Reuters North American News Service, November 23rd, 2007
(Adds Vedanta reaction, new quote from court)
NEW DELHI, Nov 23 (Reuters) - India's Supreme Court barred
Britain's Vedanta Resources Plc on Friday from mining bauxite
in sacred, forested hills in the east of the country where
tribal people and voluntary groups strongly oppose it.
But it left a window ajar for the project by asking
Vedanta's Indian unit, Sterlite Industries <STRL.BO>, to come
back with a fresh proposal on safeguarding the rights of local
tribal people through a new investment firm.
"Adherence to sustainable development is a constitutional
requirement," a three-judge bench said in its order.
While the country needed to focus on its present
development needs, it had to be done "without compromising the
needs of future generations", the court said.
"We are not against the project in principle," it said. "We
cannot risk handing over this important national asset to a
company unless we are satisfied about its credibility."
Vedanta <VED.L> wants to dig open-cast mines in the
Niyamgiri hills in Orissa state to feed an alumina refinery it
has already built in the area, as part of an $800 million
project expected initially to produce 1 million tonnes of
alumina per year.
Thousands of tribal people say the mine will destroy hills
they consider sacred, force them from their homes and destroy
their livelihoods, which are based on farming millet, hunting
and collecting fruits and spices from the forests.
Environmentalists say the open-cast mine would also wreck
the rich biodiversity of the remote hills and disrupt key water
sources that supply springs and streams in the area and feed
two rivers that irrigate large areas of farmland.
Vedanta said the court had "given certain directions" on
how the mining project could be pursued and it would follow the
terms set by the court.
"We are committed to the cause of bringing social
upliftment through responsible industrialisation and creating
employment opportunities in the state of Orissa," the company
said in a statement.
Last month, the court set new conditions for Vedanta and
Sterlite before allowing them to mine in the region.
The conditions included paying 5 percent of its annual
profits from mining throughout India to the state government to
be ploughed into developing the region.
It was also asked to deposit 500 million rupees ($12.65
million) with the state government, and specify how many local
people would be employed in the project.
Sterlite returned to the court saying those conditions were
acceptable.
But on Friday, the court said that from the various legal
documents it had received from the two firms, Sterlite seemed
to be an associate company of Vedanta and not a subsidiary.
It also said the new firm Sterlite needed to float would
have to make fresh financial commitments to ensure the
development of tribal people and submit an account of its
expenses to the court, among other terms.
The state and central government both back the mining plan,
as part of efforts to industrialise and exploit the mineral
resources of underdeveloped eastern India.
The court order drew mixed reactions from those opposed to
Vedanta, the latest in a series of controversial industrial
projects across India that have symbolised the conflict between
development and the rights of local people.
Jubilant tribal people, armed with bows and arrows, rushed
out of their houses in Orissa's Niyamgiri hills as reports of
the order reached the region.
"The people of Kalahandi and tribals of Dongria Kondh
community salute the verdict of the court," said Bhakta Charan
Das, a former MP who is spearheading the anti-Vedanta campaign.
"The apex court has come to the rescue of the people."
Voluntary groups that supported the campaign were, however,
cautious.
"We are very apprehensive of this special purpose vehicle,"
said Babu Mathew, country director of ActionAid India,
referring to the court's idea of a new firm for the project.
"There have been too many such arrangements that have
failed in the past," he said.
(Writing by Y.P. Rajesh; editing by Alistair Scrutton)
