Mining giant under fire for worker deaths

VEDANTA Resources, the mining giant buying a substantial part of Cairn Energy's Indian business, has come under intense fire from a shareholders' group over its safety record, with one worker dying every two weeks.

Influential investors' advisory group Pirc has called on shareholders at Wednesday's agm to reject the directors' pay report, which proposes that the total package for executive chairman Anil Agarwal should jump by 26 per cent to 1.7 million.

Vedanta, which is listed in London but based primarily in India, also plans to raise deputy executive chairman Navin Agarwal's package by 39 per cent to just under 1.4m and chief executive Mahendra Mehta's package by 52 per cent to 482,000. Navin Agarwal is Anil's brother.

But Pirc believes there is an "apparent contradiction" between the company's stated bonus policy and making payouts - including 500,000 for Anil Agarwal - during a year in which 26 staff were killed.

The group said: "We have concerns over the payment of annual bonuses in apparent contradiction of the safety criteria upon which bonus awards can be made and the award of unexplained significant salary increases to executives.

"The report states that bonus awards are dependent on 'effective stakeholder management, which resulted in recognition and achievement of awards in corporate social responsibility, safety, quality, business excellence and best-employer status'.

"In light of the loss of 26 lives occurring across group operations and projects, it is not clear how the award of bonuses can be reconciled with stated policy."

A spokesman for Vedanta declined to comment on the report by Pirc.

If shareholders do rebel then Vedanta would join a long list of companies that have faced investors' ire over pay during the current season of agms.

Earlier this month, Aberdeen-based transport operator FirstGroup survived one of the biggest shareholder revolts of recent years when nearly 43 per cent of votes were cast against a "golden hello" for new chief executive Tim O'Toole. Last week, brewing giant SABMiller saw 16 per cent of votes rejecting its directors' pay awards.

Vedanta's record on its environmental impact and dealings with native tribes came into sharp focus last year when the Church of England sold its 3.8m stake following concerns about its human rights record in India.Survival International - a charity campaigning for the rights of tribal people - said Edinburgh-based Martin Currie Investments had also sold its 2.3m stake.

The Joseph Rowntree Trust and Dutch pension fund PGGM also dumped their holdings following a critical report from Amnesty International and protests led by Bianca Jagger outside last year's annual general meeting in Westminster.

Edinburgh-based Cairn Energy was given the go-ahead at the start of this month to sell its 40 per cent controlling stake in its Cairn India subsidiary to Vedanta in a $6 billion (3.7bn) deal.

The sale had been mired in delays caused by the Indian government, which eventually ruled that more royalties would have to be paid on oil produced by Cairn India.