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The document discusses ethical business practices for using local resources in a foreign territory. It recommends joint ventures with local governments and obtaining necessary agreements, clearances, and support from national and local regulatory bodies. It also stresses the importance of obtaining free, prior, and informed consent from indigenous communities regarding any projects using tribal lands, as well as providing training and jobs to displaced persons. International laws and norms must be followed to responsibly develop natural resources and mitigate negative environmental or social impacts.

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54 views3 pages

Ethics Content

The document discusses ethical business practices for using local resources in a foreign territory. It recommends joint ventures with local governments and obtaining necessary agreements, clearances, and support from national and local regulatory bodies. It also stresses the importance of obtaining free, prior, and informed consent from indigenous communities regarding any projects using tribal lands, as well as providing training and jobs to displaced persons. International laws and norms must be followed to responsibly develop natural resources and mitigate negative environmental or social impacts.

Uploaded by

AYUSHNEWTON
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Questions

Q1. How do you conduct business in a foriegn territory using their resources , what is the ethical and
ideal way of doing it
 Joint Venture with the local government in foreign territory and Regional Industrial
developmental bodies.
 Gaining support from the local government for resource extraction.
 Procurement of land with the support from Regional industrial developmental bodies.
 Agreement with the previous owner of the land.
 MoU between the company’s subsidiary and the local government.
 Clearances from the national government of the target country & the environment regulatory
bodies committees.
Ans. VRLs involvement in the project began in 1997 when subsidiary company SIIL signed a Joint
Venture with the Orissa Government and the Orissa Industrial Infrastructure Development
Corporation (OIIDC) for a bauxite mine and alumina refinery. The district, one of India’s poorest,
and well known until then for starvation deaths that afflicted it, was nevertheless rich in mineral
resources. The company had the wholehearted support of the Orissa government for the
venture. The Orissa Mining Corporation Ltd (OMC) signed an agreement with SIIL under which
it took on the responsibility of sourcing the land needed for the projects.
OMC concluded an MoU with SIIL in April, 1997
After successful negotiation with SIIL for
setting up an integrated aluminium project consisting of 1 million tonnes of Alumina and 220
thousand tons of Aluminum per year, the MoU was converted on October 5, 2004, into a formal
agreement for investment in alumina refining, utilizing the Lanjigarh bauxite deposit.
To proceed with its investment plans, however, Vedanta needed to obtain various clearances
from the national government in New Delhi and in 2003 the company began to approach the
designated government ministry, the MoEF.
Limited awareness of their rights => Inability to launch organized protests  

Environmental Bodies and Committees CEC (Central Empowered Committee) FAC (Forest Advisory
Committee) WII (Wildlife Institute of India) CMPDIL (Central Mine Planning and Design Institute Limited)

Q2. What kind of Rehabilitation , employment opportunities and monetary compensation for displaced
people
Ans. The benefits that Vedanta would provide in would include appropriate training
facilities to Project Affected Persons (PAPs) to acquire skills and provide for employment as per
the provisions of Resettlement and Rehabilitation policy of Government of Orissa approved for
the Lanjigarh project

No strikes or violence to protest  Training to Project Affected Persons (PAPs) foe employment

People Civil Societies Locals –Villagers Locals – Tribals 

Q3. International law adherence 


Ans. SIIL did not mention this fact in its application despite the fact that the Forest Advisory Committee
(FAC), which was under the MoEF, needed to clear any diversion of forest land for industrial or mining use.

The Ministry was forced to do this when a Central Empowered Committee


(CEC), which had been set up by the Indian Supreme Court in in 2002 to look into proposals
involving diversion of forests for commercial use and its impact on wildlife, questioned the MoEF
about the appropriateness of giving environmental clearances for the refinery in the absence of
approval for use of forest land.

In September 2005, the CEC, submitted its report to the Supreme Court and
expressed its view that no firm should be allowed to use the Niyamgiri Hills for sourcing bauxite.
The report also criticized the official procedures which had been followed in examining and
clearing the project application.

The FAC requested the


Wildlife Institute of India (WII) and Central Mine Planning and Design Institute Limited
(CMPDIL), to assess the potential impact of the allowing mining and refining in the area.

The CEC, in its submissions to the court in May 2007, reiterated its earlier view that the MoEF
had moved with “undue haste” and had not been transparent in decision-making on the Vedanta
application.

On April 28, 2009, the MoEF gave


clearance to the mining project of Vedanta, an action that provoked widespread protests
worldwide.

Under Indian law any project involving use of tribal land must have the ‘prior informed consent’
of the tribes. wildlife, the MoEF decided to set up an expert
group to study the situation on-site. The group was asked to look at claims that the Forest
(Conservation) Act had been violated and that the project had endangered tribal rights and
wildlife

Indian law – Use of Tribal land involves ‘prior informed consent’ of the tribes  Vedanta’s Agreement with
two villages 

 Helped by International NGOs  


 They got help from Gordon Bennett, London based lawyer who fought against Botswana
Government on behalf of Kalahari tribesmen

 Regulatory bodies Central Government of India State Government of Odisha Supreme Court of India 

Q4. How should companies ethically and responsibly  use local resources
Ans. It did not request approval for the mine. Its application also did not indicate that part of the land
required was forest land. This petition was filed, not directly by the company, but through its local partner
the Orissa Industries and Investment Development Corporation (OIIDC).

Annual Reports of the company and information it


provided to the CEC indicated that the construction of the refinery started in Lanjigarh had
started much before the controversial environmental clearance had been given to the project in
September, 2004.

The agreement
makes a clear mention that the villagers will raise all their issues only through a village
coordinator nominated by Vedanta and that they will not resort to strikes or violence to press
their demands.
Village coordinator nominated by Vedanta

Residents of couple of villages raised protest despite Vedanta’s claim of reaching agreement

Companies Vedanta Aluminium Limited Odisha Industrial Infra Devt Corporation Orissa Mining Corporation
International NGOs 

Q5. Optimal resource usage and handling negative externalities


Ans. The inhabitants of the mineral rich region came to know the personal impact on them of the
project on June 6, 2002, when district government officials in Kalahandi issued a notification to
villagers for land acquisition for the alumina refinery project in Lanjigarh. (time:5 yrs)

The government notification indicated that twelve villages of the district would be acquired. Sixty
families would
be relocated elsewhere and 302 families would lose the land that they were farming when the
project was completed.

Despite the approvals, protests grew over the clearances given by various government
agencies to Vedanta. One major area of concern related to the impact of mining on various
tribal groups that were indigenous to the area.
The limited awareness of their rights among tribals reduced their ability to launch organized protests.

 Dongria Kondhs are Odisha state’s scheduled tribes who have spiritual and cultural attachment to
Niyamgiri  
 They have their abode in Niyamgiri Hills – The hill is worshipped as God  
 Their land holding is passed on only to future generation of their tribe and not to anyone outside
the native tribe  
 Location of Origin of Vamsadhara River is Niyamagiri Hills  
 Declared as Game Sanctuary and Protected Nature Conservation Area

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