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In the real world of business, Churches are not left behind in the pursuit for more income. A number of Churches in the West have a lot of investments within the corporate world. This by and large is a good but the surprising factor is that the decisions to divest from investments that go against ethics take so long to be made. As we follow with Martin Chitengi, the biggest question is; how much is the church willing to return – according to the law of retribution to the communities who have long been plundered and abused?
THE Church of England has divested from mining company, Vedanta Resources, the majority shareholder of Konkola Copper Mines, after sustained pressure from campaigners, including many Christian groups. The Church Commissioners and the Church of England Pensions Board announced that they sold their shares in the company on the advice of the Church’s Ethical Investment Advisory Group (EIAG). Consequently, none of the three national investing bodies of the Church of England hold shares in Vedanta.
United Kingdom-based thinktank, Ekklesia, on its website, said it had highlighted, over three years, how Vedanta has been involved in some alleged unethical activities. This included Vedanta’s bid for mining rights in the Indian state of Orissa in 2007 which faced mounting opposition from thousands of Dongaria Kandha tribal people. The tribal people feared the plans would damage the fragile ecosystem of the Niyamgiri mountain forest, on which they depend for their livelihoods.
Manipulation on Policymaking processes
Ekklesia also alleges that Vedanta was involved in ‘short changing’ Zambia with royalty fees of just 0.6 per cent instead of the 5 to 10 per cent industry average in developing countries before the development agreements were abolished. When contacted for comment KCM spokesperson Rahul Kharkar, who was sent the Ekklesia statement on Tuesday said he needed time to consult the chief executive and promised to call later.
Meanwhile Vedanta chairman Anil Agarwal denied allegations of maltreatment of locals according to online Economic Times of India. Mr Agarwal in a detailed e-mail response said that the mining project at Niyamgiri has been formally authorised by the Supreme Court, following a lengthy and extensively documented approval and procedure.
And Survival International pointed out that the Church is not the first to disinvest from Vedanta on ethical grounds. In 2007, Norway sold its US$13m stake, alleging ‘there is little reason to believe the company’s unacceptable practice will change in the future.” Martin Currie Investments sold its its £2.3 million stake last year, and BP’s pension fund reduced its holdings in Vedanta due to alleged ‘concerns about the way the company operates.’
Investor values Versus Ethics
The EIAG advised divestment saying its engagement with Vedanta produced no substantive results and EIAG believed it would be inconsistent with the Church ethical investment policy to remain invested given the EIAG’s concerns about the firm’s approach to relations with the communities where it operates.
The EIAG chairman, John Reynolds says, “I am a passionate advocate for engagement with companies when we have ethical concerns. We have an excellent track record of getting our concerns heard and acted upon by firms in which the Church investing bodies hold shares.
“We are grateful to Vedanta’s senior management for making themselves available to meet us on a number of occasions. However, after six months of engagement, we are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities.” The EIAG understands that the Indian government is still considering whether to give final approval for the mine project.
Mr Reynolds stressed that: “We respect the Indian democratic system. Our concern is that a company registered and listed in the UK should conform to the established environmental, social and governance norms expected in the London market – or at least reassure its shareholders that it is committed to the journey.” The EIAG said it will maintain contact with Vedanta. John Reynolds said: “We will be pleased to review our recommendation to the Church investing bodies if the company addresses the concerns we have raised.”
A Welcome Decision
The director of Survival International, Stephen Corry said: “The Church’s unprecedented and very welcome decision sends a strong signal to companies that trample on tribal peoples’ rights: Vedanta was just one of a number of investments in mining companies which the Church of England still holds. Campaigners point out that mining is one of the most polluting industries in the world. It has a disproportionately negative impact on marine-dependent and land-based communities, especially indigenous peoples
The Church of England and the Methodist Church hold shares in Anglo American, BHP Billiton and Rio Tinto, despite Catholic aid agency CAFOD, War on Want, Anglican bishops and the Catholic Bishops’ Conference of the Philippines, previously condemning the companies for their actions. The combined Church of England shareholding in these three companies was valued at £62 million in the last annual report of the Church Commissioners.
BHP Billiton in particular has faced allegations of human rights abuses and widespread environmental destruction. Campaigners, The London Mining Network recently published an ‘alternative report’ into its activities outlining negative impact of many of the company’s operations – in Australia, West Papua, Papua New Guinea, the Philippines, South Africa, Canada, Colombia and Chile.
Jonathan Bartley co-director of Ekklesia which last year produced a report examining the ethics of the Church’s investments said: “questions must now be asked about the other mining companies in which the Church also has substantial shareholdings.