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Charities call on Church to help prevent controversial mining project

Finance | Vibeka Mair | 28 Jul 2009

A coalition of international development charities has urged the Church of England to pressure a mining company in which it invests, to rethink a project in India. 

ActionAid, Survival and War on Want are leading a campaign to stop Vedanta opening a bauxite mine in the Niyamgiri mountains (pictured) in eastern India, a spiritual homeland for India’s Kondh people. The 8,000-strong Kondh tribe is dependent on the mountain for crops and water.

A spokeswoman from ActionAid said the Church of England, which has shares in Vedanta worth around £2.5m, had the power to engage and influence the company to change its decisions.

“We are calling on the Church of England to support the Kondh people and use its financial power to pressure Vedanta to stop its project.”

A Church of England spokesman said the Church investors used their influence as shareholders to improve corporate behaviour.  But for sensitive industries, such as mining companies, its Ethical Investment Advisory Group (EIAG) had a three-year monitoring and engagement process.

He added: “In law, the primary duty of trustees, including the Church of England’s central investing bodies, is to produce a good financial return on investments for their beneficiaries, but ethical considerations are rigorously taken into account in keeping with the Church’s Christian witness and values.”

The EIAG has arranged to meet one of the tribal representatives and campaigners, and hopes to meet one of the officials from Vedanta, to discuss the controversial bauxite project.

ActionAid buys access to Vedanta

ActionAid bought a share in Vedanta last month for £14 to gain access to its annual general meeting this week.

Meredith Alexander, head of trade and corporates at ActionAid, said the company provided unconvincing answers when questioned on the bauxite project: “They didn’t answer with substance,” she said. “They weaselled around like politicians and only said what they wanted to say. We didn’t get any real answers.”

Companies Act gives voice to campaigners

Elsewhere, Pensions & Investment Research Consultants (PIRC Limited), last week helped the Local Authority Pension Fund Forum call for the splitting of the dual chairman and chief executive role of Sir Stuart Rose and the appointment of an independent chairman at Marks and Spencer by July 2010.

PIRC did this by forming 100 separate companies, each holding a share in Marks & Spencer Group plc, to take advantage of a provision in the Companies Act allowing for a resolution to be tabled at the annual general meeting of quoted companies if it has the backing of at least 100 shareholders holding at least £10,000 of shares.

The resolution was supported by over 38 per cent of shareholders.

Bates Wells & Braithwaite (BWB) advised PIRC on the tabling of the resolution and the company law issues involved. Luke Fletcher, a solicitor at BWB said: “The ability to table shareholder resolutions is an important avenue for shareholders to be able to have their say and hold company boards to account.

"Charities and other campaigning organisations should be seeking to take advantage of these provisions and using similar activist investment strategies if they want to influence company policy.”

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