Church of England withdraws investment from Vedanta citing rights concerns

Taking an ethical stance over its investment in a multinational mining company, the Church of England has decided to withdraw its shares amid severe pressure from rights groups.

The Church of England dropped its £3.8 million stake in Vedanta Resources on grounds that that controversial mining company showed no "level of respect for human rights and local communities" in Orissa's Niyamgiri Hills where a bauxite mine is to be set up.

Vedanta's proposed aluminum project had drawn harsh criticisms from environmentalists and human rights activists, mainly those from Survival and Amnesty, who alleged that it destroyed the area's ecosystem and threatened the future of tribal people.

John Reynolds, chairman of the Church's Ethical Investment Advisory Group (EIAG), said: "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 that we expect of companies in whom the Church investing bodies hold shares."

This has resulted with all the three national investing bodies of the Church of England disinvesting from the FTSE 100-company.

Survival International has been lobbying the Church to disinvest from Vedanta for over a year.

Survival International director Stephen Corry said, "The Church's unprecedented and very welcome decision sends a strong signal to companies that trample on tribal peoples' rights: we will not bankroll your abuses. Anybody that has shares in Vedanta should sell them today if they care about human rights."

Cory takes the moral of James Cameron's successfully-running Hollywood movie Avatar to describe the plights of the Kondh tribe defending their land.

"Just as the Na'vi describe the forest of Pandora as 'their everything', for the Dongria Kondh, life and land have always been deeply connected. The fundamental story of Avatar – if you take away the multi-coloured lemurs, the long-trunked horses and warring androids – is being played out today in the hills of Niyamgiri in Orissa," he said.

Amnesty International UK has also meanwhile reacted to the news saying, "It is encouraging that the Church of England has sent a strong message to Vedanta that failing to respect human rights is unacceptable."

Amnesty said it would release a new report on Tuesday, Feb. 9, that exposes serious human rights abuses linked to the aluminum refinery operated by Vedanta.

Allegations about Vedanta's alumina refinery in Lanjigarh, Orissa, and planned bauxite mine in the nearby Niyamgiri hills came to the EIAG's attention in June 2009.

The EIAG has been examining the issues carefully since and has discussed them in a process of engagement with the company. EIAG Secretary Edward Mason also visited Vedanta's Lanjigarh refinery last November.

As a result, the EIAG concluded that Vedanta had not treated tribal people in the refinery area responsibly.

The Church is not the first organisation to disinvest from Vedanta on ethical grounds. In 2007 the Norwegian government sold its US$13m stake.