In case anyone was ever in doubt, the importance of managing business ethics and respecting human rights was highlighted again recently by the Vedanta/India case. Mining company Vedanta has suffered extreme losses in company shares and reams of negative press following the news that its controversial plans to mine bauxite were rejected by India’s environment ministry. This decision was made following an inquiry which concluded that the mine, planned to be built on sacred tribal land in India, would destroy the way of life for the Kutia and Dongria Kondh tribes. These tribes are hunter gatherers, living off the land, dependent on the forest and its natural resources for their survival.
Pension funds have long been calling for the likes of Vedanta to strengthen their environmental, social and governance positions and this case further emphasizes that fact. Respecting rights is the right thing to do, and failure to do so damages reputation (and your share price).
Looking at Vedanta’s global website , “Sustainable Development” is cited on the homepage three times. Additionally, both ‘sustainability’ and ‘trust’ are two of the company’s business values. It even has a sustainability microsite which describes Vedanta’s sustainability strategy and activities. Human rights fall as a key topic under the Community Engagement strand of that strategy. Furthermore, Vedanta even goes on to outline its engagement with the Kutia and Dongria Kondh tribes mentioned above, which includes health and sanitation, development of skills and irrigation/agricultural practices, and a plan to enhance their quality of life and conservation of their culture.
So what has gone wrong? Perhaps the “Seeking further growth and acquisition opportunities” strand of their business strategy got the better of them? More reason for sustainability strategies to be aligned with core business strategies and for companies to realise the true cost of “forgetting” their core values.
Katie is a consultant at Corporate Citizenship. Email her at Katie.dodds@corporate-citizenship.com to discuss environmental management systems, emission reductions and supply chain work.
Vedanta mine plan halted by Indian government
Controversial plans to develop a bauxite mine on sacred tribal land in India have been undone, as India’s environment ministry has rejected a proposal by Vedanta Resources to mine the aluminium ore in the eastern state of Orissa. Campaigners, who have been backed in their fight against the mining giant’s plans by Joanna Lumley and Michael Palin, described the move as a ‘stunning victory’. India’s Environment Minister Jairam Ramesh said Vedanta had shown a ’shocking’ and ‘blatant disregard for the rights of the tribal groups’. The Minister has also questioned the legality of the massive refinery Vedanta has already built below the hills. Michael Palin said ‘I hope it will send a signal to the big corporations that they can never assume that might is right. It’s a big victory for the little people.’ A report, produced by the Indian Ministry of Environment and Forestry outlined how the company had behaved with ‘total contempt for the law’ in its occupation of village forest lands.
Bangladesh’s Supreme Court reimposed strict environmental controls on the country’s ship-breaking yards in August, in a verdict likely to trigger protests from the sector. An estimated one third of all ships worldwide are sent to Bangladesh to be dismantled on the country’s southeast coast. Workers at these yards and people living in the area are exposed to toxic chemicals and dangerous work conditions. In January this year the same court imposed regulations that all ships scrapped be certified toxic-free by the selling nation’s environmental authorities, however the government was forced to abandon the law in April after months of strikes by shipyards. The Bangladesh Environmental Lawyers Association was able to get those regulations reinstated, and the ship breaking industry will not be able to appeal the ruling for four months. Ships heading for Bangladesh routinely contain chemicals such as asbestos, which is banned in many countries, but the government has struggled in the past to force the powerful industry to improve standards.
Contact: Bangladesh Environmental Lawyers Association www.belabangla.org
Fairtrade Foundation scoops major business award
The Fairtrade Foundation is one of two British recipients of the Ruban d’Honneur Award for Corporate Sustainability in the European Business Awards, announced in August. The European Business Awards are designed to recognise and promote excellence, best practice and innovation in the European business community. Harriet Lamb, Executive Director of the Fairtrade Foundation said: ‘This tremendous accolade is a tribute to the dedication and energy of the millions of farmers and workers, campaigners, business and everyday shoppers who comprise the worldwide Fairtrade movement.’ All Ruban d’Honneur recipients now appear before a third judging panel of academics, heads of state, industrialists, entrepreneurs and media commentators from across the 27 member European States. The final winner of the Sustainability category will be announced on 16 November.
