Saving Iceland » Mining

Tom Albanese – Blood on Your Hands

friendoficeland — Sat, 15 Mar 2014 11:16:44 +0000

On 6^th March Tom Albanese, the former Rio Tinto CEO, was appointed CEO of Vedanta Resources, replacing M S Mehta. The newspapers are billing his appointment as an attempt to ‘polish the rough edges off [Anil] Agarwal’s Vedanta’ and to save the company from its current crisis of share price slumps, regulatory delays and widespread community resistance to their operations. This article looks at Albanese’s checkered history and the blood remaining on his hands as CEO of Rio Tinto – one of the most infamously abusive mining companies.

The Financial Times notes the importance of his ‘fixer’ role, noting that:

The quietly spoken and affable geologist is seen as someone willing to throw himself into engaging with governments and communities in some of the “difficult” countries where miners increasingly operate. That is something that Vedanta is seen as desperately needing – not least in India itself. Mr Albanese may lack experience in the country but one analyst says that can give him the opportunity to present himself as a clean pair of hands who will run mines to global standards…“There’s a big hill to climb there” Mr Albanese said.(1)

In fact Albanese has already been hard at work for Vedanta since he discreetly joined the company as Chairman of the little known holding company Vedanta Resources Holdings Ltd on Sept 16^th2013, billed as an ‘advisory’ role to Anil Agarwal (Vedanta’s 68% owner and infamously hot headed Chairman).

Vedanta Resources Holdings Ltd (VRH Ltd) (previously Angelrapid Ltd) are a private quoted holding company with $2 billion assets at present, and none at all until 2009. VRH Ltd own significant shares in another company called Konkola Resources Plc – a subsidiary of Konkola Copper Mines (KCM) – Vedanta’s Zambian copper producing unit. This is an example of the complex financial structure of Vedanta – with holding companies like this one serving to move funds, avoid taxation and facilitate pricing scams like ‘transfer mispricing’.

Shortly after becoming CEO of Vedanta Resources Holdings Albanese helped Agarwal by buying 30,500 shares in Vedanta Resources in November 2013 as their share price plummeted and Agarwal himself bought a total of 3.5 million shares to keep the company afloat. In December Albanese bought another 25,163 shares.

By February 2014 he was being sent out to Zambia to manage a crisis over Vedanta’s attempt to fire 2000 workers, which Agarwal himself had failed to fix during an earlier trip in November, and further damage caused by revelations about the company’s tax evasion, externalising of profits and environmental devastation in Foil Vedanta’s report Copper Colonialism: Vedanta KCM and the copper loot of Zambia.

In a taste of things to come newspapers referred to Tom Albanese as the Chairman of Vedanta Resources, and Labour minister Fackson Shamenda alluded to a ‘change of management’ giving them new confidence in Vedanta. Albanese appeared to have done some fine sweet talking, promising that workers would not be fired as part of a ‘new business plan’ and claiming that all of KCMs reports are transparent – an outright lie as their annual reports, profits and accounts are as good as top secret in Zambia and the UK.

However, scandals and unrest continued to blight Vedanta in Zambia and the Financial Times reported that Albanese had flown out a total of four times in February alone.

Albanese’s role as a ‘fixer’ and sweet-talker is nothing new. His appointment as CEO of Rio Tinto in 2006 was on very similar terms, as an article in The Independent newspaper noted his role to ‘green tint’ Rio, and ‘scrub its image clean’. The article mentions that, in an exclusive interview with the paper Albanese declared unprompted that the company is a “good corporate citizen”, and describes him showing no emotion and choosing his words carefully, focusing on safety and environmental and social responsibility.

But Albanese could not play dumb about the reasons a new image was needed for Rio. Since he joined the company in 1993 Rio had been accused and found guilty of a number of major human right violations.

In the early nineties they forcibly displaced thousands of villagers in Indonesia for their Kelian gold mine. They, and partner Freeport McMoran caused ‘massive environmental devastation’ at the Grasberg mine in West Papua, and when people rioted over conditions in 1996, began funding the Indonesian military to protect the mine. $55 million was donated by Freeport McMoran to the Indonesian military and police between 1998 and 2004, resulting in many murders and accusations of torture. In 2010 they locked 570 miners out of their borates mine in California without paycheques leaving them in poverty. In 2008 Rio threatened to shut their Tiwai point aluminium smelter, firing 3,500 if the government imposed carbon taxes. In Wisconsin, Michigan and California the are accused of toxic waste dumping and poisoning of rivers, and in Madagascar and Cameroon they have displaced tens of thousands of people without compensation or customary rights at their QMM mine, and the giant Lom Pangar Dam – built to power an aluminium smelter.

In 2011 a US federal court action accused Rio Tinto of involvement in genocide in Bouganville, Papua New Guinea, where the government allegedly acted under instruction from Rio Tinto in the late eighties and nineties when it killed thousands of local people trying to stop their Panguna copper and gold mine. 10,000 people were eventually killed in the class uprising that resulted from the conflict over the mine. Rio Tinto were accused of providing vehicles and helicopters to transport troops, using chemicals to defoliate the rainforests and dumping toxic waste as well as keeping workers in ‘slave like conditions‘.

Yet, Albanese is being seen as a respectable CEO with a more diplomatic and clean approach than his new Vedanta counterpart Anil Agarwal. There is great irony in Albanese’s promises to improve workers conditions in Zambia when Rio Tinto are famed for their ‘company wide de-unionisation policy’, with 200 people marching against the ill treatment of mineworkers outside the international Mining Indaba in Cape Town in February, calling them ‘one of the most aggressive anti union companies in the sector’.

Perhaps Albanese will feel at home in another company with a dubious human rights and environmental record. Both Rio and Vedanta have been removed from the Norwegian Government Pension Fund’s Global Investments for ‘severe environmental damages’ and unethical behaviour following investigations. The Norwegian government divested its shares in Rio Tinto in 2008, while it divested from Vedanta Resources in 2007, and also excluded Vedanta’s new major subsidiary Sesa Sterlite from its portfolio just a few weeks ago in January 2014.

Albanese was previously famed for being one of the highest paid CEOs on the FTSE 100, earning £11.6 million in 2011. However he refused his 2012 bonus in a last ditch attempt to save his career at Rio before he was fired in January 2013 amid a total of $14 billion in write-downs caused by his poor decision to acquire Alcan’s aluminium business just before prices crashed, and a $3 billion loss on the Riversdale coal assets he bought in Mozambique, making him in effect a ‘junk’ CEO today.

Other commentators have noted that this is not the first time Vedanta have recruited a junked mining heavyweight to save their bacon, but point out that the appointments have previously been short-lived, possibly due to frustrations about the dominance of majority owner Agarwal and his family. The infamous mining financier Brian Gilbertson, who merged BHP and Billiton, was another scrap heap executive who helped Vedanta launch on the London Stock Exchange in 2003 in the largest initial share flotation that year. However, he quit after only seven months after falling out with Agarwal.

Albanese is diplomatic when faced with questions about potential conflicts between himself and 68% owner and Chairman Anil Agarwal claiming Agarwal “will be in[the] executive chairman role when it comes to M&A and strategy”. However, commentators point out that, ‘the British Financial Services and Markets Act of 2000 stipulated that the posts of CEO and Chairman of companies should be separated – a principle which was backed in October 2013 by the UK’s Financial Conduct Authority’, potentially posing another corporate governance issue for Vedanta, who are already accused of violating governance norms in London by people as unlikely as the former head of the Confederation of British Industry – Richard Lambert.

But Albanese is positive about his re-emergence as a major mining executive. In fact the man with so much blood on his hands may be alluding to his experience in making great profit from others’ misery, when he says to the Financial Times, on the occasion of his appointment as Vedanta CEO, that:

“Sometimes the best opportunities are when the times are darkest”.

1) Financial Times, March 10 2014, ‘Albanese back at the helm to face Vedanta challenge’.

* quotes are only in paper version in section on ‘marriage of convenience between American miner and Indian billionaire.

People’s Victory Costs Vedanta $10 Billion at Niyamgiri!

friendoficeland — Wed, 05 Feb 2014 17:00:52 +0000

On Saturday 11th January the Ministry of Environment and Forests finally gave its statement formally rejecting permission for Vedanta’s Niyamgiri mine. This move brings a conclusive end to the ten year struggle of the Dongria Kond tribe, alongside local farmers and dalits, to prevent the mining of this sacred mountain range which is their livelihood. Saving Iceland has followed the struggle and supported our comrades at Foil Vedanta as part of the global solidarity campaign which helped win this unique victory.

The ruling against the mine is being hailed as a precedent victory for grassroots democracy, after Supreme Court judges initiated a referendum on the mine last summer in which every inhabitant of twelve villages on the mountain voted against the project, giving passionate speeches against the company and the Odisha government.

The failure of the Niyamgiri bauxite mining project is estimated by some to have cost Vedanta $10 billion in lost investments. Vedanta boss Anil Agarwal had built the Lanjigarh refinery at the foot of Niyamgiri mountain, and even expanded it sixfold, so sure was he that he would gain permission to mine despite the local inhabitants’ dissent. In November 2004 he even used a Financial Times article to mislead investors and create confidence, by claiming that he already had permission to mine the mountain.

The misleading FT article is typical of the many ways in which the British government has propped up this contentious company, which is increasingly criticised by even such high profile figures as the former head of the Confederation of British Industries (CBI) Richard Lambert – who accused it of violating human rights and corporate governance norms and using its London listing to improve its reputation. Foil Vedanta is now calling for Vedanta to be de-listed from the UK Stock Exchange in recognition of their catalogue of human rights and environmental abuses at every one of their operations across India and Africa, as well as corruption, tax evasion and violations of corporate governance.

Foil Vedanta have recently published a comprehensive report on the company’s Zambian copper mining subsidiary KCM http://www.foilvedanta.org/articles/copp…) which has cost the Zambian exchequer billions of dollars in lost tax, as well as polluting and mistreating workers relentlessly.

Meanwhile the company are facing hard times as low share prices officially demoted them from the FTSE 100 to the FTSE 250 this December, removing their ‘blue chip’ status. In a panic Anil Agarwal (majority owner and Chairman) began to buy back as many shares as possible to increase the share price and save the company. He bought 1.7 million shares on Dec 19th, and another 3.5 million on Dec 24th, through his holding company Volcan Investments Ltd, which is based in the Bahamas, a UK controlled tax haven. A little later his new Executive, Tom Albanese (formerly Rio Tinto CEO who was pushing the aluminium industry on Iceland), also bought a large chunk of shares. But it was too late and the company slumped to the FTSE 250 nonetheless.

This makes Anil Agarwal now the 67.99% owner of Vedanta Resources, a violation of corporate governance norms for a listed public company.

Agarwal is now trying to keep his investors happy by claiming he will get bauxite to keep his refinery alive from another source in Odisha, but there are no immediate options available and activists are demanding the decommissioning of the Lanjigarh refinery, which has repeatedly spilled toxic red mud in local streams and polluted the surrounding villages.

Copper Colonialism – Vedanta KCM and the Copper Loot of Zambia

friendoficeland — Wed, 05 Feb 2014 10:38:57 +0000

Saving Iceland associates Samarendra Das and Miriam Rose of Foil Vedanta have recently authored a report exposing Vedanta’s dirty dealings in Zambia. The report has already caused a stir and the Mineworkers Union of Zambia have launched an investigation into the report’s findings.

Daily Nation, a leading independent Zambian daily newspaper, reports: Copper gate scandal deepens

The report by Das and Rose can be downloaded here: Copper Colonialism – Vedanta KCM and the copper loot of Zambia report or you can read the full report (35 page) online below.

21st January 2014.

In December Foil Vedanta activists made a trip to Zambia to investigate the operations of Vedanta subsidiary Konkola Copper Mines (KCM), Zambia’s biggest copper miner, and to make links with grassroots movements, academics, journalists and those in the political system who may be questioning the unjust terms of copper mining in their country.

We were shocked to discover the environmental and social devastation wrought by Vedanta’s operations, and the lack of information held by policy makers and regulators in Zambia on this multinational as well as on wider issues with copper market manipulations, material flows and the real interests controlling their country. This report is a comprehensive account of the origins of, and interests behind the rapid loot of Zambia’s copper resources which is currently taking place.

Copper Colonialsm

Vedanta KCM and the copper loot of Zambia

Authors: Samarendra Das and Miriam Rose, Foil Vedanta.

Contents:

Introduction: Copper from Cape to Cairo

Chapter 1:Who are Vedanta KCM?

Chapter 2: Copper – the elephant in the room

The copper elephant
Making sense of copper material flows
Opaque profit
The problem with rent seeking
The real price of copper
Material flows – where does the copper go?

Chapter 3: Vedanta’s perception management in Zambia

Chapter 4: The truth about Vedanta in Zambia

Water pollution
Air pollution
Workers’ rights

Chapter 5: Who owns Zambia?

Shareholder interests
Neo-colonialism and the UK Department for International Development

Chapter 6: NGOs and civil society – parasites of the poor?

In whose interest?
Whose politics?
Political influence

A warning about right wing critiques of aid

Conclusion and recommendations

Copper from Cape to Cairo

The question as to who, and what, is responsible for African underdevelopment can be answered at two levels. Firstly, the answer is that the operation of the imperialist system bears major responsibility for African economic retardation by draining African wealth and by making it impossible to develop more rapidly the resources of the continent. Secondly, one has to deal with those who manipulated the system and those who are either agents or unwitting accomplices of the said system.The capitalists of Western Europe were the ones who actively extended their exploitation from inside Europe to cover the whole of Africa. In recent times, they were joined, and to some extent replaced, by the capitalists from the United States; and for many years now even the workers of those metropolitan countries have benefited from the exploitation and underdevelopment of Africa.

Walter Rodney, 1972, ‘How Europe Underdeveloped Africa’.

Zambia has been exporting Copper for almost a century. In 1889 the British South African Company (BSAC) was given a Royal Charter, modelled on the East India Company, to exploit the mineral wealth of Southern Africa for Britain. The board of BSAC included Sir Cecil Rhodes, founder of the De Beers Mining Company, and pioneer colonialist after whom Southern and Northern Rhodesia (Zimbabwe and Zambia) were at that time named. Rhodes’ signature project was to link the Cape to Cairo by railway, allowing minerals and natural resources to be easily extracted and exported to Europe.

BSAC administered Northern Rhodesia with paramilitary forces until 1924, when it was replaced with direct British rule, but continued to own Zambia’s railways until 1947, and their mineral rights until 1964 when Zambia achieved independence.

Massive copper deposits were discovered in Northern Zambia in the 1920?s and European prospectors and industrialists flooded into the country. Like today’s multinational companies, they brought with them administrators, technicians and skilled labourers, but the life-threatening job of mining was reserved for Africans, who suffered appalling conditions, but had to earn an income in order to pay the ‘hut tax’ imposed throughout colonial rule. BSAC has been called a ‘parasite’ on Northern Rhodesia, paying very low royalty rates (which were even tax deductable) and allowing companies to pay taxes where their headquarters were based (mostly London) rather than in Zambia.^¹

In the 1930?s and 40?s a rising tide of African nationalism led to strikes and protests in the mines, and the formation of the Northern Rhodesian African Congress – the first African political party in Zambia – in 1948. As a response to these uprisings, the 1955 Public Order Act was instated by the British colonial rule, to maintain their administrative and economic power, ensuring that extractive colonialism was not interrupted. The Act (similar to Section 144 in India) prevented meetings, protests, and political flags or uniforms, criminalising all forms of resistance. The Public Order Act remains in Zambian law today, and current President Michael Sata has been widely criticised for breaking an historical ‘selective use’ policy, and using the colonial law extensively to prevent any dissenting gatherings or protests.

Zambia achieved independence in 1964, and joined the IMF in 1965. First President Kenneth Kaunda nationalised the mining companies and briefly oversaw an economic boom as high copper prices brought prosperity to the nation. The Intergovernmental Council of Copper Exporting Countries (CIPEC) was created in Lusaka in 1967 with major copper producing nations Zaire, Peru and Chile as a copper cartel to increase national revenues from mining. But CIPEC did not succeed, copper prices fell dramatically in the late 1970?s, and Zambia’s sanctions on white-ruled Rhodesia (Zimbabwe) endangered their trade routes for copper exports to South African ports.

In the 1980?s Kaunda was forced to ask for international aid, and in 1983 the first official Structural Adjustment Programme was imposed by the World Bank and IMF, leading to food riots, student demonstrations and civil unrest, as government spending was slashed, price controls were removed and poverty increased. Kaunda’s government rejected the World Bank/IMF’s programme briefly in 1987, and saw economic growth return, but were forced to remove all protective measures again only a year later under pressure from the Paris Club (a group of rich country leaders) who were withholding bi-lateral aid^².

Since then Zambia has undergone one of the most far reaching liberalisation and privatisation programmes in Africa, and simultaneously has become poorer and poorer. Today, in a country half the size of Europe, covered in fertile soils and forests, with a population of only 13 million, life expectancy is only 37, and 20 percent of the population claim 68.67 percent of the total income³. A core plank of the World Bank and IMF’s conditions was the break up and privatisation of national mining company ZCCM. They facilitated secret Development Agreements between the Zambian Government and mining conglomerates, which reduced royalty rates, environmental regulations, electricity prices, corporate tax and workers’ wage and welfare packages. The agreements are guaranteed for between 15 and 20 years, and can only be changed via a process akin to changing the national constitution.

Cecil Rhodes’ bridge over the Victoria Falls gorge continues to fulfil its intended purpose, as trucks and trains carrying copper stream over the border to Zimbabwe, heading for South African ports. From there it is allegedly mainly exported to Switzerland, but only a fraction of it arrives at its declared destination, suggesting that the majority is sold on the high seas to China – the world’s biggest importer of the metal. (More on this in later sections)

The legacy of extractive colonialism and recent far reaching neo-liberal economic policies (which can be clearly seen as neo-colonialism), is a Zambian state which has been corrupted, bankrupted, disenfranchised and dis-informed^⁴. Lack of resources and political conflicts of interest, alongside a concerted effort by mining companies to hide data and manage perceptions, leave the Zambian state with virtually no information on the ownership, operations or production of the mining companies. There is no independent data on the volumes of copper or other minerals they are producing or exporting, or where it is going. On top of this, weak laws (negotiated by the World Bank and IMF programmes), and ill-resourced regulatory bodies mean that tax evasion, fraud, illegal mining, environmental damage and human rights abuses are rarely penalised even if they are known. Most strikingly, two Chinese managers who shot 13 Zambian workers at Collum mine in October 2010, had charges against them dropped a few months later^⁵.

Meanwhile agencies such as the Zambia Development Agency (previously the Zambia Privatisation Agency) continue to advertise Zambia’s ongoing achievements in economic liberalisation in an attempt to attract more Foreign Direct Investment. The 14th Zambia Review, prepared for the UN World Tourism Organisation 2013 General Assembly in Victoria Falls, to attract investment from attending delegates, notes that mining companies can enjoy lower corporate tax rates than other companies (at 30%) and that 57.3 billion Kwacha ($10 million) of the 2013 budget has been allocated to the development of Multi-facility Economic Zones (MFEZs) (in which tax and other legal exemptions apply). The review openly states that:

‘Investors face no restriction on the amount of interest, profit, dividends, management fees, technical fees and royalties that they are allowed to repatriate. Income earned by foreign nationals may also be externalised without difficulty.’^⁶

These kind of policies are leaving Zambia with very little revenue or benefit from the extensive and rapid mining taking place. The highest unemployment rates are in the Copperbelt and in the capital Lusaka, at 24.5% and 22.3% respectively^⁷, mostly affecting youth, and prostitution is the only way of earning for many wives of jobless miners in the region^⁸.

This report uses the best available sources from within and out-with the industry to inform and widen the debate around copper mining in Zambia, focusing on the activities of Konkola Copper Mines (KCM), a subsidiary of Vedanta Resources. It aims to expose the interests behind Vedanta, their environmental and human rights abuses, and their loot of copper and other minerals from the Zambian people. More generally, we look at who really controls the Zambian economy and national policies – from international institutions and shareholder patterns, to donor agencies and NGOs. Due to high levels of opacity (opaqueness) we are missing vital information such as KCM’s annual reports, and accurate figures on copper production and exports, despite visiting every government and private institution we could in an attempt to find them. Lacking this crucial information, this report is based on international financial data and first hand interviews as well as other studies and documents.

Who are Vedanta-KCM?

Konkola Copper Mines (KCM) was the largest and most copper rich asset sold off as part of the break up of national mining company ZCCM. It was originally sold to Anglo American plc for $90 million in 2002, who have been in Zambia since the 1930s, and had been managing the mine for ZCCM prior to official privatisation. In 2001 they had secured a $81 million loan from the UK Department for International Development (DfID) to refurbish the Nkana smelter (begging questions about why the UK’s aid budget was being used for private gain)^⁹. But only a few months after privatisation Anglo American claimed the mine was unprofitable and pulled out their shares again. This raises stark questions about why and how Anglo acquired the mine. The former head of Anglo in Zambia, Anderson Mazoka, later claimed it was to ‘lock up resources in Zambia’^¹⁰, but Mazoka was also sponsored by Anglo to start a political party to oust President Chiluba, which was unsuccessful and may have led to his poisoning in 2001,^¹¹ another potential reason given for Anglo’s hasty withdrawal. In reality this is yet another opaque mystery in Zambia’s copper history.

A 51% share in KCM was sold to Vedanta Resources for just $25 million, paid in cash, and $23 million in deferred payments, in 2004^¹². The deal was facilitated by Clifford Chance and Standard Chartered Bank^¹³ (one of the main bookrunners and lenders to Vedanta Resources). Within three months Vedanta had already recouperated its initial investment, making $26 million. The banks also helped Vedanta secretly negotiate a call option allowing them the right to purchase Zambia Copper Investments’ 28.4% share^¹⁴, which they exercised in November 2005 (a year after their initial purchase), giving them the 79.4% monopoly they currently hold on KCM, while the Zambian government – via ZCCM-IH (their mining investment wing), own the remaining 20.6%. The Competition Commission was even rendered irrelevant by the Zambian government to allow Vedanta such a large majority share^¹⁵.

Andrew Sardanis, a politically connected businessman in Zambia, details the irregularities of the sale of KCM to Vedanta in his 2007 book A Venture in Africa: The Challenges of African Business. On top of the $25 million, Vedanta was to compensate the existing shareholders (Zambia Copper Investments – a Bermuda [tax haven] based, part Zambian government owned entity, and ZCCM-IH) for their share losses. But while ZCI received $23.2 million in deferred payments (for the dilution of its shareholding from 58% to 28.4%), ZCCM-IH was not offered the corresponding $16.8 million for its share dilution from 42% to 20.6%. Instead, Vedanta made a deal with the Zambian Government (GRZ) that $16.8 million in debt owed by ZCCM-IH to the GRZ would be cancelled. Vedanta was supposed to pay this amount to the GRZ, but there is no evidence that the payment was ever received, or asked for.^¹⁶

The price negotiated for the buyout of ZCI’s remaining shares is not reported, but analysts at the time valued it between $250 million and $550 million, putting Vedanta’s original 51% share at between $455 and $910 million, nine to eighteen times what Vedanta paid! This means the Zambian exchequer lost between $155 and $340 million in from the sale of 21.4% of ZCCM-IH’s shares alone. In response, ZCI’s 33% French shareholders (grouped into a company called Sicovam SA) called the deal ‘the most outrageous and scandalous ever seen in Africa for decades’.^¹⁷

In addition to all this Vedanta was allowed to carry forward all losses incurred ‘up to and including 31 December 2003? – before it even owned shares in KCM. These amounted to $635,897,000, meaning Vedanta would not have expected to pay tax until the year 2024 at the market conditions of the time^¹⁸. In the following years Vedanta made record profits – for example $301 million in financial year 2006/7 alone^¹⁹, but very little change was seen in the Zambian national revenue from this mining boom.

Vedanta abandoned the DfID refurbished Nkana smelter in 2008 and built their own high tech smelter at Nchanga instead. Construction started on the project in February 2006, but the Environmental Impact Assessment (EIA) was only submitted in April 2006.^²⁰

The pattern of buying massively undervalued state-owned entities, and operating them without adequate permission is Vedanta’s speciality. In Chhattisgarh, India, they bought BALCO’s bauxite refinery, smelter and mines for $89million in 2001 when it was worth around $800 million^²¹. Vedanta Chairman Anil Agarwal is currently under investigation by the Central Bureau of Investigations in India over the original disinvestment of 51% of Hindustan Zinc Ltd (HZL) to Vedanta for only $72 million^²², claiming the deal was considerably undervalued, and may have lost the exchequer hundreds of millions of dollars in revenue^²³. Vedanta subsidiary Sterlite’s copper smelter in Tuticorin, Tamil Nadu, has been built and expanded without various permissions. Local activist researcher Nityanand Jayaraman’s article Vedanta-Sterlite – Dangerous by Design^²⁴ summarises these illegalities and could be a useful resource for Zambians to understand the operating patterns of the company which owns the majority of their copper.

KCM is a subsidiary of British FTSE 250 mining company Vedanta Resources. Under a recent restructuring of Vedanta, KCM is now one of only two major subsidiaries. The other subsidiary Sesa Sterlite has eight subsidiaries of its own. Sesa Sterlite has been called a ‘corporate rubbish bin’ by analysts who suggest its purpose is to soak up debt and risk from loss making and high debt companies like Vedanta Aluminium and Cairn India (oil)^²⁵. One of the reasons KCM was kept separate from the other subsidiaries is because it is a high earning venture, making 12.19% of revenue for the Vedanta group in 2012 according to Global Data analyst reports.^²⁶ The re-structuring saved Vedanta $200 million in tax costs.^²⁷

Vedanta Resources was a FTSE 100 company until December this year, when their share price dropped to an all time low of 775p (from a 52 week high of 1,335p). In response Chairman Anil Agarwal played his usual trick of buying as many shares as possible – a total of 5.2 million^²⁸²⁹, but it was too late. This leaves Anil Agarwal owning 67% of the company, via his holding company Volcan Investments Ltd, based in the Bahamas – a UK controlled tax haven. This means he pays a minimum of tax, in Britain, or anywhere else he operates.

Vedanta, which has operations across India and Africa, has been named ‘the world’s most hated mining company’ by The Independent newspaper in Britain^³⁰, while even the former Director of the Confederation of British Industries, Richard Lambert, has recently suggested Vedanta is bringing shame on the FTSE 100 by ‘challenging the canons of corporate governance’^³¹. As Vedanta’s share prices crashed this winter, the Business Standard of India published an article naming people’s resistance and environmental issues at their operations, government regulations, and high debt as Vedanta’s major woes affecting their Indian operations^³². People’s movements have cropped up in response to illegalities, human rights abuses, pollution and workers rights issues at almost all of Vedanta’s plants. Most strikingly Vedanta lost $10 billion this summer when it failed to gain permission to mine bauxite in the Niyamgiri mountains in Odisha, India, due to ten years of resistance by the inhabiting tribal groups and farmers. Vedanta had built its refinery, and expanded it six fold to 6 million tonnes per year capacity, before it received permission to mine, so certain was Agarwal that he would get the bauxite despite the inhabitant’s disagreement^³³,³⁴.

When Vedanta bought KCM they inherited many of the concessions negotiated by Anglo American in 2000, some of which had even required new legislation or changes to existing legislation^³⁵. These are legalised in Vedanta’s secret Development Agreements negotiated by Clifford Chance with the Zambian Government which are fixed until 2018. These agreements were leaked to NGO researchersand can be found online^³⁶. The deal guarantees them a royalty rate of only 0.6%, and allows them to deduct 100% of capital allowance from their investments. The Development Agreements also radically reduced levels of environmental regulation and environmental liabilities which the mining industry had claimed ‘could result in very large claims’. Vedanta were exempted from tax on dividends, interest, royalties and management fees. They are also exempt from rural electricity tax^³⁷, which is useful for KCM since they use around 13% of Zambia’s electricity. Vedanta KCM are currently searching for new coal to power a captive plant so that they can avoid a price hike when their agreement ends^³⁸.

Copper – the elephant in the room

‘..The production and sales figures [for copper] announced are indeed impressive but what puzzled me was the Governor’s carefully phrased ‘estimate copper export earnings’. It made me think that these ‘earnings’ were perhaps never received in the country and I am asking for clarification. Were the ‘estimated export earnings’ actually received or are they likely to be received and when? If not, how much was received and what happens to the rest? Are the new mining companies allowed to keep them abroad and if so how do they account for them? Does the Government monitor the foreign accounts of these companies and does it make sure that the country gets its fair share? The Nation needs answers to these questions.’

Kenneth Kaunda (Zambia’s first President), The Post Zambia newspaper, 2005.

The copper elephant

Zambia produces a sixteenth of the world’s copper, at almost 1 million tonnes in 2012 (according to data reported by mining companies to the Bank of Zambia)^³⁹. It has the world’s richest copper deposits (alongside Congo), and is the eighth largest copper producing country in the world^⁴⁰. Copper is Zambia’s most important export, making up 75% of its export revenue. However, despite all this, copper mining only contributes 2% to Zambia’s domestic revenue! ^⁴¹

Why is it that when copper prices are around $7,300 per tonne, and demand from China is increasing annually, Zambia is one of the world’s poorest nations with external debts of 32% of GDP? As Kenneth Kaunda, Zambia’s first African President, points out in the quote above, the profits from mining are gushing out of the country, and the Zambian Government and regulatory bodies remain painfully short of information on where this revenue, or even the copper itself, is going.

This dearth of information makes copper the ‘elephant in the room’ in Zambia. There is no monitoring of production volumes at the mines, or exports at ports of exit. Instead all figures come from the company’s own reporting, which historical cases show is often deliberately distorted^⁴². Politicians, trade unions, academics and journalists debate endlessly over the percentage of royalty or windfall tax the nation should be receiving. But without accurate information on the volumes of extraction or the profit made by mining companies, how can the Government make an informed decision on mining policy?

We went from pillar to post looking for a copy of Zambia’s biggest miner Vedanta-KCM’s annual report, believing the vital figures on production and profit it contains should be public information. But despite visiting the Central Statistical Office, the Bank of Zambia, the Deputy Minister of Mines, the Lusaka Stock Exchange, and ZCCM-IH (20.6% shareholder of KCM), none was available. This section looks at the opaque nature of copper mining in Zambia, and uses global financial statistics and parallel case studies to examine copper material flows and financial flows from Zambia, evaluating the potential for the Zambian people to truly profit from their extensive resource.

Making sense of copper material flows

According to the Central Statistical Office of Zambia (CSO) copper and cobalt products worth $5.9 billion were exported from the country in 2010^⁴³, while the Bank of Zambia (BoZ) puts the value of metal exports in 2010 at $6.07 billion^⁴⁴. In the same year, according to the Government of Zambia’s reports to the Extractive Industries Transparency Initiative (EITI) only $552 million was received in tax revenue from mining, or $688 million if PAYE (tax deducted from workers’ pay) is included^⁴⁵, a tenth of the estimated value of the exports.

But this is not the whole story. Why are the CSO and BoZ figures so different? The CSO takes its figures from the mining company’s declarations, while the Bank of Zambia uses its own formulas to estimate production and export volumes. In 2010 CSO report 767,008 tonnes of copper produced, while BoZ report 852,566 – a difference of 85,000 tonnes. In 2012 CSO report 721,446 tonnes, and BoZ 824,922 tonnes, a difference of 103,000 tonnes^⁴⁶⁴⁷. So there is no clarity within Zambia on the actual levels of production or export of metal.

It is likely that the real figures are considerably higher for several reasons; illegal mining operations extracting ore under the radar, and deliberate under-declaring of production and export volumes by companies. Research conducted by the ISS in Zambia in 2010 found the mining industry extensively affected by theft, corrupt business practices, tax evasion and smuggling^⁴⁸.

