Church of England sells stock in controversial mining firm

Finance | Vibeka Mair | 9 Feb 2010

The Church Commissioners and the Church of England Pensions Board have sold their shares worth £3.8m in controversial mining company Vedanta on the advice of the Church’s Ethical Investment Advisory Group (EIAG).

The EIAG advised pulling out of Vedanta after six months of discussions on its approaches produced “no substantive results”. The EIAG felt it would be inconsistent with the Church investing bodies’ joint ethical investment policy to remain invested given the EIAG’s concerns about the company’s approach to relations with the communities where it operates.

Allegations about Vedanta’s alumina refinery in Lanjigarh, Orissa, and planned bauxite mine in the nearby Niyamgiri hills came to the EIAG’s attention in June 2009.

At the time, international development charities ActionAid, Survival International and War on Want organised protest marches (pictured) and called on the Church to use its voting power to prevent Vendanta’s mining plans.

The EIAG promised to examine the issue and began a process of engagement with the company. The EIAG secretary, Edward Mason, even paid a visit to India in November 2009 to see the refinery and mine site at first hand.

EIAG chairman John Reynolds said: “I am a passionate advocate for engagement with companies when we have ethical concerns. We have an excellent track record of getting our concerns heard and acted upon by the companies in which the Church investing bodies hold shares.

“We are grateful to Vedanta’s senior management for making themselves available to meet us on a number of occasions. However, 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 Ethical Investment Advisory Group advised that it would be inconsistent with the Church investing bodies’ joint ethical investment policy for the investing bodies to remain invested.”

The EIAG understands that the Indian government is still considering whether to give final approval for the mine project.

Reynolds stressed: “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.”

EIAG to keep in touch with Vedanta

The EIAG will maintain contact with Vedanta.

Reynolds said: “We will be pleased to review our recommendation to the Church investing bodies if the company addresses the concerns we have raised.”

Directory: Church Commissioners for England

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