Vedanta crisis shows its corporate warts, and boosts the case for community relations

Reuters File Photo

It was nice to see a video message from Vedanta Group chairman Anil Agarwal last week after bloody protests by activists in Thoothukudi in Tamil  Nadu against its Sterlite copper smelter that left more than a dozen people dead in police firing. A video message from the chairman is a good way to douse fires, especially if he says he is ‘pained’ by the whole thing, but it is time to ask him: “Where were you all these years, Mr. Agarwal?”

The hard fact is that protests against the polluting smelter in the coastal city earlier called Tuticorin are not new. Vedanta has been facing environmental protests for years. They go back a decade, or maybe more. However, in India, it has been generally fashionable to run down protests by non-governmental organisations (NGOs) or locals as ‘anti-development’ or ‘misinformed’ or leftist and slap sometimes ‘foreign-inspired’ charges on them. This results in apathy or indifference in the media and among the general public but explodes in an ugly manner when things take a bad turn — as it did this month.

No less than John McDonnell, the shadow chancellor of UK’s Labour Party (a potential finance minister in waiting) has said Vedanta should be delisted from the London Stock Exchange. The Centre for Science and Environment and Amnesty International, both of whom are highly respected for environmental and human rights issues, respectively, have slammed authorities in Tamil Nadu — and somewhere, Vedanta has to pick up the tab.

Whether it is a matter of investor relations or humanitarian reputation, Anil Agarwal’s group has been too controversial, perhaps brazen, in its management of core issues and community concerns. No less than Anbumani Ramadoss, former Indian health minister and a significant leader in Tamil Nadu, said in a TV debate that his state was hosting the smelter while several Indian states would not have it. He wants an inquiry commission to probe Sterlite.

Vedanta’s chief executive for copper in India, P. Ramnath, played the victim and blamed “vested interests” as he detailed environment-friendly measures in Thoothukudi. He even says the plant was open to inspection by activists.

I am tempted to ask: Did Sterlite invite anybody from the Centre for Science and Environment while it held out invitations to check its now-closed plant? Also, Vedanta has only been contesting environmental authorities — not necessarily complying with them. There is room wide open for interpretation — and sidestepping civil society concerns or making technical arguments does not quite cut it anymore.

My overall impression is that Vedanta has been very slow and low-key — if at all — in managing communities. What’s more, it has to realise that in this case, its reputation cannot be restricted to managing the media but have broader international community outreach. It is a multinational group now with operations across continents and a listing in London. This is the 21st Century and just pointing out to growth and job creation is not going to wash anymore because worldwide, citizens have become more aware of the negative effects of some industries. They have been aided by NGOs, activists and the Internet, especially social media. Old-fashioned white-washing and regulation-fixing does not work anymore.

Consider the fact that while drawing room chatter in India paints China often as a country that is ahead of India in growth because of its no-nonsense governments with no environmental “obstructions” that country has in reality seen public protests against polluting projects including one in Shifang that resulted in the stoppage of a copper smelter. Here in India, even a speck of a town like Udhampur in Jammu & Kashmir — barely on the industrial map of India — there have been spirited protests against polluting industries.

Community relations involves more than just jobs for locals or corporate social responsibility (CSR). There is a case for community relations to be seen separately from media relations, government relations and corporate social responsibility (CSR). CSR is about doing good social work, it is not necessarily about co-opting and convincing people. The proof of the pudding is in the eating — and we didn’t see any positive outcomes in Tamil Nadu despite years of work. Could it be that the efforts were cosmetic and not empathetic?

Madhavan Narayanan
N Madhavan is a senior journalist and editor who has worked for Reuters, Business Standard and Hindustan Times. He is currently an independent media entrepreneur, consultant and columnist.

He is listed among the top 200 Indian influencers on Twitter. He tweets as @madversity.

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