A 2011 detailed investigation into the operations of Mopani Copper Mines (a subsidiary of Glencore International) by a group of international NGOs ‘revealed cobalt extraction rates twice inferior to other producers of the same area – a difference deemed unlikely by the auditors and which indicates that some of the ore extracted by Mopani could remain undeclared.‘^⁴⁹

It is likely that cobalt, a metal with a value three times higher than copper, is considerably under-declared. Statutory instrument 89 in Zambian law permits the export of unprocessed ore, and the export of waste products is also permitted. One financial journalist we spoke to in Lusaka alleged that cobalt, silver and other minerals are exported undeclared in ores and waste products. KCM allegedly export waste known as ‘slimes’, which may contain other minerals for processing outside Zambia. In India Vedanta’s subsidiary Sesa Goa are accused of exporting 150 million tonnes of iron ore from Goa in 2010/11 while only declaring 7.6 million, their agreed export allowance.^⁵⁰ It would not be unreasonable to assume such a company would be prone to misdeclaring its exports elsewhere. Revelations about Vedanta’s illegal mining in Goa and Karnataka were originally made after community surveys of numbers of trucks leaving their mines were carried out. Simple surveys such as this could equally be used in Zambia to determine the accuracy of company reporting on production and export.^⁵¹⁵²

Opaque profit

KCM and other mining companies in Zambia don’t publish their profits, even though the Zambian taxpayer has a share in most of them via ZCCM-IH. However Vedanta’s 2013 annual report claims KCM produced 216,000 tonnes of copper in 2013. In the same year costs of production were valued at 255.1 US cents/lb, putting the total cost of production that year at $1.2 billion, which would constitute a profit of $362 million (at a current copper price of $7,300).^⁵³

However, Vedanta has declared that they are making very little profit at KCM, justifying the retrenchment of 2000 workers which they announced in May 2013, and which KCM vice-president for human capital David Kaunda, told the Mine Workers Union of Zambia was due to “a very unsustainable cost of production” with high pay rates, and electricity prices.^⁵⁴ Vedanta regularly cite production rates of 8 tonnes per employee, but at the 2013 production levels stated in their annual report, with 18,000 employees, the real figure would be 12 tonnes/employee. In fact 11,000 of KCM’s employees are casual or contract labour and may be working part time, as well as for considerably lower pay than full time labourers^⁵⁵. The 225.1 cents/lb (or $4,962 per tonne) cost of production Vedanta cite in 2013 is actually not far from the global average of between $3200 and $5000 (according to one analyst). With copper prices consistently above $7000 per ton this provides a huge profit margin on copper compared to other metals.^⁵⁶

Vedanta’s own figures should be treated with suspicion. If they only produce 8 tonne/employee compared to a global average of 150 tonne/employee, as they have often stated, how are they still making a $362 million profit? Either they are paying the workers very little, making large margins on other concessions, or misdeclaring their production. Deputy Minister of Mines Richard Musukwa suggested to the researchers of this report that Vedanta have been doing a lot of in-house trading by bringing in Indian companies as contractors.

Analysts reports from Global Data reveal that KCM made 12.19% of revenue for the entire Vedanta group in 2012^⁵⁷ so they are certainly not doing too badly.

The widespread use of ‘transfer mis-pricing’ means that many mining companies under-declare their profits within Zambia to reduce tax. Transfer pricing is heavily linked to the use of tax havens, which is very common among mining conglomerates. For example, mining companies can sell their copper to a holding company which is one of their own subsidiaries, based in a tax haven like the British Virgin Islands or the Bahamas, at below market price, recording low or zero profits in Zambia. The holding company then sells it on to the buyer at a high value, recording high profits at their holding company, which are barely taxed. A leaked report authored by Grant Thornton at the request of the Zambia Revenue Agency (ZRA) demonstrated how the Glencore’s Mopani Copper Mines (MCM) used this type of transfer mis-pricing, as well as overestimated operating costs and underestimated production volumes, to declare no profits, and cheat Zambia’s exchequer out of millions of dollars, while making a fortune.^⁵⁸

A 2010 Economic Commission for Africa report on Tracking and Certification of Mineral Output in Southern Africa states:

There are also concerns about such practices as transfer pricing by large-scale mining conglomerates taking advantage of intra-group agreements involving the holding companies based in low tax jurisdictions and the subsidiaries based in the region. Transfer pricing abuses take various forms, including over- or under-invoicing of exports and imports, overloading of costs onto the subsidiary, service contracts and intra-group loans. Through such agreements, the holding companies are able to transfer income and allocate costs in a hidden manner that unfairly favours them.These malpractices reduce revenue which would have accrued to the producing States, thus exacerbating poverty amidst a rich natural resources heritage – the so-called ‘paradox of plenty!’^⁵⁹

The problem with rent-seeking

Under pressure from the World Bank, IMF and other donors, Zambian authorities have reduced taxation on mining companies to a minimum to ‘attract investment’. The corporate tax rate for mining companies is set at 30% (compared to 33% for other companies)^⁶⁰, though many mining companies, such as KCM, have agreed rates of 25%. KCM’s agreement allows them to deduct 100% of capital allowance from any investments made – such as prospecting, buildings and equipment, and losses from bad years may be carried over into good years.^⁶¹

This is very similar to the agreement for Mopani Copper Mines, and other major miners in Zambia and can leave the exchequer with virtually no tax revenue at all from companies making enormous profits. For example KCM declared profits of $301 million in 2006/7 ^⁶², though they extracted $1 billion worth of ore, and only paid royalties of $6.1 million^⁶³.

KCM’s Development Agreement only requires it to pay 0.6% in royalties, fixed until 2018, and they have even argued that this is too high^⁶⁴. Royalties are calculated as a percentage of the market value of minerals ‘less the cost of smelting, refining and insurance, handling and transport from the mining area to the point of export or delivery within Zambia’^⁶⁵, leaving much room for manipulation of figures by companies. KCM bragged in a presentation to investors that PAYE (Pay As You Earn) deductions from worker’s wages make up nearly 50% of their tax contributions to the Zambian Government. In the same presentation, in 2007, they note that they are not paying income tax since they are waiting until ‘carry-forward losses are exhausted.’^⁶⁶ And Vedanta’s 2013 Annual Report notes that:

The Group has US$1,263.4 million of unutilised tax losses at KCM (2012: US$1,301.7 million) which expire in the period 2014 to 2022. These unutilised tax losses have been recognised as a deferred tax asset, as they will unwind as the accelerated capital allowances unwind, thereby generating economic benefits for the Company.^⁶⁷

As we noted earlier, these losses were inherited from Anglo American, the previous mine owner.

In an interview with the researchers of this report, Dr Mattheus Mpande, former Deputy Minister of Mines, and Professor at the University of Zambia, named three problems with Zambia’s mining policies; rent seeking behaviour, labour aristocracy, and populist views. We will refer to the latter two later in this report, and will look at the former now. Mpande argued, and we agree, that royalties and taxation should not be seen as the primary method of revenue generation from copper mining. Instead, he suggested that increasing value addition and ‘backward linkages’ in Zambia should be the main focus^⁶⁸. This means raising the value of copper before it is exported by processing it into coils, pipes, wires etc, after which the product can be sold at a far higher price.

Beyond that, we suggest Zambian authorities should re-examine the concept of royalties all together, and look at charging private companies a realistic price for the ore they extract. Royalty itself is a colonial concept, which originally meant ‘a percentage of profit gained from a service rendered to the state’. The relevance of royalty was challenged by Indian courts in 1993-4 during a dispute over low royalty and other rental rates for granite mining.^⁶⁹ Major international campaigns such as Tax Justice Network and the Extractive Industries Transparency Initiative have played into this ‘rent seeking’ ideology, lobbying for minor increases in tax revenues, and ignoring more profound issues around the ownership and valuation of mineral resources at the outset.

Zambia did abandon royalty rates in 1966, following independence, and introduce an export tax to reduce the leakage of copper profits overseas. This helped enable the country’s copper boom in the next decade.^⁷⁰ Today copper prices are again high, with a profit margin of at least $2000 per tonne (difference between production cost and price of copper – see figure 2) but Zambians are seeing very little benefit.

The real price of copper

Since private mining companies are not carrying out a ‘service’ for the state, but rather extracting resources for their own profit, royalty rates may not be an appropriate form of resource tax. Instead it would be useful for the Zambian government to evaluate the real value of its copper and other mineral resources, and consider charging for extraction accordingly. This means demanding, or independently seeking, information on the real cost of production, and the real profit attained by companies.

According to KCM’s own reports, their assets in Zambia comprise 13.6 million tonnes of copper^⁷¹. At current rates of $7,300/tonne this would be worth $99 billion. This value belongs to the Zambian people.

Shortly after taking office this year President Mahama of Ghana stated his dismay about the meagre returns the country sees from its natural resources. He declared that exports of unprocessed ore and other resources should be stopped, and value should be added to these products in Ghana. The Public Accounts Committee also made statements expressing shock at the volume of earnings from Ghana’s gold mines which were kept in foreign offshore accounts^⁷². Head of Policy Monitoring and Evaluation in the President’s office, Dr Tony Aidoo, made a very profound statement to the press:

Dr Aidoo told the Accra-based Radio Gold that he would rather the minerals remained untapped in the ground so that local mining techniques, even if primitive, could be employed to exploit them. If that meant only 5% of the minerals were exploited, he said, it would be far better for the country than the current situation where Ghanaians themselves did not benefit from God-given resources^⁷³.

The cost of mining to the Zambian and Ghanaian economies goes far beyond loss of profit from taxation or export value. The real price of copper includes the pollution of water and air caused by mining and transportation, the cost of decommissioning mines and smelters, health effects on local populations, and the depletion of the finite resource, which will not be available to future generations. These are known as ‘externalities’ – real costs which will be borne by people and governments at present and in the future, but which are not included in the market price of a resource. Ecological economist Maarten De Wit values the real cost of copper (including externalities) at $33,000 per tonne, four to five times the current market price.^⁷⁴ The price is high because copper is one of the most material intense metals to produce – creating 500 tons of waste, and using 260 tons of water for each ton of primary copper.^⁷⁵ Understanding the real ecological price of copper is important for resource rich states, since when their resource is depleted, they will continue to pay for the externalities for years to come. This sort of calculation should be included in the cost benefit analyses when new mines are proposed or deals struck with companies.

Material flows – where does the copper go?

Perhaps the most stark case of opacity in Zambia’s copper story relates to the final destination of its copper exports. On paper the majority ends up in Switzerland (a major tax haven where Glencore International is based)^⁷⁶. Figure 6 shows Zambia’s main export markets in 2008/9 when the dominance of Switzerland was more striking than today, with the most recent graph inset. The increase in imports to China can be attributed to the influx of Chinese state owned mining companies now exporting copper from Zambia.

Though Zambia is the world’s eighth biggest copper miner, it doesn’t even register on the list of copper consumers. China currently consumes 40% of global copper, and this is predicted to rise to 84% by 2014^⁷⁷. So how can the majority of Zambia’s copper end up in Switzerland? The obvious truth is that it doesn’t. A 2010 Christian Aid report found that in 2008 half of Zambia’s copper exports were destined for Switzerland as they left Zambian customs, but the Swiss import authority claims most of it didn’t arrive. The report also found vast differences between the price paid by Swiss agencies for Zambian copper, and the price attained for exporting this again from Switzerland. They claim the Zambian Government could have increased its revenue from mining six times if these prices had been realised in Zambia^⁷⁸. (see figure 8)

Copper leaves Zambia on trucks and trains bound for ports in Dar es Salaam (Tanzania) or South Africa, but very little is known by the Zambian authority about what happens next. The Bank of Zambia notes its lack of information when it states:

Large metal traders (e.g. Glencore International AG), headquartered in Switzerland, purchase copper and cobalt from Zambian mining companies off gate and sell the commodity to other foreign markets. Most Zambian companies are not fully aware of the final destination of the copper purchased by these companies. ^⁷⁹

Selling ‘off gate’ means that the cost of, and responsibility for, freight is picked up by the buyer. So where do KCM’s exports go and what is their real value? In an affidavit to the Zambian High Court (as part of a court battle over tax owed) in November this year, KCM claimed it sells its copper cathode exports to traders including Traxys SA, Marubeni Corp and Ambrian Metals Ltd., and is not privy to who the final buyers are or where they are located.^⁸⁰

The fact is that most metal is traded on the high seas – a colonial tradition which is almost totally de-regulated, and unaccountable^⁸¹. For example the contribution of shipping to pollution and climate change has only recently been established when it was revealed that sixteen mega ships alone produce the same amount of sulphur as all the world’s cars. Global shipping is overseen by the International Maritime Organisation (IMO), a key United Nations body based in London, which has refused to take part in carbon reduction and other regulatory programmes.^⁸²

Vedanta’s perception management in Zambia:

Like other places where they operate in India, Vedanta have put considerable emphasis on Public Relations (PR) since acquiring KCM in Zambia. PR is used to emphasise and exaggerate their Corporate Social Responsibility (CSR) programmes, and create positive perceptions of the company for politicians, investors and community members. However, behind the shiny images of happy African children, Vedanta’s rhetoric of alleviating poverty through mining is usually very hollow. The reality for communities around Vedanta’s operations around the world, and in Zambia, is far from positive, as pollution, workers rights violations and tax evasion leave little local benefit.

Shortly after acquiring KCM Vedanta employed ‘image builder’ Augustine Seyuba – a former journalist, to create confidence in the company locally. They sponsored the Zambian super-league and took on several local clinics and schools previously run by ZCCM and Anglo American, and promoted these developments in newspaper adverts and billboards. However they did not promote the fact that they also gave back one of the hospitals previously run by Anglo to the government, and that, according to a local activist – ‘the standards of health care and service delivery have drastically dropped with chronic shortages of even basic medication where even clients are compelled to buy some of the medicines from drug stores in town’^⁸³. Another report notes that: ‘in a speech to officially launch the football league sponsorship, and in the presence of the Republican President, the KCM Chief Executive Officer (CEO) could not hide the intentions of the company when he asked the government to extend the tax holiday/exemptions the company has been enjoying ever since KCM was set up (2000).’^⁸⁴

Augustine Seyuba is now Permanent Secretary in Zambia’s North Western province, an upcoming mining area, showing the dangerous and common revolving door from journalism to PR to politics. KCM’s current PR head – Joy Sata, is another former journalist, and their head of Communications – Shapi Shacinda, is a former Reuters correspondent.

In India Vedanta has come under attack for its misleading PR campaigns. A major national campaign in India called ‘mining happiness’ had to be scrapped after celebrity participants pulled out due to concerns about Vedanta’s ethics. Activists formed a parallel campaign called ‘faking happiness’ which pointed out the truth about Vedanta’s mining practices such as land grabbing, toxic waste dumping and harassment of villagers who opposed their projects^⁸⁵.

Vedanta are currently running another major PR campaign in India called ‘Our Girls, Our Pride’ which paints them as women’s rights advocates. This has also been opposed by women’s groups who have called it a sham, noting the many women and girls made homeless, fatherless and destitute by Vedanta, as well as those who have led social movements against their operations^⁸⁶.

Vedanta’s perception management in Zambia has also involved spreading some serious misconceptions right up to the highest levels of Zambian politics. The most common myth is that Vedanta is an Indian company, when in fact they are registered on the London Stock Exchange and headquartered in London. Though the majority of their operations are in India, and majority owner Anil Agarwal is Indian by birth, Indian shareholders hold less than 1% of the company, and Vedanta are answerable to British company law.

We were shocked to discover the prevalence of this misconception in Zambia. Deputy General Secretary of the Mine Workers Union of Zambia – Leonard Phiri, told us “The belief we have had is that KCM is an Indian company and it has not been making profit.” He went on to respond to the news that Vedanta was in fact British, and was making large profits in Zambia saying;

“They can’t take care of safety measures, they can’t talk about their future plans for KCM, or where they expect to go to after this.. they can’t follow mining regulations, they have huge indebtedness due to outsourcing companies that were not being paid money. All these things have been made clear to the people in the country,..and it has really been looked at in a negative light by the Zambian community and the Zambian state, where the government now has to look for a team to monitor its operations so they can see if they can salvage the company from its current doldrums, which is a very very sad state of affairs. And, if it is owned by the British, as you are saying, I would not expect this, because the British have a history of running entities in a professional manner, respecting the indigenous laws of the country they are operating from, and motivating the workers of the country. This is not the case with KCM.“^⁸⁷

Creating a perception that they are not making profit is important to Vedanta in Zambia as they can use this to bargain for reduced taxes and other costs. Vedanta recently claimed they could not pay an alleged $586 million in unpaid tax as it would compromise their ability to pay workers^⁸⁸. A journalist told us that since Vedanta’s reputation was seriously compromised by their attempt to fire 2000 workers this year, they have been taking out front page newspaper ads saying they are prospecting for oil and gas in Zambia, though there is no evidence that they have made any such developments.

This sort of perception management is also used by Vedanta to create investor confidence. For example, while claiming they are cash strapped in Zambia, Vedanta will tell investors that KCM is highly profitable. This enables them to secure loans or increase share uptake. Most famously, Vedanta created the perception that they had permission to mine the Niyamgiri Hills in Orissa, India, for bauxite, which was reported in the UK’s Financial Times in 2004, assisting them with investment and loans for the project.^⁸⁹ In fact permission was never granted, ultimately costing them $10 billion from an unrealised investment^⁹⁰.

The truth about Vedanta in Zambia:

Water pollution

We visited communities living around Vedanta-KCM’s mines and refineries in the Copperbelt. Helen and Shimulala communities are located near KCM’s Nchanga mine in Chingola. They are home to 400 people. Pollution from KCM’s tailings dam number 2 (known as TD2) has contaminated their water supply as well as the Mushishima stream which runs nearby. Local residents told us that KCM drilled them a borehole after the stream became contaminated but when they took samples it was also polluted with copper sulphate. They allege that a water tank subsequently delivered by the company also contained contaminated water. With no clean water source in their village residents now walk to a shallow well they have dug in marsh to fetch dirty water. They fear this may also be polluted.

KCM’s press releases praise their contribution to local communities by releasing 50,000 fingerlings into Mushishima stream this summer.^⁹¹ But residents say although they eat fish from the stream, they are worried that they may also be contaminated.

In 2006 KCM released raw effluent from their pollution control dam into the Mushishima stream, which runs directly into the river Kafue, the water source for 40% of Zambia’s population. The result was some of the worst contamination Zambia has ever seen, with chemical concentrations of 10 x acceptable levels of copper, 770 x manganese and 100 x cobalt in the river Kafue, turning it a strange blue green colour.^⁹² One local resident told a journalist:

“We are scared. In fact even this water they are bringing in tanks is not enough. Now we are dead because of KCM. We may have problems in the future. We do not know what is in our bodies. We drank because we were thirsty. But the taste was bitter. It was like chloroquine. Most people are sick. Most people can’t even stand up. If we try to put chlorine, the water becomes black. If we boil it, it becomes brown.”^⁹³

Water companies in Kitwe and Chingola sued KCM for their negligence, which had damaged their water processing plants, and Vedanta compensated them out of court. But they refused to settle any compensation with the thousands of people affected by drinking the water. Following the failure of the Environmental Council of Zambia (ECZ, now ZEMA) to prosecute the company, Lusaka based lawyer Kelvin Bwalya took a public interest litigation against KCM on behalf of 2000 affected people. In a landmark ruling Supreme Court judge Phillip Musonda ordered KCM to pay a total of $2 million to the families, saying he wanted to make an example of KCM for their ‘gross recklessness’. He also stated that;

“The courts have a duty to protect poor communities from the powerful and politically connected. I agree with the plaintiff’s pleadings that KCM was shielded from criminal prosecution by political connections and financial influence, which put them beyond the pale of criminal justice.”^⁹⁴

However, Vedanta subsequently challenged this decision, claiming they were not responsible for the contamination. Until now the case has not been heard and the residents are yet to be compensated. Mr Bwalya told us about the long term effects of the incident where local people are still experiencing miscarriages, and premature and deformed births.^⁹⁵ The likely long term impacts of the spill may include lung and heart problems, respiratory diseases and liver and kidney damage. Exposure to manganese can cause ‘manganism’ a disease of the central nervous system affecting psychic and neurological functions. Brain damage effects in the local population may only show up in future generations.^⁹⁶

In 2010 KCM contaminated the river again, in another major incident which left thousands poisoned once again. They were found guilty by Zambian courts on four counts, including ‘wilfully failing to report an act or incident of pollution of the environment’.^⁹⁷ One of the victims, who was admitted to hospital with the rest of his family following the spill told the press that KCM was a serial offender, and had repeatedly polluted the Kafue river with sulphuric acid as well as committing several major incidents. He claimed KCM was ‘polluting the environment with impunity because the mining company was highly favoured by the government‘.^⁹⁸

Air pollution

We met residents living near KCM’s Nkana refinery and smelter in Kitwe who claimed ambient air pollution is a constant problem, and that miners and other local residents suffer from diseases such as TB caused by airborne contaminants (as well as the high rate of industrial accidents in the mines and plant). A recent academic study evidenced the damage done by sulphur dioxide pollution around the Nkana plant, which caused die-back in trees and killed vegetable gardens in the community, as well as affecting residents’ health.^⁹⁹ In December KCM’s Nkana smelter released so much sulphur dioxide that their PR head Joy Sata warned residents to stay in their homes. Though the incident was caused by a power failure at a government facility, KCM’s back up power source failed to kick in, causing the unique incident at their plant.^¹⁰⁰

At Vedanta’s other copper smelting subsidiary – Sterlite, in Tamil Nadu, India, a major sulphur dioxide release which hospitalised hundreds of residents brought more than 5000 people into the streets this March, in a ‘bandh’ which closed the town of Tuticorin.^¹⁰¹ The smelter was temporarily closed as a result, but was reopened a few months later. The Sterlite plant has one of the highest rates of workers deaths, with sixteen dying between 2007 and 2011.^¹⁰² Many of these were recorded by the police as suicides. In 1997 a toxic gas leak at the plant hospitalised 100 peoplesparking an indefinite hunger strike by a local politician and a ‘siege on Sterlite’ that led to 1643 arrests.

Workers rights

Another of Vedanta’s patterns to be played out at KCM is the minimisation of full time employees in favour of cheaper and less unionised contract labour. Of KCM’s 18,000 employees an estimated 11,000 are contract labour. A Christian Aid report claims that sub-contracted labourers at KCM are paid just £37 per month instead of £150 they require for a living wage.^¹⁰³Skilled, and even semi-skilled labour is often supplied by imported Indian employees, with an estimated 500 currently working at KCM.^¹⁰⁴

KCM’s reputation in Zambia took a nosedive this May when they announced they would retrench (fire) 2000 workers as part a bid to streamline operations and increase profits. President Sata threatened to revoke their mining license if they went ahead, and the plans were put on hold. But KCM’s CEO Kishore Kumar defied him, laying off 76 workers in November, which so angered Sata’s government that they issued a deportation notice for Kumar and cancelled his work permit, calling him ‘arrogant’. By November the official number of employees to be fired had decreased to 1529, though local activists claim 500 had already taken voluntary redundancy in the meantime.^¹⁰⁵ Vedanta Chairman Anil Agarwal flew out to Zambia to negotiate over the lay-offs, leading Chingola’s district commissioner to accuse KCM of acting like a ‘small god’ by trying to arm twist and blackmail the government.^¹⁰⁶

Each mine worker in Zambia has an estimated 10-12 dependants so Vedanta’s proposed job losses will affect up to 20,000 people in total. Samfronce Bwayla from Nchanga province Catholic Church Justice and Peace, who work with mining communities says:

“Many people in this nation will suffer from retrenchment. Each miner who is retrenched has nieces and daughters who depend on them, in colleges and Universities and elsewhere. They will all suffer. Even people who have left the copperbelt still depend on copper belt money.”^¹⁰⁷

KCM have also been deducting excess tax from workers since the retrenchment was announced in May, by claiming the workers had previously underpaid tax, and deducting the backdated amount from the paycheques, leaving them with up to half their usual salary. This went on for a few months until union action put a stop to it and the excess tax was eventually refunded.^¹⁰⁸ A recent article also claimed that the 76 fired workers were unfairly compensated, and given ‘peanuts’ as redundancy benefits.^¹⁰⁹Vedanta’s claim that lay-offs are necessary due to poor profitability has led to their investigation by a Government task force, to establish the sustainability of their operations^¹¹⁰. Meanwhile at Vedanta’s Annual General Meeting in London in August 2013 Agarwal brazenly claimed that the company has not retrenched a single worker in any of their operations.^¹¹¹

In June 2012 KCM were ordered to pay damages to Balaam Mwila, an engineer who was dismissed after he attended a public forum shortly after KCM’s 2006 contamination of the river Kafue. Mr Mwila said that residents should ‘take KCM on’ because they made $2.6 million every day and could easily afford to compensate residents. KCM subsequently fired him for ‘unprofessional conduct that might directly or indirectly tarnish the company’s image‘. Judge Makangu agreed that Mr Mwila was exercising his freedom of expression and added that “The defendant has not shown that the plaintiff told a lie that the company was earning profits of that magnitude daily.”^¹¹²

As previously mentioned Vedanta are also in a legal battle with the Zambian government over a $586 million tax bill, charged by the Revenue Authority after an audit revealed KCM did not have receipts from the final destination of many of its exports. Meanwhile Vedanta has bragged in investor presentations that 50% of their tax contributions in Zambia are via workers’ Pay As You Earn (PAYE).^¹¹³

Who owns Zambia?

Other studies have dealt with Zambia’s lack of sovereignty over its own ‘development’ due to the restrictive conditions placed on it by World Bank and IMF loans and ‘aid’. These conditions have forced cuts to government spending and the privatisation of almost all of Zambia’s parastatal entities over the last three decades, making Zambia a celebrated model of economic liberalisation, but simultaneously exacerbating levels of poverty and deprivation.^¹¹⁴ We will not deal with the well publicised impacts of the World Bank and IMF here, but instead attempt to shed light on several of the lesser known interests behind these agencies and the multinational companies they have ushered in.

Shareholder interests

A glance at the top shareholders of the largest mining companies in Zambia is very revealing (see figure 9). Common shareholders in Vedanta Resources, First Quantum Minerals and Glencore International are Blackrock, Standard Life, Capital Group and the Government of Singapore.

Figure 9:Some of the top shareholders of Zambia’s main mining companies as of 30^th Dec 2013.^¹¹⁵

Vedanta Resources	%	Glencore International	%	First Quantum	%
Volcan investments	66.93	Glencore Xstrata plc	50	Unlisted shareholders	10
Blackrock Inc	5.62	Qatar Investment Authority	8.15	Blackrock Inc	9.54
Standard Life plc	5.11	Blackrock Inc	6.43	Capital Group companies Inc	7.17
Blackrock Investment Management (UK) Ltd	4.41	Government of Norway	2.3	Affiliated managers group Inc	4.82
Blackrock global funds – world mining fund	3	Capital group companies Inc	1.04	Prudential plc	3.39
Chase nominees (on behalf of GIC private ltd)	2.99	Standard Life plc	0.46	Carmignac Gestion	3.1
GIC private ltd	2.99	Government of Singapore	0.43	JP Morgan chase & co	2.38

Blackrock is the world’s biggest asset management company, in charge of $4.1 trillion of assets (including much of Zambia’s copper via its shares). It is bigger than any bank, insurance company or government fund, and is the majority shareholder in half of the world’s 30 largest companies. It was set up by Larry Fink – a Washington insider who was named as a potential treasury secretary in the US.^¹¹⁶

Blackrock, JP Morgan and Goldman Sachs are currently working together in an attempt to buy up 80% of available copper on behalf of investors, and hold it in warehouses. This will create a copper futures market enabling speculation, futures trading, and backing of new loans and funds. In 2010 JP Morgan bought more than half of the available warehoused copper in a few weeks, leading to a spike in copper prices. Manufacturers and copper wholesalers warned the Securities and Exchange Commission (SEC) that such a monopoly on copper would squeeze the market and send prices skyrocketing but under pressure from Blackrock and the banks the SEC approved their proposal.^¹¹⁷ The aluminium futures market set up by Goldman Sachs, on which the copper takeover is modelled, is estimated to have cost consumers billions of dollars in price hikes, as market manipulations sent prices soaring.^¹¹⁸ Blackrock also owns 7.91% of Freeport McMoran Copper and Gold Inc, the world’s largest publicly traded copper producer, making it a major power in the copper industry.

Another key shareholder in Zambia’s copper – Capital Group, based in Los Angeles, is one of the world’s largest investment managers, controlling around $1 trillion in assets.

It is worth noting that the Government of Norway have a large share in Glencore International, the controllers of Mopani Copper Mines (one of the largest and most contentious and tax avoiding miners in Zambia). While NORAD, the Norwegian government’s development programme, funds programmes in anti-corruption and auditing of mining companies which are billed as helping to reduce the loot by mining companies, the Norwegian government simultaneously profits from the same loot, in dividends and payouts. For example NORAD is currently funding the Zambian Revenue Authority to set up a special Mining unit to monitor company profits and increase revenue, an act which, if successful would significantly reduce their own profits from Glencore shares.^¹¹⁹The Norwegian Government’s significant influence on Zambia via shareholding and aid should be closely monitored.

Neo-colonialism and the UK Department for International Development

As a former British colony it is not surprising that the UK government continues to have significant interests in, and influence on, Zambia. The UK’s Commonwealth Development Corporation (previously the Colonial Development Corporation and now known as CDC group) owned 7.5% of KCM when it was controlled by Anglo American, and had previously set up the Kafue Consortium to try to buy key mines during the privatisation of ZCCM^¹²⁰. CDC is wholly owned by the UK government and overseen by the Department for International Development (DfID).

DfID also helped maximise Anglo American’s profit from KCM while they themselves owned shares in it, by using $81 million of UK taxpayers money to fund the upgrading of KCM’s Nkana smelter.^¹²¹ Later, DfID helped rescue Anglo from its failure to manage KCM via its contentious initiative Business Partners for Development (BPD). BPD was set up with the World Bank in 1998 and abandoned in 2002 following considerable criticism. The initiative aimed to provide ‘long-term benefits to the business sector and at the same time meet the social objectives of civil society and the state by helping to create stable social and financial environments’. It carried out projects bringing business, civil society and governments together, describing partnerships with NGOs and government agencies as ‘fundamental’ in order to primarily ‘reduce disputes as obstacles to social investment, and doing so in such a way that they do not re-emerge.’^¹²²BPD has been heavily criticised for working in the interests of business not communities, leading it to re-brand itself ‘Building Partners for Development’ (removing the word ‘business’). Evidence has now shown that many of their projects never came to fruition, were short lived, or were even abandoned after the industrial project began, effectively being used to reduce dissent and pave the way for multinational corporations in the third world.^¹²³

BPD brought together CARE International, United Stated Agency for International Development (USAID) and the World Bank with various governmental bodies, civil society organisations and businesses to create a local plan to mitigate for Anglo American’s disastrous pull out from KCM in 2000 by ‘reducing dependency’ on the mining company. This included ‘retrenchment training’ for thousands of miners. It is notable that the list of participants does not include any community group, only NGOs who may not be accountable to the needs of the people (see next chapter).^¹²⁴

In June 2012 Zambian President Michael Sata was keynote speaker at the Commonwealth Economic Forum jubilee dinner in London. The conference was part sponsored by Konkola Copper Mines (as well as Zambeef) and contained a session on ‘Investing in Zambia’ with a speech from then CEO of KCM, Jeyakumar Janakaraj alongside Zambian parliamentarians.^¹²⁵ Another speaker at the conference was Tom Albanese, the then Rio Tinto CEO, who is also poised to be the next CEO of Vedanta, whom he joined as Chairman of its subsidiary Vedanta Resources Holdings Ltd in September 2013.^¹²⁶ The dinner was co-facilitated by the City of London Corporation, the shady heart of the UK finance industry, and manager of the UK’s multiple tax havens. The importance of these lobbying networks should not be underestimated. High profile events like this give multinationals direct access to policy makers and can secure deals with UK government support. The day before the event Sata held a closed door meeting with Anil Agarwal (Vedanta majority owner and Chair) in London. The other keynote address was to be given by Mahinda Rajapaksa, authoritarian President of Sri Lanka – another head of state in which Vedanta has significant interests via its oil and gas subsidiary Cairn India, and whom Agarwal is also likely to have met with. Rajapaksa was ultimately unable to speak at the event due to protests highlighting his role in Tamil ‘genocide’.^¹²⁷

At the same time DfID remains a key provider of ‘aid’ to the Zambian government, including supporting its electoral process, and funding the Central Statistical Office and anti-corruption strategies. Like the earlier example of Norway, the UK government’s stated aims of its ‘development aid’ to Zambia are often in direct conflict with the interests of UK financial policy and UK registered companies, begging questions on how the UK government is really using its influence in Zambia.

In fact Britain has been a central force in opposing policies which would have brought greater prosperity to Zambians through mining. In 1962 the UN General Assembly passed Resolution 1803 on The ‘Declaration on the Permanent Sovereignty of Natural Resources (known as PSNR) which established the right of nations to use natural resources for their own development by nationalisation or raising taxes. The policy, which was originally initiated by UN General Secretary Dag Hammarskjöld, was staunchly opposed by Britain, along with other Western powers and South Africa, who saw it as a threat to ‘neo-colonialism’.^{¹²⁸,¹²⁹} It is poignant that Dag Hammarskjöld died in the Zambian Copperbelt, in what is now believed to be an MI6/CIA assassination^¹³⁰, taking with him his vision of a New International Economic Order (UN General Assembly Resolution 3201, 1974)^¹³¹ which aimed to bring economic justice to Third World nations.

Of course there are many other major forces controlling Zambia’s land, resources and policies. Multinational agribusinesses such as Cargill and AB Sugar (previously British Sugar) are buying up rich swathes of land, undermining food security for Zambians in their vast and fertile country^¹³². China’s influence on Zambia is often bemoaned by its newspapers and politicians and there is much published criticism. Though Chinese human rights standards in many of their mines and other industries have indeed been despicable, Zambians should be careful of ‘China bashing’, and keep their eye on all of the multinationals. In fact Chinese investments often come with less strings attached than European or American ‘development’ projects.^¹³³ The Tazara railway built by Chinese labour in the 1970?s to reduce Zambia’s dependency on white ruled Zimbabwe is a notable example.^¹³⁴

Finally, the next chapter will deal with the enormous influence of international NGOs and donor agencies on Zambian politics and society, and their role in the neo-liberal project in Zambia.

