UK-based mining giant Vedanta Resources is threatening the health, livelihoods, human and religious rights of entire communities in India due to its unethical practices, a major new report said on Tuesday.

Last week the Church of England pre-empted Amnesty International UK's report by disinvesting in the FTSE 100 group, saying it was 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 except".

Amnesty claims in its hard-hitting report that an alumina refinery owned by a subsidiary of Vedanta in the eastern Indian state of Orissa has caused air and water pollution that is threatening the health of the local population and their access to water.

One local woman from Lanjigarh, where the refinery is based, told Amnesty: "We used to bathe in the river but now I am scared of taking my children there. Both my sons have had rashes and blisters."

In the nearby Niyamgiri Hills meanwhile Vedanta is, according to Amnesty, poised to destroy the life of the Dongria Kondh community with a 700-hectare open-cast bauxite mine.

The Dongria Kondh do not cut trees or cultivate the top of the hills as they believe their deity Raja Penu lives there.

"People have a right to water and to a healthy environment but Vedanta has failed to respect these rights in Orissa," warned Amnesty International UK director Kate Allen.

"Villagers were given scant and misleading information about the potential impact of the alumina refinery and mining project. Today they are living in the shadow of a massive refinery, breathing polluted air and afraid to drink from and bathe in a river that is one of the main sources of water in the region.

"The Indian government is responsible for protecting the rights of its people, but that doesn't absolve Vedanta from responsibility for the damage that it is causing people. Vedanta must ensure that its existing operations respect human rights before considering any expansion."

Vedanta has already been criticised by the UK National Contact Point (NCP), which is responsible for examining breaches of the Organisation for Economic Cooperation and Development guidelines on multinational enterprises.

It said in September last year that it had "failed to engage the Dongria Kondh in adequate and timely consultations about construction of the mine".

The NCP said it could "not find any record of the views" of the Dongria Kondh about the construction of the bauxite mine.

Amnesty, which conducted one-on-one interviews across eight villages in Lanjigarh and 19 villages in Niyamgiri in February, March and September last year, said that the existing mine was 70.5 per cent owned by Vedanta, with the remaining 29.5 per cent owned by Sterlite India, itself 59.9 per cent owned by Vedanta.
Sterlite India meanwhile has a 74 per cent stake in the new mining project, with a state-owned corporation owning the remainder.

Vedanta has faced a series of disinvestments in recent years on ethical grounds.
The Norwegian government has previously sold its $13 million stake in the London-headquartered group, which employs more than 27,000 people worldwide and in 2008 recorded pre-tax profits of just over £2.5 billion.

Martin Currie investments jettisoned a £2.3 million stake in 2009, while BP's pension fund reduced its holdings in Vedanta due to "concerns about the way the company operates".

Indigenous people's human rights group Survival International said the Church of England's decision last week had sent a "strong signal to companies that trample on tribal people's rights".

Its director Stephen Corry said: "Anybody that has shares in Vedanta should sell them today if they care about human rights."

Amnesty International UK's economic relations programme director Peter Frankental added: "Investors should take strong action when 'constructive engagement' with a company does not result in a change in practice. It is encouraging that the Church of England has sent a strong message to Vedanta that failing to respect human rights is unacceptable".

Vedanta initially had no response to the report when contacted by inthenews.co.uk on Monday night.
© Adfero Ltd