s Vedanta Resources and the Odisha government have only themselves to blame for the strong reaction to the group’s expansion plans in the state Sudeep Chakravarti
Vedanta’s defensive response came after the flak it received over a 30 July hearing in Lanjigarh to expand the capacity of group company Sesa Sterlite’s alumina refinery. Photo: Reuters On 2 September,
Vedanta Resources Plc wrote to the Business and Human Rights Resource Centre, an influential UK-based global platform. “The Public Hearing for the expansion of the Lanjigarh Refinery was conducted by Odisha State Pollution Control Board under the watch and ward of the district administration,” Vedanta stated. “The company reiterates its decision made public in May 2014, which is, ‘In deference to the sentiments of the community, Vedanta confirms it is not seeking to source bauxite from the Niyamgiri bauxite deposit for its alumina refinery operations and will not do so until we have the consent of the local communities.’” Over July and August 2013, residents of a dozen villages in the Niyamgiri area had voted against granting of a mining lease to a Vedanta subsidiary and its partner, Odisha Mining Corp. Ltd (OMCL).

Vedanta’s response came after the flak it received over a 30 July hearing in Lanjigarh to expand the capacity of group company Sesa Sterlite Ltd’s alumina refinery from 1.4 million tonnes per annum (mtpa) to 6 mtpa. Besides raising again the persistently thorny issue of Vedanta’s approach in Lanjigarh, it also raises the question: how far will the government of Odisha go for Vedanta? Critics of Vedanta question the group and the Odisha government’s claims that the 30 July public hearing in Lanjigarh was an unqualified approval for the expansion project. A widely circulated article in the Web edition of Caravan quotes a Biju Janata Dal legislator from nearby Junagarh assembly constituency as saying “everyone” supported the expansion. The article, published in mid-August, quotes Kalahandi’s district collector as claiming that 90% of the residents from villages to be affected by the expansion agreed to it. This is disputed by several activists and residents, who claim residents were bulldozed, and dissent misrepresented. There is also concern over the claim in the environmental impact assessment submitted by Vedanta at the hearing, that 888 hectares (nearly 2,200 acres) of land will need to be acquired for “accommodating the red mud pond, ash pond, township, railway corridor, and green belt…”. Other local concerns include diversion of scarce water from farms and homes for industrial activity.

Spooked, Vedanta’s critics have also assumed that the current push to expand the alumina refinery is just a step away from a renewed push to acquire bauxite mining rights in the Niyamgiri Hills to feed that expansion. If this seems like an overreaction, Vedanta and the government of Odisha have only themselves to blame. Vedanta has displayed spectacular presumption. Several years prior to the anti-mining vote, it had already constructed the skeleton of a conveyor system from the refinery to the base of the Niyamgiri Hills. Vedanta Resource’s annual report for 2013 offered this guidance: “…Approval for refinery expansion: January 2014 with project to commence from October 2014.” As to mining operations at Niyamgiri: “Mining approval by September 2013 with production expected to commence in September 2015.” Caveats hardly diluted the group’s expectation that the government would come through on its behalf. While Vedanta’s annual report for 2014 offers no such presumption, moves on the ground and its defensive comment to the Business and Human Rights Resource Centre offer open-ended hope. Moreover, it is unlikely that a business is going to walk away from hundreds of millions of dollars of invested funds—as Vedanta has in Lanjigarh—and among the richest bauxite deposits in the world a few hundred metres away. For its part, the government of Odisha has a record of being a quite free market in aiding business.

In February 2013, officials of the Industrial Development Corp. of Orissa Ltd (Idco) participated in a police assault on villagers protesting land acquisition for Posco India Pvt. Ltd’s steel plant in the state’s Jagatsinghpur district. Idco also fronted a land acquisition fracas in Kalinganagar Industrial Estate, in Jajpur district, for a plant of Tata Steel Ltd. In all, 14 protesters, all local villagers, died when police shot at them on 2 January 2006. The collector and district magistrate of Jajpur at the time, who among other things ignored villagers’ pleas, was subsequently posted to another district in a similar capacity. He was also for some months in 2012 the managing director of OMCL, and was later appointed chairman. The superintendent of police in Jajpur at the time was transferred as a deputy inspector general of the Central Industrial Security Force. In 2008, he was recommended by the Odisha government for a meritorious service medal awarded annually by the President of India. He received the medal.
The rewards from Lanjigarh too could prove substantial. Sudeep Chakravarti’s latest book is Clear.Hold.Build: Hard Lessons of Business and Human Rights in India. His previous books include Red Sun: Travels in Naxalite Country and Highway 39: Journeys through a Fractured Land. This column, which focuses on conflict situations in South Asia that directly affect business, runs on Fridays. Respond to this column at [email protected]

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