills, or to pay any regard to their views.

He added, If Vedanta has nothing to hide, it is difficult to understand why it has gone out of itsway to obstruct our inquiries. Their press release is entirely without foundation.

ve impact of this projectMetals giant Vedanta Resources Indian subsidiary has launched anunprecedented attack on Survival International, apparently to drive its researchers out of an areawhere the company is planning to mine.


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The mining company has falsely accused Survival of forcedly interacting with the DongriaKondh tribe who live around the area earmarked for mining, and of causing unrest. Vedantahas prompted a police investigation into Survival, with officers making a late night visit to ahotel where they believed Survival researchers were staying.

Survival researchers were in the Niyamgiri area of Orissa, east India, to talk with members of theDongria Kondh community whose future is threatened by a proposed Vedanta mine on theirsacred mountain.

Pavan Kaushik, Vedanta Groups head of corporate communications, wrote to journalistsalleging that foreign NGOs including Survival International are provoking innocent tribals todefame the government and the company. In the letter, he attacked foreigners for freelymoving in the region and alleged that they were circulating false information. The letter alsoinvites journalists to contact the regional Superintendent of Police, who is named as available forinterview.

In September the British government ruled that Vedanta had repeatedly failed to respect thehuman rights of the Dongria Kondh, demanding a change in the companys behaviour. Thegovernment asked Survival to report back on what steps Vedanta had taken to implement theseessential changes before the end of the year.

Gordon Bennett, a London barrister who represented the Kalahari Bushmen in their historic winover the Botswana government, has been acting on behalf of the Dongria Kondh in theircomplaint over Vedantas behaviour, and accompanied the Survival researchers.

He said today, We have not circulated any false information about Vedantas mining activities.All the information we have given the Dongria has been culled from Vedantas own mining plan,

which it has never troubled to discuss with the Dongria itself. We have not forcedly interactedwith the Dongrias: on the contrary we have been warmly welcomed by all those we have beenable to meet.

We have not provoked innocent tribals to defame either the government or Vedanta. It is trueto say however that feelings run high in Niyamgiri and that many Dongria regard Vedanta withsuspicion and distrust. They believe that their way of life is under serious threat.

We

ENVIRONMENT BECAME THE KEYFOCUS-India'sdecision to reject UK-based Vedanta's plans to mine bauxite points to tighterenforcement ofenvironment laws,acommitment to playing by the rules rather thana political campaignagainst mega-corporations.

Ina landmark decisionon Tuesday, theenvironment ministry blocked Vedanta's mining project in Orissabecause theforest-hillsit wouldhavedestroyedareintertwinedwith the livesand livelihoodsof localprimitive tribes.


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It wasastunningvictoryforafour-year-longglobal campaignfor the Dongria Kondh tribeagainst agiantminingfirm that has been pitchforkedintoIndia'sdebateoverenvironmental laws.

It alsoinfused lifeinto theenvironment ministrywithits maverick minister,Jairam Ramesh,whose tusslewithhiscabinet colleaguesonclearingforestsfor miningand roadsunderlinesIndia'sstruggleforsustainablegrowth.

"What Jairam Rameshisdoingissayingifyouhave todo businesshere playit by the rule,nosidetrackingenvironment,no backdoor,whichisagood thing," said R.K. Gupta, managingdirectorofTaurus Mutual Fund.

"Theclearsignal tooverseasinvestorsis that youcannot takeenvironmental clearanceforgranted.Thingswill not bedoneas theyused to bein the past. Thisiscoursecorrection."

Commentators point out that thousandsoffactoriesget built inIndiaeveryyearand thegovernment hasclearlyencouragedindustrial projects - evidenceanalystssay that the ruling Congress partyisnot anti-development.

Hero or villian?

Ramesh'sstandinacountryfocusedondevelopment and raring to take theglobal high tablehas meantheisalsoscoffedat bysomeasaninflexible "greenfundamentalist".

Foryears, theenvironmental ministrywasseenas rubber-stamping projects. But Rameshhasscrappedordelayedclearanceforsome 100 mining projects,including those backed by South Korea's POSCO,drawing protests that heishurtingdevelopment inanationshort ofpowerand raw materials.

A secondairport in Mumbaiiscaught in theenvironment debateasaredozensofroadanddam projects.

Rameshhasalsocrackeddownonillegal mining,oftendonewithhelp from local politicians,and broughtmoreaccountabilityinasector that had minimal environmental regulations.

Underlyingall thisisa realisationinIndia that enforcingenvironmental rulesdoesnot have tohurt growth,can boost theideaofa ruleoflawand makegovernment policies transparent.

"Thisnot a problem typical toIndia,it isadevelopingcountry phenomenon; Brazil has realised, Australiafaced this." said Paranjoy Guha Thakurta,anindependent political economist.

Government sourcessay POSCO could begiven permissionforits USD 12 billionsteel mill in Orissain 2months becauseits problemswerenot quite thesameas Vedanta's.

_PAEGBREAK_

Political dividend

Mining lobbieshaveaccused Rameshofwitch-hunting multinational corporations,sayingheisgoingafterprojectsinstatesnot controlled by the Congress ruling party.

