“There continues to be an unacceptable risk that your company will cause or contribute to severe environmental damage and serious or systematic human rights violations,” Johan H. Andresen, a senior official with the Norwegian fund, wrote in a letter to Vedanta after studying the mining firm’s operations. “Following its assessment, the Council has decided not to recommend the re-inclusion of Vedanta in the Government Pension Fund Global’s investment universe.”The Church of England (COE), Martin Currie Investment Pensions, and other investors have also dumped the company on human rights and environmental grounds.Critics say EDC’s support for Vedanta when other large investors are rejecting the company shows the Canadian agency has weak oversight when it comes to tracking the human rights and environmental records of companies it finances. EDC documents do not provide a breakdown of where Vedanta spent the money or exactly how much support the company receives.
EDC documents do not provide a breakdown of where Vedanta spent the money or exactly how much support the company receives.
“EDC’s team was aware of the [Norwegian] fund’s decision, but was also equally aware that a number of banks and third parties are noting improved performance on the part of Vedanta over the past year,” EDC official Phil Taylor told VICE News.Vedanta is part of Environmental Management Systems ISO 14001 Standards, an independent international monitor of sustainability performance, and another third party set of standards tracking health and safety standards, Taylor added.EDC made its financing deals with the blacklisted company through Cairn India, an oil and gas firm that was later acquired by Vedanta, Taylor said.“Cairn is very well regarded as a CSR (Corporate Social Responsibility) leader in India,” he continued. “EDC is confident that Cairn will continue to operate efficiently under the new management system, given its past performance.”Human rights groups, however, are not convinced given Vedanta’s track record in India.Amnesty International has accused the firm of “seriously undermining the quality of life and threatening the health” of thousands of people in Indigenous communities in eastern India’s Orissa State where Vedanta has operated.Vedanta did not respond to calls or emails from VICE News through its London-based public relations firm or via its main office in India.
Amnesty International has accused the firm of “seriously undermining the quality of life and threatening the health” of thousands of people
‘LACK OF TRANSPARENCY’
In contrast to other government departments or state agencies, a full accounting of EDC’s relationships with the companies it finances cannot be obtained through the Access to Information Act.“There is a lack of transparency,” Keenan told VICE News.The EDC says some of its documents are excluded from freedom of information rules due to the need to protect the commercial confidentiality of private firms who do business with the lender.The problem, says Keenan, is that companies generally provide EDC with information about their due diligence and monitoring when it comes to human rights and environmental compliance. Because that information comes from private companies, it is often not accessible to watchdog groups like hers who want to see what sorts of due diligence standards companies financed by EDC are reporting.
“This public financing undermines the Canadian government’s commitments to address climate change.”
DIVIDENDS FOR TAXPAYERS
Trade and investment deals signed by Canada mean that EDC cannot mandate companies to buy products from domestic suppliers as a condition for receiving loans, Keenan said, questioning the organization’s broader benefit in light of human rights concerns in its portfolio.EDC says that view is not backed by evidence. EDC’s loans, networking events and other policies are crucial for Canadian suppliers, especially small and medium sized firms, when they are trying to sell to larger international companies, Taylor said.Those loans, even if they are going to companies like Vedanta rather than Canadian firms help domestic exporters gain exposure to the big players, he said.“We want to create more opportunities for Canadian companies to get into the supply chain,” Taylor said, and giving loans to big firms and then introducing them to Canadian suppliers has been effective in opening those doors.Moreover, EDC is profitable for Canadian taxpayers; the crown corporation paid $786 million to the Government of Canada as a dividend in the first quarter of 2017 alone, according to company documents.
“We want to create more opportunities for Canadian companies to get into the supply chain.”