NGOs and civil society – parasites of the poor?

According to the Central Statistical Office of Zambia, NGOs and churches employed 37,519 people in 2012,^¹³⁵while mining employed 74,000 (according to the Zambia Development Agency).^¹³⁶ Walking around Lusaka, offices of International NGOs, usually behind gated compounds, are a regular sight. Conversely, we were surprised to find that, despite the injustices suffered by local communities in the Copperbelt, there were virtually no grassroots people’s movements on the ground. In India and Latin America, it has been largely these mass movements (such as at Niyamgiri) that have secured major victories for people’s rights to land, workers’ rights and even fair taxation, changing the politics and policies of nations. One recent article notes how in India ‘activists and concerned citizens have managed to foster contentious agency and a judicial and political system that allows grassroots-level democratic steering of ecology in greater depth than in other countries’. This has created ‘a legacy of mass movement based emancipation from colonialism, and sustained culture of questioning and political activism’.^¹³⁷

Zambia’s NGOs are the recipients of large amounts of foreign donor aid and funding, but are they making a significant difference for people in mining areas, and are they accountable to Zambia’s affected communities? It is our experience in India and elsewhere, that NGOs often have the effect of suppressing, or co-opting grassroots actions, and hence do not create the significant long-lasting change that originates from mass movements. Interestingly, where strong grassroots movements exist in India and Latin America NGOs are often scarce, suggesting an inverse relationship between the two groups. This chapter looks at three ways in which Zambia’s NGO culture may be more harmful than beneficial to the country.

In whose interest?

Many people we met in mining affected communities in Zambia complained to us that international NGOs had come to their communities, done surveys, carried out workshops, or gathered evidence for reports, never to be seen again. They mostly felt that they were being used by these organisations to help them get more funding or tick boxes. Small NGOs in the Copperbelt who had partnered with larger ones (usually in Lusaka) also complained that the Lusaka NGOs were out of touch with people’s issues, but received the majority of funding due to their connections to international donors. One man working for a small Chingola based organisation told us how this NGO culture had affected their relationship with the local communities:

“a lot of NGOs came here in Chingola and used us. They come here and collect information and they go just like that. Now the community is hating us”.^¹³⁸

NGOs are primarily accountable to their funders, who are usually foreign government aid agencies, or international NGOs (who are in turn funded by government bodies and/or donor agencies), rather than the people they claim to work for or with.

There are several problems with this. Firstly, projects approved by funders are often ‘delivered’ to communities by centralised NGO offices, rather than originating from their priorities or needs. One community worker described her experience in an online article when the village she worked in was suddenly ‘filled with DfID Land Cruisers and people from the district whom she had not met before. Apparently this was the ‘delivery’ of DfID’s gender-based violence programme. The DfID team swooped in, gave everyone free Coca-Cola and a text to keep about GBV, and then swooped out again.’ .^¹³⁹

Secondly, it can lead to a ‘box ticking’ approach, where NGOs appear to be doing the minimum necessary to engage the participation of communities for funding reports. One activist we spoke to alleged that Action Aid employees had bought community members beer in exchange for giving statements against a mining company.^¹⁴⁰

Thirdly, in many cases, as we examined earlier, large donor agencies (whether governmental or private) have their own commercial or national interests which influence the agenda of NGOs and limit their capacity to represent communities. The head of a large Lusaka based international NGO told us how DfID had warned her not to put too much pressure on British companies operating in Zambia. She had replied that DfID funded the UK branch, and not the Zambian unit.^¹⁴¹

We have covered the case of Business Partners for Development (BPD) projects involving CARE international and other local NGOs previously. Behind the rhetoric of local capacity building, BPD’s KCM project was largely in the interests of Anglo American and its shareholders. Whether the participating NGOs were aware of this or not, they are complicit in what was essentially a CSR project aimed at preventing dissent at mass lay-offs and rescuing the image of an a multinational mining company. Writing about NGOs in Zimbabwe, Diane Jeater claims that ‘very often, there is a belief that the aid agendas serve external commercial interests more than local human needs‘, leading her to the conclusion that NGOs are ‘parasites on the poor’.^¹⁴²

Whose politics?

Earlier in this report we touched on the minimal impact of tax justice and royalty based campaigns in Zambia. The aims and values of these campaigns are often more related to donor interests and world-views than an informed questioning of mining economies or people’s grassroots perspectives. The most obvious example of this is the Extractive Industries Transparency Initiative (EITI), promoted by almost all the Zambian NGOs without question. EITI was initiated by British Prime Minister, Tony Blair, and Development Minister, Clare Short (now its head) in 2002 as a joint project with the World Bank. It aims to increase transparency by asking signatory companies to publish their tax and royalty contributions, and signatory states to disclose what they receive, revealing any discrepancies.

In a comprehensive critique of the EITI by Khadija Sharife for Al Jazeera, she asks how the UK can be so concerned about fair taxation when they host more than half of the world’s tax havens, where many multinationals have shell subsidiaries which allow them to legally avoid paying tax in Zambia. The EITI, she points out, ‘does not focus on what multinationals ought to have paid, only what they have paid, and it never investigates the means through which corporations were able to circumvent taxation’, leaving it ‘off the mark by billions‘.^¹⁴³ Hence, the millions of dollars of funding spent on EITI not only fail to address the real source of tax leakage, but simultaneously co-opt the debate and hide the UK’s central role in cataclysmic levels of tax avoidance. As Sharife says;

Each year, Africa loses a minimum of $148bn – almost four times the sum of foreign aid it receives, to capital flight – of which 60 per cent is due to corporate mispricing. Clearly, the solution toward enabling African countries to recover their lost revenue and become economically independent, is to block revenue leakages, rather than provide further loans and grants characterised by conditionalities that undermine development.^¹⁴⁴

Political influence

One NGO country head for Zambia told us how working for ‘civil society’ can be a career path to a job in politics, via connections made though lobbying activities and international donor agencies:

“Civil society figures also end up in politics, then they change. Some civil society people are actually working for the government and chamber of commerce, so they are really already government, yet they represent the civil society“.^¹⁴⁵

One popular Independent MP, Patrick Mucheleka, was previously Executive Director of Civil Society for Poverty Reduction, a large NGO funded by the European Union, Action Aid, DfID, GIZ (German aid), Norwegian Church Aid, UNICEF, the Finnish Embassy, Diakonia and the World Bank.^¹⁴⁶ What interests and ideologies will he bring to his job in politics?

We noted how easy it was for NGOs we met to get access to politicians and even cabinet ministers. The perspectives of civil society are clearly highly valued by Zambian policy makers, who they extensively consult with, but it should not be automatically assumed that they speak on behalf of the people. NGOs’ significant influence on policy making could be seen as undemocratic, largely representing donor interests and effectively suppressing the authentic voice of communities.

A warning about right wing critiques of aid

The Lusaka born writer and banker Dambisa Moyo, author of ‘Dead aid: Why Aid Is Not Working and How There is Another Way for Africa’,^¹⁴⁷ and other neo-liberal economists such as William Easterly have made widely circulated critiques of aid from a right wing perspective. They note that countries flooded with aid money have in many cases become poorer and not more developed, and suggest it should be replaced by Foreign Direct Investment (FDI) by multinational companies. This is in fact already happening, with FDI flows overtaking aid in Sub Saharan Africa since the 2008 recession, boosted considerably by Chinese industrial interests. Some reports claims China has invested $2 billion in Zambia already.

Easterly claimed in 2003 that:

If Zambia had converted all the aid it received since 1960 to investment and all of that investment to growth, it would have had a per capita GDP of about $20,000 by the early 1990s. Instead, Zambia’s per capita GDP in the early 1990s was lower than it had been in 1960, hovering under $500.^¹⁴⁸

This simplistic argument fails to take account of the many ways, noted in this paper, in which Zambia has lost out from its attempts to attract FDI, not least the ‘capital flight’ of tax revenues owed by these companies, on top of weakened regulations, environmental damage and social issues. Dambisa Moyo, a Goldman Sachs banker, now sits on the boards of Barrick Gold and Barclays Bank – both infamous for their tax evasion and loot of the Third World, and has made her theories popular with the IMF, World Bank and Council on Foreign Relations among other neo-liberal institutions.^¹⁴⁹

Though a reduction in aid may not be a bad thing, its replacement with investment by foreign multinationals with equally conflicting interests to the Zambian people is not a solution. As the Africa Progress Panel’s 2013 report on Equity in Extractives states:

Viewed from a different perspective, foreign investment brings many challenges. Few African governments negotiating the terms of concessions and licences have the type of information they need to assess the extent of mineral reserves and the potential costs of extraction and marketing. By contrast, oil and mining companies have unrivalled access to commercial market information, geological analysis, technologies for exploration and extraction, financial resources, and export channels. While corporate revenues are not strictly comparable to GDP, the commercial activities of multinational natural resource companies dwarf the economies of the African countries that they operate in.

Asymmetry in information is not the only problem. Foreign investors in Africa’s extractive industries operate across jurisdictions and through enormously complex company structures. Petroleum and mining companies channel their financial and trade activity in Africa through local subsidiaries, affiliates and a web of offshore companies. The combination of complexity, different disclosure requirements and limited regulatory capacity is at the heart of many of the problems discussed in this report. It facilitates aggressive tax planning, tax evasion and corruption. It also leads in many cases to the undervaluation of Africa’s natural resources – a practice that drains some of Africa’s poorest nations of desperately needed revenues.^¹⁵⁰

The report also notes that ‘returns on investment in Africa are high by the standards of other developing regions: 20 per cent compared with 12 per cent to 15 per cent in Asia and Latin America‘, a clear indication that exploitation is taking place, and that other policies are possible.

What is truly needed in Zambia is political autonomy from all outside interests, strategic links with fellow resource rich nations and between their social movements, and sharing of information to enable a deep re-analysis of how to avoid the ‘resource curse’ and create a sustainable future.

Conclusion and recommendations

Zambian politicians and newspapers often talk about foreign companies as ‘investors’ in their country, and companies themselves present their presence in Zambia as a benevolent effort to create jobs, even at their own loss. This misconception couldn’t be further from the truth. Extractive industries come to Zambia to take advantage of low taxes and liberal policies which allow them to ruthlessly loot and exploit the natural resources, leaving behind corruption and environmental and social damage which their minimal tax contributions don’t come close to compensating. Recent studies have revealed in unequivocal terms that Sub Saharan Africa is a ‘global net creditor’ of billions of dollars each year (mostly in ‘illicit flight’ of owed taxes, undeclared extraction and corrupted deals), and not a burden on the rest of the world as we are made to believe.^¹⁵¹ This is extractivism, not investment, or aid.

The bottom line is that Zambia’s copper based economy has a finite lifetime, with economists suggesting that Zambian copper will be exhausted between 2020 and 2100.^¹⁵² The upper end may be unlikely, and we have shown how companies and even financial analysts can manipulate these figures to create investor confidence and enable speculation. At any rate there is limited time to reverse the trend of losing, rather than gaining from this precious resource, making it last, or planning for an economy without it. Vedanta claim their Zambian assets at KCM comprise 13.6 million tonnes of copper, which, at current copper prices would be worth $99 billion. Is this resource benefitting the people of Zambia under Vedanta’s management? If not, how can the Zambian people and its authorities radically re-examine the worth and potential of this enormous national asset? This report does not intend to give simple answers, but instead to raise some crucial questions and provide missing information to enable informed debate. The following recommendations are intended to help Zambians take steps towards re-assessing and redefining copper-based ‘development’ in their country.

Recommendations

Primarily, we suggest Zambia must break its current isolation and make links with other resource rich nations, sharing different approaches to policy and economy which genuinely benefit people in the long term. In particular, connections should be made between people’s movements which have enacted deep and meaningful changes from the bottom up. By connecting our struggles and sharing research and tactics we can be more informed and better supported to dissent from unequal and exploitative extractive policies.

Lack of information is a key issue in Zambia. Learning from other global examples there are a variety of ways in which crucial research could be carried out, affecting informed policy change. A people’s survey of trucks and/or trains leaving mines and smelters is an excellent way to estimate the true volume of production and exports. This was how Goa’s illegal mining was initially discovered (see chapter 2), leading to a judicial inquiry into mining in Goa, and subsequently other Indian states, which revealed the massive scale of loot and tax evasion and facilitated an overhaul of mining policy.^{¹⁵³,¹⁵⁴} A similar process could be carried out in Zambia.

Accurate information could contribute to developing a ‘critical consciousness’ in Zambia, which examines and questions new models of development, asking how they will serve people’s needs. Critical consciousness is necessary to prevent Zambians from being wooed by the rhetoric of new brands of neo-liberalism, which represent little or no change from the old extractivist regime and are backed by the same interests. Black Economic Empowerment (BEE) in South Africa (led by the ANC’s Cyril Ramaphosa – who now sits on the board of Lonmin),^¹⁵⁵Dalit Capitalism in India (which has helped Indians from the lowest caste [known as ‘untouchables’] become managers and owners in the very same industries that exploit dalits as cheap labour)^{¹⁵⁶,¹⁵⁷}, the United Nations Environment Programme (UNEP)’s Global Green New Deal (formed following the 2008 financial crisis as a fair way to continue resource extraction from Africa in a ‘clean and green’ way), and Africapitalism™ coined by Nigerian businessman Tony Elemelu^¹⁵⁸ are a few examples.

Finally, Zambia’s NGO culture should be critically re-examined. The notion of ‘civil society’ should be expanded to include community groups, marginal trade unions and people’s movements. The growth of these bodies, which are at the heart of true democracy, should be encouraged and valued. At a community level people should learn from hopeful global examples of social movements in India, Latin America and elsewhere, and begin a bottom up process of redefining ‘progress’ and ‘development’ which truly serves Zambia’s people.

“…They should make public the tonnage they produce and the selling price they achieve, to enable us to determine that the Zambian companies and not their foreign affiliates are deriving the highest possible benefits from the market boom. They should report their profits and the amount of tax they paid; their cash reserves and where they are located; their dividends and their borrowings and their costs; their employment levels broken down between local and expatriate; their investment plans and their projections.

So that the Nation may be fully informed about what is happening to its most important resource. And so that these new Mining companies (and all foreign investors for that matter) can understand that they are a part of this Nation and not a caste apart.”

Kenneth Kaunda (Zambia’s first President),

The Post Zambia newspaper, 2005

With thanks to all those who facilitated our trip to Zambia, and who we connected and shared
with during our time.
This report and our trip were resourced by our own fund-raising efforts, including an Indian
banquet evening and a sponsored song. We are deeply grateful to all those who contributed
small and larger amounts to make this work possible.
Front cover pictures: Vedanta KCM’s Nchanga mine, Chingola.
A copper truck leaves Zambia over the Victoria Falls Bridge.
Polluted water in Shimulala village, Chingola.
Vedanta Chairman Anil Agarwal and Zambian President Michael Sata meet in London.

References:

1A.D. Roberts, 1982, ‘Notes towards a financial history of copper mining in Northern Rhodesia’. Canadian Journal of African Studies. Vol 16, no 2, 1982: 347-359.

2World Development Movement, 2004, ‘Condemned to Debt‘.

3Central Statistical Office of Zambia, 2012, Living Conditions Monitoring Survey report 2006 and 2010.

4ACEMOGLU, D., S. JOHNSON, and J. ROBINSON, (2001), ‘The Colonial Origins of Comparative

Development’, American Economic Review, 91, 1369-1401.

5Barry Bearak, New York Times, April 4, 2011, ‘ Zambia Drops Case of Shooting by Chinese Mine Bosses’.

6Zambia Review, 14^th Edition, 2013. p.24. Ministry of Commerce, Trade and Industry. Directory Publishers of Zambia ltd.

7Central Statistical Office of Zambia, 2012, Living Conditions Monitoring Survey report 2006 and 2010.

8IRIN News, 26^th Feb 2009. ‘ZAMBIA: Copper-mining downturn sees upturn in sex trade’ at

9Freedom of Information Requests to DfID filed by Simon Chase (ACTSA), reported in ‘Undermining Development: Copper Mining in Zambia’, Oct 2007, by Aby Diamond et al, SCIAF, Christian Aid and ACTSA.

10Khadija Sharife, 2011, Pambazuka News, ‘Copper in Zambia: Charity for multinationals’. 2011-06-02, Issue 532 http://pambazuka.org/en/category/features/73742

11Opposition leader ‘poisoned’ 26^th May 2006, News 24 archives, http://www.news24.com/Africa/News/Opposi…

12Andrew Sardanis, 2007, A Venture in Africa: The Challenges of African Business. IB Tauris, London.

13Zambia Copper Investments, Circular to Shareholers, 11^th October 2004. ‘The recommended introduction of Vedanta Resources plc as a strategic equity partner in Konkola Copper Mines plc’.

14Clifford Chance, Vedanta Call Option Deed, Nov 5^th 2004. Leaked and available at http://minewatchzambia.blogspot.co.uk/

15Khadija Sharife, 2011, Pambazuka News, ‘Copper in Zambia: Charity for multinationals’. 2011-06-02, Issue 532 http://pambazuka.org/en/category/features/73742

16Andrew Sardanis, 2007, A Venture in Africa: The Challenges of African Business. IB Tauris, London.

17Andrew Sardanis, 2007, A Venture in Africa: The Challenges of African Business. IB Tauris, London. p.247

18Andrew Sardanis, 2007, A Venture in Africa: The Challenges of African Business. IB Tauris, London.

19Zambia Copper Investments (2007) Annual Report, 2007 p 1

20KCM, EIA for the new smelter complex in Nchanga, 2006, cited in ‘Undermining Development: Copper Mining in Zambia’, Oct 2007, by Aby Diamond et al, SCIAF, Christian Aid and ACTSA.

21Frontline, Volume 18 – Issue 05, Mar. 03 – 16, 2001, ‘Lessons from the Balco fiasco’. http://www.frontline.in/static/html/fl1805/18051090.htm

22Economic Times of India, Oct 8, 2013. ‘CBI to initiate preliminary enquiry into disinvestment of HZL’ http://articles.economictimes.indiatimes…

23Economic Times of India, Dec 23, 2013. ‘Hindustan Zinc Ltd disinvestment: CBI registers PE against Vedanta Chairman Anil Agarwal’.

24 Nityanand Jayaraman, Kafila, March 28, 2013. ‘Vedanta-Sterlite – Dangerous by Design.’ http://kafila.org/2013/03/28/vedanta-ste…

25Paul Whitfield, Feb 27, 2012, The Deal. ‘Vedanta reshuffle creates corporate rubbish bin’. http://www.thedeal.com/content/restructuring/vedanta-reshuffle-creates-corporate-rubbish-bin.php#ixzz2osuGMZma

26GlobalData, Vedanta Resources plc (VED) – Financial and Strategic Analysis Review, 18th July 2013.

27Denise Wee, Vedanta tackles unwieldy corporate structure. 19 September 2013. Finance Asia. http://www.financeasia.com/News/357556,v…

28Jane Tindall, Invezz. Dec 19^th 2013. ‘Vedanta share price: Chairman buys 1.7 million shares.’ http://invezz.com/news/equities/7703-ved…

29Director Dealings, 24/12/2013. ‘Vedanta Resources Chairman Buys 35 Million Shares’ http://www.lse.co.uk/AllNews.asp?code=3t…

30Alistair Dawber, The Independent, 29^th July 2010. ‘Vedanta Resources: the world’s most hated company?’

ttp://www.independent.co.uk/news/busines…

31Vedanta was described in the British Parliament by MP Lisa Nandy as ‘one of the companies that have been found guilty of gross violations of human rights’ . Ms Nandy quoted Richard Lambert the former Director General of the CBI: ‘It never occurred to those of us who helped to launch the FTSE 100 index 27 years ago that one day it would be providing a cloak of respectability and lots of passive investors for companies that challenge the canons of corporate governance such as Vedanta…’ http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120522/debtext/120522-0002.htm

32 Mansi Taneja & Shine Jacob , Dec 16^th 2013. Business Standard. ‘Anil Agarwal’s many struggles in India‘.

33Madhusree Mukerjee, Huffington Post, ,08/26/2013 ‘Pristine Tribe Saves Sacred Mountain From Mining’ http://www.huffingtonpost.com/madhusree-…

34Saurabh Chaturvedi,’ India Rejects Plan to Mine Bauxite in Niyamgiri Hills’. Jan 12^th 2014. Wall Street Journal, http://online.wsj.com/news/articles/SB10…

35John Lungu and C Mulenga, 2005. ‘Corporate Social Responsibility practices in the extractive industry in Zambia.

36See http://minewatchzambia.blogspot.co.uk/

37Clifford Chance. The Government of the Republic of Zambia and Konkola Copper Mines plc. Amended and restated Development Agreement. Leaked at
38Matthew Hill, Bloomberg News, Jul 17, 2013. ‘Vedanta’s Zambian Unit Plans Coal Power Plant to Reduce Costs.’ http://www.bloomberg.com/news/2013-07-17…

39Bank of Zambia, Mineral Production and Export, 2012.

40International Copper Study Group (ICSG), 2012.

41Lusaka Times, July 22, 2011, ‘Mining Sector contributing less than 2% of domestic revenue-ZCTU’.

42e.g Sherpa versus Mopani, April 2012. Specific Instance regarding Glencore International AG and First Quantum Minerals Ltd. and their alleged violations of the OECD guidelines for multinational enterprises via the activities of Mopani Copper Mines Plc. in Zambia.

43Central Statistical Office, Traditional Exports 2003 – 2012. Supplied on request to researchers. (The figures are $6.9 bn in 2011 and $6.5 bn in 2012)

44Caleb Fundanga, Governor of Bank of Zambia, 2011, Macroeconomic trends in relation to the attainment of MDGs. Bank of Zambia website.

45Zambia 2010 EITI report.

46Central Statistical Office, Graph of Total Copper Production 2000-2012.

47Bank of Zambia, Statistics Fortnightly: fortnight ending Nov 15 2013. Volume 20, no22.

48A Mafuleka, 2010, Organised Crime in Southern Africa: the case of Zambia (unpublished report). Subsequently incorporated into a review of organised crime compiled by A Huebschle, Organised Crime in Southern Africa: First Annual Review (2010) Institute for Security Studies pp. 59-61

49Sherpa versus Mopani, April 2012. Specific Instance regarding Glencore International AG and First Quantum Minerals Ltd. and their alleged violations of the OECD guidelines for multinational enterprises via the activities of Mopani Copper Mines Plc. in Zambia.

50Rajeev Kumar, Gulail, 15^th Nov 2013, ‘Vedanta, a major player in Goa’s illegal mining syndicate.’ http://gulail.com/vedanta-a-major-player…

51Rediff news, ‘Detailed report: Story of BRAZEN illegal mining in Goa’, December 08, 2012 http://www.rediff.com/news/report/detailed-report-story-of-brazen-illegal-mining-in-goa/20121208.htm

52Suditpo Mondal, The Hindu. June 17, 2013. ‘Karnataka lost Rs 1 lakh cr from 2006-2010?, http://www.thehindu.com/news/national/karnataka/karnataka-lost-rs-1-lakh-cr-from-20062010/article4820758.ece

53Vedanta Annual Report 2013

54Misheck Wangwe and Darius Kapembwa, 25^th May 2013, Zambia Post, ‘Govt rejects KCM’s plan to sack 2,000 workers’. http://www.postzambia.com/post-read_arti…

55Christian Aid’s report claims that sub-contracted labourers are paid just £37 per month instead of £150 they require for a living wage. Aby Diamond et al, October 2007, Undermining Development: Copper in Zambia. ACTSA, SCIAF and Christian Aid.

56Jonathan Ruff, March 12, 2013. ‘Feared Copper “Flood” More Likely a Trickle’, AllianceBernstein http://blog.alliancebernstein.com/index.php/2013/03/12/feared-copper-flood/

57GlobalData, Vedanta Resources plc (VED) – Financial and Strategic Analysis Review, 18th July 2013.

58Grant Thornton, 2010, Pilot audit report – Mopani Copper Mines Plc: International expert team report to the Commissioner Domestic Taxes, Zambia Revenue Authorities.

59Economic Commission for Africa, 2010, Tracking and Certification of Mineral Output in Southern Africa. p.vii

60Lusaka Times, July 22, 2011, ‘Mining Sector contributing less than 2% of domestic revenue-ZCTU’.

61Sherpa versus Mopani, April 2012. Specific Instance regarding Glencore International AG and First Quantum Minerals Ltd. and their alleged violations of the OECD guidelines for multinational enterprises via the activities of Mopani Copper Mines Plc. in Zambia.

62Zambia Copper Investments (2007) Annual Report, 2007 p

63Banktrack, April 2011, Dodgy deal: Konkola Copper Mines.

64Zambian Eye, November 10, 2013, Govt reps sitting on KCM board in dark about laying off over 1500 workers – Minister. http://zambianeye.com/archives/16270

65Lusaka Times, July 22, 2011, ‘Mining Sector contributing less than 2% of domestic revenue-ZCTU’.

66KCM, a presentation for investors on Vedanta and KCM, 2007; – the presentation states that PAYE totalled up to US$35 million out of a total of US$75-80 million. – quoted in Aby Diamond et al, October 2007, Undermining Development: Copper in Zambia. ACTSA, SCIAF and Christian Aid.

67Vedanta Resources, Annual Report 2013

68Interview with Mattheus Mpande, UNZA, 5^th December 2013.

69Taxes of mines and minerals – Karnataka State at NIC, 18 Aug 1999. www.kar.nic.in/finance/trc/ch08.pdf?

70A.D. Roberts, 1982, ‘Notes towards a financial history of copper mining in Northern Rhodesia’. Canadian Journal of African Studies. Vol 16, no 2, 1982: 347-359.

71Konkola Copper Mines, presentation to investors, November 2012. www.slideshare.net/VedantaGroup/kcmpresentation-november2012

72Dr Tony Aidoo, head of policy monitoring and evaluation in President Mahama’s office. Femi Akomolafe, New African, December 2013, ‘Ghana: Fury over offshore accounts’

73Dr Tony Aidoo, head of policy monitoring and evaluation in President Mahama’s office. Femi Akomolafe, New African, December 2013, ‘Ghana: Fury over offshore accounts’

74Maarten J. de Wit, 2005, Ecological Economics, ‘Valuing copper mined from ore deposits’, Volume 55, Issue 3, 15 November 2005, Pages 437–443

75Michael Ritthoff, Holger Rohn, Christa Liedtke. 2002. Calculating MIPS : Resource Productivity of Products and Services. (Wuppertal Spezial no. 27e) The Wuppertal Institute for Climate, Environment and Energy

76Central Statistical Office, cited from Bank of Zambia, Zambia direction of trade report, Q1 2013. http://www.boz.zm/%28S%28uc3ksc55shnjfl4…

77Standard Bank, An Analysis of China’s Copper Demand, February 21, 2012.

78Christian Aid, May 2010, Blowing the Whistle: The time’s up for financial secrecy.

79Bank of Zambia, Direction of Trade report, Q1 2013.

80Matthew Hill, Bloomberg, Nov 6 2013, ‘Vedanta’s Zambia Unit Sues Tax Authority Over $586 Million Bill’ http://www.bloomberg.com/news/2013-11-06…

81Sletmo, G.K, 2001, ‘The End of National Shipping Policy? A Historical Perspective on Shipping Policy in a Global Economy’, International Journal of Maritime Economics, Volume 3, Number 4, 1 December 2001 , pp. 333-350(18).

82Fred Pearce, 21 November 2009. The Daily Mail newspaper. ‘How 16 ships create as much pollution as all the cars in the world’.

83Email from Vincent Lengwe, Director of Copperbelt Trade and Development Forum, Luanshya. 6^th January 2013.

84John Lungu and C Mulenga, 2005. ‘Corporate Social Responsibility practices in the extractive industry in Zambia.

85Faking happiness campaign. http://fakinghappinesscampaign.blogspot….

86http://www.kractivist.org/open-letter-to-priyanka-chopra-on-ndtv-vedanta-our-girls-our-pride-campaign-vaw/ and http://www.foilvedanta.org/articles/1275/

87Interview with Leonarh Phiri, Mine Workers Union of Zambia, 9/12/13.

88Matthew Hill, Bloomberg News, Nov 6, 2013, ‘Vedanta’s Zambia Unit Sues Tax Authority Over $586 Million Bill’. http://www.bloomberg.com/news/2013-11-06…

89Kunal Bose, Financial Times, November 3, 2004, ‘India: Investor interest grows as nation shows its mettle.?

90Saurabh Chaturvedi,’ India Rejects Plan to Mine Bauxite in Niyamgiri Hills’. Jan 12^th 2014. Wall Street Journal,
91Daily Mail, June 6 2013, ‘KCM restocks Mushishima stream with 50,000 fingerlings’. http://daily-mail.co.zm/blog/2013/06/06/…

92Times of Zambia, November 8 2006. ‘KCM pollutes Kafue River’.

93Sunday Post, Lusaka, November 19 2006, ‘KCM Pollution Victims Speak Out’. Cited in Fraser, A and Lungu, J. For Whom the Windfalls: Winners and losers in the privatisation of Zambia’s copper mines, 2006.

94Newton Sibanda, December 12, 2011. Zambia: High Court orders Konkola Copper Mines to pay 2 million USD for polluting River Mushishima.

95Interview with Kelvin Bwalya, 18^th December 2013.

96Dobson, AW et al, 2004. ‘Manganese neurotoxicity’. Mar; 1012:115-28.

97Steel Guru, 28 November 2010, ‘Konkola Copper fined KCM USD 4000 for polluting water in Kafue River.’

98Kabanda Chulu, 03 Dec. 2010, The Post newspaper. ‘KCM pollution victim speaks out’.http://www.postzambia.com/post-read_article.php?articleId=16411

99Ncube, E., C. Banda, and J. Mundike (2012), “Air pollution on the Copperbelt province of Zambia: Its sulphur dioxide effects on vegetation and possibly humans”, Journal of Natural and Environmental Sciences, Vol. 3, No. 1, pp. 34-41

100 Nicholas Bariyo, Dec 14, 2013, Wall Street Journal, ‘Outage damages Zambia’s largest copper smelter’

http://www.marketwatch.com/story/outage-…

101‘Bandh affects normal life in Tuticorin,’ Hindu newspaper, April 8^th 2013. http://www.thehindubusinessline.com/comp…

102 Nityanand Jayaraman, Kafila, March 28, 2013. ‘Vedanta-Sterlite – Dangerous by Design.’ http://kafila.org/2013/03/28/vedanta-ste…

103Aby Diamond et al, October 2007, Undermining Development: Copper in Zambia. ACTSA, SCIAF and Christian Aid.

104 Estimated by Mineworkers Union of Zambia Deputy General Secretary, Leonard Phiri, 9/12/13

105The Independent Observer, 6^th Nov 2013, ‘KCM fire 76 workers’, http://www.tiozambia.com/1/post/2013/11/…

106Chiwoyu Sinyangwe, The Post Newspaper, 03 Dec. 2013. ‘KCM should not be treated like a small god – Sichula’ http://www.postzambia.com/post-read_arti…

107Interview with members of CCJP in Kitwe, 9^th De 2013.

108Misheck Wangwe, The Post newspaper. 29^th Nov 2013, ‘KCM refunds wrongly deducted PAYE’. http://www.postzambia.com/post-read_arti…

109The Independent Observer, 2^nd Dec 2013, ’76 KCM fired workers given peanuts as benefits’. http://www.tiozambia.com/1/post/2013/12/…

110 Zambian Eye, November 10, 2013, Govt reps sitting on KCM board in dark about laying off over 1500 workers – Minister. http://zambianeye.com/archives/16270

111 Richard Solly, ‘Vedanta says: India needs us, and it wasn’t us what did it’. London Mining Network. Aug 6, 2013. http://londonminingnetwork.org/2013/08/v…

112 Mwila Chansa-Ntambi, The Post Newspaper. 17^th June 2012, ‘Court penalises KCM for unlawful dismissal’. http://www.postzambia.com/post-read_arti…

113 KCM, a presentation for investors on Vedanta and KCM, 2007; – the presentation states that PAYE totalled up to US$35 million out of a total of US$75-80 million. – quoted in Aby Diamond et al, October 2007, Undermining Development: Copper in Zambia. ACTSA, SCIAF and Christian Aid.

114 Lishala C. Situmbeko and Jack Jones Zulu, April 2004, Zambia: Condemned to debt. World Development Movement.

115 Global Data, Orbis company reports, 30^th Dec 2013.

116 The Economist, Dec 7th 2013. ‘BlackRock: The monolith and the markets’ http://www.economist.com/news/briefing/2…

117 The New York Times, July 21^st 2013, ‘Next up Copper.’

118 David Kocieniewski, New York Times, July 20, 2013. ‘The House Edge: A Shuffle of Aluminum, but to Banks, Pure Gold’

http://www.nytimes.com/2013/07/21/busine…

119 OECD, Synthesis report:Between high expectations and reality: An evaluation of budget support in Zambia

(2005-2010). (see p 131) www.oecd.org/countries/zambia/49210553.pdf?

