Controversial mining company Vedanta Resources has made noticeable progress on social and environmental matters over the past two years, according to an analysis by Ethical Investment Research Services (Eiris).
The UK-based socially responsible investment research body says a review of Vedanta’s progress has shown the company made positive strides on five of seven recommendations that Eiris suggested to the business in 2010.
A new Eiris paper says four concerns previously graded as ‘amber’ are now ‘light green’, and one previously graded ‘red’ is now graded as ‘amber’. The other two areas have remained at ‘amber’
Eiris carried out the review with co-operation from Vedanta, which provided access to internal company documents. It says the metals and mining group, which is headquartered in the UK but operates mainly in India, has made progress on a number of fronts.
These include the creation of a board-level sustainability committee, recruitment of a chief sustainability officer, and the development of a sustainability framework. It has also signed up to the United Nations Global Compact and is working with the Extractive Industries Transparency Initiative in Zambia.
However, Eiris says Vedanta still needs, among other things, to:
• publish human rights-based policies on indigenous peoples and the use of security guards
• disclose details of social and environmental risk training for all main board members
• create a link between board members’ remuneration and responsible business behaviour
• provide a timeframe for implementation of a global grievance mechanism standard
• become a signatory to the Voluntary Principles on Security and Human Rights.
Eiris concludes that the company has been ‘responsive’ to calls for improvements, and is ‘putting policies and management systems in place, based on best practice and international norms’.
It believes Vedanta wants to ‘draw a line under past controversies and move forward’ but warns that it needs to be ‘proactive and transparent’, especially in relation to indigenous peoples.
Over the past decade Vedanta has gained an unenviable reputation on social and environmental issues, notably in relation to plans for a bauxite mine and the expansion of its Lanjigarh alumina refinery in Orissa.
Vedanta’s annual shareholder meeting in August was besieged by protesters and subject to numerous interventions from concerned campaign groups and institutional investors, including Standard Life and Aviva Investors.
Posted on September 12, 2012 at 05:42am.