Church of England sells £3.8m stake in Vedanta over human rights fears

THE Church of England yesterday revealed it had sold its £3.8 million stake in Vedanta Resources following concerns about the mining company's human rights record in India.

Allegations about Vedanta's alumina refinery in Lanjigarh, Orissa, and planned bauxite mine in the nearby Niyamgiri hills came to the Church's attention in June last year, sparking a period of "engagement" with the company.

But the Church's Ethical Investment Advisory Group (EIAG) – which counsels the Church commissioners and its pensions board – said the talks had produced "no substantive results".

EIAG chairman John Reynolds 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.

"In these circumstances, the EIAG advised that it would be inconsistent with the Church investing bodies' joint ethical investment policy for the investing bodies to remain invested."

EIAG said the Indian government was still considering whether to give final approval for the mine project.

Reynolds added: "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."

Survival International – a charity campaigning for the rights of tribal people – said Edinburgh-based Martin Currie Investments had already sold its 2.3m stake in Vedanta and that BP's pension fund was also reducing its stake.

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."

The charity also noted that the Norwegian government had sold its $13m (8.3m) stake in 2007.

A spokeswoman for Vedanta said: "We are disappointed by the Church of England's decision to sell its holding in Vedanta.

"Vedanta remains fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights. We work with a number of NGOs and with the authorities in India, the world's largest democracy, ensuring all our projects are conducted in compliance with the law and international best practice.

"We will continue to engage closely with the Church of England to address the concerns they have raised."

A spokesman for the Church of Scotland said that the Kirk did not hold any shares in Vedanta.