120 Joe Kaunda, the Post Newspaper, 10 June 1998. ‘Africa: Kafue Consortium finally abandons ZCCM’s mines bid’.

121 Response to FoI’s to DfID by ACTSA in 2007.

122 Business Partners for Development, Natural Resources Cluster Project Proposal. Disclosure 1c. FoI response from DfID, April 27, 2010

123 Richard Whittel, Corporate watch. January 28, 2010. Dodgy Development: False Promises. http://www.corporatewatch.org/?lid=3661

124 BPD Engagement with the KCM Project, Zambia. Exploratory Stakeholder Workshop, October 2000.

125 Brochure for Diamond Jubilee Commonwealth Economic Forum: Shaping capitalism for global prosperity and sustainable growth. June 6-7, 2012. Mansion House, London.

126 Economic Times of India, Dec 31, 2013. ‘Vedanta looking for new CEO; extends M S Mehta’s term till March’. http://articles.economictimes.indiatimes…

127 Shiv Malik and Alexandra Topping, ‘Sri Lankan president cancels speech in London over protest fears’, 6^th June 2012. The Guardian newspaper.
128 Butler, Larry (2008) Mining, nationalism and decolonization in Zambia: Interpreting Business Responses to Political Change, 1945-1964. Archiv fuer Sozialgeschichte, 48. pp. 317-332.

129 UN Resulution 1803, 1962. Voter pattern: Yes: 87, No: 2, Abstentions: 12, Non-Voting: 9, Total voting membership: 110http://www.un.org/en/ga/search/view_doc.asp?symbol=A/RES/1803(XVII)&Lang=E&Area=RESOLUTION

130 Julian Borger and Georgina Smith, ‘Dag Hammarskjöld: evidence suggests UN chief’s plane was shot down’. 17 August 2011. The Guardian Newspaper.
131 UN resolution 3201 (S-VI). Declaration on the Establishment of a New International Economic Order. Adopted 1^st May 1974.
132 Nebert Mulenga, 2^nd Nov 2012, Inter Press Service, Foreign farmers undermine food security in Zambia.

133 Mohan, Giles (2013). ‘Beyond the enclave: towards a critical political economy of China and Africa.’

Development and Change, 44(6) pp. 1255–1272.

134 The Tazara railway which linked the Zambian copperbelt to Tanzanian ports was the third largest aid project to Africa at that time, after the Aswan Dam in Egypt and the Volta (Akosombo) Dam in Ghana.The latter two, which were Western financed, had considerable negative environmental, economic and social impacts and have remained very contentious, while the Tazara railway has been a relative success. Howard French, ‘The Next Empire’, 13^th April 2010. Atlantic Magazine. http://www.theatlantic.com/magazine/arch…

135 Central Statistical Office, September 2013. Zambia labour force survey report 2012.

136 Zambia Development Agency, Zambia Mining Sector Profile, June 2013.

137 Markus Kroger, June 19th 2013. Shabka. Mining boom, resistance and the future: Indias global position. http://www.shabka.org/2013/06/19/mining-…

138 Interview with anonymous worker in Chingola, 6^th Dec 2013.

139 Diana Jeater, 5^thAugust 2011. Pambazuka News, Issue 554. Zimbabwe: International NGOs and aid agencies – Parasites of the Poor?
140 Interview with anonymous activist 6/12/13.

141 Interview with anonymous NGO head 17/12/13.

142 Diana Jeater, 5^thAugust 2011. Pambazuka News, Issue 554. Zimbabwe: International NGOs and aid agencies – Parasites of the Poor?
143 Khadija Sharife, 18 June 2011. Al Jazeera. ‘Transparency’ hides Zambia’s lost billions

144 ibid

145 Interview with anonymous NGO head, Ndola, 5^th Dec 2013.

146 CSPR Annual Report 2012. Available at http://www.csprzambia.org/index.php/reso…

147 Dambisa Moyo, (2009). Dead Aid: Why Aid Is Not Working and How There is Another Way for Africa. New York: Farrar, Straus and Giroux

148 William Easterly, 2003, ‘Can Foreign Aid Buy Growth?’ Journal of Economic Perspectives—Volume 17, Number 3. p.17

149 Dambisa Moyo biography at http://www.dambisamoyo.com/biography/

150 Equity in Extractives: Stewarding Africa’s natural resources for all, Africa Progress Report 2013.
151 Mark Tran, ‘Illicit financial flows have made Africa ‘a net creditor to the world’.’ The Guardian 29 May 2013

http://www.theguardian.com/global-development/2013/may/29/illicit-financial-flows-africa-creditor

152 Ventakesh Seshamani, Professor of Economics, University of Zambia, in: Zambia, Mining, and Neoliberalism: Boom and Bust on the Globalized Copperbelt, Edited by Alastair Fraser and Miles Larmer. Palgrave Macmillan, December 2010.

153 Rediff news, ‘Detailed report: Story of BRAZEN illegal mining in Goa’, December 08,

2012 http://www.rediff.com/news/report/detailed-report-story-of-brazen-illegal-mining-in-goa/20121208.htm

154 Shah Commission submits final report on illegal mining. Economic Times of India. Oct 15, 2013. http://articles.economictimes.indiatimes…

155 Greg Marinovich and Greg Nicolson, ‘Marikana massacre: SAPS, Lonmin, Ramaphosa & time for blood. Miners’ blood’. 24 Oct 2013. Daily Maverick. http://www.dailymaverick.co.za/article/2…

156 Manning Marable (2003). How Capitalism Underdeveloped Black America,

157 Ashwini Deshpande, Can Dalit capitalism be a vehicle for social mobility in India?. Livemint. Sept 23 2013. http://www.livemint.com/Opinion/DwEs4I3f…

158 Earl Nurse and Jill Dougherty, CNN, Tony Elumelu: The ‘Africapitalist’ who wants to power Africa. November 12, 2013

Skouries – A Story of Political Emancipation

friendoficeland — Thu, 30 Jan 2014 20:46:31 +0000

How a mining conflict led to the political emancipation of a community in Northern Greece.

By Evi Papada

Occupied London – From the Greek Streets

Mining conflicts are increasingly surfacing globally due to complains over mines and pollution of water, soil and land occupied as well as over transport and waste disposal. The Skouries forest in Halkidiki has been at the center of a hot dispute between the mining company, Hellas Gold, a subsidiary of the Canadian mining giant Eldorado Gold and local communities. The company claims that an ambitious plan for mining of gold and copper in the area- including deforestation and open pit mining with excavation and everyday use of explosives- will benefit the region through the creation of some 5,000 direct and indirect jobs, while local residents argue that the planned investment will cause considerable damage to the environment and livelihoods, resulting to many more jobs losses in the existing sectors of the local economy (farming, pasture land, fisheries, beekeeping, food processing and tourism). The residents’ claims are supported by research conducted by various independent scientific institutions including the Aristotle University of Thessaloniki and the Technical Chamber of Macedonia. In addition to legitimacy questions underpinning the transfer of mining rights from the Greek state to the aforementioned company[1], the Environmental Impact Assessment produced by El Dorado has been found to contain gross methodological discrepancies and whilst the public consultation process could be at best described as cosmetic[2].

Local communities have been mobilizing against the expansion of mining activities long before El Dorado was given the green light to begin works on site. Small scale mining had been taking place almost uninterrupted since the end of Second World War and residents have had first experience of its impact on their livelihoods and the environment. During the 90’s the Greek government had made several attempts at reviving mining activity in the region but following an appeal by the people the State Council decided that the potential risks of the proposed investment were higher than the potential benefits for the community and the environment and operations came to a halt in 2002 . The case of mining in Halkdiki took a definite political dimension owing to the following events. In December 2003 the mines were transferred to the Greek state through a law ratified by the Greek Parliament for 11 million euros and were sold the same day and for the same price to Mr George Bololas, owner of Hellas Gold S.A for the same price and without an open procurement process. The concessions relieve the company in advance from any tax transfers and from any financial obligation concerning environmental damage resulting from previous operation of the mines. It also stipulates that the mining company has possession of all minerals in the concession granted and there are no royalties for the state.

When it comes to mining conflicts, issues of distribution of resources extracted, recognition of the community’s relationship to natural resources at stake as well as their meaningful participation in the decision making processes determine the sense of injustice, or environmental injustice[3]. In political ecology thus, mobilizations can be understood as a response to a series of disruptions in the course of ‘procedural justice’. [4] In the years to come, local village communities set up local committees and met in their homes, organized information seminars and succeeded in engaging and mobilizing the wider scientific community of Northen Greece in an attempt to collect data and exert pressure against the expansion of mining in the region. A space has been created where communities and individuals live and develop political strategies. The documentary ‘Gold in the time of crisis: the treasure of Cassandra’ released in 2012 is a rare in depth investigation of the resistance movement and offers an eloquent account of everyday resistance in praxis.[5]

Further parliamentary pressure lead to the European Commissions’ decision that the terms of the contract amount to an illegal State aid in favor of he company and ruled that the Greek government should collect 15.3 million Euros, plus interest. In addition, the EU Court of Justice decide that the Environmental Impact Assessment (EIA) produced by the company failed to meet any of the goals of the Framework Directive 60/2000/EK regarding community action in water policy and ruled it out as inadequate[6]. From the same Directive follows that mining activity can be sustainable only if it does not alter the character of a region, and developmental if it is carried out in the overall interest of society. The Greek government has appealed the decision and the case is still pending. Despite a court decision and the strong criticism it received, the EIA was finally approved and in March 2012, 4.1 square kilometers of public forest was conceded for the company to begin the implementation of the mining projects.

The way an environmental conflict fleshes out is determined by the language of valuation used by the different actors involved. The impact on the surrounding environment and livelihoods of current and future generations may be evaluated in physical or monetary terms or ‘strong’ versus ‘weak’ sustainability respectively. For the residents of Halkidiki, collective memory of village life, loss of livelihoods and the future of the coming generations are values that surpass monetary valuations of cost and benefit analysis. On the other hand, scientific valuations typically exert a cost benefit analysis monetizing environmental externalities using basic economic theory. Such externalities include social, environmental and policy impacts and data should be selected during the initial stages of the project. In the absence of original data selection, as is the case in the Halkdiki mines, a ‘benefit transfer’ methodology has been used as a ‘second to best’ approach to estimating benefits and costs of projects or policies. A robust Environmental Impact Assessment is deemed essential for such a method to be scientifically sound and it is, regrettably, absent given it has been ruled by the European Commission as not meeting set standards. The concept of ‘ecological distribution conflicts’ is often used to illustrate the incommensurable values pertained in any such conflict , while dynamics of power regarding the prevailing language of such valuations may bare significant consequences on how the conflict is negotiated in the public domain. According to a study recently conducted by a consortium of Greek universities using the aforementioned methodology, the annual environmental externalities of the mining activity in the area are estimated at 1.3M while the mining project will increase GDP by 40% and national income by 66% and will create 880 indirect and induced jobs. The benefit-cost ration is found to be 3.13 for the Greek economy[7].

A golden opportunity for growth

Regional competition for resources and pressure to curb high unemployment rates are pushing a gradual shift in European attitudes and policies towards mining. In an article published on the Reuters on line edition on July the 4^th2013 titled ‘mining revival offers hope in crisis hit Europe’  an analyst of Raw Materials Group explains that growing resource nationalism in many parts of the world makes Europe more attractive from a political risk point perspective[8]. Canadian investors clearly encountered no resource nationalism when they knocked on Greece’s door: the concessions mentioned above (full possession/no royalties for the state) were granted based on a law that dates back to the Greek military Junta, and which the current government did not bother to amend.

Since 2009, Greece has been operating under the auspices of financial recovery plan, designed collectively by the IMF, European Central Bank and the European Commission. According to the signed Memorandum, the country has agreed to a multi billion bailout on the condition of implementation of structural adjustment programmes and the attraction of investment is seen the only road to growth and job creation. Given the pressures inherent in any IMF structural adjustment programmes to allow Foreign Direct Investment, it come to no surprise that the Greek government approved the questionable terms of the Environmental Impact Assessment. The paradox however still remains as the terms of the concessions made to the company leave little room for the Greek state to profit out of this investment. The scale of environmental damage and the circumstances under which this project has been licensed bare striking resemblance to many post colonial modernization projects widespread in the developing world.[9]

It is not the first time that the economic crisis is used as a pretext for the sacrifice of the environment and basic rights. So eager was the then Minister of Finance to approve the Environmental Impact Assessment and sign the investment agreement with Hellas Gold (the Greek subsidiary of Canadian based El Dorado) and so determined to follow it through, that practically no one could stand in his way. Certainly not protesting local residents, who were soon to be accused of forming and participating in a terrorist organization.

The turning point came on Oct. 21 2012 when about 2,500 protesters fought a pitched battle with more than 200 police along the forest road leading to Eldorado’s Skouries gold-and-copper deposit, arresting 14 people. Retribution came on the night of Feb. 16, when about 40 masked men invaded a Skouries work site in the forest, set fire to machinery and vehicles, and doused three security guards with fuel, threatening to burn them alive. Eldorado put the damage of the arson attack at $1-million (U.S.). Two men were arrested and another 18 are under investigation.

Evoking concerns over terrorist activity and threat to social order, police forces imposed a regime of occupation in Ierissos, conducting continuous house searches, interrogations, arrests including 16 DNA samples taken by force and without consent as well as arbitrary detentions, an Orwellian reality that residents of Ierissos and the neighboring areas were forced to experience. A 76 year old was called to testify at the local police station under accusations of ‘use of illegal violence’ during her participation at the June demonstration June 2013 blockade of the road leading to the worksite in Skouries. 35 more local residents are facing identical charges, for protests and blockades in April 2013. To make matters worst, on October 23, 2013 the National Federation of Editors Union released a statement condemning the surveillance activities of the National Intelligence Service for secretly recording conversations with national and international media regarding the events in Skouries, for the purpose of using them as evidence in court against those accused.

The local mobilization and unprecedented repression that ensued quickly found an international platform for support and solidarity through social and critical media platforms. The ‘battlefield’ ceased to be the central stage for mobilization and resistance welcomed new actors. More hybrid forms of resistance emerged, local, national and global, local protests continued along with international advocacy, lobbying etc. Consequently, police presence has been gradually withdrawing and the North Star ascended, a by private security firm guarding the site and equipment. On December 16^th, 2013, 150 employees of the aforementioned security firm were fired and came to protest at the village square of Stratoni as El Dorado Gold decided to change their security provider to ‘Blackwater’, the notorious international private army known to the public through its involvement in the Iraq and Afghanistan wars. Protesters were carrying a placard writing ‘murderers of nations out of here’.

Corruption and the mainstream media

An open letter addressed to the National Federation of Editor Unions from the Coordinating Committee of affected communities wrote:

“During the last few days…..the residents of our towns and villages have been targeted by a certain part of the Media, which systematically present us as “terrorists”. Not only is televised time split unequally, but we also often see a television “reality” that is manufactured for the needs of the 8pm news. On the pulpit of tele- democracy and the government affiliated news papers, there is no mention of the repetitive violations of our human and constitutional rights, the continuous police surveillance of our personal lives, the violation of our lawyers’ rights, the abductions/citizens’ disappearance for hours at a time, the unbearable pressure to give DNA samples. The rule of law is abolished everyday in our towns and the journalists pretend they see nothing”.(sos.halkidiki fact sheet,2012)

The mainstream media tactic concerning the events and issues surrounding the investment in Skouries has been two fold. First, the vast majority of TV and written press failed to report on the organisation of events and demonstration in area or surrounding cities, which were often attended by tens of thousands, making them the largest demonstation during the histroy of austerity in Greece.

A characteristic example is the newspaper ‘Kathimerini’ reporting of the demonstration of the 9^th of September 2012 and the police repression. In an article under the heading ‘Determination in the face of extremities’, the unknown author argued that the struggle against the expansion of mining activities is equivalent to the action of far right groups, characterizing protesters as’ leftist assault battalions.

Not a single journalistic account had been published or braodcasted on the greviances put forward by residents of nearby villages regarding the illicit activities of the company. Reporting has been scarce if not absent, rendering the importance of the events not news worthy. Second, mainstream media outlets have used the method of selective reporting of events, broadcasting exclusively the opinions of government and company representatives, allowing it to be adopted as the ‘dominant truth’. A reference by representatives of the Ministry of Environment about a similar mining project of El Dorado S.A in environmentally sound Finland has been continuously reported whereas reports from national and international scientific bodies regarding the devastating effects on the environment are silenced is an illustrative example of the mainstream media serving particular interests. In this way, the ‘dominant truth’ is established as the single means of interpreting events, and succeeds in presenting such an investment activity as devoid of environmental risks, safe and necessary.

The political economy of the Greek media is of great interest and relevance and it has been further scrutinized both nationally and internationally, following Greece’s financial downturn in 2009. A gradual death of mainstream Greek media that positioned critically against the Memorandum singed between Greece and the Troika (IMF, ECB, EU) gave space for the emergence of a ‘memorandum of consensus’. Not only is there greater pressure on journalists to promote austerity measures, but there has also been a massive reduction of voices diversity: 63% of political parties TV air time goes to government, while Troika representatives or journalistic accounts about them account for 57% of TV news (June-December 2013). And another astonishing figure: Greece fell from the 35^th place to the 84 in Press Freedom between 2009-2013 (Smyrnaios, 2013). The attitude and stand of the Greek mainstream mass media points to interwoven relations of corruption[10]. Incidentally the owner of the biggest Media Group, DOL is Mr George Bobolas, the same person who owns Hellas Gold S.A.

Local Community strikes back

The liberal peace project of post dictatorship Greece is broken. It is beyond the scope of this document to analyze the current democratic deficit, however rampant police violence and arbitrary arrests are reported nearly on a daily basis on the few media that survived the angry grip of the establishment. All these, coupled with prohibition of assembly on major streets, marshaling of state employees, neo-nazi ressurgence and corruption at the heart of the very institutions that guarantee democratic and transparent processes are pointers to a fragile post 1974 social and political consensus. The terms for the new social contract will have to be negotiated again as the country is struggling to cope with the social and financial wreckage of austerity. The events in Skouries are but only one example of how state and media power as technology of power is creating ruptures with the everyday lives of people.

The presence and scale of activities of the mining company constitute a challenge to customary forms of community organizing and local state institutions. Local authority representatives are divided between those who support the project and sign agreements with the company and those who oppose it and join the resistance network. Land disputes and environmental hazards pose a threat to traditional forms of employment (farming, fishing etc) and different forms of popular mobilization against the mining giant as well as the decision or not to opt for employment in the mines are challenging the main constitutes of the village community, traditionally based on family and work relations. Institutional power revealed itself as ideology, under the mask of growth and the local struggle at safeguarding the environment against the activities of El Dorado transfuses itself with a struggle against an ideology that places the doctrine of ‘growth at whatever cost’ at the center of the new financial liberation dogma for debt ridden Greece.

The tactic of ‘divide and rule’, so carefully put in place by both the government and a large section of the mainstream media has not yield the expected results. The community’s response to the harassment, violations and serious legal allegations has been dynamic and continues; their everyday mobilization and repoliticization denotes resistance. When the governmental, judicial and Media institutions stand so firmly against a community then autonomous agency reclaims that vacant institutional space and introduce processes that resonate with the local experience and satisfy the needs of that particular community. The different tactics the communities use are flexible, resourceful and able to adapt against the institutionalized forms of control and coercion. On Sunday 19^th of January 2014, in advance of the local election due to take place in May this year, over 3000 voters from five villages of the Aristotelis Municipality, under the banner of ‘ An initiative of Unity’ organized a secret ballot for the purpose of selecting one out of the three candidates, all active members in the movement against mining in the region, who will represent the anti mining block in the local elections. This is where autonomous agency meets with the liberal paradigm and creates what Oliver Richmond refers to as places of hybridity.[11]In other words, this is an example of a creation of a space for political emancipation.

[1]    http://europa.eu/rapid/press-release_IP-…

[2]    For more information on the investment and impacts please visit http://soshalkidiki.files.wordpress.com/… (in english)

[3]    ibid: 162

[4]    Martinez-Alier, J (2001) Mining con?icts, environmental justice, and valuation, Journal of Hazardous Material. 86, 153-170

[5]    http://www.exandasdocumentaries.com/gr/d…

[6] The Kakkavos mountain supplies water to the entire N.E. Halkidiki.The proposed mining activity will directly and irreversibly affect the region’s water resources. The EIA does not meet any of the goals of the Framework Directive 60/2000/EK – “Establishing a framework for Community action in water policy” which has been incorporated into Greek law

[7]    A.Kontogianni, D.Damigos, C.Tourkolias, M.Skourtos (2012) ‘The social cost of mining: the case of gold mining in Chalkidiki’. Presented at the 3^rd International Conference of Industrial and Hazardous Waste Management, Crete

[8]    http://www.reuters.com/article/2013/07/0…

[9]    Watts, Michael J. (2004) Antinomies of Community: Some Thoughts on Geography, Resources and Empire, Transactions of the Institute of British Geographers, New Series, Vol. 29, No. 2 pp234-

[10]   See also “Greece’s triangle of power”(Reuters Special Report 21.12.2012)

[11] Oliver Richmond, Resistance and the Post-Liberal Peace’ Millenium Journal 2010 (38) 3 pp 680

Original Page: http://blog.occupiedlondon.org/2014/01/30/skouries-a-story-of-political-emancipation/

The Age of Aluminium – A Documentary

friendoficeland — Thu, 03 Oct 2013 23:48:12 +0000

Aluminium has found its way into every facet of our lives: deodorants, sun lotions, vaccines or filtered drinking water. But what do we actually know about the side effects of our daily consuming of aluminium products? The light metal comes with heavy consequences. Latest research links it to the increase in Alzheimer’s, breast cancer and food allergies. Hand in hand with the large scale environmental destruction and routine cultural genocide, deemed necessary to generate electricity for smelters, come the often disastrous ecological impacts of bauxite mining.

Saving Iceland would like to recommend this recent and informative film by Bert Ehgartner. Below is a short trailer for the film. You can stream or download the whole film, in either English or German here.

See also: Is Aluminium Really a Silent Killer?

Jamaica Bauxite Mining Videos

Call Out for Action: Kick Vedanta Out of London! 1pm, 11th Jan 2013

solskin — Sun, 16 Dec 2012 16:16:05 +0000

From our friends at Foil Vedanta.

Declare solidarity with grassroots movements fighting Vedanta in India, Africa and elsewhere!

Kick Vedanta out of London for it’s corporate crimes, murder and destruction. Noise demonstration and picket at Vedanta headquarters, 16 Berkeley Street.

Mayfair, W1J 8DZ . Green Park tube.
1 – 3pm. Friday 11th January.

On Friday 11th January the Supreme Court will finally announce its historical decision on whether to allow the mining of the threatened Niyamgiri mountain in Odisha, India¹. Simultaneously tribals and farmers from a number of grassroots organisations² will hold a rally of defiance in Bhawanipatna, near the mountain. They will call for closure of the sinking Lanjigarh refinery and an absolute ban on the so-far-unsuccessful attempt to mine bauxite on their sacred hills³.

On 10th of January activists in New York will rally outside the United Nations Headquarters pointing out Vedanta’s clear violations of the UN Declaration on the Rights of Indigenous Peoples, including right to participate in decision making, right to water and cultural and religious rights. They will call for the Indian Government to put a final stop to this contested project, and for the state owned Orissa Mining Corporation to be pulled out of dodgy deals it has made with Vedanta in an attempt to force the mine through the courts on Vedanta’s behalf (see their facebook event).

Here in London we will draw attention to Vedanta’s nominal Mayfair headquarters from which they gain a cloak of respectability and easy access to capital. We will call for Vedanta to be de-listed from the London Stock Exchange and thrown out of its cosy position in the London corporate elite for proven human rights and environmental abuses, corruption and poor corporate governance⁴.

Please join us and bring drums, pots and pans and anything that makes noise!

Our solidarity demo on 6th Dec was covered in all the Indian papers and our solidarity was felt directly. Let us do it again!

See you there! More information below.

(1) The Supreme Court is due to make a final decision on the challenge posed to the Environment Ministry’s stop to the Niyamgiri mine on 11th January. In its December 6th hearing the Supreme Court concluded that the case rested on whether the rights of the indigenous Dongia Kond’s – who live exclusively on that mountain – could be considered ‘inalienable or compensatory’. The previous ruling by Environment and Forests minister Jairam Ramesh in August 2010 prevented Vedanta from mining the mountain due to violations of environment and forestry acts. The challenge to this ruling has been mounted by the Orissa Mining Corporation, a state owned company with 24% shares in the joint venture to mine Niyamgiri with Vedanta, begging questions about why a state company is lobbying so hard for a British mining company in whom it has only minority shares in this small project (see Niyamgiri: A temporary reprieve).

On 6th December, in anticipation of a final Supreme Court ruling, more than 5000 tribals and farmers rallied on the Niyamgiri mountain and around the Lanjigarh refinery sending a message that they would not tolerate the mine or the refinery. In London Foil Vedanta held a noise demo outside the Indian High Commission in which a pile of mud was dumped in the entrance. This news was carried all over India by major papers and TV and had a significant impact (see London protesters join 5000 in India to stop mine).

(2) Niyamgiri Surakhya Samiti, Sachetana Nagarika Mancha, Loka Sangram Mancha, Communist Party of India and Samajwadi Jan Parishad will coordinate the rally in Odisha on the 11th Jan.

(3) The Lanjigargh refinery was built at the base of Niyamgiri and assessed for environmental and social impact without taking into account the intention to mine the hill above for bauxite to run the plant. However, obtaining permission to mine the mountain has been much more difficult than Vedanta supposed and has left them running Lanjigarh at a loss, leaving Vedanta Aluminium with accumulated debt of $3.65 billion. http://www.bloomberg.com/news/2012-11-27…)

(4) Vedanta was described in Parliament by Labour MP Lisa Nandy as ‘one of the companies that have been found guilty of gross violations of human rights’ . Ms Nandy in her speech quoted Richard Lambert the former Director General of the CBI: ‘It never occurred to those of us who helped to launch the FTSE 100 index 27 years ago that one day it would be providing a cloak of respectability and lots of passive investors for companies that challenge the canons of corporate governance such as Vedanta…’. Similarly City of London researchers from ‘Trusted Sources’ have noted Vedanta’s reasons for registering in London:

“A London listing allows access to an enormous pool of capital. If you are in the FTSE Index, tracker funds have got to own you and others will follow.” Both Vedanta Resources and Essar Energy are members of the FTSE 100. London’s reputation as a market with high standards of transparency and corporate governance is another draw for Indian companies. Both Vedanta and Essar have faced criticism on corporate governance grounds in India, and a foreign listing is seen as one way to signal to investors that the company does maintain high standards.

We are joining the calls of parliamentarians and financiers in pointing out how the London listing is used for legal immunity and to hide Vedanta’s corporate crimes. We are calling for Vedanta to be de-listed from the London Stock Exchange and taken to court for Human Rights abuses here in London.

Glencore: Reaping Huge Profits From Life’s Essentials

solskin — Mon, 21 May 2012 10:55:58 +0000

This video by Patrick Clair tells the story of commodity broker Glencore International, the biggest shareholder of Century Aluminum, and the company’s dangerously powerful position on the world’s markets.

Click here to read Saving Iceland’s dossier on Glencore, Century and the incestuous world of mining.

From Siberia to Iceland: Century Aluminum, Glencore and the Incestuous World of Mining

solskin — Wed, 09 Nov 2011 09:35:39 +0000

A special report for Saving Iceland by Dónal O’Driscoll

Preface

Glencore are the majority shareholder of Century, the owner of one operational and one half-built smelter in Iceland, it’s key operations for aluminium smelting. But who are Glencore and what are the implications for Iceland? This comprehensive article profiles the world’s biggest commodity broker, who’s only comparable predecessor was Enron. The profile covers the reach and grip of Glencore’s domination of metal, grain, coal and bio-oils markets, allowing it to set prices which profit very few and are detrimental to many. It shows the tight web of connections between the major mining companies and Glencore through shared board history and shared ownership of assets, cataloguing key shareholders (and board members) who’s stakes make them larger shareholders than institutional investors in ownership of Glencore. These connections include Rusal’s co chair Nathaniel Rothschild, a financier with a $40m investment in Glencore, and a personal friend of Peter Mandelson (former EU trade commissioner and British politician) and George Osborne (UK Chancellor).

The article details the human rights and environmental abuses of Glencore at it’s many operations, including the 2009 killing of Mayan indigenous leader Adolfo Ich Chamán who spoke out about Century’s activities in Guatemala under CEO-ship of Peter Jones (still a Century board member). It claims that Glencore is higher than most in the running for most abusive and environmentally detrimental mining company, going where lesser devils fear to tread – trading with Congo, Central Asia and embargoed countries such as Saddam Hussein’s Iraq and apartheid South Africa. Glencore founder Marc Rich was involved in trading embargoed Iranian oil, and fled the United States in 1983 accused of insider dealing and tax dodging over Iranian deals, becoming one of the 10 fugitives most wanted by the FBI, until he was pardoned by Bill Clinton. Glencore is still run by two of his main men.

Introduction

From Kazakhstan to Australia, taking in the views of Zambia, war-stricken Congo and Angola, cutting across from Siberia to Iceland is a network of mining and metals companies with a catalogue of environmental and community abuse in their wake. In Iceland its face is Century Aluminum, but behind them, at the heart of this web lies the secretive commodity broker Glencore International of Switzerland. Glencore is about to launch one of the biggest placement of shares, raising $10 Billion, making a lot of people very rich and valuing itself as a company worth $60Bn. In this article we start to throw a spotlight on just how Glencore makes its money and how Iceland is just one of many victims of a company built on ruthless exploitation.

On the surface, Glencore’s wealth comes from the buying and selling of the world’s commodities (see below for more detail), specialising in grain and metal markets. However, what is unusual for a commodity broker is that it invests heavily in the very companies whose produce it is trading. Its interests are global, from the breadbaskets of Russia, to zinc mines in Kazakhstan, copper and cobalt interests in Congo and Angola, and aluminium in Iceland.

It is the latter that ties Glencore into the Icelandic economy through its 44% ownership of Century, as well as membership of the board of directors. Century is the owner of the Grundartangi smelter and is behind the building of another plant at Helguvik, for which a number of controversial new geothermal and hydro power plants would need to be built. There is also a doubt if enough energy to run a smelter in Helguvík actually exists. Glencore controls 38% of the global trading market in aluminium. Of this, 50% of this comes from Century and UC Rusal, the Russian Aluminium giant (of which Glencore owns 8.8%).

The result is a private network of personal ties and business relationships so tight that what matters to Century also matters to Glencore. The Icelandic government may be doing deals with Century, but Glencore is always present in the background, bringing unsavoury alliances to this particular bed. There are a lot of unanswered questions over how and with whom Glencore chooses to invest. One only has to look at its principle partners and deals to see it does not shy away from exploitation of war torn countries or making alliances with men whose fortunes carry with them heavy taints of corruption. Despite all the exuberance in financial circles at the profits to be made by the Glencore share offering, a few more level-headed traders and journalist are wondering if there should be more caution, especially given how little is known about the inner workings of the company and just how manages to pull off so many exceptionally profitable deals.

It is also worth noting that the last time the world saw such a commodity broker dominate a market to this extent ended up going very sour – that commodity broker being Enron.

Who are Century Aluminum?

Century is a company that specialises in smelting aluminium. It was founded in 1995 when various interests controlled by Glencore were brought together. In 1996 it was spun off as a public company^.1 As well as its Icelandic sites, which it owns outright, it owns or has a share in aluminium plants at Ravenswood, West Virginia, at Hawesville (100%), Kentucky (80% owned with the rest owned by Glencore), and at Mt. Holly, South Carolina (50%, the other half owned by Alcoa Inc). In the past it has had interests in the Congo. As a global player it is the 10th largest producer.

Its ownership remains dominated by Glencore at 44%, with the majority of the other shareholders being held in relatively small amounts by US institutional investors (hedge funds etc.).² It is clear from Century’s website that Iceland is a major part of their business and strategy and three executives of its Icelandic operations are listed as key management.

Key People

Gunnar Gudlaugsson, Plant Manager of Nordural Grundartangi

Joined Nordural in 2008, from Straumsvik, the Rio Tinto Alcan smelter, where he had served for over ten years.

Ragnar Gudmundsson, Managing Director of Nordural

Nordural is the holding company for the Icelandic interests of Century. Previously Chief Financial Officer of Basafell, prior to which he was a senior manager at Samskip, both leading companies in Iceland.

Wayne R. Hale, Chief Operating Officer

Joined Century in 2007, having previously been with Sual in Russia (it was Sual, Rusal and Glencore’s Russian aluminium interests which merged to form UC Rusal). Has also worked for Kaiser and Rio Tinto.

Peter Jones, Director

2001-2006 was President & Chief Operating Officer of Inco Ltd. Former President & CEO of Hudson Bay Mining & Smelting Co (retired at the end of 2009).

David J. Kjos, Vice President of Operations in Iceland

Former manager of Cygnus Inc, an aerospace manufacturing company; prior to that was with the United Development Co & Kaiser Aluminium & Chemical Co.