Observer Good Companies Guide: Eaga wins green title
Eaga, a FTSE 350 company set up in 1990 to lead government-funded initiatives to improve conditions for poor people in energy-inefficient homes, has come top of the league table for ecological sustainability in the 2010 Observer/Co-operative Asset Management Good Companies Guide. Eaga has been running the Warm Front scheme, which has provided insulation and heating improvement grants to more than 2 million homes. Recently, it has begun to diversify into renewable technologies, such as solar cells that convert sunlight into electricity. Just behind Eaga in the ranking is Hansen Transmissions, a wind turbine and industrial gearbox manufacturer. Engineer Invensys is also cited for developing technologies to help customers improve efficient use of energy resources. Medical equipment company Smith & Nephew leads the table for companies well positioned to benefit from improving living standards in the developing world, as well as from changing demographics in the west.
Goldcorp face criminal charges over mine pollution
Authorities in Honduras last week filed criminal charges against senior officials of Entremares – a wholly-owned subsidiary of mining giant Goldcorp – based on evidence of severe water contamination. An investigation by aid agency CAFOD at the San Martin gold mine in the Siria Valley area of Honduras revealed dangerously high acidity and metal concentrations in water flowing into a local stream. Charges have been filed against two executives from Entremares for contaminating water and damage to the environment; if convicted, they could face imprisonment of up to six years.
To mark the UN Day of Indigenous People on August 9, Survival International released a new report highlighting the devastating impact on tribal people of a massive boom in dam-building for hydropower. Drawing on examples from Asia, Africa and the Americas, Survival’s report ‘Serious Damage’ exposes the untold cost of obtaining ‘green’ electricity from large hydroelectric dams. A rapid increase in global dam-building is currently under way. The World Bank alone is pouring $11bn into 211 hydropower projects worldwide. One Amazonian tribe, the Enawene Nawe, has learnt that Brazilian authorities plan to build 29 dams on its rivers. Across the Amazon, the territories of five uncontacted tribes will be affected. The Penan tribe in Sarawak face eviction to make way for a dam, and tribes in Ethiopia could be forced to rely on food aid if a dam being built on the famous Omo River is not halted.
Human rights advisor sues Statoil over its commitment to respecting human rights
On August 17, a human rights advisor filed a lawsuit against Statoil, ASA, a multinational oil company which is partially owned by the Norwegian Ministry of Petroleum and Energy. Ms. Forouhar alleges that the company misled her about the nature of her position as a Human Rights advisor, claiming that she was hired by Statoil mainly for “public relations” purposes, despite the company’s promises to the contrary. After working for the company for over a year, she realized that the company’s commitment to human rights was lacking. For example, despite the fact that she was supposed to be responsible for human rights policies in Statoil’s overseas operations, she was only allowed to make two trips to Statoil’s foreign facilities. In her lawsuit, Ms. Forouhar alleges that “despite having been promised that the company was committed to the Human Rights Risk Assessment (HRRA), Ms. Forouhar encountered tremendous resistance to her efforts to implement the HRRA. In a statement on August 24, Statoil rejected the allegations as unfounded and incorrect, and took the opportunity to emphasize Statoil’s membership of the UN Global Compact.
Nokia Siemens Networks sued for selling spy kit to Iran
Nokia Siemens Networks is facing a lawsuit over allegations that it sold equipment to Iran that was subsequently used by the government to monitor opposition activists. Iranian journalist and activist, Isa Saharkhiz and his son, Mehdi Saharkhiz have filled the lawsuit in a US Federal Court against Nokia Siemens Networks and its parent companies Siemens and Nokia alleging human rights violations committed by the Iranian government through the aid of spying centers which were provided by Nokia Siemens Networks. In a statement released on August 20, Nokia Siemens Networks emphasized that it condemns human rights violations around the world. The company also outlined that the Saharkhizes, whilst alleging brutal treatment by the Government in Iran, have not sued that government, instead blaming Nokia Siemens Networks for the acts of the Iranian authorities. It also outlined that all modern mobile communications networks include a lawful interception capability; which capability became a standard feature at the insistence of the United States and European nations.
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