Twelve villages in the state of Orissa in India voted against the plans by Vedanta Aluminium Limited to quarry the Niyamgiri hills for bauxite last month in a historic referendum mandated by the Supreme Court. Vedanta initially signed a memorandum with the state government for a joint mining project in the Niyamgiri hills in 2003. After 4500 crores in investment and 10 years of protest by the local tribal community, the outcome of the referendum has been widely celebrated as a significant victory for civil rights in India. In response to this verdict, Vendata is engaging in a massive corporate social responsibility and publicity campaign to improve its market image, but its PR efforts are already doomed to failure
Vedanta has had a history of perpetrating environmental damage and infringing on the lives of local communities around their units. This includes coercion and contriving consent of tribes for their projects.
The company has cited altruistic motivations, such as socio-economic "development" for local communities, for their Niyamgiri project — development that those communities do not want. According to the Economic Times, the leader of the movement against the Niyamgiri project Kumti Majhii told Vedanta, "Your plan is to empty resources from Niyamgiri and leave. I will never allow that and you will never get hold of that land."
One of the other movement leaders, Lado Sikaka, believes that school education has taught people only about the economic potential of the mountain, and not about its ecological significance as a habitat. This gap in knowledge creates tension between traditional local communities and the corporations intent on foisting models of development on them that are designed to generate maximum profit at their expense.
Vedanta's exercise in corporate social responsibility is not merely a token effort at addressing these concerns but a counterintuitive one at that, disguising the company's revenue-generating mechanisms as social good ventures.
The company also recently launched the deceptively titled NDTV-Vedanta "Our Girls, Our Pride" campaign to deal with inequity issues affecting girls in India.
Vedanta says they intend to adopt 2635 anganwadi (day care centers) in the state of Karnataka. This decision has been met with protests by anganwadi workers — for good reason. Privatization of day care will not only lead to many centers being shut down (and hundreds of workers out of jobs), but it will also negatively affect the state-run Integrated Child Development Scheme (ICDS) scheme for children under the age of six. Lakshmidevamma, secretary of the CITU Anganwadi Workers’ and Assistants’ Association, told the Deccan Herald that the entry of a private player would negatively affect anganwadi, and leave many workers unemployed. Prima facie at least, it does not seem like the anganwadi venture will benefit anybody but the company itself.
Vedanta has also proposed building specialized hospitals for patients suffering from cancer and heart ailments as part of its CSR contributions. These hospitals, located around the Vedanta plants, are most likely to treat patients who are suffering from those ailments because of their proximity to the pollution and hazardous working conditions at the units themselves. A Vedanta plant in Tuticorin was forced to shut down over its pollution. Creating hospitals to address health problems created by poor working conditions creates a vicious cycle of damage and self-absolution in the garb of corporate social responsibility.
Vedanta has especially emphasized its micro-financing and "self-help groups" for women whose livelihoods will be adversely affected by the company's projects. This venture has come under criticism, as it is seen as a way Vedanta can crack down on protests by women by making them financially obligated via low-interest loans.
In another one of its schemes, Vedanta organized a film competition in 2010 called "Mining Happiness." The competition had to be cancelled following "Faking Happiness,"a counter-effort that exposed the atrocities being committed by Vedanta.
A couple of weeks ago, the president of India gave his assent to the "new companies bill," which makes it mandatory for companies who generate profits beyond a floor value to spend a minimum of two percent of their average profits on corporate social responsibility, while giving companies the freedom to choose the area of spending. The Vedanta case is a clear example of how this well-intentioned statutory provision can be misused and harm the very public it seeks to help.
Today, the 12 villages are celebrating saving their beloved Niyamgiri from corporate clutches. Vedanta is engaging in CSR campaign to rebuild its reputation, especially after its investors expressed dissatisfaction with their image. So far, it seems that the public will not be gratified by these meager attempts. A community petition by activists calls the "Our Girls, Our Pride" campaign "desperate" and accuses Vedanta as using it to "distract" India from real issues. "Vedanta's interests are directly opposed to those of India," the activists charge.
Instead of giving companies the freedom to indulge in arbitrary CSR acitivities as penance for their irreparable sins, it is crucial that a solid environment and social-impact-assessment legal mechanism is put in place. Companies should not be allowed to initiate controversial projects after deriving profit. The state should pursue serious criminal litigation against companies perpetrating human rights abuse along with tort-based liability aiming at compensation. Until then, do-gooding by corporations like Vedanta must be taken with a huge barrel of salt.