Judges today threw out Vedanta’s appeal to the May 2016 High Court judgment allowing Zambian farmers to have their case against the company heard in the UK.
The judgment adds further weight to precedents holding UK companies legally responsible for the actions of their subsidiaries.
Judges today released their verdict on Vedanta’s appeal in the case of the Chingola communities suing UK company Vedanta Resources, and their Zambian subsidiary Konkola Copper Mines (KCM), for pollution causing illness and loss of livelihood.
The three appeal judges Lord Justice Simon, Lord Justice Jackson and Lady Justice Asplin threw out Vedanta’s appeal in the case of Dominic Liswaniso Lungowe vs Vedanta Resources and Konkola Copper Mines, agreeing with the High Court verdict that Vedanta owes a duty of care to the claimants polluted by its Zambian subsidiary, and that the case against it has merit. They also agreed with the high court judge that England is the proper place to try both KCM and Vedanta, especially considering issues with lack of access to justice in Zambia. Vedanta is unlikely to appeal such a strong judgment to the Supreme Court, and the trial can now be heard in the UK.
The ruling helps pave the way for other London-listed multinationals to be held liable in the English courts for the actions of their subsidiaries abroad.
The judgment is being celebrated by the affected communities who have fought an eleven year legal battle against the company for continuous pollution of their water sources since it took over KCM in 2004. Communities first took KCM to court in Zambia in 2006 when the River Kafue which they depend on for drinking, bathing, cooking and irrigation was severely polluted by the company. They were awarded a landmark $2 million fine in 2011 in the Zambian High Court, but KCM appealed, and in 2015 the Supreme Court upheld the guilty verdict but removed all compensation. As a result the victims took their case to UK lawyers. In the 2016 High Court judgment Justice Coulson stated that KCM and parent company Vedanta had attempted to pervert the course of justice in Zambia, and claimed KCM could even declare insolvency in Zambia to avoid paying victims, noting the company’s financial secrecy and historic dishonesty.(1)
Recent news coverage has detailed the ongoing pollution, sickness and poverty suffered by the affected communities.(2) Headmen of the affected communities recently issued these demands which were announced to the Vedanta board at its August AGM by a dissident shareholder:
- Stop polluting the rivers immediately. Close down the plant until pollution control measures are replaced and upgraded.
- Provide clean water to the villages immediately, by tankers or pipes.
- De-silt the Mushishima stream and Kafue River and remove contaminated waste.
- Remediate the entire polluted area to make it safe to live, farm and fish there again.
Compensate the affected people for loss of health and livelihood. All medical costs should be paid by KCM/Vedanta in future.
Case studies in Zambia available.
Foil Vedanta is an independent grassroots solidarity organization focused primarily on the British-Indian mining giant Vedanta Resources PLC. Foil Vedanta targets the company in London where it is registered, as well as linking with people’s movements where Vedanta is destroying lives and devastating the land in India, Sri Lanka, Zambia, Liberia and South Africa. www.foilvedanta.org
- Justice Coulson’s 2016 judgment exposed the opaque nature of KCM, revealing that the company has not filed any annual accounts in accordance with the Zambian Companies Act. The court had explored the reasons KCM might want to hide its financial position and Justice Coulson refers to the case of Konkola Copper Mines Plc v U&M Mining Zambia Ltd heard in the London Court of Arbitration in 2014 in which Justice Eder found that KCM was close to bankruptcy and ‘may not be good for the money‘ (in that case $55 million owed to their contractor U&M). The case cited reports by Grant Thornton and the Auditor General of Zambia which sought to reconcile Vedanta boss Anil Agarwal’s private claims that KCM made $500 million per year, with KCM’s loss making claims in Zambia. The reports found evidence of multiple tax evasion and capital flight devices used by Vedanta-KCM along with asset stripping and failure to invest any CAPEX as claimed. Alongside other evidence including ‘ministerial statements about the threat of insolvency, bankruptcy or receivership facing KCM and the existence of at least one debt of $30million which went unpaid‘Justice Coulson concluded that:
‘I would be wrong to ignore the possibility that, if the litigation was conducted in Zambia, Vedanta/KCM could seek to strike it out, or if they lost at trial, Vedanta might put KCM into liquidation in order to avoid paying out to the claimants. The history of the U&M case demonstrates that these are possibilities which cannot be ignored.’
The judgment is attached to this press release.
Our detailed article following visits to the communities in 2015 includes scientific reports and testimonies from the victims: https://web.archive.org/web/20