By any measure, 2013 has been a dismal year for Vedanta Resources plc, the $11.4-billion U.K.-based mining, oil and gas conglomerate with two-thirds of its operations in India.
On August 13, its woes culminated in a referendum by Dongria Kondh tribal villagers blocking efforts to extract bauxite from their sacred Niyamgiri hills, which stretch 92 miles through eastern Orissa.
After a decade of protests and worldwide condemnation, the verdict in the court of public opinion was swift. “Two days before India celebrated its 67th Independence Day, a tiny village deep inside the forests of Orissa tasted the fruits of freedom,” trumpeted Mumbai’s Business Today echoing the media, populist, nongovernmental organization (NGO) and international activist voices dogging the proposed refinery by the company’s subsidiary, Vedanta Aluminum Ltd.
But Vedanta Resources, 65% owned by Indian business mogul and onetime scrap metal dealer Anil Agarwal, is no stranger to controversy: industrial accidents, environmental mishaps and human rights abuses have stained its reputation across the subcontinent—and the world beyond. But as Vedanta continues lobbying for its Orissa interest—while actively recruiting public relations consultants in international publications like The Economist—it maintains a very Corporate Social Responsibility (CSR)-oriented agenda.
And it also makes Vedanta unique in the mining sustainability realm: Moreover, many Western firms have either learned hard lessons from past irresponsible mining or are implementing CSR to avert future ones—with social activists condemning them as covering for past abuses. Vedanta, on the other hand, is accused of firing tit-for-tat—implementing CSR in the face of constant violations and negative publicity alike.
India is unique unto itself, too, of course. The world’s second-most populous nation of 1.2 billion is also home to a feisty but deeply flawed democracy where poor governance, rampant corruption and explosive poverty collide head-on—with challenges to any extractive industry accentuated by a powerful, combustive NGO culture.
Amid a flailing economy, Vedanta’s bind is illustrative, according to sector advocates like RK Sharma. “India has an unsustainable density of NGOs—and the movement is instigated by them,” said Sharma, secretary general of the Federation of Indian Mineral Industries, which has recorded 64,565 applications bottlenecked by state governments.
Officials at Vedanta and its state-owned, joint venture partner, Odisha Mining Corp. Ltd., have strong motivation to develop the Niyamgiri Hills: Estimates by the Geological Survey of India indicate the area contains 70% of national bauxite deposits—or 2,525 billion tons—allowing for some of the most profitable global aluminum industry operations.
But NGO activism stoking awareness by international celebrities and investors, coupled with state bureaucracy, “are stalling the country’s development,” added Sharma.
To its credit, meanwhile, Vedanta has implemented vast CSR programs across the country and overseas. “Corporate social responsibility, is close to my heart,” Agarwal said in a statement.
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