Norway fund blacklisted company protests decision

Vedanta Resources, the FTSE 250 metals and mining group, blacklisted this week by the €250bn ($366bn) Norwegian Government Pension Fund over allegations of environmental damage and human rights abuses in India, has said it is “disappointed” at the fund’s reaction and claims it was unable to defend itself against the allegations because of legal proceedings at the Supreme Court in Delhi.
A spokesperson for Vedanta said: “There appears to be a misunderstanding. We informed the Norwegian fund that we could not respond because the information they requested was sub-judice in the Indian courts.” Vedanta is mired in legal wrangling with environmentalists in India, including hearings over a controversial £470m bauxite project in the Niyamgiri Hills in the eastern Indian state of Orissa. Campaigners say the mine will disrupt the areas fragile ecosystem and endanger wildlife. The Norwegian fund, whose investment boycotts are closely monitored by other investors worldwide, pulled €9m in shares from the company and its subsidiaries following a recommendation by the Norwegian government’s Council on Ethics. Its actions could prompt other investors to follow suit. Norwegian Minister of Finance, Kristin Halvorsen, said: “Norges Bank does notregard the exercise of ownership rights as a tool by which Vedanta’s behaviour can be influenced in a positive direction. We cannot hold shares in such a company.” The fund said allegations levelled at the company, including abuse and forced eviction of tribal peoples, were well founded: “In the Council’s view the company seems to be lacking the interest and will to do anything about the severe and lasting damage that its activities inflict on people and the environment.” In 2005, an environmental panel of India’s Supreme Court accused Vedanta of 400 violations of national environmental guidelines. Norges Bank, which manages the pension fund money, said it had been promised a reply to the allegations in April this year. The Norwegian Ethical Council said the lack of response indicated a “pattern in the company’s practices where such violations are accepted and make up an established part of its business activities.” The spokesperson for Vedanta said the company had a highly developed policy of corporate social responsibility, including local education programmes in India. The company says it aims to reduce the impact of its activities on the environment wherever feasible and that the majority of its sites are certified to the international environmental management systems standard ISO 14001.