Logan W. Kruger, CEO, President

Joined November 2005. Before Century, from 2003 he had been a leading executive at Inco, the large nickel mining company where he over saw operations in the Asia / Pacific region, including the Goro Nickel operation in New Caledonia and other projects in Indonesia, remaining as a director of the Indonesian subsidiary P.T. Inco (Inco has since been acquired by the Brazilian nickel miner Vale). He has also served as head of Anglo American’s operations in Chile (2002-03) and as CEO of the Hudson Bay Mining & Smelting Co in Canada (1998-2002).³ He is also a director of Amcoal which over sees the South African coal interests of the mining giant Anglo-American.

Andrew Michelmore, Director

From 2009 CEO of Minerals and Metals Group; former CEO & Managing Director of OZ Minerals. Both firms are leading Australian mining companies. Minerals & Metals Group is a subsidiary of Minmetals Resources Ltd, a Hong Kong based company with significant aluminium interests in China.

John P. O’Brien, Chairman of the Board

Chairman since January 2008. His background is in business management and restructuring.

Willy R. Strothotte, Director

Chairman of Glencore and of Xstrata (see below under Glencore).

Jack E. Thompson, Director

Also serves a director for a number of other mining companies including Anglo-American and Centerra Gold (largest Western-based gold producer in Central Asia), among others.

Though there are 4 other directors who appear to represent general institutional investors, it is clear from the above that the board is dominated by mining executives who share considerable common history. There is much more that is not obvious just from this board of directors. For example, Century and Noranda purchased from Kaiser Aluminium the bauxite mine at St. Anns, Jamaica and factory at Gramercy, Louisiana, though Noranda has since bought out Century. Noranda is a spin off from Xstrata who originally purchased it in 2006 when it took over the Falconbridge mining company.

Other links of note are:

Xstrata and Anglo-American Chile are joint owners of the Collahuasi copper mine, the world’s third biggest such mine and which in 2010 saw violent action against striking miners.⁴

Hudson Bay (of which Logan Kruger, now Century CEO, was CEO until 2002) is now the subject of a lawsuit over the murder of Mayan indigenous leader Adolfo Ich Chamán who spoke out over the company’s activities in Guatamala – he was hacked to death by security personnel in 2009.⁵ This took place while Century board member Peter Jones was CEO of the company.

Centerra Gold has acquired the Kumtor mine in Kyrgyzstan from the government there. Given that the deal saw little benefit to the people of that country, it has, as a result, played an important political role there.⁶ Jack Thompson, board member of Century and of Anglo-American sits on Centerra’s board also.

In 2006, indigenous tribes people stormed the Inco mine at Goro, New Caledonia due to environmental concerns.⁷ Inco’s CEO of the time was Peter Jones, while Logan Kruger oversaw operations at this mine from 2003-2005, and remains a director of its parent company P.T. Inco of Indonesia.

UC Rusal, the world’s single largest aluminium producer is controlled by Russian oligarch Oleg Deripaska through his En+ Group which he chairs. En+ is the controlling interest in a large number of other extractive and power generation businesses, mostly based in Siberia.⁸

His co-chairman is the financier Nathaniel Rothschild who runs the mining investment company Vallar, has a $40m investment in Glencore and is on record as being keen to support a Glencore takeover of Xstrata.^9,10 Rothschild is also a personal friend of both Peter Mandelson, the former EU Trade Commissioner, and of George Osborne, current UK Chancellor.

Xstrata has large interests in Australia where it has been criticised for sharp business practices¹¹, run roughshod over indigenous people at the McArthur River site¹² and is subject of a campaign due to its environmental destruction at it Mangoola opencast mine.¹³

It is hard to single out any firm within the incestuous world of mining conglomerates as being better than the other. All have issues with relationships with indigenous people, suppression of union activity and environmental damage, however the ease at which these accounts can be found in the collective past and present of Century’s key people and directors is telling.

Glencore International AG

Marc Rich & Co

The origins of Glencore are in the trading firm controlled by commodities baron Marc Rich, a controversial figure over the last few decades. Rich built up a commodities trading empire by making deals with the likes of Ayatollah Khomeini to trade Iranian oil while a US embargo was in place. At the same time he was linking himself to Mossad, the Israeli secret service.

In 1983, he and his partner Pincus Green were accused of insider dealing, dodging tax and illegal dealings with Iran when that country was under US sanctions. As a result they both fled the United States and Rich was named among the top ten most wanted fugatives by the FBI until he was controversially pardoned by Bill Clinton on the latter’s last day in the White House. Interestingly, his representative in Washington for 15 years (1985-2000) was Lewis ‘Scooter’ Libby, the subsequently disgraced Chief of Staff to Dick Cheney.

Rich settled in Switzerland where he founded Marc Rich & Co, continuing his commodities dealing, specialising in oil, gas and metals. In 1993/4 he failed in an attempt to corner the world zinc market, which lead to the loss of control of his company, though he remains a comfortably well off billionaire.

At the same time part of the company was spun off to become the equally controversial Trafigura. This is another commodity broker who entered the news when it brought out a ‘super-injunction’ to stop reporting of its role in illegal dumping of toxic waste in Côte d’Ivoire, though it has other scandals to its name as well.

Glencore

Marc Rich & Co was taken over by Rich’s inner circle and renamed Glencore. Many of its partners, of whom there are 485, will become very wealthy men following the listing of the shares. Day-to-day control remains principally with two of Rich’s former lieutenants, the highly seclusive and media-shy Ivan Glasenberg (current CEO) & Willy Strothotte (founding CEO and Chairman). Under these two, Glencore has continued to grow and dominate many of the markets it is involved in. It developed the tactic of investing in producers of raw materials, then striking deals that gave it exclusive access to their products which it would then trade on the market. The result is a global empire with its fingers in many pies, particularly metals, oil and grain. The ruthless and aggressive dealings methods developed under Marc Rich continued to shape the culture of the company, though it remains mired in considerable secrecy.

A large part of Glencore’s success is its willingness to do deals in places and with people were the more respectable sides of capitalism are wary to tread, doing deals in Congo and central Asia. It has also never been afraid to make deals that breached embargoes, including Saddam Hussein or South Africa during the apartheid era. Large-scale deals are being done in Central Asia with the numerous mining barons which emerged there after the collapse of the USSR, and who have strong links to corruption in those states. To this day many of its subsidiaries continue to be accused of human rights and environmental abuses.

The networks of control associated with Glencore are vast. In terms of its position in the world, it controls huge amounts of the addressable global market in copper (50%), zinc (60%), aluminium (38%), lead (45%), cobalt (23%), ferrochrome (16%), thermal coal (28%), wheat (10%), and one quarter of the worlds barley, sunflower and rape seed.^14,15 What this means is that it can effectively set prices for these commodities.

Addressable: the amount of a commodity accessible to a market. For example, many mines are owned by larger concerns who have acquired them entirely for their own use rather than for trading the ore/products on the open market. Thus the percentages quoted are for the volume of the global market rather than the total amount if all production is taken into account.

Leading Business Interests¹⁶

Glencore has a vast number of interests around the globe. The following is a brief on some of its leading assets and their problems, and it is certainly not exclusive. Many of the other mines it has a controlling interest in are open cast, with all the attendant problems, such as habitat destruction and pollution of the environment.

Argentina

The AR Zinc Group, acquired in 2005 operates the Aguilar mine, the Palpala smelter and a sulphuric acid producer, Sulfacid S.A. in the heavily mined north-western state of Jujuy, Argentina. These operations are part of a group of mines and related industries that have caused significant environmental damage and health problems to the various indigenous peoples of the region – demonstrations and protests against the presence of the mining companies have been held, including AR Zinc.^{17, 18, 19}

Australia

Glencore have a 40% stake in Minara Resources (formerly Anaconda), which runs the Murrin Murrin mine. Willy Strothotte, Ivan Glasenberg and others connected with Glencore sit on Minara’s board.²⁰ Both Murrin Murrin and Mt Isa Mines, which is controlled by Xstrata, were cited in 2009 as among the worst polluters in Australia.²¹

Bolivia

Glencore owns the Sinchi Wayra mining company that operates five mines. There has been an ongoing dispute with workers over attempts to increase working hours and on pay. The workers have called on the government to nationalise the company.²² In the past it has been criticized for mass lay-offs as a cost cutting tactic.²³

Columbia

The El Cerrejon Norte mine, jointly owned with Anglo American & BHP Billiton has been described as “a continuing horror story of forced relocations of indigenous people, human rights violations, environmental destruction and other assorted injustices”, in particular against the Wayuu people. Union organisers have received death threats from paramilitaries.²⁴ Similar allegations are made in relation to its coal mine at La Jagua, which Glencore’s subsidiary Prodeco purchased from Xstrata.^25,26,27 Prodeco also operates an open cast coal mine at Calenturitas, La Loma.

Congo

Glencore acquired control in 2008 of the financially troubled Katanga Mining²⁸, one of Africa’s biggest copper and cobalt producers. It is situated in a highly troubled region where militias have funded their struggles by selling off resource rich land. There are reports of water contamination and poor working conditions at its mines.²⁹ Swiss NGOs have been highly critical of Katanga Mines, with Bread For All and The Swiss Catholic Lenten Fund publishing a report accusing Glencore of involvement with of human rights abuses, child labour, pollution and tax evasion in the region³⁰, which has lead to a campaign against the company. ³¹ Glencore also owns the new mine at Mutanda, also in Katanga province. Glencore’s minority partner in Katanga is the Israeli magnate Dan Getler who specialises in investments in the Congo and who has links to blood diamonds and to right-wing Israeli politicians, in particular Avigdor Lieberman.³²

Kazakhstan

Glencore has partnered with Kazakhstan private investment company Verny Capital to take control of the Kazzinc, which has extensive mining and smelting interests throughout that country. Currently 51% owned by Glencore, that stake is expected to rise to 93% following Glencore’s floatation. Verny is controlled by the controversial Utemuratov family, which is close to President Nazarbayev, who is also believed to have a stake.³³ Under Nazarbayev there has been large-scale transfer of the nation’s mineral wealth into private hands and Glencore has been integral to that process.

Peru

Glencore owns the Iscaycruz & Yauliyacu mines (Los Quenualos), which have been accused of unsafe working conditions and subsequent anti-union activities.³⁴

Philippines

Xstrata’s proposed Sagittarius mine at Tampakan, Mindanao threatens indigenous peoples and important rainforests. On 9th March, 2009 a leading opponent of the project, Eliezer “Boy” Billanes, was assassinated.³⁵ Mines in Philippines, such as this one, have also been linked with threats to food security, partly due to the particular nature of the ecology they work in.³⁶

Russia

UC Rusal³⁷, the Russian aluminium giant; controls the world’s largest deposits of bauxite (the ore from which aluminium is obtained) and is the second biggest producer of global alumina (aluminium refined from bauxite) with a 14% of global production. Controlled by oligarch Oleg Deripaska, the firm was created by a merger of Rusal with the smaller SUAL and Glencore aluminium interests. There remain strong links between Glencore and UC Rusal with Glencore owning 8.7% of UC Rusal, and a friendship between Deripaska and Glasenberg.³⁸

As well as UC Rusal, Glencore has numerous other business interests in mineral wealthy Russia. Some of these date back to when Glencore was swift to do deals to take control of Russian state assets following the collapse of the USSR. Though it has been edged out of some of these companies who prefer to sell direct to consumers in China, etc, it does have deals with Russian producers of coal, oil and grain, in part through EN+, Deripaska’s company. There are rumours that it is trying to exploit links into the zinc, nickel and lead producers. Other deals and their relations to Glencore remain murky³⁹, but another major partner is the independent oil refiner Russneft.⁴⁰

Zambia

Glencore has control of Mopani Mines, which has come under environmental scrutiny, being believed to be the source of acid rain due to sulphur dioxide emissions.⁴¹ In 2005, 20 miners died in different accidents at the mine, blamed in part on cut backs in training.⁴² A Daily Mail investigation has claimed that Glencore is engaged in exploitation tax evasion through sharp pricing techniques, so depriving the country of much needed revenue.⁴³

Zimbabwe

In 2011 Glencore signed an agreement with Mwana Africa to acquire nickel from the Trojan mine at Bindura in Zimbabwe – notable for its links with Morgan Tsvangirai. Mwana’s is a South African based miner with copper operations at Katanga in the Congo and gold mines in Ghana.

Other global interests

Glencore owns the PASAR copper smelter in the Philippines, the Sherwin Alumina smelter in Texas (cited for hazardous chemical releases^44,45) and the Portovesme lead and zinc smelter on Sardinia. It also owns 70% of the South African coal miner Shanduka. As owner of the Moreno sunflower oil company, one of the biggest in the world’s largest suppliers of sunflower oil, Glencore is heavily involved in the producing and selling of genetically modified products.⁴⁶ It controls 270,000 hectares of agricultural land and has various grain processing sites around the world which aid its interests in these markets.

Kandhamal 2008 – New Documentary by Samarendra Das about Mining-Driven Hindu Supremacist Violence

solskin — Fri, 14 Oct 2011 10:30:28 +0000

During 2007 and 2008, Kandhamal, a district of the eastern Indian state of Odisha, witnessed organised attacks on Christians in some of the worst communal violence in India’s history.

Through survivors’ testimonies, Kandhamal 2008 examines how Hindu supremacist groups turned two communities – Adivasi (indigenous) Konds and Pano Dalit Christians – against each other, with the tacit support of the State Government and local administration. More than 50,000 people became refugees, 5,000 houses were burnt and destroyed, at least 400 churches, prayer halls and institutions were desecrated, demolished or burnt down. This region is extremely poor, but rich in mineral resources which have attracted multinational mining companies including British firm Vedanta. The Odisha Government has ruthlessly pursued neo-liberal land acquisition policies formulated by the UK’s (Department for International Development (DfID) and the World Bank. The Konds have consistently fought this corporate land grab and the film highlights how Hindu supremacist groups and the State Government have sought to undermine that struggle.

Kandhamal 2008 will be premiered on Tuesday, 1 November, in Rm CLM.6.02 Clement House, London School of Economics at 7.15 pm. Director and researcher Samarendra Das, who was born in Odisha and has lived most of his life in Kandhamal, will discuss the background to and making of the film. Samarendra’s book, Out of this Earth: East India Adivasis and the Aluminium Cartel (Orient Black Swan, 2010), which was co-written by anthropologist Felix Padel, is a thorough study of the aluminium industry and its global impacts. For more information about the documentary screening contact: sasg at southasiasolidarity.org.

Protest at the Cairn Energy Headquarters in Edinburgh: “No Oil for Vedanta!”

solskin — Thu, 18 Aug 2011 19:17:25 +0000

At 2.30pm today 10 people arrived unannounced at the offices of Cairn Energy at the Clydesdale Plaza in central Edinburgh. They installed themselves at the grand entrance to the building, blowing whistles and shouting: “No oil for Vedanta! Stop, stop, stop the deal!” and “Vedanta out of Sri Lanka”, attracting the attention of the floods of passers-by attending the Edinburgh theatre festival. Three of the demonstrators gave out leaflets in the street from the campaign group Foil Vedanta and explained that the demonstration was timed with Cairn India’s AGM in Mumbai, where the Vedanta-Cairn deal would be discussed. The leaflets describe the protest as in solidarity with Indian people’s movements in communities affected by Vedanta’s atrocities including Niyamgiri and Puri in Orissa, Advalpal in Goa, and Thoothkudi in Tamil Nadu. They stress Vedanta’s poor environmental track record and demand that the company should not be allowed to take over Cairn India, an oil company drilling in pristine ocean off Sri Lanka.

Protesters claim this is a British issue as both Cairn and Vedanta are British companies, and have been aided by David Cameron and the British Ambassador to India in pushing the deal through. The leaflets highlight Vedanta CEO Anil Agarwal’s position as the 17th richest man in Britain and claim the British government has allowed him to evade millions of pounds worth of tax using Jersey and Bahamas based tax havens. One of the placards showed Cairn CEO Bill Gammell and Vedanta CEO Anil Agarwal in bed with David Cameron and read ‘Bill Gammell, Anil Agarwal, David Cameron in bed for oil’ while another slogan accused all three of having ‘blood on their hands’. A stack of leaflets was handed in to the building to distribute to Cairn Energy staff and a security guard warned those gathered that the police would be called if they remained at the building. This warning was taken seriously in the light of Cairn Energy’s zero tolerance policy on protests at the same offices by Greenpeace a month earlier, at which the company took out injunctions against Greenpeace preventing them from publishing any pictures of the event. The protesters left after an hour.

Below is a press release that followed the protest. Download the leaflet that was distributed at the protest here: Cairn India AGM leaflet.

__________________________________________________________________

PRESS RELEASE

18th August 2011

PROTESTERS TARGET CAIRN INDIA IN EDINBURGH

Exactly one month after Greenpeace occupied Cairn Energy’s Edinburgh offices to protest their Arctic oil drilling(1), the offices have been targeted again by campaigners objecting to Britain’s role in the take-over of key subsidiary Cairn India by British-Indian mining company Vedanta Resources plc. On the day of Cairn India’s AGM in Mumbai, protesters banged pots and pans to disturb the Edinburgh offices and shouted ‘Vedanta – blood on your hands’ and ‘Cameron get out of India’. They are angry that Vedanta – already accused of multiple violations of environmental law in India(2) – are being allowed to buy an oil company which is drilling in sensitive frontier oil fields around Sri Lanka’s coral reefs, and even angrier that David Cameron has personally helped to pave the way for the deal.

Vedanta has waited a year to complete its 58% buyout of Cairn India (leaving 22% with parent company Cairn Energy). When the Indian government delayed the deal citing uncertainty over Vedanta’s safety record and ability to handle ‘strategic oilfields’, David Cameron sent a personal letter to Indian Prime Minister Manmohan Singh urging him to prevent ‘unnecessary delays'(3). Britain’s Indian High Commissioner Richard Stagg also wrote to the Indian PM over a royalties dispute between Cairn India and Rajasthani state oil company ONGC which was hampering progress on the deal, telling him that any change in financial conditions could ‘render the proposed transaction unviable'(4). Vedanta currently own 28.5% and await a Cairn India shareholder resolution to complete the deal.

Miriam Rose from the group Foil Vedanta said the protest was in solidarity with people affected by Vedanta’s activities in India:

Vedanta has been found guilty of flooding a village with toxic mine waste, killing 40 workers when a poorly built chimney collapsed, illegally grabbing tribal land and polluting major rivers. How can a company with such a poor track record be trusted to deep drill for oil in the most bio-diverse area of Sri Lanka’s coast? Vedanta are a British company and should be accountable to British law for their crimes. Instead Anil Agarwal’s cosy relationship with the UK government has helped him become one of the richest men in Britain. His politician friends even help his business and allow him to evade millions of pounds of tax by keeping his earnings in tax havens.(5)(6)

Cairn India have already begun drilling in Block SL-2007-01-001 of Sri Lanka’s Mannar basin, using a fifth generation Japanese drill ship the ‘Chikyu’ which was damaged in the Sendai tsunami and awaits repair on one of its thrusters. The block extends right to the edge of the Bar Reef Marine Sanctuary, a pristine coral reef which is thought to be the most biodiverse area off India’s coasts(7).

Cairn employees have expressed fear over the Vedanta takeover, worried about pay and working conditions and that the mining giant has no experience in the risky business of oil(8).
__________________________________________________________________

Notes and References:

For a profile of Cairn India see here and for Vedanta here.

(1) See: Police make arrests in Greenpeace ‘polar bear’ protest

(2) Vedanta’s Environmental and Human Rights Crimes Identified by the Indian Authorities
Vedanta’s bauxite mining has killed thousands, mainly Adivasi (indigenous) people, in India in accidents, police firings, forced displacement, injury and illness. It has displaced thousands of families and destroyed the environment, contaminating drinking water and devastating vast tracts of fertile land in an area of Odisha which has experienced famine regularly since 2007.

In Niyamgiri, Odisha: In August 2010 India’s then Environment Minister Jairam Ramesh stopped Vedanta from mining the Niyamgiri mountain which is the sacred mountain of the Dongria Kondh adivasis in Odisha. But Vedanta has now appealed to the Supreme Court against this decision.

In Lanjigarh, Odisha: In August 2010, the Environment Ministry ruled that Vedanta and its subsidiary Sterlite had contravened the Forest Conservation Act of 1980 by illegally clearing forest to establish its alumina refinery in Lanjigarh in 2006 and by again by expanding the plant in 2009. Environment Minister Jairam Ramesh criticised the Supreme Court for allowing the Lanjigarh project. The National Human Rights Commission identified 3.66 acres within the refinery that legally belong to Adivasis. Following this, the administration has now registered a case of land-grab against the company. This is the first time that Vedanta’s illegal land-grabbing has been ‘officially proved’.

However Vedanta’s environmental crimes continued On 5 April and again on 16th May this year a wall of the red mud impoundment (storing toxic waste) collapsed, polluting the Vansadhara river. The wall had not been properly constructed despite warnings from the Odisha State Pollution Control Board in December 2008 when it had previously collapsed.

In Puri, Odisha: In November 2010 the Odisha High Court ruled that Vedanta’s acquisition of thousands of acres of land in Puri for the so-called Vedanta University was illegal and void. The court ordered Vedanta to return the land it had stolen to the original owners.

In Jharsuguda, Odisha: In September 2010 the Odisha State Pollution Control Board found that Vedanta’s 500,000 tonne smelter and another nine captive power plants in the Jharsuguda district of north Odisha were operating without clearances from it and were violating water and air pollution Acts.

In Advalpal,Goa: In November 2009 the Bombay High Court ruled that Vedanta’s Sesa Goa iron ore subsidiary, the largest exporter of iron ore in India, was illegally dumping mining waste near Advalpal village in north Goa. On 6 June 2010, the dumps collapsed due to heavy rains. Tonnes of mining waste overflowed into a stream leading to floods. The Indian Bureau of Mines found that the mining plan had been violated.

In Thoothukudi, Tamil Nadu: In September 2010, the Madras High Court ordered Vedanta to stop production at its Thoothukudi copper smelter for environmental reasons — a decision that has been overturned by a stay order of the Supreme Court for the time being. Villagers from Thoothukudi complain of severe respiratory ailments

In Korba,Chhattisgarh: Vedanta and its subsidiary BALCO (which is 100% managed by Vedanta) have been found culpable for the collapse of a power plant chimney causing the deaths of 40 people. Vedanta built the chimney on state-owned forest land and had ignored ‘stop notices’ and threats of legal action and dismantling of construction work by the Korba Municipal Corporation. The chimney collapsed, according to a report commissioned by the Korba police, because of “careless, poor construction practice and poor workmanship in the construction of piles” and “improper cement content in the concrete mix” and because new layers of the chimney were being built before lower levels had been given time to cure properly”.

In Zambia: In December 2010,Vedanta’s Zambian subsidiary Konkola Copper Mines (KCM) was fined in court for polluting the very river it had poisoned four years earlier in the north of the country. In November 2006, effluents cascaded from a burst slurry pipeline into the Kafue river, raising chemical concentrations to 1,000% of acceptable levels for copper, 77,000% of those for manganese and 10,000% for cobalt. Following the most recent event, the UK company was also found guilty of willfully failing to report it to the authorities.

(3) James Lamont and Amy Kazmin in New Delhi, and Alex Barker in London, Financial Times, Feb 18^th 2011 ‘Cameron intervenes in Cairn sale’

(4) EI Finance. April 27, 2011. ‘Vedanta Buys Smaller Cairn India Stake as Delays Continues’

(5) Vedanta’s CEO, Anil Agarwal is the seventeenth richest person in Britain, whose personal wealth has grown even in the recession by 583% according to 2010 figs5.

(6) Vedanta plc is a London listed FTSE 100 Mining Corporation owned by Anil Agarwal and his family through a number of shell companies in tax havens – Bahamas-based company Volcan Investments Limited, Twinstar Holdings Ltd, THL KCM Ltd in Mauritius and Vedanta Resources Cyprus Ltd and others6

(7) Arijit Barman, Business Standard, Mumbai, August 17, 2011. ‘A year on, Cairn drills into Sri Lankan waters’.

(8) Himangshu Watts, 12/8/11, ‘Cairn India staff keep fingers crossed on future in Vedanta’, Economic Times of India.

Foil Vedanta: New Website on the Struggle Against British Mining Giant Vedanta in India

solskin — Thu, 21 Jul 2011 13:01:35 +0000

The Saving Iceland collective is happy to point its readers to the newly established website of Foil Vedanta, an independent campaigning organization focused primarily on the British-Indian mining giant Vedanta Resources PLC. Explaining the campaign, Foil Vedanta, says on its website that “ Vedanta is headed by Britain’s seventeenth richest billionaire, Anil Agarwal, and was launched on the London Stock Exchange in 2006 with the assistance of the UK’s Department for International Development and Department of Trade and Industry, who continue with their support. Vedanta is a major producer of aluminum, a strategically important metal for the UK’s huge arms industry.” And continues:

Vedanta has mines, refineries and factories in various states in India – including Orissa, Chhattisgarh and Goa – as well as in Zambia. In Orissa Vedanta hopes to mine the mineral-rich Niyamgiri mountain. This would destroy the lives and livelihoods of the Adivasi (aboriginal) Dongria Kond people who live in the region. Despite the Indian Ministry of Environment repealing permission to mine Niyamgiri in 2010, Vedanta continues to push for the project, which if successful would be an act of cultural genocide.

Vedanta has been exposed for corruption and illegal land acquisition in the city of Puri, where it attempted to build a 9000 acre corporate University with the $1 billion sponsorship of Anil Agarwal. In Goa it’s mining operations have caused massive pollution. Today Vedanta, helped by the Indian Government, also has it’s eyes on oil extraction in Greenland and Sri Lanka.

Also, don’t forget about the protest outside Vedanta’s Annual General Meeting, coming up in London on June 27th. Read Saving Iceland’s most recent news and articles concerning Vedanta here below:

– Fundamental Questions About Modern Civilization Itself – Arundhati Roy on “Broken Republic”
– Red Mud Spill and People’s Resistance at Niyamgiri: A First Hand Report From the Struggle
– Press Release on Red Mud Pollution by Vedanta PLC
– People Can’t be Made to Bathe in Red Mud

Blood and Treasure – Rio Tinto’s Bloody Path in Bougainville

solskin — Wed, 20 Jul 2011 11:30:28 +0000

Originally published on Dateline

It’s 14 years since the war ended over what was once the world’s largest copper mine, at Bougainville in Papua New Guinea, but Dateline has uncovered claims that the PNG government was acting under instruction from mining giant Rio Tinto, when it killed thousands of people who wanted the mine shut down. The allegations come from PNG’s former Opposition Leader, and now Prime Minister, Sir Michael Somare, in 2001 court documents obtained by SBS Senior Correspondent Brian Thomson for Dateline. In them, Somare says the company, and its subsidiary Bougainville Copper Limited, effectively used its wealth to control the government – a claim denied by BCL. With negotiations now underway to reopen the abandoned mine, could Bougainville be heading for a repeat of the bloody battle over its resources?

“We stand in solidarity…” – Protest at the Vedanta Annual General Meeting in London, July 27th

solskin — Mon, 11 Jul 2011 17:52:35 +0000

Call for protest at the Vedanta AGM (Annual General Meeting) 2011, 3pm on 27th July, Queen Elizabeth II conference centre, London, SW1P 3EE.

Please join us for the 7th annual protest outside the AGM of Vedanta Resources, the now infamous UK registered Indian mining company who have this year been exposed by the Indian government for serial environmental and human rights violations. We stand in solidarity with the Dongria Kondh and other inhabitants of Niyamgiri and Lanjigargh who have lost land, health and livelihood to Vedanta’s refinery, and faced repression and struggle in fighting Vedanta’s plans for a 73 million tonne bauxite mine and a six fold increase in the refinery’s capacity. We oppose Vedanta’s attempted take-over of British Oil company Cairn Energy who plan to drill in Greenland and Sri Lanka.

In 2010, protests outside Vedanta’s AGM made headlines as protesters on the outside shouted slogans targeting CEO ad majority shareholder Anil Agarwal for the ‘blood on his hands’, as well as David Cameron who was in India promoting joint UK-Indian business ventures at the time. Meanwhile activist shareholders held Vedanta to account inside the AGM, and key investors Aviva threatened to pull out due to the company’s ‘disdain’ for OECD environmental law. One month later the Indian government’s Saxena Report damned Vedanta for violations of tribal rights and environmental law at the Niyamgiri hills. Vedanta is also being investigated by the Indian government’s Lok Pal anti-corruption ombudsman for massive corruption over the illegal acquisition of 3000 acres of land for a ‘Vedanta University’ in Puri, Orissa.

This year we are celebrating the prevention of the illegal Vedanta University project and the denial of their right to mine tribal land at Niyamgiri without permission. However, the fight is far from over. We are calling on the British and Indian governments to put Anil Agarwal on trial for these violations, and drawing attention to the company’s continued attempts to get Niyamgiri via the Orissa state government. Please join us and raise your voices in solidarity with Indian communities who will be watching us and feeling our support.

The enclosed photos show the protest at Vedanta’s 2010 AGM.

Contact savingiceland at riseup.net for more details.
____________________________________________________________________

Recent relevant articles:

Red Mud Spill and People’s Resistance at Niyamgiri – A First Hand Report from the Struggle
Press Release on Red Mud Pollution by Vedanta
Victory in India: The Tribes of Orissa Conquer British Mining Giant Vedanta
From 2009: Join us at Vedanta Sterlite AGM – 27th July London

____________________________________________________________________

Please see coverage of last year’s AGM here (from the London Mining Network website):

Protesters descend on FTSE 100 mining group’s AGM – but chief executive describes criticism as ‘lies’
Vedanta Resources’ highly successful financial year, and its annual meeting, were overshadowed yesterday when more than 100 protesters, some dressed as characters from James Cameron’s Avatar film, came to object to what they say is the company’s shocking human rights and environmental record.

Police stopped protesters storming the meeting, as pressure groups and celebrities lined up to attack the mining group’s record over its treatment of the Dongria Kondh tribe, which, they claim, will be devastated if Vedanta’s planned bauxite mine in India’s Orissa state goes ahead.

Read the full story here.

Vedanta meeting held up by difficult question
Activist shareholder challenge Vedanta’s Chief Operating Officer at Lanjigarh on the sacred status of Niyamgiri to its tribal inhabitants and causes an embarrassing and revealing silence when the ‘expert’ cannot answer.

Read the full story here.

Vedanta meeting disrupted by demonstration
Accusing the Vedanta mining company of destroying the Niyamgiri mountain worshipped by indigenous Dongria tribes of Orissa, around 250 supporters of a campaign group ‘Foil Vedanta’ held a vociferous demonstration during its annual general meeting here. The demonstrators last evening carried placards saying ‘Anil Agarwal, Blood on Your hands’, ‘Who killed Arsi Majhi? Vedanta, Vedanta’. They claimed that Agarwal, Chairman of Vedanta, was a “Wanted Criminal”.

Read the full story here.

Anti-mining protesters ambushed Vedanta’s AGM
New Delhi, Lanjigarh- For the fourth year in a row, anti-mining protesters ambushed the Annual General Meeting (AGM) of Vedanta Resources, a London-based FTSE 100-listed company. The AGM was held in London on Wednesday evening. While in the last three years, Dongria Kondh (tribals from Orissa) representatives protested against the mining of their sacred hill in the state, on Wednesday it were blockbuster Avatar’s aliens, Na’vi, and fashion icon Bianca Jagger.

At the heart of this cross-continental row is the bauxite-rich Niyamgiri hill in the Lanjigarh area of dirt-poor Kalahandi district. While Anil Agarwal-promoted Vedanta Resources wants to mine the hill through its subsidiary companies for its aluminum refinery in Lanjigarh, located 500 km southwest of Bhubaneshwar, and “develop the backward area,” tribals and activists feel that it will displace thousands and leave them without any livelihood opportunities.

Read the full story here.

Channel 4 News Wednesday 28 July
Watch 4 minutes into this clip for coverage of protests against Vedanta at the annual meeting in London:

Fundamental Questions About Modern Civilization Itself – Arundhati Roy on “Broken Republic”

solskin — Sat, 04 Jun 2011 13:11:41 +0000

In the video above, Indian author Arundhati Roy talks about her recently published book, Broken Republic: Three Essays, and how the Indian government is, along with international mining corporations, violating the indigenous of India, destroying their lands and displacing them, leading to a constantly increasing gap between the rich and the poor. One of the book’s essays, titled “Mr Chidambaram’s War”, focuses on the Dongria Kondh tribe in Odisha, who have fought against Vedanta’s and ALCAN’s bauxite mining for aluminium production over the last decades.

The following text explains Broken Republic’s content briefly:

War has spread from the borders of India to the forests in the very heart of the country. Combining brilliant analysis and reportage by one of India’s iconic writers, Broken Republic examines the nature of progress and development in the emerging global superpower, and asks fundamental questions about modern civilization itself.