Orissaisoneofthesenon-Congressstatesanditschiefminister,Naveen Patnaik reacted to thescrappingofthe Vedanta project bysaying: "Ihope therewasno politics (involved)."


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Andasifanticipatingsuchcharges, Ramesh,while rejecting the proposal on Tuesday,said: "Thereisnoemotion,no politics,no prejudice ... Ihave taken thedecisionina purely legal approach. That these lawsare beingviolated."

But inIndia,saving theenvironment isa political issue.

Yearsofuncontrolled mininghas pushed tribal peopleofftheirforest land,alienating them andfuellinginsurgencies that feedoffa perceivedneglect ofthe poor.

InIndia, two-thirdsofthe population makesa livingfrom farmingandagrowingMaoist rebellionhascapitalisedonawider resentment over thegovernment'sseizureof landforindustry.

So, Ramesh's toughstandonenvironment couldalsohelp his ruling Congress party reap politicaldividends by restoring the lost support ofmillionsoftribespeople.

Andin pursuinghisenvironment policies, Ramesh'shandis probablystrengthened bysupport from hisCongress partychiefSonia Gandhi. Hewasclose toherhusband Rajiv,aformer prime minister,whowasinstrumental in bringing Rameshinto politics.

The 56 year-old minister,asprightlynew kidon the block by thestandardsofIndia'sgrandfatherlypoliticians,is pushinga reformist agendaagainst more traditional figureswithin thegovernment whohaveoftenfocused moreon political expediency.

When Prime MinisterManmohan Singhappointedhim environment minister last year, monthsaheadofthe Copenhagenclimateconference, Rameshcreatedaflutter bysuggesting that Indiacould be moreflexibleinitsnegotiatingstanceat the Copenhagensummit. Hesoon backeddown,andevenseemedcontrite.

"Inourcountry,youarenot acceptedifyoustart thinkingout ofthe box," Ramesh,aformer U.S.-educatedcivil servant,saidafter thecontroversy.

Kalahandi has been in the news since middle of 1980s when India Today reported sale of a childby its parents due to financial crisis. That article led the then Prime MinisterRajiv Gandhi to paya visit to the district and brought the district to the attention of the national stage for its acutepoverty and famine. Subsequently similar reported cases of starvation deaths and sale of childrenhave led to the announcement of a host of relief efforts and development projects. Prime MinisterP. V. Narasimha Rao announced the famous KBK project (Kalahandi-Bolangir-Koraput) in1994. Nonetheless, Kalahandi has not been able to take off despite of hosts of programmes,largely because of lacuna at implementation stage. As the basic infrastructure is dismal state, thedevelopment progress is very slow.

But some development in the recent past has shown some sign of progress. The Indravati Water

Project, second biggest in the state has changed the landscape of southern Kalahandi, leading totwo-three crops in a year. Because of this, blocks like Bhawanipatna, Jayapatna, Dharamgarh arewitnessing rapid agriculural growth. Vedanta Alumina Limited (VAL), a subsidiary ofSterliteIndustries, a majoraluminium processor has made major investments in the Kalahandi-Koraputrange by establishing an 1 MTPA Alumina Refinery and 75 MW Captive Power Plant atLanjigarh. The compnay has also proposed for Expansion of the Refinery to 6 MTPA, which willmake it one of the largest refinery in the world. Though this project has received criticism from


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environmentalists, especially from outside groups; supporters of VAL claims it has broughtsignificant changes in Socio-Economic scenario of Lanjigarh and Kalahandi.

[edit] Recent Developments

Kalahandi also is an example of disparity /contrasts that exist in many part ofdeveloping/underdeveloped world. On the one side, this district is famous for famine andstarvation deaths: this is the same district that boasts of among the Highest Number ofRice Millsin Orissa. The number of rice mills in the district was around 150 in the year 2004-05. More than70% have been built in the five years after commissioning of the Indravati project. The rice millbusiness is so lucrative that businessman from adjoining districts and states have investeddirectly or indirectly. Most of the rice mills purchasepaddy from the government allottedvillages throughpanchayat and sell the rice to Food Corporation of India. As many rice mills arecompeting for paddy, the price paid the farmers has increased in the recent past. But much needsto be done as the Rice mill Owners are primarily profit-oriented. No remarkable Farmers'Movement is seen in the areas so far. To articulate the voice & rights of the Kalahandia, people

have waited for a 'mahatma'to descend amidst them.

Orissa government has also set up a private medical college with a tie up with one South Indiabased organisation in Junagarh block of Kalahandi. This has the potential of changing the healthinfrastructure of the adjoining blocks in the locality. Recently Orissa state Government hasannounced to establish a Government Engineering College and an Agriculture College atBhawanipatna but local demand for a Central University in Kalahandi has not beenaccomplished.People are joining the Separate State Movement for the creation of 'Koshal'state.The 'Koshal Mukti Rath'of Mr.Balgopal Mishra,a former M.P.7 M.L.A. has been widelywel comed by the people of Kalahandi.

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