A UK registered
mining company failed to comply with OECD standards for operating
overseas when it did not consult an indigenous group on the
construction of a bauxite mine in India, a UK Government
examination has found.
Vedanta Resources plc is a UK-registered mining company operating
directly or through subsidiaries in India, Zambia and Australia.
Vedanta’s activities focus on aluminium, copper, zinc, lead and
iron mining. The company is listed on the FTSE 100.
The Government’s examination found that Vedanta acted
inconsistently with the OECD Guidelines for Multinational
Enterprises by failing to put in place an adequate and timely
consultation mechanism fully to engage the indigenous group
Dongria Kondh about the construction of a bauxite mine in the
Niyamgiri Hills, Orissa, India.
Trade, Investment and Small Business Minister, Lord Davies, said:
“The Government promotes responsible business practices and
adherence to internationally recognised standards.
“Clearly, mining can have an impact on those living nearby so it
is essential that UK registered companies maintain an open
dialogue with local communities, including indigenous groups,
affected by their activities and put adequate means of
consultation in place”.
A complaint under the Guidelines against Vedanta was made by
Survival International on 19 December 2008, triggering the start
of the complaint procedure by the UK National Contact Point (NCP)
for the OECD Guidelines.
The UK NCP’s Final Statement on the complaint made two recommendations:
Vedanta should immediately and adequately engage with the
Dongria Kondh, on the construction of the bauxite mine. Vedanta
should include a human and indigenous rights impact assessment in
its project management process, paying particular attention to the
creation of an adequate consultation process, prior to the
finalisation and execution of a project, with indigenous groups
potentially affected by the company’s activities.
Notes to Editors
1. The UK National Contact Point’s Final Statement on the case is
published at www.bis.gov.uk/nationalcontactpoint.
2. The OECD Guidelines for Multinational Enterprises set out
standards that adhering states expect business to apply, wherever
they are trading and operating overseas. The Guidelines cover a
broad range of issues in business ethics including industrial
relations, the environment, corruption and human rights.
3. The UK National Contact Point (UK NCP), part of the Department
for Business, Innovation and Skills, initially aims to bring
parties together to mediate a solution to complaints brought
against UK registered multinationals or foreign multinationals
operating in the UK. It is only if mediation fails that the UK NCP
fully examines the allegations contained in the complaint. If it
considers that a company has not met the requirements of the
Guidelines, the UK NCP will issue a statement detailing this
decision and making recommendations on how the firm can come into
line with the Guidelines in the future.
4. On 19 December 2008, Survival International raised a
number of concerns to the UK NCP in relation to the planned
construction of an open pit bauxite mine by Vedanta and its
subsidiaries in the Niyamgiri Hills situated in the State of
Orissa (India). In particular, Survival International alleged
that Vedanta had failed to consult with an indigenous group
affected by its operations, the Dongria Kondh, who live within 4
to 5 km from the mine but revere as sacred the area on which the
mine is being built, and depend for their livelihood on the area
affected by the mine’s operations.
5. Survival International also claimed that Vedanta, by allegedly
failing to consult the Dongria Kondh, has breached India’s
international commitments under the UN International Covenant on
Civil and Political Rights, the UN Convention on the Elimination
of All Forms of Racial Discrimination, the Convention on
Biological Diversity, and the UN Declaration on the Rights of
Indigenous People.
6. The OECD Guidelines are not legally enforceable on businesses,
but all OECD members are committed to raising awareness of the
Guidelines and implementing the Guidelines’ complaint procedur
Department for Business, Innovation & Skills
The Department for Business, Innovation and Skills (BIS) is
building a dynamic and competitive UK economy by: creating the
conditions for business success; promoting innovation, enterprise
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Contacts:
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Ben Lloyd
Phone: 020 7215 5974
Ben.Lloyd@bis.gsi.gov.uk