The Church of England has sold a £3.8 million stake in Vedanta Resources, the mining group accused of mistreating indigenous tribes in India, in protest at the London-listed company’s record on human rights.

The rebuke came after a six-month inquiry and two decades of soul-searching by the Church over its investments.

John Reynolds, chairman of the Church’s ethical investment advisory group, said: “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 that we expect of companies in whom the Church investing bodies hold shares.”

Criticism of Vedanta has centred on the treatment of villagers near its plant in Lanjigarh, in the eastern Indian state of Orissa. An investigation by the Church found that “tribespeople in the refinery area had not been treated responsibly”.

The company’s plans to mine bauxite in the nearby Niyamgiri Hills had also been condemned. Activists claim that the mining will displace 8,000 members of the Dongria Kondh tribe, who hold the area sacred, and wreck the ecosystem.

Vedanta, whose Orissa plans are part of a drive to treble production capacity over the next four years, has courted controversy for several years. In 2007 the Norwegian Government sold its stake in the miner, saying it believed that the company was unlikely to change its practices.

Stephen Corry, the director of Survival International, which has campaigned against the Orissa projects, said: “The Church’s decision sends a strong signal to companies that trample on tribal people’s rights: we will not bankroll your abuses.”

Two of the Church’s investment bodies — the Church Commissioners and Church of England Pensions Board — had held shares in the company worth about £3.8 million.

Shares in Vedanta shed 96p, or nearly 4 per cent, to close at £23.19 yesterday. A company spokesman said: “We are disappointed by the Church of England’s decision to sell their holding in Vedanta.

“Vedanta remains fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights.”


(2010/02/07- The Times)