Vedanta logo

VEDL - Vedanta News Story

₹302 -7.1  -2.3%

Last Trade - 17/09/21

Sector
Basic Materials
Size
Large Cap
Market Cap £11.03bn
Enterprise Value £12.95bn
Revenue £9.90bn
Position in Universe 45th / 3148

BREAKINGVIEWS-Zambia case puts corporate ethics guff on notice

Thu 11th April, 2019 3:46pm
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.) By Ed Cropley LONDON, April 11 (Reuters Breakingviews) - Hiding behind anodyne guff about corporate and social responsibility just got riskier. By siding with a group of Zambian villagers against mining giant Vedanta VDAN.NS , Britain’s Supreme Court has made two important points: London can have jurisdiction for alleged misdeeds in poor countries, and a company’s promises to be a good corporate citizen carry legal weight. The unanimous ruling from the five justices is a classic case of David sticking one over the proverbial Goliath, in this case Vedanta’s ultimate owner Anil Agarwal. Mumbai-listed shares in the Indian mining tycoon’s $10 billion parent company, Vedanta, fell 4 percent on Thursday after the company lost its bid to keep the Zambian case out of the British courts. The villagers say their lands and lives were ruined by pollution flowing from Vedanta’s Nchanga copper mine. But the decision is more than the latest PR headache for Agarwal, who was criticised for his dismissive initial response to Indian police killing 13 protesters outside one of his copper smelters last year. Even though the alleged pollution happened in Zambia, the ruling makes clear that UK courts should hear the case because of the difficulties and costs of bringing complex litigation in a country with annual per capita income of just $1,300. In its dispute with two communities from Nigeria’s polluted Niger Delta, oil major Royal Dutch Shell RDSa.L was more successful in arguing British law should not apply, but it’s facing an appeal. More importantly, the ruling unpicks the view that a global firm cannot be responsible for everything that its separate bits get up to. In Vedanta’s case, the ruling says the parent is legally liable because it publicly declared its commitment to “appropriate group-wide environmental control and sustainability standards”. In other words, head office promises not to abuse workers or the environment now have legal consequences. One way for cynical bosses to respond would be to take a red pen to such pledges in their annual reports. But that means swimming against the current tide of investors’ increasing focus on so-called environmental, social and governance considerations. With the law as well as activists on their backs, executives will have to pay attention. On Twitter https://twitter.com/edwardcropley CONTEXT NEWS - Britain’s Supreme Court ruled on April 10 that nearly 2,000 Zambian villagers could sue UK-headquartered mining company Vedanta in the English courts for alleged pollution in the southern African country. - The villagers allege that their land and livelihoods were destroyed by chemicals flowing from the Nchanga copper mine, owned by Vedanta through its Konkola Copper Mines subsidiary. - The court decided that Vedanta, which delisted from London last year, was responsible for the actions of its subsidiary and that the villagers might not have access to “substantial justice” in Zambia for a large and complex case. - Shares in Vedanta, the parent company owned by Indian mining magnate Anil Agarwal, fell 4.3 percent at 0656 GMT on April 11 to 180.70 rupees. - For previous columns by the author, Reuters customers can click on CROPLEY/ - SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS http://bit.ly/BVsubscribe <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Nearly 2,000 Zambian villagers can sue Vedanta in England - Supreme Court urn:newsml:reuters.com:*:nL8N21S2HH Supreme Court ruling https://www.supremecourt.uk/cases/docs/uksc-2017-0185-judgment.pdf ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by George Hay and Karen Kwok) ((ed.cropley@thomsonreuters.com; Reuters Messaging: ed.cropley.thomsonreuters.com@reuters.net))
© Stockopedia 2021, Refinitiv, Share Data Services.
This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.