Red Mud Spill and People’s Resistance at Niyamgiri: A First Hand Report From the Struggle

solskin — Tue, 24 May 2011 13:12:10 +0000

From Miriam Rose

On 16th May after heavy rain, toxic red mud poured from a breach in one of Vedanta’s Lanjigarh refinery red mud ponds, spilling onto the village below. The next day landless people displaced by the project held two blockades demanding adequate compensation; a five day walking protest ended with a meeting of 500 people on the threatened Niyamgiri hills; and the funeral of a tribal movement leader, killed by factory pollution, was held. Two months before Vedanta’s often-subverted AGM this will be bad news for the company. This is a direct report from the scene.

Red Mud Spill

On the evening of 16th May 2011 one of the Lanjigarh alumina refinery’s red mud ponds burst its banks, spilling toxic waste sludge into an adjoining village. Only a month earlier a similar breach had occurred, polluting local streams and ponds.

When we reached the red mud ponds on the morning of 17th May the breach had already been largely patched up by the company. Local people recounted how after a heavy rain the sludge had poured through the earthen pond walls and flooded into the village and factory compound. Fearing bad press (particularly in the wake of the Hungarian disaster) Vedanta employees rushed out with bulldozers and hoses to wash down and patch up the evidence. However, trails of the wet mud could still be seen and a village pond was bright red with the toxic waste. The Wall Street Journal reported the incident, quoting local man Sunendra Nag on the pollution of the Vansadhara river by the red mud ponds:

Now we don’t drink its water because of the waste from the refinery that flows into it, but people still use the river for bathing and washing clothes. We are getting eye, skin and respiratory diseases due to this but we don’t have other options. (1)

Incredibly, Vedanta’s regional vice president responded to the spill by blaming the villagers. He claimed that;

Due to agitation and dharna (sit in) at the site by local people, Vedanta Aluminium is not allowed to operate its second red mud pond. They are raising the dyke height of the first pond. During every rain, exposed red-coloured soil wash run off goes into streams.

In fact Vedanta’s red mud ponds are far from meeting international standards. They are soil lined instead of concrete, contain wet waste-mud instead of ‘dry stacking’, and are poorly located – directly uphill of the factory and villages. Approximately four tonnes of red mud are produced for every one tonne of aluminium. Red mud contains arsenic, heavy metals and radioactive trace elements, which can cause cancer, silicosis and other diseases.

Background

The Niyamgiri hills in the thickly forested tribal lands of central Odisha (formerly Orissa) have been prospected by various mining companies since 1976 for the 73 million tonnes of bauxite under the soil of the mountain’s flat table top. The hills have achieved mythical status all over the world for the iconic fight playing out there. The battle is between tribal inhabitants who worship the mountain which sustains them, and the encroaching mining company, seeking the rich bauxite deposits for aluminium production.

After several contenders failed, the UK registered Vedanta Resources stepped in 2003 (Sterlite a subsidiary of Vedanta had the lease application pending since 1997). They quickly built the Lanjigarh alumina refinery at the base of the mountain before obtaining any permission to mine the hills. Contrary to the arrogant assumption that their money would buy the mountain against the inhabitant’s wishes, years of local and international protest finally led to with-holding of the project by the Environment ministry in August 2010.

Today Lanjigarh is operating on just above break-even profit at 1 million tonnes per year, with bauxite transported by rail from the troubled neighbouring state of Chattisgarh. Though already one of the biggest refineries in India, the aim is to expand the plant to 6 million tonnes, for which the Niyamgiri deposits are crucial. Vedanta cannot afford to lose. They are currently using the state-owned Orissa Mining Corporation, who are applying to carry out the mining on their behalf. Worse, opposing communities are facing increased oppression by the Central Police Reserve Force, who have arrested, attacked and killed local leaders under the guise of their violent anti-Maoist combing operations ‘Operation Green Hunt’.

In many ways the story really begins with the bloody colonisation of Odisha by the British in 1801. The first bauxite surveys carried out by the British geologist T. Walker in 1901 with the help of the King of Kalahandi then became the blueprint for today’s extraction via so-called mining based ‘development’ of the region. Today this is headed by our most neo-colonial of agencies – the World Bank, the UK Department for International Development (DfID) and a hoard of private companies, and NGOs through reports such as ‘Orissa Drivers for Change’ that promote an unregulated mining sector in the resource-rich state.

An Active Resistance

Despite the forces trying to destroy them, Niyamgiri people’s movements are alive and kicking. On May 17th, in the 45 degree heat of summer, landless oustees organised a rail and road blockade demanding adequate compensation. They felled a tree and blocked the only incoming road to the factory, creating a long line of heavy trucks unable to enter the plant to collect alumina. At the same time around 100 women and men sat on the railway that runs into the factory, planning to stay until their demands were met. They heard speeches from movement leaders on the politics of corporations and the importance of making global connections to strengthen their local struggle. They shouted slogans which recalled the 1855 killing of adivasis (tribals) led by Rendo Majhi, who revolted against British imperialism in Orissa:

‘Rendo Majhi dakara deea’ – Rendo Majhi is calling us,
‘Ladhei kari banehi huea!’ – There is a dignity in fighting!

Their actions are justified. Most of the land for the factory was illegally acquired, including some reserved forest which the company still claim was never there. 12 villages were bulldozed, but the company only partially rehabilitated 100 of the families, who now live in Niyamgiri Vedanta Nagar, a shoddy housing colony right beside the belching plant.

The un-housed live in shanty towns around the plant, and many local people are suffering skin diseases, lung problems and other ailments caused by the pollution and dust. We attended the funeral of Dai Singh Majhi, a tribal Kond and movement leader who was president of Niyamgiri Surakshya Samiti (Niyamgiri Protection Committee) in 2002. He lived in Belamba village, just beside the factory, and died in his fifties from illnesses caused by the toxins. During the fight to save the mountain he famously analysed the company’s strategy saying; ‘they are flooding us out with money’, and recounted how the district administration had told him that ‘only one foot of soil is yours, the rest is owned by the government’. He insisted that they would not give up their homeland for money, which would not last anyway.

In the end the blockade was called off on 20th May when Lanjigarh’s Chief Operational Officer, Mukesh Kumar, brought the media to meet the protesters and claimed that all their demands would be met. This is the third time such false promises have been made to them in publicity stunts, but the blockaders usually submit in desperation for a way out of their poverty. It is very unlikely that the company will follow through on their apparent responsiveness, when they can avoid doing so and manipulate the media so easily.

On the same day, a five day Padayatra (walking protest) was culminating in Chhatarpur village on the Niyamgiri hills with a meal and meeting for 500 people from the Niyamgiri communities. During the march 40 people travelled from village to village, sharing stories and strategies on dealing with the state violence being enacted on them in the name of anti-terrorist policy. Operation Green Hunt is presented as a programme to eradicate Maoist extremists. In fact it is being used to divide and destroy tribal and other community opposition to industrial projects in the so-called ‘red corridor’ (Chattisgarh, Odisha, Jharkhand, West Bengal and Andhra Pradesh) by murder in fake-encounters, rape, harassment, and by labelling movement leaders as Maoist in the media.

In Chhatarpur we met Kond leader Lodo Sikaka who was abducted by the police shortly after the mountain was saved, and held for four days until media and international pressure forced his release. He explained:

Niyamgiri is good for us. If we save our land and our forest it is good for us. The government is sending guns to our house. Those who are participating in the resistance are accused as maoists. We are not raising guns or opposing police, how can they say this? We don’t have that business, so why are they targeting us? We don’t understand. Why did they blindfold me and take me to the forest? Naveen Patnaik (Chief Minister)’s government is telling us that there are Maoists in Niyamgiri. After five days journey in these villages I haven’t seen one. Only when the police come to our villages do we assume that there are Maoists.

CSR: Corporate Social Rip-off

Seeing the villages on the mountain gave a sense of what Lanjigarh might have looked and felt like before the refinery. Hazy mountains rose in the background while a line of women snaked back from the forest and fields with fresh produce on their heads. The ancient beauty of the Niyamgiri villages is sharply contrasted by the smoke stacks of Lanjigarh below it, which tower dark grey over the mud-clad village houses scattered on the plains. Beside the road an extensive fly ash dump fills the fields. The ash is piled high and left exposed, blowing dust into farms and homes, some of which back directly on to the dump. International standards state that fly ash ponds should be located a good distance from habitations and sealed from dust-blow as the ash contains significant amount of toxic substances – silicon dioxide, mercury, lead, arsenic, hexavalent chromium and with radioactive trace elements.

Further on, the conveyor belt which marches from the factory towards the sought after mountain now stands rusted and unused.

Vedanta logos can be found at every turn, advertising a school, a science college and mid day meal centre. But the company’s claims to Corporate Social Responsibility (CSR) have been exposed as far from the reality. They have vastly over-exaggerated their good works in reports and have even been caught claiming ownership for existing government schemes in the area. Local people have whitewashed Vedanta’s logo from walls on nearby schools which had nothing to do with the company.

The company must have a sarcastic sense of humour since the walls of the factory are covered in slogans for environmental and social welfare. One reads ‘mining happiness for the people of Orissa’, while another explains that ‘a healthy nature will lead to a radiant future’. Vedanta would do well to listen to its own advice.

A 2002 report prepared for BHP Billiton and Oxfam details research, carried out in Andhra Pradesh and Odisha, into how to use CSR to deal with local resistance to mining projects. The participation of Oxfam and local NGOs in this project, without informing local communities of the dangerous research is shocking and shameful, and reveals the role of NGOs who are often responsible for destroying people’s movements instead of complimenting them.

Vedanta’s AGM will be held in London in July along with the eighth annual protest outside and inside the building. Along with this year’s scandals and injustices at Niyamgiri, activists will highlight Vedanta’s illegal acquisition of 3000 acres of land for a corporate university near Puri in Odisha, which has recently been found to be in contempt of law on multiple counts by the Lok Pal (an ombudsman appointed by the State legislative body). Once again the company will have a lot to answer for, and will have to face the shame of losing the mountain and the university. If the shareholders are shaken and the media critical, this could be the start of their ultimate demise.

(1) Krishna Pokharel, 18th May 2011, ‘Orissa Locals Fear Red Mud Spill’, Wall Street Journal.

Press Release on Red Mud Pollution by Vedanta PLC

friendoficeland — Tue, 12 Apr 2011 18:57:50 +0000

South Asia Solidarity Group, London / Simon Chambers

On 5 April, in a similar but much smaller scale repeat of the Hungarian red mud pond disaster last year, the wall of the red mud pond at Lanjigarh collapsed, resulting in caustic toxins to flow into the Vansadhara river. This was after several warnings from the Orissa State pollution control board (which were ignored by Vedanta) that the wall to the RMP was badly built. See below for a link to a very good video made by locals.

.

This has happened at a time when Vedanta are waiting to hear whether they can get permission to expand their operation at Lanjigarh six-fold, and have applied to the Supreme Court to overturn the Ministry of Environment and Forests decision to not allow mining on Niyamgri.

Please watch this news video by KBK Samachar (Bhawanipatna) about how a breach occurred in Vedanta’s red-mud pond at Lanjigarh in Orissa the day before and how the company could hush up the matter in such frightening ease! Toxic red mud has flown into water bodies and the Banshadhara river for 3 hours, after a brief thunder shower. Residents around the plant fear the worse when Monsoon comes!

.

http://www.youtube.com/watch?v=i_8Tp2skbNM

Victory in India! – The Tribes of Orissa Conquer British Mining Giant Vedanta

solskin — Sat, 29 Jan 2011 18:00:51 +0000

These news about Dongria Kondh’s victory against Vedanta are not recent, but from August 2010. Unfortunately we were not able to publish the story until now.

Miriam Rose

After 13 years of continuous battle, the people’s movements to save the Niyamgiri hills from bauxite mining have won their land and livelihood back from the jaws of extinction. Niyamgiri is one of a series of threatened bauxite capped mountains in Orissa. On August 21st 2010 a review of the Vedanta mining project carried out by the Ministry of the Environment exposed the company’s “total contempt for the law”, having violated a number of environmental regulations, and revealed “an appalling degree of collusion” by local government officials with Vedanta. A few days later Environment Minister Jairam Ramesh called a halt to the project.

Two months later the Environment Ministry also rejected Vedanta’s plans for a six fold increase in capacity at the Lanjigarh alumina refinery, the plant at the foot of the Niyamgiri hills which would have been served by the 8 million tons of bauxite mined above. The company were also warned to follow pollution guidelines closely and were reprimanded for starting expansion work without prior permission (1). One month after that (November 2010) Vedanta Chairman and founder Anil Agarwal’s extravagant plans for a $3.2 billion ‘Vedanta University’ in Orissa were also knocked back when the High Court ordered that 6892 acres of beautiful coastal land, including part of the sacred Jagannath temple, had been illegally acquired and should be returned to the ousted inhabitants (2). An incredible victory! The events sparked celebrations across Orissa, and held the state government’s assembly in limbo for several weeks as ministers furiously argued over what had become an iconic battle of tribal people and people’s movements versus a mega corporation.

The Niyamgiri story has also been hitting headlines in the West in the past two years, focussing on the involvement of celebrities such as Bianca Jagger and Michael Palin, and the glitsy media campaigns of Action Aid and Survival International. Reading the papers you might think these large NGO’s led the fight against Vedanta. You would not hear that Action Aid accepted donations from Vedanta subsidiary Sterlite in 2003, and has signed MoU’s with Vedanta’s investors, ICICI bank (3), or that NGO professionals in their big jeeps have succeeded in splitting people’s movements in the area, paying particular tribal activists to be the face of their campaigns, and encouraging de-politicisation of the struggle. You would also not hear that the big NGO’s only joined the fight in 2007 and 2008, long after the people’s organisation Niyamgiri Surakshya Parishad (later Samiti) was formed in early Jan of 1998 in a gathering of more than 200 people in Asupada, a village at the foot of the lush green mountains. Nor that the Adivasi’s (tribals) are far from the helpless figures the NGO campaigns portrayed, but have fought tooth and nail for decades to successfully preserve their mountains and way of life from various threats, including logging during the British colonial rule. Sadly, the culture of protest orchestrated by the big NGOs was never intended to stimulate long lasting grassroots activism or to make the existing struggles visible. They were selling their product in India and the West, and by doing this they were actually suppressing the politics and the voice of the real people’s movements.

For the grassroots movements in Orissa the fight has been long and hard, with moments of great empowerment and also deep sadness and brutal police repression. After years of chasing away company men who surveyed their land with tools and clipboards, the threat of displacement finally became real for the Khonds when the Orissa government ordered the compulsory acquisition of farmlands around the proposed Lanjigarh refinery in 2003. During the land acquisition process government officials promised that the company would provide jobs to every family who sold their land. In reality very few got jobs or compensation. Instead local people suffer skin lesions, dust pollution, deaths from lorry accidents on the new road, TB and contaminated crops. One family who’s farm is just outside the refinery wall have begged the company to buy them out so they can leave their contaminated land and move somewhere safer, but Vedanta have refused.

Later that year the chimney of a BALCO refinery being built in the neighbouring state of Chhattisgarh collapsed killing 57 workers, a stark reminder of the unsafe conditions for aluminium workers in India. 2003 also saw the illegal arrest and detainment of Lingaraj Azad, state president of the political party Samajvadi Jan Parishad (Socialist People’s Council) and also convenor of Niyamgiri Surakshya Samiti (Council for the Preservation of Niyamgiri) who was jailed for 100 days on two occasions. In 2004 a rally of a thousand tribals protesting forceful evictions was violently broken up by police who ‘lathi-charged’ the crowd, striking them with long thin sticks that break the skin, and injuring women and men alike. Thirteen activists were arrested on invalid charges. On 23rd March 2005 the first state-sponsored murder took place when local activist Sukru Majhi was killed. This would be followed in 2010 by the murder of Arsi Majhi. 2000 had also seen police open fire on a meeting of tribals regarding another Orissa alumina refinery owned by Utkal in Maikanch village, killing three and wounding seven (4). In 2007 the Norwegian Government’s pension fund pulled its $13 million of shares in Vedanta as it believed its involvement could result in “an unacceptable risk of contributing to grossly unethical activities”, and in 2010 the Bank of England similarly dis-invested from the company on human and environmental grounds after UK authorities in India upheld allegations of illegal and unethical activity against tribal people.

Blockades of the Lanjigarh refinery by women and children in particular were a regular occurrence during the long struggle. One of the most symbolic protests took place in January 2009 when 10,000 mostly tribal people encircled the Niyamgiri hills in a 17km long human chain, vowing to protect its sacred ecology and its ancient inhabitants. A week earlier 7000 protesters had marched to the gates of the aluminium refinery saying ‘Vedanta Hatao!’ (Remove Vedanta!), demanding that the company leave the area (5).

Here in the UK, where the company is registered (despite violating a number of British company laws), the campaign came to a head at the 2010 Vedanta AGM, which was dominated by the Niyamgiri issue for the fifth year running. A Guardian article entitled ‘Vedanta’s very embarrassing silence’ reported how during the meeting our friend Orissa activist and film-maker Samarendra Das challenged the Lanjigargh refinery’s manager Mukesh Kumar’s claims that the mountain was not sacred to the affected Dongria Khond tribe. Testing his knowledge he demanded that Mr Kumar give the Dongria’s name for their holy Niyamgiri mountain, which he could not (6). The presence of paid protesters from Survival and Action Aid was minimal at the 2010 AGM, whereas they had dominated the previous years meeting, showing the volatility of NGO support and commitment. They may have believed the fight was over as the company appeared on the brink of bringing in the bulldozers and showed no signs of stopping.

The battle for Niyamgiri was fought on many fronts; through international solidarity, court room action, media campaigns, shareholder activism and in depth research and understanding of the aluminium industry itself (embodying what Gandhi termed ‘satyagraha’- the truth force). But at the root of all of these actions was the energy and determination of the Dongria Kondh, who’s understanding of the fallacies of ‘development’ are often as sharp as any university professor. In an improvised songKucheipadar village Deka musician and elder Salu Majhi is recorded asking how mining can be called ‘development’, and describing the ideological rift between the way they value their environment and societal well being, and the quantified measures of the company and state:

Use all this up in 25 years, very clever my friend
We are kui people
Storing water wont be enough
Our life is in our flowing streams (7)

Evidence agrees with Salu. Out of half a million Indians displaced by mining in the last 10 years in just four states, 92% are much worse off, even if they receive the paltry compensation offered by companies.

So where is Vedanta now? According to the Sunday Times Rich list the company founder and chairman Anil Agarwal is still tenth richest man in UK with wealth growth of a record 583% after the financial crisis. He remains very well connected in London, yet somehow manages to be invisible in the media, despite being an almost despotic character with a rags to riches story and a childish temper when he doesn’t get his way. Using his connections he has managed to rapidly diversify the business of the company, teaming up with the Scottish oil company Cairn Energy to exploit the controversial oil fields around Greenland. Two of Vedanta’s board members also serve on the board of Cairn India and one (Naresh Chandra) is also on the advisory board of BAE, not unusual for aluminium companies due to the direct link between aluminium production and arms manufacture (8).

But we must celebrate our victories before turning to face the next fight. In the three years since Saving Iceland’s 2007 International Conference against Heavy Industry we have seen a series of projects halted by people’s movements, a success we never would have dared to dream of! Trinidad’s La Brea smelter was canceled in 2010 after years of protest by our friends from No Smelter TnT and others. The site is now being reclaimed by local people who have permission to build a bio-digester or a mango plantation there! (9)

In Iceland all smelter construction ground to a halt following the economic crisis, and Alcoa’s plans for a mega smelter in Husavik, North Iceland, may have fallen through all together thanks to the determination of Saving Iceland and others to reveal the true costs of the dams and geothermal plants needed to power the project. In Greenland public opinion in favour of Alcoa’s enormous planned smelter plummeted after activists from Avataq sought international help to educate local people and politicians on the history of the aluminium industry and the clear lessons for communities dependent on an aluminium economy. The Greenland smelter now looks a lot less certain than it has long appeared. On top of the massive turn around of aluminium industrialisation in Orissa these victories are enormous.

Most importantly they all demonstrate the power of people’s movements to stop corporations in their tracks. Though we may sometimes doubt it, our grassroots actions to understand, expose and resist projects which we know will not benefit people or planet, are powerful, and they work. Davids continue to bring down Goliath’s… in fact they are the only thing that ever will.

*

The cancelling of Vedanta’s Niyamgiri project also occurred just after the publishing of Samarendra Das’ and Felix Padel’s seminal book on the fight and the global aluminium industry ‘Out of This Earth: East India Adivasis and the Aluminium Cartel‘, which was in the Indian best seller list and was read by the Home Secretary of India. For an in depth analysis of the aluminium industry and the struggle in India the book is highly recommended.

Notes:

(1) Govt says no to Vedanta’s $8.5 bn expansion plan, NDTV Correpsondent, October 21, 2010 (New Dehli).

(2) Deborah Mohanty, Indian Express, 16th Nov 2010. ‘Land acquisition procedure for Vedanta University illegal‘

(3) Das, Samarendra and Padel, Felix 2010 ‘Out of This Earth: East India Adivasis and the Aluminium Cartel‘. Orient Blackswan, Delhi.

(4) Das, S. and Padel, F. 2010,’Out of This Earth: East India Adivasis and the Aluminium Cartel‘, Orient Blackswan

(5) Saving Iceland, Jan 30th 2009. ‘Ten Thousand People Encircle the Niyamgriji Mountains in Orissa, India‘

(6) Peter Popham. ‘Vedanta’s very embarrassing silence’. The Guardian. Friday, 30 July 2010

(7) An excerpt from Samarendra and Amarendra Das’ 2005 documentary film Wdira Pdika (‘Earth Worm Company Man’

(8) Press Association, 25th April 2010. The Guardian ‘Rich list reveals record rise in wealth: Collective wealth of Britain’s 1,000 richest people rose 30%, the biggest annual increase in list’s 22-year history‘

(9) Richardson Dhalai, September 27th. ‘Rowley slams Govt’s decision to scrap smelter‘, Newsday.

Battles over Bauxite in East India: The Khondalite Mountains of Khondistan

anti — Mon, 23 Aug 2010 01:22:26 +0000

By Samarendra Das & Felix Padel
(Article for ‘The Global Economic History of Bauxite’, Canada 2010)

Most critiques of the aluminium industry focus on refineries and smelters, which are among the worst culprits of global heating. But bauxite mining excavates a huge surface area, and has caused environmental devastation in Jamaica, Guinea, Australia, India and recently also in Vietnam.

Perhaps no bauxite deposits are located in more sensitive areas than those in India, whose most significant deposits occur as cappings on the biggest mountains in south Orissa and north Andhra Pradesh. Tribal people live in hundreds of communities around these mountains, which they regard as sacred entities for the fertility they promote. Appropriately, the base rock of these mountains was named ‘Khondalite’ after the region’s predominant tribe, the Konds. Early geologists noticed the perennial streams flowing from these mountains, and modern evidence suggests that their water regime is severely damaged when the bauxite cappings are mined.

Bauxite has probably never been sold for a price commensurate with the damage done by mining it. For Konds and other small-scale farmers in East India, the aluminium industry brings a drastic disturbance to their way of life and standard of living that amounts to cultural genocide. If mainstream society sees these bauxite cappings of India’s Eastern Ghats as resources standing ‘unutilised’, Adivasi culture understands them as sources of life, and sees mining them as a sacrilege based on ignorance.

Bauxite Cappings of the Eastern Ghats

India’s most extensive bauxite deposits lie on top of a series of mountains in Orissa and Andhra Pradesh. The special geology of these mountains was noted by British geologists at the start of the 20th century. T.L.Walker named their base rock Khondalite in 1902, ‘in honour of those fine hill men the Khonds’, since the mountains based on this rock (‘garnet-sillimanite-graphite schist’) had almost exactly ‘the same boundaries as Khondistan’. In other words, the Kond tribe (also called Kuwinga, Kondho, Kondh and Khond), who now number about a million, inhabit the very region where India’s best Bauxite deposits occur.
Walker noted the abundance of fresh water coming down from these mountains, and the use which Konds made of it.

The frequent occurrence of perennial springs of clear cool water from beneath these laterite caps has been mentioned by both Ball and Smith. A very good example occurs south of Korlapat, where in March, in the dry season, I noticed a tiny rill which dashed down the precipitous face of one of these hills, to be utilised to irrigate a second rice crop in the fields of the valley below. (1902 p.13)

This detail is significant. One of Orissa’s bauxite mountains, Panchpat Mali, has been mined since 1980. Konds living in villages below it describe how they used to rotate crops and grow two a year. Since bauxite mining started on the mountain, this is no longer possible.

Our water sources are drying, because of mining. We cannot to rotate our crops. I, Sri Lasu Jani, speaking on behalf of my community, say we are struggling to survive. (Das 2005)

Bauxite cappings maintain fertility over a wide surrounding area. Aluminium’s capacity for bonding with other elements, that makes it so versatile in industry through an extensive range of alloys, is also evident in its natural form in the earth, where it is present everywhere in the soil, and forms 8% of the earth’s crust.

‘Without aluminium there would be no fertile earth’ (Pelikan 1973 p.151), due to Al’s bonding with H2O, which is fundamental to the soil’s capacity to retain moisture. Bauxite is a very special ore for its high aluminium content the alumina content of bauxite varies from 31-52%), and the regions where it is concentrated include some of the world’s largest forests, with the most biodiversity, including the Amazon rain-forest, Cape York in Australia, and areas in West Africa, and East India. India’s bauxite deposits are counted as the world’s 4th largest.

Since Nalco was formed (National Aluminium Company) in 1980, as an Orissa-integrated company based on mining Panchpat Mali, there have been repeated attempts by other mining companies to gain access to most of the other bauxite-capped mountains in this region. Every attempt so far (2010) has been thwarted by local campaigns protecting them.

‘Khondalite’ is a peculiarly appropriate name, since these mountains occupy a central place in Kond economy, culture and religion. Gopinath Mohanty, one of Orissa’s best known writers, records in his autobiography a conversation with an official undertaking the 1941 Census, to the standard question ‘What is your religion?’ The official found Konds’ reply of ‘Dongar’ (Mountains) is hilarious.¹ Yet this answer reflects Konds’ recognition of their mountains’ ecological importance, for maintaining the fertility of their fields. Each Khondalite mountain is a sacred entity to the tribal people, and often also to Hindus too, who live in its vicinity.

Of all these mountains, the best forested is Niyam Dongar. This is because the Niyamgiri range has its own tribe, the Dongria Konds, who live only within the range, and have maintained a strict taboo on cutting forest on the mountain tops – as opposed to the mountain sides, where they practise swidden cultivation at a steep gradient. The summits are held to be sacred to their principal deity Niyam Raja, ‘King of Law’, and necessary for preserving numerous perennial streams. Niyam Dongar is the largest in size and by far the best forested in the Niyamgiri range.

This is the mountain sought by Sterlite Industries, which first signed a Memorandum with the Orissa Government for mining it in 1997, and launched itself on the London Stock Exchange in December 2003, with a plan for building a new refinery and smelter in Orissa, based on this. Articles in the Financial Times in 2003-4 gave the mistaken impression that mining rights had already been secured. This was far from the case, and the majority of Dongria have repeatedly demonstrated their opposition.²

Current plans to turn Orissa’s poverty into wealth through mining its bauxite and other minerals have been brewing for a long time, and date from the colonial era. ‘Khondistan’ was invaded and conquered by the armies of the East India Company during the 1830s-60s (Campbell 1864, Padel 1995). Following surveys by British geologists from the 1860s-1900s, Cyril Fox, in publications from the 1920s, spelt out the blueprint for resource extraction that has surfaced as a new invasion by aluminium companies. He mentions most of the Khondalite mountains whose fate now hangs in the balance, highlighting Karlapat, one of the remotest, which has been sought recently by BHP Billiton among others. He also highlights the region’s hydro-potential – now realised in a series of massive dams and reservoirs built from the 1950s-1990s – and the co-ordination of new railways to meet at Vizag (Vishakhapatnam), now India’s biggest port (Fox 1932 p.136).

If Khondistan’s first invasion was legitimised in terms of Pax Britannica, the new one is justified by ‘giving the tribal people the fruits of development’. The first step in its realisation was an Eastern Ghats Bauxite Survey made by the Geological Survey of India in 1975-6 (Rao & Raman 1979) of the deposits in south Orissa and north Andhra Pradesh. This named the deposits India’s ‘East Coast’ deposits, not because these mountains are near the coast (which they are not), but because the rail-lines to Vizag facilitate transport to one of India’s biggest ports, used by Nalco for export since the 1980s, as well as for steel exports to Japan etc. The name also advertised the deposits’ accessibility – though in fact, many of the mountains are extremely remote, and the network of new railways and roads was still rudimentary. Accessibility was the key focus in a World Bank Investment Analysis of aluminium (Brown 1983), that rates the world’s deposits and plants according to this criterion.

The ‘East Coast’ survey was published in time for an international conference on Laterite/Bauxite at Trivandrum in 1979. Panchpat Mali, as the largest deposit, was made the source for Nalco, a new public sector aluminium company, vertically integrated in Orissa, which currently provides about 40% of the bauxite mined in India (‘Orissa’s Aluminium Complex’ – Rajagopalam et al 1981). A few years later, the UNDP (United Nation Development Programme) provided about half the funding for a research institute at Nagpur, the Jawaharlal Nehru Aluminium Research Development and Design Centre (JNARDDC). This was inspired in part by the Jamaican Bauxite Institute, set up through Norman Girvan’s seminal work on bauxite during the 1970s, as part of a move to try and ensure that Jamaica got a fair price for its bauxite. By contrast, research at the JNARDDC has been restricted to servicing the needs of mining companies, Questions asked in Parliament in 2002 highlighted the institute’s ‘languishing and pathetic conditions…due to lack of funds’.³

Dams and Bauxite Business

When Nalco’s aluminium complex was being set up in Orissa during the early 1980s, an article in the leading intellectual journal Economic & Political Weekly gave a range of economic arguments against it, in particular the low price for bauxite enforced by external pressures – in effect the aluminium cartel – plus excessive consumption of electricity and water, and excessive pollution. Another commented that to understand the effects of setting up Nalco, one must comprehend ‘the past, not very pleasant, history of the Indian aluminium industry’.⁴ We would add that is impossible to understand the effects of opening bauxite mines and building greenfield aluminium factories in Orissa and Andhra, unless one has an overall understanding of the aluminium industry and its effects worldwide, and in several countries in particular.

In India, a number of refineries and smelters were set up during the 1950s-70s as Joint Ventures with foreign firms. Each complex was built near a new dam/reservoir complex, to draw hydropower and water. Indian Aluminium (Indal) and Alcan (taking over from the British Aluminium Company), built refineries and smelters in Kerala, Maharashtra and Bihar, with a smelter at Hirakud in northwest Orissa, constructed between 1950 and 1956, and a principal customer for Hirakud hydropower. This dam’s foundation stone was laid by Nehru, and it displaced at least 150,000 people, causing immense hardship, with two government administrators reportedly killed during unrest.⁵

Three other refinery-smelter complexes were set up: by Malco (Madras Aluminium Company), with Italian help near the Mettur dam on Kaveri river, in Tamil Nadu; by Balco (Bharat Aluminium Company), with Russian and Hungarian help, at Korba, for which the Hasdeo Bango dam was built, in what is now Chhattisgarh; and by Hindalco (Hindustan Aluminium Company) at Renukoot, near the Rihand dam, which made one of India’s biggest reservoirs, in the south of Uttar Pradesh, on the border with Madhya Pradesh (now Chhattisgarh).

Hindalco represented a joint venture beginning in 1959 between G.D.Birla and Henry Kaiser’s son Edgar – the largest US investment in India to that date. The Rihand dam was one in a succession of Kaiser-built dams in India. It was designed to supply Renukoot, and was financed through World Bank loans through the influence of George Woods, shortly before he became President of the Bank in 1962. An estimated 200,000 people, mainly Adivasis, were displaced by this dam, without proper warning or compensation, and the electricity price, guaranteed for 25 years, was a twentieth of the normal rate.⁶

Before this, Nalco’s refinery at Damanjodi and smelter at Angul were built in collaboration with Pechiney, and though these factories have often been cited as outstanding examples of rehabilitation and environmental management, closer inspection shows they are nothing of the kind. Bauxite mining on Panchpat Mali, now at six million tonnes per year, has seriously affected the mountain’s water-holding capacity (as mentioned above). About 400 people work the mine, using about 70 ‘dozer-rippers’ and trucks. The work-force is divided into unskilled, semi-skilled and skilled labourers. A notice at the mine entrance lists the daily wage for each—between 55 and 117 rupees (between $1 and $3). Like most bauxite mines, this is open-cast. The mined-out area on top of the mountain stretches for several km already. It is ‘re-landscaped’, which means putting the overburden and topsoil back and planting trees, but most of these are eucalyptus, notorious for desiccating the soil, and large areas are sterile pits. At the foot of the mountain, several Kond villages including Kapsiput and Gortili receive the full impact of noise and waste. Lasu Jani and other villagers walk up the mountain most days to labour in the mine, but the dust pollution from blasting, and the rapid deterioration of their land, which had been exceptionally fertile, coupled with the authorities’ refusal to deal with a host of extreme difficulties and unmet promises, has affected peoples’ lives profoundly. As Lasu says,:

We have been writing applications to the authorities three or four times. Still they don’t care. The Collector [senior administrator] invited a few elders of our community and then abused them by calling them goats, sheep, bloody fools and they were beaten by the security forces. We had to run away from there. The police told us before not to come with arms, otherwise it would have turned violent. Still they charged and fired gas on us. 70 of us had false cases made against us. 15 of us still have court cases pending against us for the last five years. They don’t listen or give us any job. (Das 2005)

A conveyor belt 14.6 kms long takes bauxite from Panchpat Mali to the Damanjodi refinery. It was completed in 1985, displacing at least 3,000 people from 19 villages.
Nalco had a book written about this displacement process and their ‘action programmes’, meant to ensure that

people who were happy peasants enjoying fruits of their labour amidst natural surroundings yesterday are not rendered homeless and unemployed today leading the life of destitutes because of their sacrifices in the national interest. (Muthayya 1984, pp. 1–8)

Yet this is exactly what has happened. In the words of a young tribal woman in Amlabadi, the main resettlement colony at Damanjodi:

I loved my village, it was very pleasant though remote…. We had cattle, and I used to look after them. We had goats and sheep, a kitchen garden. It was so nice when I was little. We used to cultivate vegetables on our own… They kept us here. An asbestos roof, and everything else is earthen, only a thin layer of cement. It is unsafe to live in… In Damanjodi people are living with hardship, some even have not enough to eat a meal. It was nice before, at least they had land, nobody was starving. Now, no land and no cattle. So no food… Unemployment and even educated unemployed are everywhere… We have lost everything… Nalco is death for us. (Das 2005)

Jobs invariably promised to ‘Land Displaced Persons’ (LDPs) rarely if ever materialise in practice without a bribe. This was attested to us even for the lowest level of labouring and bauxite mining jobs. Statistics on poverty show that Koraput, where Damanjodi stands, is one of India’s most poverty-stricken districts (CSE 2008). The effects of pollution, as well as industrial disease among workers, are notorious, though virtually unrecorded.

Damanjodi refinery was built alongside the Upper Kolab dam, which provides it with electricity and water. Construction on this dam started in 1976, and continued until 1992, when it started to generate electricity. It was built by the Central Water and Power Commission (CWPC), which had also built Hirakud. Lobbying from the electricity sector and industrialists played a decisive role in the decision to build it, and Damanjodi refinery is among its main customers. The dammed water flooded an irregular-shaped area between hills that are now bare and badly eroded. At least 14,000 people from 60 or more villages were displaced between 1984 and 1990, as the water level rose. Estimates vary wildly, as with most dams, since the administration has not kept a proper count. Most ‘oustees’ now live in poverty-stricken rehabilitation villages, or had to resettle themselves, suffering severe neglect (Jojo 2002). To pay for this dam, 3,769 million yen (c. $20 million) was loaned by the Overseas Economic Cooperation Fund of Japan.

During these same years, a new railway line was built from Koraput to Damanjodi, then on to Rayagada, in order to carry Damanjodi’s alumina to the smelter which Nalco was building at Angul in central Orissa, as well as for export via the port of Vishakhapatnam. This railway snakes high through Orissa’s bauxite mountains, with stations at convenient places for future mines and factories. The line cost an estimated .$400 million, of which $80m (80 crore rupees) came as a loan from the Saudi Fund for Development. These investments are signs of long-term Japanese and Middle Eastern interest in Orissa’s bauxite.

Building the smelter at Angul involved a history of intimidation and displacement that has barely been told, and involved a desperate act of resistance, when a local man stabbed to death the Additional District Magistrate Gopabandhu Pattnaik, as he was addressing a crowd on 23rd December 1987.⁷ Officially, the smelter displaced 4,000 families from 40 villages. Like Damanjodi refinery, it has its own coal-fired power station, but also draws power and water from a dam, in this case Rengali, which displaced at least 224 villages, and was almost certainly built to supply the smelter. Agitation against this dam between 1972 and 1978 faced ruthless suppression by police. The history of pollution from this smelter includes major spills of toxic waste from ash-ponds during the cyclone in 1999 and on 31st December 2000, when a containing wall broke, damaging land and buildings over 20 villages and causing many deaths. National TV news on 13th September 2004 reported fluoride contamination over 500 acres of fields, leaving the crop unfit for consumption, and interviewed villagers, who complained they could not get medication for their bone disease because Nalco officially denies this exists. Inhabitants of nearby villages, as well as their few remaining cattle, show severe signs of skeletal fluoridosis from the smelter. The Nandira and Brahmani rivers near the smelter, into which smelter effluents run, are seriously polluted, and all fish are said to have died in them for a stretch of at least 30 km. A report from the Supreme Court Monitoring Committee on Hazardous Wastes, whose team visited Nalco’s smelter in June 2006, lists numerous violations of pollution levels and confirms that fluoride and other emissions into air and water remain unacceptably high, while toxic Spent Pot Lining (SPL, classed as a hazardous waste) was not being properly disposed of.⁸

In mid-2002 there was an outcry in Orissa at the proposed privatisation of Nalco – one of India’s most profitable companies, ‘pride of Orissa’as well as of the public sector. Nalco’s huge profits stem from the quality of Orissa bauxite, whose low silica content allows it to be refined at a lower temperature than most.

Gandhamardan was the next mountain marked out for bauxite mining – probably the best forested bauxite-capped mountain after Niyam Dongar. It was saved by a people’s movement in 1984-7, that united tribals, dalits, Hindu devotees and nationwide activists, and managed to prevent the project even after Balco had constructed a 9 km road up the mountain as well as a new colony for hundreds of officers and workers, now a ruin. Among Dalit women leaders, Jambubati Bijira from Dungripalli village was prominent, encouraged by her husband, who worked for Balco, and got fired. When most of the men had been arrested, she and other women laid their babies on the road in front of mining vehicles, shouting to run them over, since they would have no future if the mountain was mined. The Ministry of Environment and Forests eventually sided with the protestors, after a high level enquiry. The US company Continental Resources has retained a provisional mining lease, and there have been reports of Nalco and Vedanta interest, while plans for a Lower Suktel dam nearby are linked to a planned refinery to process Gandhamardan’s bauxite. Villages marked for displacement by this dam have already faced severe police repression in the form of lathi charges and intense pressure to sign away their land.⁹

Five years after the saving of Gandhamardan, a new alumina project in the Kashipur region of Orissa emerged, facing intense opposition, and inaugurating an era of conflict over bauxite and alumina that has continued ever since. The Utkal project started out as a joint venture between Tata, Norsk Hydro and Indal. Alcan was a prime mover, but joined a little later, manoeuvring a takeover of its subsidiary Indal by Hindalco in 1998. After seven years of protests against the proposed invasion and takeover of of tribal and dalit land and villages, police repression culminated in police opening fire on a group of tribal protestors at Maikanch village in December 2000, killing two men and a boy. Hydro withdrew, after Tata had already withdrawn. This incident was alluded to by India’s President in his Republic Day speech on 25th January 2001:

The mining that is taking place in the forest areas is threatening the livelihood and survival of many tribes… Let it not be said by future generations that the Indian Republic has been built on the destruction of the green earth and the innocent tribals who have been living there for centuries.

An enquiry into this firing delayed the project another three years, but after police repression started again in 2005, Alcan withdrew in April 2007, under pressure from Canadian campaigners over numerous violations of law and human rights, just before it was taken over by Rio Tinto in July-October.¹⁰

Nevertheless, the refinery is being built on a site cleared of several tribal and dalit villages, in an atmosphere of repeated demonstrations and sustained opposition. The Utkal project is based on mining Bapla Mali, which surrounding tribal people are determined to prevent. There is outrage too at the refinery’s plan to take water from Baro and Sano Nadis (Big and Little rivers). These flow towards the Upper Indravati reservoir, built with aluminium interests in mind using World Bank loans in 1989-1997, at the cost of many workers killed in a terrible accident on 28th July 1991, over 40,000 villagers displaced, repression of a movement against the Indravati dams, and vast deforestation. The river’s water was channelled north instead of south, and since 2006 has been piped to supply Vedanta’s Lanjigarh refinery. The villagers displaced by this dam are among the most neglected in Orissa, witnessing a long line of broken promises. ‘If I starve, you also bear responsibility’, as a villager told a World Bank consultant.¹¹

Hindalco and its sister company Aditya Aluminium (both controlled by the same Birla dynasty who built Rihand dam) are also negotiating to open new mines on other mountains: Kodinga Mali – where another refinery is planned – and Mali Parbat, where intense opposition has come under escalating repression, with the area invaded by several thousand armed police targeting Maoist rebels. Here an organisation called Chasi Mulya Adivasi Sangho (Cultivating Labour Tribal Society) forcefully took back tribal land illegally taken over by traders, at the same time as organising resistance against mining companies. Maoist support was fairly open, so when CMAS men and women protested outside Narayanpatna police station on 20th November 2009 against atrocities being committed by armed police in tribal villages, police marksmen shot dead two of its leaders, and these atrocities intensified, with over 100 leaders arrested.¹²

The first Birla factory in Orissa was Orient Paper Mill (1940), whose pollution of the Ib river was the subject of a letter to Birla’s friend Gandhi (1946). This became in effect Orissa’s first Public Interest Litigation (1950). The judgement finally went against Birla in Orissa’s High Court. This was then negated by a River Pollution Act passed by the Orissa Assembly (1953), that took away Courts’ jurisdiction on matters of river pollution.¹³ Meanwhile, Mystery of Birla House (Burman 1950) is a tax commissioner’s exposure of the Orient Paper Mill’s history tax avoidance. There is an irony of history here: G.D.Birla, Aditya’s grandfather, was a staunch friend of Gandhi, and Gandhi’s assassination took place in the grounds of Birla house. Yet this Birla factory could be said to have set a glossed-over trend of corruption and pollution that culminates in recent events surrounding Hindalco’s invasion of Adivasi lands in the Kashipur and Koraput region, orchestrated under the aegis of G.D.’s grandson Aditya.

While the Utkal project was stalled, another company called Sterlite made a move to build an alumina refinery at Lanjigarh with a view to mining Niyam Dongar, and registered on the London Stock Exchange in December 2003 as Vedanta Resources, after promotion by J.P.Morgan and many other banks. Sterlite had already bought controlling shares of Malco and Balco, the latter a highly controversial privatisation of a public sector company with many irregularities (Bidwai 2001). Intense opposition to the Lanjigarh refinery has met with vicious repression.¹⁴ In Septmember 2005, the Central Empowered Committee, advisory body on forests to India’s Supreme Court, released a long report detailing numerous violations in the project. This report recommends strongly against the refinery and mine: the refinery should never have been approved, because it was sited right on the banks of the Bansadhara river at the point where it forms below Niyam Dongar, and because application for the refinery was delinked from the mine, which would involve felling a huge area of primary reserved forest on top of the mountain (CEC 2005). The J.P.Morgan report detailed large numbers of deaths on roads around the Malco and Balco projects, and pollution from the factories – a pattern that has been repeated with interest at Lanjigarh. It mentions Niyamgiri, but concentrating on economic factors, failed to notice the mountain’s superb forest cover, or the Dongria who have preserved this, so failed to foresee today’s intense opposition.¹⁵

The CEC’s recommendations were sidelined, partly by commissioning more reports, from the Wildlife Institute of India – which concluded, until ‘leaned on’, that the mine would cause great harm to the mountain’s water regime and wildlife – and the Central Mine Planning & Design Institute, which argued against this that during mining micro-cracks would form on the side of the mountain that would ‘facilitate run-off’ and help ‘recharge ground water’ (CMPDI August 2006 pp.18-20) – a monstrous distortion of science: during the monsoon, rain water runs straight off the mountain, but the water-holding capacity of the mountain during summer months is ruined, as with Panchpat Mali.

By this stage, the Niyamgiri case was being heard in a succession of hearings at the Supreme Court. In a session on 6th September 2007, the Judges called for a report from the Ministry of Environment and Forests that was submitted on 5th October by India’s Attorney General about the situation of bauxite mining leases in Koraput and Kalahandi districts. This report is full of inaccuracies, and outlines a selection of ten mountains with a combined total of 54 memoranda of understanding by various companies, showing the extent of bauxite mines being planned. The case also sidelined the Konds, who have been vocal in their opposition to mining, not least in a public hearing held in Belamba village on 28th April 2008 for a sixfold expansion of the refinery, from the 1 million tonnes per year originally applied for to 6mtpy. Nearly everyone present spoke strongly against the refinery, which has already heavily polluted the Bansadhara river and caused enormous suffering for villagers displaced as well as those near the refinery; yet the hearing was reported in a way that implied people gave their consent!¹⁶ The company’s attempt to mine Niyam Dongar received a setback when the new Environment Minsiter Jairam Ramesh drew attention to extensive tree-felling without permission on the basis of highly questionable ‘provisional clearance’.¹⁷

The authors witnessed three sessions of the Supreme Court case, where many things amazed us. Among the most extraordinary were the argument made by pro-Vedanta lawyers about how the project would alleviate the region’s poverty, giving everyone in Kalahandi ‘two square meals a day’, and sidelining Dongria Konds from the case, despite this tribe’s role in preserving forest on the mountain summit at 4,000 feet. Also, the idea that the forest, wildlife and impact on local people can be compensated by making the company pay large sums for reforestation, a wildlife management plan, and tribal development. The judges admitted that a recent report from the Norwegian Pension fund had blacklisted Vedanta, but called on Sterlite to set up a Special Purpose Vehicle with the Orissa Mining Corporation and Orissa Government, when the report actually mentions Sterlite alongside Vedanta for numerous violations of the law at numerous sites in India and other countries.¹⁸

While the Vedanta drama has unfolded from 2003 to2010, several other major bauxite projects are in various stages: Alcoa, BHP Billiton and Rio Tinto have mentioned an interest several times, Larsen & Toubro has a joint venture with Dubal (Dubai Aluminium) for mining Kuturu Mali and Siji Mali with a refinery near Kalyansingpur, IMFA has designs on Sasubohu Mali, Jindal has designs on mountains in south Orissa and north Andhra Pradesh (with a refinery at S,Kota in Andhra), where RAK (Ras Al-Khaimah, another Dubai-based company) also has plans for mining the Jerrela range.

Meanwhile, Vedanta’s new smelter in north Orissa has started production, while Hindalco/Aditya Aluminium has advanced plans for a new smelter nearby. Both these draw from the Hirakud reservoir, which has been refurbished with aid from the DFID. 30,000 farmers held demonstrations there in November 2007 against the diversion of water from Hirakud to these new smelters. After police lathi-charged the crowds, Orissa’s Chief Minister invited the movement’s leaders to a meeting, announcing that some of Hirakud’s water would go to farmers, though if all the deals for supplying aluminium and steel plants go through, evidence suggests that water reaching farmers along the (highly inefficient system of) canals is likely to diminish still further.²⁰

Invasion and Resistance: the threat of Cultural Genocide

Analysing the social structure of the aluminium or steel industry, the clash of ideologies emerges as a key fault line. The tribal viewpoint is powerfully expressed by Bhagaban Majhi, a leader of the Kashipur movement against Utkal:

Agya, unnoti boile kono? (Sir, what do you mean by development?) Is it development to displace people? The people, for whom development is meant, should reap benefits. After them, the succeeding generations should reap benefits. That is development. It should not be merely to cater to the greed of a few officials. To destroy the millions of years old mountains is not development. (Das 2005)

Resistance became focused through the Gandhamardan movement, and intensified with the Kashipur movement that stalled Utkal for more than ten years. The Maikanch police firing, which killed three tribal people in December 2000, showed the depth of polarisation. All the bauxite mountains are protected by local tribal and non-tribal villagers, who see them sacred entities for the life they give through their perennial streams.

It seems to be hard for mining executives, and many government officials, to comprehend the strength of resistance to these projects, and people’s attachment to their mountains. The mainstream belief, that the aluminium projects will bring development and wealth to a region long sunk in poverty, looks on those resisting these projects as ‘anti-development’, driven by ignorance of the benefits of industry, and instigated by outsiders. Yet the mainstream view of ‘educated people’ often seems ignorant of the history of aluminium, briefly summarised in this paper, and extremely ignorant about the tribal villagers, their culture and values.

What is actually happening over large areas of East India is a process of cultural genocide, carried out by people who do not understand what they are destroying. Driving them is a 200 year old ideology that powered forced industrialisation from Western Europe to the USA to the USSR and China. In India, industrialisation has displaced an estimated 60 million villagers within the last 60 years, more than 2 million in Orissa alone, of whom a majority are Adivasis and Dalits.20 Very few have been properly compensated, let alone improved their standard of living, especially since most lost their livelihood as cultivators, and therefore their food security. This is why most of these people consider these projects have been the opposite of development.

This reality contrasts starkly with companies’ rhetoric of ‘generous R & R packages’, ‘Sustainable Development’ and ‘CSR’, in the present rush to make deals for mineral resources and construction projects. Whatever wealth is generated for the nation as a whole, or for its business elite, the people displaced face a worse poverty than anything they knew before: ‘projects meant to reduce poverty are the ones adding to the numbers of the poor.’ ²¹

According to World Bank and other international standards on involuntary resettlement, if a project really constitutes ‘development’, then ‘the first rule is that all parties to the project should be better off.’ ²² In practice however, it is clear to everyone, and easy to demonstrate, that most of India’s 60 million displaced people are not better off at all.

There is a strong tendency among those implementing displacing projects to simply deny these risks that their projects are bound to make most oustees poorer.²³ When forced to admit the hardship which displacement causes, they tend to justify it in terms of ‘sacrifice’ – a sacrifice of the few for the many, or ‘for the national interest’. This usage has western roots: indigenous areas affected by uranium mining in the US are known as ‘National Sacrifice Areas’ – to which Russell Means, a leading American Indian activist of the Lakota tribe replied ‘We are fed up with being called a national sacrifice people!’ ²⁴

When so many people’s lives have been ruined, how can so many more displacements be planned ‘in the name of development’? ²⁵ As Bhagaban puts this:

We have sought for an explanation from the Government about the people who have already been displaced in the name of development. How many have been properly rehabilitated? You have not provided them with jobs; you have not rehabilitated them at all. How can you again displace more people? Where will you relocate them and what jobs will you give them? You tell us first. The government has failed to answer our questions. Our fundamental question is: how can we survive if our lands are taken away from us? We are tribal farmers. We are Earthworms (Matiro poko). Like fishes that die when taken out of water, a cultivator dies when his land is taken away from him. So we won’t leave our land. We want permanent development. Provide us with irrigation to our lands. Give us hospitals. Give us medicines. Give us Schools and teachers. Provide us with lands and forests. The forests we want. We don’t need the company…. But the government is not listening to us. (Das 2005)

The whole issue of displacement has been routinely neglected in development projects. While Environment Impact Assessments have often been rudimentary, their shortcomings have at least been frequently attacked by campaigners and in the courts. Social Impact Assessments are given far less importance still, and administration of R & R is normally relegated to highly unsuited personnel, in a low-status Govt post, when their task requires the utmost sensitivity.²⁶ Officials’ usual response to the inevitable complex difficulties that arise, since almost every displaced family faces huge trauma and injustice, is to deny the problems. Much energy goes into masking painful realities and abuses of power – a deliberate manipulation of the economic and cultural risks inherent in displacement.²⁷

Economic risks are evident wherever people have been resettled. Even World Bank studies admit that ‘income restoration’ remains elusive: the hard fact is that most oustees’ standard of living declines drastically.²⁸ As for cultural risks, tribal culture exists through relationships ordered in a carefully maintained social structure, which traditional anthropology analyses in terms of distinct domains, each of which is torn apart by displacement:-

*   The Economic System, along with the whole tradition of cultivation is completely destroyed with people’s removal from their land, and the termination of their existence as farmers.
*   The Kinship System is fractured by displacement from villages, where social relations follow the pattern of a village’s traditional layout, and spatial distance from kin in neighbouring villages. In every area where a project causes displacement, there is a split in long-standing relationships, and tension between those who accept compensation and move, and those who remain opposed.
*   The religious system is undermined by removal of sacred village sites, as well as the mining of venerated mountains. As a woman from Kinari village said to us days after being moved to Vedantanagar colony to make way for the Lanjigarh refinery, after seeing bulldozers flatten her village and its central earth shrine, “Even our gods are destroyed.” Losing her land means she can never grow her own food again, so the whole system of values attached to the customary way people have supported themselves is undermined.
*   The material culture, through which people make most of what they need, is destroyed as soon as the houses people built from local earth and wood are knocked down and replaced with a concrete house.
*   Above all the power structure is transformed. From being in control of their area and its resources, people find themselves at the bottom of extremely hierarchical structures of power and authority. Traditional tribal society is remarkably egalitarian, and women have a higher status than in much of mainstream society, which they lose when new, corporate forms of domination invade their area. In many ways women have even more to lose than men, which is why they are often at the forefront of campaigns against displacing projects.

In other words, tribal people’s economic and political systems are fundamental to their culture, and when dispossessed of their land these systems are effectively destroyed. This is why adivasis often say they would rather die than leave their land. Losing their land brings the death of all they value, including the sacredness of nature, respect for elders’ knowledge, ritual contact with the ancestors, growing their own food on family land and making their own houses and tools, exchanging food with neighbours with an egalitarian spirit. These things are swept away by corporate values, which emphasize money and financial power. ‘We’re being flooded out with money’ is how adivasi elders describe the process.

Actual Genocide involves physical extermination – all too evident in the civil war situation in neighbouring south Chhattisgarh, where over 600 tribal villages have been burnt with countless atrocities by Salwa Judum, in areas where steel companies require huge tracts of land. In south and west Orissa, direct killings, e.g. by police in the Maikanch and Narayanpatna incidents, may be relatively few. But they symbolize a psychic death for Adivasis that non-tribal people rarely understand. Underlying this Cultural Genocide is the invaders’ total lack of respect for tribal people’s traditions and connection with the land. Mainstream culture, in India as in the West, ceased a long time ago to be rooted in the soil: most elite and middle class families (as well as many working class ones) tend to move around a lot, buying and selling distant properties over the generations rather than staying put in one place. As land prices shoot up, collective attachment to the land a village has worked over successive generations has no value in newcomers’ eyes, which focus only on profits the land can generate – a completely novel attitude to land for tribal people.

Few outsiders listen to what Adivasis actually say – even when claiming to support them. When they are interviewed on TV, the intimidating superiority assumed by interviewers brings out only stereotypes. The authors have witnessed countless Adivasis transported to meetings around India as spokespeople or symbols of resistance, being completely sidelined in the road shows, rarely even asked to give their views, simply sitting in dignified silence in the meetings, and returning to their villages sad at the confusion among people who say they want to help them. Elders in a Kond village once asked us: ‘Where are the saints in your society? We are all saints here.’ This is a culture that emphasizes sharing, with low but equal consumption and minimal wastage.

Belief in markets was as strong in the 1830s as it is in the 2000s, and shows in the first colonial writings on the Konds. In 1836 the Honourable G. E. Russell, senior civil servant of the East India Company in charge of the first stage of British conquest, advocated setting up markets for the Konds on the grounds that

giving them new tastes and new wants will, in time, afford us the best hold we can have on their fidelity as subjects, by rendering them dependent upon us for what will, in time, become necessities of life.

As his superior put it, Lord Elphinstone, Lieutenant-Governor of the Madras Government: ‘with the extension of this commerce their wants will increase.’ ²⁹
Spreading consumer values is at the heart of the new market-driven invasion of Kond land by mining companies. A terse Kond counter-view comes in an improvised song recorded from Salo Majhi, a blind singer in Kucheipadar, the village at the forefront of the Kashipur movement.

‘They are flooding us with money
They are coming to take our Mountain…
The lazy people are invading…’ (Das 2005).

The ideology opposing the invasion is one of standing firm, and resisting displacement. It could be called an ideology of sustainability, in contrast to the ideology of material development through mining and industrialisation. It is this ideology of sustainability that has checked a succession of projects in East India. In West Bengal, Tata’s nano-car factory and Indonesia’s chemical giant Salim Industries have been stopped in their tracks; while in Orissa the anti-Posco and Kalinganagar movements are two out of many opposing iron-ore mining and mega-steel projects. In the words of Kishen Pattnayak,

Orissa has enormous mineral reserves. This is considered to be the biggest asset to increase the prosperity of Orissa. This is really a myth. Mining areas of Orissa have never been known for being rich or developed. Now the condition is becoming much worse……A few national/multi-national companies and their contractors and those ministers and officials helping these companies in unlawful, unethical manner become the owners of huge property. Orissa as a state is not going to get any benefit from this.³⁰

The Real Price of Bauxite

Aluminium executives admit that getting bauxite at a cheap price is the starting point of value creation for their companies.³¹ The need for subsidies on electricity and other materials for producing aluminium has often been stressed (e.g. Graham 1982, Gitlitz 1993, Switkes 2005). Less so with the price of bauxite. Basically, if this cannot be kept low, the price of aluminium will rise.

The industry in India defines itself by increasing consumption. A policy shift took place in India from 1990/1991, just after the Bureau of Industrial Costs and Prices recommended keeping a check on aluminium consumption in India due to the high costs of electricity and environmental impacts (BICP 1988). A few years later, executives at INCAL conferences of the Aluminium Association of India (1998 and 2003), lamented the ‘dismally low level’ of consumption in India, which averaged 0.65 kg per capita per year, and aimed to increase output as fast as possible, towards the average of 25 kg consumption in ‘developed’ countries. A proliferation of aluminium foils and tetrapaks, use in construction, in cars and trucks, and in the arms industry, have recently boosted the consumption of aluminium in India, though the emphasis in new projects is on export, e.g in the huge Utkal/Hindalco and Vedanta/Sterlite factories going up in Orissa now. Nalco set the trend, starting to export over 50% of its output around the year 2000.

Orissa’s new refineries and smelters make no economic sense if these companies cannot obtain local bauxite cheaply. Since starting operation in 2007, Vedanta’s refinery in Lanjigarh has had to bring bauxite from Chhattisgarh and even Australia, and has claimed to be losing $100,000 a day due to the delay in getting clearance to mine Niyam Dongar (Times of India 2 March 2009).

There is no set price, let alone free market, for bauxite. Different companies get it for wildly different prices, and how much royalty and other taxes they pay varies greatly around the world. Nalco calculated its raising cost of bauxite in 2007 as 236/- rupees per tonne, of which 64/- is royalty and 172/- extracting cost. |Rs.236/- is about $6, less than half the world’s average. Compared with the price of bauxite, the price of commercial information about bauxite is costly indeed. A copy of CRU’s Analysis Report: Bauxite mining costs (2007) costs £9,950.

If a proper Cost Benefit Analysis was done of any bauxite project, conventional estimates of revenue and benefits in triggering employment and other industries need setting against ‘externalities’: if subsidies on electricity, water, infrastructure, transport etc were included in costs, the price of aluminium would have to rise exponentially. Costs of dams and coal mines would have to be included.

The Wuppertal Institute for Climate, Environment and Energy in Germany, which the authors visited in July 2006, calculates the material intensity of producing one tonne of aluminium at 85.38 tons of abiotic material (i.e. overburden, bauxite waste etc), 9.78 tonnes of air (i.e. basically GHG emissions), and a staggering 1,378.6 tonnes of water consumed (Ritthoff et al 2002 p.2002).

The externality cost of carbon emissions is calculated at $85 per ton by the Stern report, while producing a ton of aluminium is estimated as emitting between 5.6 and 20.6 tons of CO2, depending on whether a smelter uses coal or hydro-power (most in Orissa use both), which would give an externality cost of over $1,000 per ton of aluminium for these two factors alone.21 Also to be included in this calculation are SO2 and many other factory emissions, methane and other GHGs from reservoirs, and emissions from coal mining and captive power plants. What this does not include, and would be impossible to assess financially, is the effect of bauxite mining on mountains’ ecology and water regime, the loss of forests and their biodiversity, and the impacts on people whose environment is being rapidly impoverished to feed an escalating demand for aluminium consumption.

Yet in many ways, it is these non-economic costs that are the highest. The judgement in the Indian Supreme Court case, delivered on 8th August 2008, emphasised the idea of ‘striking a balance’ between environmental and economic needs through the concept of ‘sustainable development’. In particular, the Judges drew on the concept of ‘green accounting’, by which the Net Present Value (NPV) of forests can be calculated to determine compensation. This project was undertaken by a team from the Green Indian States Trust and TERI, financed in particular by Deutsche Bank (Gundimeda, Sukhdev et al 2005, 2006). Implementing the ‘polluter pays’ principle has introduced a new level of threat to India’s environment, by reducing natural resources to an artificial monetary value – often a gross underestimate – in effect subverting the principle into a licence to pollute. The judgement laid out a Rehabilitation Package, by which Vedanta, supplied from the mine by a Special Purpose Vehicle run by the Orissa Mining Corporation, Sterlite Industries (Vedanta’s subsidiary), and the Orissa Govt, would have to pay the forests’ NPV + ‘5% of profits before tax and interest from Lanjigarh project or rupees 10 crore whichever is higher’. Local reports showed that the first traffic to make much use of the new roads into Niyamgiri was the timber mafia. If Niyamgiri’s forests are being felled like this, what trust can be placed in authorities’ reforestation plans?

Net Present Value of forest or biodiversity becomes a formula that blurs the elementary distinction between primary forest and plantations. Lado Majhi, a Dongria of Lakhpadar village, put this point most powerfully at the Belamba Public Hearing on 25.4.09, where he was the first to speak:

Niyamgiri is our Mother. Our life depends on the mountain. Can you pay five lakhs for each tree? Our Sarkar [Govt] should not sell out to a foreign company. Even if everyone else accepts the project, we won’t allow mining on Niyamgiri.³²

In other words, biodiversity – especially in a forest on top of a mountain, protected as inviolate by local people – cannot be costed or compensated in financial terms. The GIST-Deutsche Bank enterprise of working out the NPV of forests becomes a pretext for selling them off. The Niyamgiri case makes this clear – not least because Deutsche Bank has been a prominent promoter of investment in Vedanta.

The basic waste of bauxite is red mud. In March 2008, Vedanta joined an international Red Mud Project, whose website reveals that despite use of red mud in bricks being banned in Australia after tests by the Health Department in 1983 found that radiation levels were unacceptably high, vast quantities are used to make bricks in China, while in India, 2.5 million tons of red mud were used for cement in 1998-9 alone.³³ We have seen, and photographed, red mud lakes leaching into streams at Muri refinery (Jharkhand) and at Korba (Chhattisgarh). Red Mud contamination is not only from caustic soda, but from at least 14 rare earths and 22 radio-active elements, all of which are present in bauxite as destabilised minerals, including uranium.

At least the Orissa State Pollution Control Board has pointed out Vedanta’s violations at Lanjigarh, which figured in the Norway government report blacklisting Sterlite/Vedanta (Council on Ethics, 2007). Residents of Chatrapura and other villagers have attested that the refinery regularly discharges highly toxic chemicals into the river, writing a letter to the OSPCB about this on 9.9.08. Many people and animals have developed body sores after bathing in the river, and at least two people have died, covered in sores. Meanwhile, residents of Bondhaguda and other villages close to the refinery and approach road are suffering from lung diseases. Yet, once again, in June 2009, Vedanta won a Golden Peacock award for excellence in its environmental record! ³⁴

In effect, with the closing of many refineries and smelters in ‘developed’ countries, aluminium production is being ‘outsourced’ to ‘developing’ countries such as India, where environmental and human rights legislation is circumvented on a regular basis. In March 1996, for example, R.C. Das, Chairman of the Orissa State Pollution Control Board (OSPCB), wrote a report recommending against any further bauxite mines, refineries or smelters in the state, having studied in detail the excessive pollution from existing plants (a refinery and two smelters), and knowing by experience the ease with which the companies involved avoid correcting the situation (Das 1996). For this, he was dismissed by the Orissa Government. The Global Reporting Initiative, used by Vedanta and promoted by the International Aluminium Institute and other bodies, was set up to avoid proper regulation, and facilitates a deception of figures.³⁵ For example, deaths in factories and on roads around them, is grossly under-reported, due to the system of sub-contracting. Vedanta’s annual reports have Sustainable Development reports attached, and each of the ‘big four’ London-based accountancy firms in turn have ‘verified’ these, based on the most superficial analysis.

The history of other countries’ experience of bauxite-based industrialisation is vital to understand forthcoming impacts in Eastern India. The exploitation at the heart of aluminium economics starts from the aluminium companies getting bauxite cheap. If the true costs of mining bauxite were taken into account, India’s bauxite would have to be sold for far more than it is now.

Jamaica’s experience is relevant here. Michael Manley’s bauxite levy in 1974 increased the price of Bauxite immediately by about $10, from $8 to $19.94. But this feat has never been repeated, and savage reprisals from the US exemplify the influence that keeps the price of bauxite low, in India and worldwide. Jamaica also exemplifies the heavy environmental and social costs of bauxite mines. Recognition of these costs is behind a campaign to save Jamaica’s Cockpit Mountains from bauxite mining – a movement analogous to the movements in India.³⁶

Brazil’s wealth in bauxite, water, forest, coal and iron is similar to Orissa’s, though on a vaster scale. The way Japanese companies and banks sold the Tucurui dam in a scheme that impoverished the state’s electricity company has parallels with the privatisation of Orissa’s electricity companies and their complex debt-relationship with aluminium companies, with villages around e.g. the Indravati reservoir lacking the electricity they were promised.³⁷ New dams and smelters in Iceland and Trinidad have many parallels with Orissa, including circumvention of laws protecting the environment, and harsh repression of community movements against these projects.³⁸

Of all the world’s bauxite deposits, those in India probably have the greatest population density around them – a largely tribal/indigenous population, whose spiritual bond with their mountains is simultaneously economic, since their livelihood and cultural survival depends upon them. What this means is that the consequences of mining bauxite in Orissa and Andhra are likely to involve more upheaval than anywhere else where bauxite has been mined.

Vietnam’s tribal highlanders face a similar and simultaneous threat as those in Orissa and Andhra Pradesh. The country claims to have 8 billion tons of bauxite (even more than India), lying on mountains in the Central Highlands, where Chalco and other companies are currently trying to set up mines, despite protests by a wide range of leading citizens, who point out the threat to the Hill Tribes and to the long-term health of the country’s environment and economy, including tea and coffee plantations, lakes and rivers.³⁹

Another incalculable cost is the escalating resource war. Maoists attacked Nalco’s Panchpat Mali mine on 12th April 2009. They numbered about 100 and killed ten security staff hostage, losing four themselves, after which production dropped from 14,000 tonnes per day to 9,000, and security has increased.⁴⁰ We have seen how Hindalco’s move towards mining Mali Parbat has been opposed by the tribal organisation CMAS, which was supported by Maoists, and has therefore been targeted by an incursion of at least 4,000 armed police, and numerous arrests after the police firing that killed two members in November 2009. The situation in Dantewara district of Chhattisgarh, where Tata and Essar are trying to set up steel plants based on new iron ore mines, is far worse, with an estimated 300,000 tribal refugees from over 600 villages burnt by the pro-mining tribal militia, Salwa Judum, armed by the police to fight against Maoists. There have been several well-reported atrocities by Maoists, as against hundreds of unreported atrocities by Salwa Judum and the security forces. ‘Peace Committees’ are similar militias springing up in Orissa on the Salwa Judum model.⁴¹

The ‘Operation Green Hunt’ war currently escalating across Eastern-Central India against the Maoist insurgency has many features of a resource war, since the region’s concentration of tribal people, its forests and minerals, and its Maoist strongholds are largely coterminous. The violence in Kandhamal district, when about 50,000 Christians were driven from their homes, also has a hidden connection with bauxite deposits on mountains in the south of the district known as the Ushabali plateau: this was announced in July 2008, just six weeks before the Swami Saraswati’s murder by Maoists. In the aftermath of this violence, there have been calls to build a railway to the district, whose real purpose is clearly to facilitate extraction of this bauxite.⁴² Increasingly, non-violent movements against factories and displacement are being analysed as Maoist-instigated, even when they are not.⁴³

And how does one calculate the cost of corruption? During 2009-2010 Orissa was rocked by mining scams, mostly related to iron ore mines in the north, but bribes seem to be a regular feature of mining deals, and the effects of corruption are visible at every levels around a project.⁴⁴

The metal factories going up in Orissa now are raising India’s GHG emissions exponentially. When Indian or Chinese business or government representatives argue that as ‘developing countries’ they have a right to increase their carbon emissions, this suits business interests in London and other capitals. The picture painted in Anderson’s 1951 essay still holds: the environmental costs are too high, and it makes sense for the most powerful countries to outsource most aluminium production. But side by side with this imperative is the strategic need for aluminium. As Anderson says, no war can be waged or won without consuming and destroying vast quantities. The metal has had a central place in the military-industrial complex since the First and Second World Wars (Padel & Das 2006).

Aluminium’s claims to be a ‘green metal’ do not add up (Mathias 2003). Bauxite reclamation, where we have seen it in Orissa and Chhattisgarh, consists of little more than eucalyptus or jatropha plantations. For tribal people in villagers near Lanjigarh, the heating of the climate and decline in rainfall from the new refinery and its captive coal-fired power plant is something obvious. Knowledge, here, is a continuum still rooted in the earth – a different basis of knowledge, that the modern mind struggles to comprehend (Padel 1998). The importance of intact mountains and forests for the earth’s climate is something tribal people ‘know’ because they know their environment thanks to uncounted generations of ancestors who lived and worked in this landscape.

Notes
1.Gopinath Mohanty: Sroto Swati 2000 (his autobiography, in Oriya) Part III p.324.
2.FT 5 November 2003, and 3 November 2004, Samantara 2007, and The real face of Vedanta documentary www.youtube.com).
3.Parliament of India: Rajya Sabha nos. 66 and 80 (March and December 2002). The UNDP gave Rs 17 crore and the GoI, 19 crore. Among JNARDDC’s first functions was an international meeting on bauxite (Bauxmet) in 1998, and studies of bauxite from several mountains in Orissa.
4.Articles in Economic and Political Weekly: Rajagopalam et al 1981, Subramanian 1982. This section of our paper summarises arguments presented in our forthcoming book: Out of this Earth: East India Adivasis and the Aluminium Cartel (2010)
5.Viegas (1992) summarises the outline of this dam’s history – though not its connection with the smelter. The violence is referred to in an article ‘Sarkar Javaab Diantu’ (‘Government, explain’) in Dharitri newspaper by B. Krishna Dhalo, 23 October 2007.
6.Madhu Kudaisya (2003), pp. 334–35; Gita Piramal 1996.
7.Mohanty et al 2004, p. 33, in an article by Golak Bihari Nath. Samarendra visited this man’s family in 2005, shortly before he was due for release.
8.This SC Monitoring Committee report is item 34 in Environment Protection Group Orissa’s website freewebs.com). Newspaper reports on the toxic spill of 31.12.2000 in Indian Express and Asian Age, 1–11 January 2001.
9.Bahuguna 1986; Onlooker, 1–15 July 1986: ‘Adivasis up in Arms to Save Nature’; PUDR 1986; and Meena Menon in The Hindu Survey of the Environment (2001), p. 148. On Lower Suktel: Dams, Rivers and People, January 2005, p. 9–10, Das 2005.
10.Extensive coverage in Barney et al 2000, PUDR May 2005, Das 2005, Goodland 2007, and our forthcoming book, Out of This Earth. On Alcan’s withdrawal from Utkal: http://www.corpwatch.org/article.php?id=…
11.Caufield 1998 p.227; see also a documentary film about this dam: Sahu 2009.
12. Amnesty International index ASA 20/021/2009, 2 December 2009.
13.G. D. Birla, Towards Swadeshi: Wide-ranging Correspondence with Gandhiji, ed. V. B. Kulkarni, Bombay: Bharatiya Vidya Bhavan, 1980, p. 118, and Karunakar Supkar 2007, pp. 28–32.
14.PUCL May 2003, Padel and Das 2004, Das 2004.
15.E.g. Sukru Majhi’s death on 27.3.05, and the Assistant Sub-Inspector of Lanjigarh police station, killed on his motorbike by an alumina lorry on the road to Lanjigarh (Sambad 24.1.08 p.1). Many deaths have been mentioned in the local Oriya press, but very few in Vedanta’s Annual Reports (2004-8), due to the system of subcontracting, which allows the company to shrug off responsibility and record a much lower number than actually take place. Vedanta’s PR companies Finsbury and CO3 have carried on a battle against Survival International and others (see http://www.pressreleasepoint.com/dongria…, and a Survival website ‘Behind the lies’, exposing Vedanta’s PR offensive at www.survival-international.org). On villagers thwarting Vedanta’s attempts to take vehicles up the mountain to start setting up the mine from January 2009, see Action Aid International-India www.minesandcommunities.org).
16.http://epgorissa.blogspot.com/2009/07/protests-against-vedantas-mining-of.html, www.youtube.com Recorded in Proceedings of the Public Hearing for Vedanta Aluminium Ltd held on 25.4.2009 for expansion of refinery capacity from 1 millions tons per year to 6mtpy, held at Belamba village under P.C.Rauta, Regional officer of the Orissa State Pollution Control Board, Rayagada, and Chudamani Seth, Additional District Magistrate, Kalahandi.
17.‘Vedanta flouts rules in Orissa, central government wants to know why, http://www.indiaenews.com/business/20091…; and ‘Vedanta flouted Centre’s norms, http://www.hindustantimes.com/india-news…
18.Council on Ethics 2007, IA no.2134 of 2007 on Writ Petition no.202 of 1995, of petitioner T. N. Godavaraman Thirumulpad (petitioner) versus Union of India and others (respondents), in the matter of Sterlite Industries (applicant), at the Forest Bench of the Supreme Court of India, 8.8.08.
19.Articles in New Indian Express, Bhubaneswar, from November 2007: ‘No Hirakud water for industries’, 8.11.07 front page, ‘Industries eye other dams too’ 26.11.07 front page (‘Currently 13 industries are drawing water from Hirakud and another 20 are in agreement with the Government to do the same’), ‘Naveen’s water woes overflowing’, 27.11.07 p.3, ‘Farmers reject Naveen largesse’, 28.11.08 p.6, ‘Industries default on water cess’ 28.12.2007 p.6. Also POKSSS 2008.
20.Fernandes 2006 pp.110-111.
21.Mathur 2006 p.2.
22.David Pearce quoted by Cernea in Mathur ed. 2006 p.22.
23.Cernea 2006.
24.Moody 2007 p.127, Russell Means 1982.
25.Padel 2000 Ch.8.
26.Mathur 2006 pp.48 & 69-70.
27.Cernea 2006 pp.26-28.
28.WB OED Report no.17538, cited in Mathur 2006 pp.61-2.
29.Russell 1836, Elphinstone 1841, cited in Padel 1995 p.179.
30.Kishenji was a great political leader of Orissa and India. He wrote these unpublished words shortly before he passed away in 2005.
31.Rolf Marstrander’s paper in INCAL 2003 (Aluminium Association of India).
32.Proceedings of the Public Hearing for Vedanta Aluminium Ltd held on 25.4.2009 at Belamba, and www.youtube.com
33.www.redmud.org, consulted on 15 November 2008, under ‘Red Mud, Industrial Uses’. Sea dumping seems to have been a general practice until recently, and took place in Greece’s sensitive Gulf of Corinth. The main researchers profiled on this website include five from India, four from Greece and one from China. One of the Indian scientists, Harish K. Chandwani had helped set up Korba and the JNARRDC.
34.Ashutosh Mishra in Down to Earth (17 November 2008), ‘Extracting a cost: Vedanta’s refinery pollutes river, sickens people in Orissa’,  http://www.downtoearth.org.in/full6.asp?…, and OSPCB reports to the Central Pollution Control Board in Delhi, 1995 and 2002.
35.Moody 2007 pp.16-19, 156-60.
36.Blum 2003 p.263. On Jamaica’s hike of royalty see Bonnie Campbell 1995 p.199, and Jamaica Information Service ( jis at jis.gov.jm) 14 March 06; also Jamaican Bauxite Environmental Organisation at www.jbeo.com; Switkes 2005, p. 11; John Maxwell (18 February 2007), ‘Is Bauxite Worth More than People?’ ( jankunnu at gmail.com, 2007); Oli Munion, ‘Corporate Crimes in the Carribean: How Jamaica and Iceland Face a Common Enemy,’ in Voices of the Wilderness, Saving Iceland www.savingiceland.org), summer 2008.
37.On Brazil: Gitlitz 1993; Switkes 2005; Barham, Bunker and O’Hearn 1995; Bunker and Ciccantell 2005 p. 67 ff. On Orissa’s electricity reforms: Prayas et al 2003.
38.On Iceland: Rose 2008, Sigurðardóttir (forthcoming). On Trinidad: Kublal-Singh 2008, and ‘Trinidad: Anti-Smelter Camp may be a Permanent Fixture’, 31 October 2008 (Peter Richards at http://ipsnews.net/news.asp?idnews=35314).
39.Sergei Blagov in Asia Times, 24 May 2006, at www.atimes.com and 27 October 2008 at www.tradefinancemagazine.com 10 April 2009 ‘About 1,000 Vietnam Catholics hold anti-government vigil’ Brisbane Times 27 April 09; http://www.thefirstpost.co.uk/47848,news…; Lam 2 June 2009; Mydans 29 June 2009; John C. Wu on Vietnam, in US Department of the Interior for US Geological Survey, June 2007 at the http://minerals.usgs.gov/minerals/pubs/c…, and vietnamnews.vnagency.com.vn/showarticle.php?num=01IND080406.
40.‘Nalco’s Orissa mine production drops after Maoist attack’, Thaindian News 5.5.2009 at http://www.thaindian.com/newsportal/busi…
41. Articles by Javed Iqbal in The New Indian Express: ‘Operation Tribal Hunt?’ 15.11.09, and ‘State-sponsored violence at Narayanpatna’ 24.12.09; PUDR April 2006: Where the State makes War on its Own People ( www.pudr.org).
42.The Hindu 12.7.08 http://www.hinduonnet.com/businessline/b…). Railway suggestion: http://www.orissadiary.com/ShowOriyaColu… (5th January 2009)
43.Sudha Ramachandaram: ‘India drives tribals into Maoist arms’, 16.1.2010 at http://www.atimes.com/atimes/South_Asia/…
44.Pravin Patel: ‘Mining Scam of Orissa: a tip of the iceberg’, 21.9.09, http://www.orissadiary.com/ShowOriyaColu…

References
Agbemabiese, Lawrence & John Byrne 2005. ‘Commodification of Ghana’s Volta River: An Example of Ellul’s Autonomy of Technique’ Bulletin of Science, Technology & Society, Vol. 25, No. 1, 17-25 (2005)

Anderson, Dewey 1951. Aluminum for Defence and Prosperity. Washington: US Public Affairs Institute.

Bahuguna, Sunderlal 1986. ‘A voice from Gandhamardan,’ in The Sunday Statesman 27.4.1986.

Barham, Bradford, Stephen G. Bunker & Denis O’Hearn eds. 1995. States, Firms and Raw Materials: The World Economy and the Ecology of Aluminum. Madison: University of Wisconsin Press.

Barney, I., A.B.Ota, B.Pandey & R.Puranik 2000. In Focus: Engaging Stakeholders.   Lessons from Three Eastern India Business Case Studies. Swansea: Centre for    Development Studies and London: Resource Centre for the Social Dimensions of Business Practice. (available at International Business Leaders Forum website: www.iblf.org)

Bidwai, Praful 2001. ‘Balco’s privatization,’ in Alternative Economic Survey 2000-2001. 2nd Generation Reforms: Delusions of Development. By Alternative Survey Group. Delhi: Rainbow Publishers, Azadi Bachao Andolan & Lokayan.

Blum, William 2003. Killing Hope: US Militarism and CIA Interventions since World War Two. London: Zed.

Brown, Martin, Alfredo Dammert, Alexander Meeraus, Ardy Stoutjesijk 1983. Worldwide Investment Analysis: The Case of Aluminium. Washington DC: WB, Staff Working Paper no.603.

Bunker, Stephen & Paul S. Ciccantell 2005, Globalization and the Race for
Resources. Baltimore: John Hopkins UP.

Bureau of Industrial Costs and Prices, Dec.1988. Energy Audit of Aluminium Industry.   Delhi: GoI.

Burman, Debyajoti 1950. Mystery of Birla House. Calcutta: Jugabari Sahitya Chakra.

Campbell, Bonnie K. 1995. ‘The impact of the restructuring of the aluminium industry in the 1980s on productive activities in Guinea,’ in Barham et al pp.179-214.

Campbell, Major-General John 1864. A personal narrative of 13 years’ service among the wild tribes of Khondistan, for the suppression of human sacrifice. London.

Caufield, Catherine 1998. The World Bank and the poverty of nations. London: Pan.

Central Empowered Committee 21 Sept. 2005. Report in IA no.1324 regarding the alumina plant being set up by M/S Vedanta Alumina Ltd at Lanjigarh in Kalahandi District, Orissa. Delhi: GoI.

Central Mine Planning & Design Institute August 2006. Interim Report on the Hydrogeological Investigations, Lanjigarh Bauxite Mines, submitted to M/s OMC Ltd, Bhuaneswar. Ranchi: CMDPI (a subsidiary of coal India Ltd).

Centre for Science and Environment 2008. Rich lands, poor people: Is ‘Sustainable’ Mining Possible? Delhi: CSE.

Cernea, Michael M. 2000. ‘Impoverishment Risks and Reconstruction: a model for population displacement and Resettlement,’ Chapter 1 of Cernea and Chris McDowell eds: Risks and Reconstruction: Experiences of Resettlers and Refugees. Washington: World Bank.

——–   2006. ‘Resettlement Management: Denying or confronting risks,’ in Mathur ed. 2006.

Council on Ethics, Norwegian Govt Pension Fund May 2007. Report on Vedanta Resources plc. Oslo: Ministry of Finance, available at www.freewebs.com

Das, Amarendra & Samarendra 2005. Wira Pdika or Matiro Poko Company Loko [Earth Worm, Company Man, in Kui/Oriya with English subtitles], available from sdasorisa at hotmail.co.uk

Das, Samarendra 2004. ‘Bulldozed out of their own land.’ Tehelka, 21.2.2004. Delhi.

Das, R.C., Chairman. March 1996. Recommendation for environmentally sound growth of aluminium industry in Orissa. Bhubaneswar: OSPCB.

Fauset, Claire 2006. What’s wrong with CSR? Corporate Watch Report, Oxford.

Fernandes, Walter 2006. ‘Liberalization and Development-induced Displacement,’ in Social Change vol.36 no.1, pp.109-123.

Fox, C.S. 1932: Bauxite and aluminous laterite. London: Technical Press.

Girvan, Norman 1967. The Caribbean Bauxite Industry: The Scope for
Rationalization and Regional Collaboration. Mona: Institute of Social and Economic Research, (I.S.E.R.), University of the West Indies.
_____ 1971. Foreign Capital and Economic Underdevelopment in Jamaica.
Institute of Social and Economic Resources, Univ. of Jamaica.
_____ 1976. Corporate Imperialism: Transnational Corporations and Economic Nationalism in the Third World. London: Monthly Review Press.

Gitlitz, Jennifer S. 1993. The relationship between primary aluminium production and the damming of world rivers. Berkeley: International Rivers Network, Working Paper 2.

Goodland, Robert March 2007. ‘Utkal Bauxite and Alumina Project: Human Rights and Environmental Impact,’ Washington, ISBN 978-0-9792179-0-6.

Govt. of Orissa, Finance Dept. 2001: Fiscal and Governance Reforms.

Graham, Ronald 1982. The aluminium industry and the third world. London: Zed.

Gundimeda, H.S. Sanyal, R. Sinha & P. Sukhdev 2005. Green Accounting for Indian States Projects, Monograph 1. The Value of Timber, Carbon, Fuelwood, and Non-Timber Forest Products in India’s Forests. Delhi: TERI Press for Green Indian States Trust (GIST). Sponsored by Centurion Bank of Punjab, GIST, and Deutsche Bank.
_____ 2006. Green Accounting… Monograph 4.The Value of Biodiversity in India’s Forests. Delhi: TERI for GIST.

Haberl, Helmut, Fridolin Krausmann, Simone Gingrich 2006. ‘Ecological
embeddedness of the Economy: a Sociological Perspective on Humanity’s Economic Activities 1700-2000.’ Economic and Political Weekly 25, Nov. pp.4896-4904.

Holloway, S.K. 1988. The Aluminium Multinationals and the Bauxite Cartel. NY: St. Martin’s Press.

Indian People’s Tribunal on Environment and Human Rights Oct. 2006. Kashipur: An Enquiry into Mining and Human Rights Violations in Kashipur, Orissa. Mumbai: IPT www.iptindia.org). Written & ed. by Shravant Reddy, Tribunal led by S.N.Bhargava (retd.), Former Chief Justice, Sikkim High Court.

Jojo, Bipin K. 2002. ‘Political economy of large dam projects: a case study of Upper Kolab Project in Koraput District, Orissa’, in S.Thakaran ed. The nowhere people: Responses to Internally DisplacedPersons. Bangalore: Books for Change.

Krater, Jaap 26 October 2008. ‘More power plants may cause more economic instability’, at http://savingiceland.puscii.nl/?p=3800&a…

Kublal-Singh, Wayne 2009. Ital Revolution. Trinidad & Tobago: Just World Publications.

Kudaisya, Medha M. 2003. The Life and Times of G.D. Birla. Delhi: OUP.
Lam, Tran Dinh Thanh 2 June 2009. ‘Vietnam farmers fall to bauxite bulldozers.’ Asia Times at http://www.atimes.com/atimes/Southeast_A…

McCully, Patrick 1998. Silenced rivers: The ecology and politics of large dams. Hyderabad: Orient Longmans [London: Zed, 1996].

Mahapatra, Richard 1999. ‘Confrontation Mine’, in Down To Earth, Delhi 15 April.

Mahariya, Baba 2001. ‘Development: at whose cost? An Adivasi on dislocation and
Displacement’, in K.C.Yadav ed. Beyond the mud walls: Indian social realities. Delhi: Hope India.

Martinez-Alier, Joan 2002. The Environmentalism of the Poor: A Study of Ecological Conflicts and Valuation. Cheltenham: Edward Elgar.
Mathias, Alex 2003. ‘Greening aluminium,’ in The Carbon Challenge journal, London.

Mathur, H.M. 2006. ‘Resettling People Displaced by Development Projects: Some Critical Management Issues,’ in Social Change vol.36 no.1, pp.36-86.
_____ ed. 2006. Managing Resettlement in India: Approaches, Issues, Experiences. Delhi: OUP.

Means, Russell 1982. ‘On a New Consciousness of the American Indian Movement,’ Lokayan Bulletin no 7, Delhi [a partial transcript of a speech given at Pine ridge reservation, South Dakota, July 1980].

Monbiot, George 2006. Heat: How to stop the planet burning. London: Allen Lane.

Moody, Roger 2007. Rocks and Hard Places: The Globalization of Mining. London: Zed.

Muthayya, B.C. et al. 1984. Rehabilitation of displaced villages: A study in Nalco complex, Damanjodi, Koraput District, Orissa. Hyderabad: National Institute of Rural Development.

Mydans, Seth 29 June 2009. ‘War Hero in Vietnam forces Government to listen’. New York Times.

Padel, Felix 1998. ‘Forest Knowledge: Tribal people, their environment and the structure of power’ in Nature and the Orient: The environmental history of South and Southeast Asia, ed. Richard H.Grove, Vinita Damodaran & Satpal Sangwan. Delhi: OUP.
_____ January 2010. Sacrificing People; Invasions of a Tribal Landscape. Delhi Orient Black Swan. (first published 1995 as The sacrifice of human being: British rule and the Konds of Orissa)
_____ & Samarendra Das 2004. ‘Exodus part two: Lanjigarh’, in Tehelka 13.3.2004. Delhi.
_____ 2006. ‘Double Death: Aluminium’s Links with Genocide,’ Social Scientist no.394-5, pp.55-81. Delhi.
_____ 2008. ‘Cultural Genocide: the Real Impact of Development-Induced
Displacement,’ in H.M.Mathur ed. India: Social Development Report 2008. Development and Displacement, pp.103-115. Delhi: OUP for Council for Social Development.
_____ Dec. 2008. ‘Orissa’s highland clearances: The reality gap in R & R,’ in Social Change vol.38 no.4, pp.576-608.
_____ 2010. Out of This Earth: East India Adivasis and the Aluminium Cartel. Delhi: Orient Black Swan.

Pandey, Balaji 1998. Depriving the underprivelaged for development. Bhubaneswar: Institute for Socio-Economic Development.

Paschim Orissa Krishak Sangathan Samanbaya Samiti Feb. 2008. Chashiro Rekha. [Farmers’ Line]. Sambalpur: POKSSS.

People’s Union of Civil Liberties (PUCL) 16 May 2003. A Fact-finding Report on physical attack on the villagers agitating against their displacement due to the proposed Sterlite Alumina Project in Lanjigarh Block of Kalahandi district. Bhubaneswar: PUCL, Rayagada & Bhubaneswar units, www.indymedia.org:8080

People’s Union of Democratic Rights (PUDR) 1986. ‘Report on Gandhamardan Mines,’ in Mainstream 8 Nov. pp.30-34.
_____ May 2005. Investigation into the Impact on People due to the Alumina Projects in South Orissa. Bhubaneswar.

Piramal, Gita 1996. Business Maharajas. Delhi: Viking.

Prayas & C.S.Venkata Ratnam 2003. Indian Power Sector Reforms: Issues and Challenges for Electricity Employees. Delhi: Public Service International.

Rajagopalam, S., Srinivasan, K., Vyasalu, V. 1981 ‘The Orissa aluminium complex. Points towards a debate.’ Economic & Political Weekly, Dec. 5, p.2005-14.

Rao, M.G. & P.K. Raman October 1979. East Coast Bauxite Deposits of India. Report by the Geological Survey of India. Calcutta: GSI.

Rich, Bruce 1994. Mortgaging the Earth: the World Bank, Environmental
Impoverishment and the Crisis of Development. London: Earthscan.

Ritthoff, Michael, Holger Rohn & Christa Liedtke 2002. Calculating MIPS:
Resource productivity of products and services. Wuppertal spezial 27e. Germany: Wuppertal Institute for Climate, Environment and Energy.

Roberts, J. & D.McLean 1976. Mapoon – Book Three: The Cape York mining
Companies and the Native Peoples. Victoria: International Development    Action.

Rose, Miriam 2008. ‘The Icelandic energy dilemma and how to help: a masterplan to exploit Europe’s greatest wilderness,’ in Saving Iceland www.savingiceland.org): Voices of the Wilderness, summer 2008.

Sahu, Subrat 2009. DAMaged! [about the Upper Indravati reservoir], available from subrat69 at gmail.com

Samantara , Prafulla July 2006. Niyamgiri: Waiting for Justice. Berhampur: Lok Shakti Abhiyan (Orissa unit).

Saroj Jan. 2008. ‘Kashipur hahakar o udasin sarkaro’ [Kashipur’s desperation and apathy], in Bikolpo Bichar, July-Dec.2007 pp.91-100. Boroghoro.

Sigurðardóttir, R. (forthcoming) Energy good and green. In: Bæ bæ Ísland (bye bye Iceland), to be published by the University of Akureyri and Akureyri Art Museum.

Simms, Andrew 2005. Ecological Debt: the health of the planet and the wealth of nations. London: Pluto.

Stiglitz, Joseph 2002. Globalization and its Discontents. London: Penguin.

Subramanyam, K.V. 1982. ‘Orissa Aluminium Complex,’ EPW 30 Jan.

Switkes, Glen August 2005. Foiling the aluminium industry: a toolkit for
communities, activists, consumers and workers. Berkeley: International Rivers Network.

Viegas, Philip 1992. ‘The Hirakud Dam Oustees: Thirty Years After,’ in Enakshi Ganguly Thukral ed. Big Dams, displaced people: Rivers of sorrow,rivers of change. Delhi: Sage.
Walker, T.L. 1902. ‘The Geology of Kalahandi State, Central Provinces,’ Memoirs of The Geological Survey of India, vol.XXXIII part III pp.1-22. Calcutta: GSI.

Samarendra Das, from Orissa, studied maths and computer science at Berhampur and Indore Universities. He is a film-maker and political activist with the Samajvadi Jan Parishad (Socialist People’s Council). His film about the aluminium industry in Orissa (Das 2005) gives an Adivasi perspective. Felix Padel is a freelance social anthropologist who obtained his doctorate from Oxford University, after studying also at the Delhi School of Economics. Padel’s first book analysed British rule over the Konds in Orissa (1995). Their book Out of This Earth: East India Adivasis & the Aluminium Cartel is published in 2010 by Orient Blackswan.
On Saving Iceland’s website you can also read two articles by Samarendra Das written in conjunction with Felix Padel: Agya, What Do You Mean by Development? and Double Death – Aluminum’s Link with Genocide and a press release on their book: Out of This Earth: East India Adivasis and the Aluminium Cartel

Open Meeting With Samarendra Das in Akureyri

solskin — Sat, 14 Aug 2010 12:43:18 +0000

This Sunday, August 15th at 20:00, an open meeting with Indian author, filmmaker and activist Samarendra Das, will take place in the Akureyri Academia, Þórunnarstræti 99, Akureyri. The meeting is a part of Samarendra’s second visit to Iceland, now presenting his and Felix Padel’s recently published book, Out of This Earth: East India Adivasis and the Aluminium Cartel. For the last decade, Samarendra and Felix have been researching the global aluminium industry and working with the Dongria Kondh tribes of Odisha, India, who are struggling against the British mining company Vedanta, that wants to mine bauxite there for aluminium production.

Samarendra will be in Iceland from August 14th to 21st and will have more talks and presentations during his stay. This Wednesday, August 18th, he will have a talk in the Reykjavík Academia, Hringbraut 121 at 20:00. More talks will be announced soon.

Click here for a full-length press release about his visit and the book.

Samarendra Das in Iceland – Lectures and Presentations on the “Black Book” of the Aluminum Industry

solskin — Sat, 14 Aug 2010 09:44:42 +0000

The Indian author, filmmaker and activist, Samarendra Das, will be in Iceland from August 14th to 21st. This is the second time that he comes here in collaboration with the environmental movement Saving Iceland. The occasion this time is the recent publishing of his and Felix Padel’s book, Out of This Earth: East India Adivasis and the Aluminium Cartel, which is published by Orient Black Swan and could be refered to as the “black book” of the aluminium industry. Samarendra will have a talk and presentation on his book, in the Reykjavík Academia, Hringbraut 121, on Wednesday August 18th at 20:00. More talks will take place in other place around the country while Samarendra is here and will be advertised later.

For the last decade, Samarendra has been involved with the struggle of the Dongria Kondh tribe in Odisha, India, against the British mining enterprise Vedanta, which plans to mine bauxite for aluminium production on the tribes’ lands – the Niyamgiri hills. The struggle has gained strength lately and for example, many official parties have sold their shares in Vedanta on the grounds that the company does not live up to expected demands about respect to human rights and local communities. Samarendra’s part in this can not be undermined, but he has written hundreds of articles, published and edited books, and made documentaries about the struggle and related issues. The new book, Out of This Earth, can be called the “black book” of the aluminium industry, since it addresses all the dark sides of the industry. In a press release from the publisher, Orient Black Swan, this says e.g. about the book:

“Aluminium is a metal we take for granted in hundreds of artefacts. But what do we understand about its real costs? This book traces a hidden history, coming alive through hundreds of voices and stories, of how one country after another swallowed promises of prosperity, and plunged into a cycle of exploitation and unrepayable debt. What is the link between the massive meltdown of Iceland’s banks, and the promotion of dams and smelters? Between the mafia-style looting of Russia’s assets and the rise to power of a succession of aluminium barons? Why did the US set a limit during the 1950s-60s and start to outsource aluminium factories to other, poorer countries, such as Ghana, Guinea, Jamaica, India?”

In the book, Samarendra and Felix discuss how industries like the aluminium industry are driven by an international cartel that fuses mining companies, investment bankers, government deals, metals traders and arms manufacturers. Their input into the discourse here in Iceland comes at the most needed time, now the plan still seems to by to build more aluminium smelters and the discussion about the selling of geothermal energy company H.S. Orka to the Canadian Magma Energy – a company that has its roots in metal mining in South America – seems to be reaching its climax.

This is not the first time that Samarendra comes to Iceland. He was here in the summer of 2008, when Saving Iceland’s resistance camp took place in Hellisheiði, where Reykjavík Energy (O.R.) is enlarging its geothermal power plant. That summer Samarendra had a well attended talk in the Reykjavík Academia, along with Andri Snær Magnason, the author of the book and documentary, Dreamland. After the talk it seemed like all of a sudden a discussion about the global context of aluminium production appeared in Icelandic society. And finally the biggest Icelandic media talked about bauxite mining in context without aluminum production of this country.

This is the third time that Saving Iceland organizes visits and talks of foreign guests here in Iceland. In the summer of 2007, an international conference called The Global Consequences of Heavy Industry and Large Dams took place in Ölfus, South Iceland. There, people from five continents came together and shared their stories of the environmental and social impacts of energy and aluminium production.

Like said before Samarendra will have more talks while he is in the country, which will be advertised later. We encourage medias to come to the talk on Wednesday, in Reykjavík Academia, as well as interviewing Samarendra – about the book, aluminium industry and the struggle of India’s tribal people. Those who want to talk to him are asked to contact Saving Iceland through this email: savingiceland at riseup.net.

___________________________________________________

The whole press release about the book can be seen here: Out of This Earth: East India Adivasis and the Aluminium Cartel

Read a recent article by Miriam Rose, about the struggle of the Dongria Kondh tribe: The Suffering of the Humble.. and Our Complicity

Read two article by Samarendra Das and Felix Padel: Agya, What Do You Mean by Development? and Double Death – Aluminum’s Link with Genocide