Court/Judicial body:: UK National Contact Point for the OECD Guidelines for Multinational Enterprises grievance mechanism
Date: 25 September 2009
Instrument(s) cited:Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational EnterprisesUN International Covenant on Civil and Political RightsUN Convention on the Elimination of All Forms of Racial Discrimination Convention on Biological Diversity UN Declaration on the Rights of Indigenous Peoples
Background: The UK based Non-Governmental Organisation (NGO) Survival International filed a complaint against Vedanta Resources plc (“Vedanta”), a UK mining company operating in India, with the UK National Contact Point for the OECD Guidelines for Multinational Enterprises grievance mechanism (“UK NCP”). Survival International alleged that Vedanta, in planning to construct a large mine in proximity to local indigenous groups in India, acted in violation of the Guidelines. The construction of a new open-pit bauxite mine and an aluminium refinery was planned to take place in the Niyamgiri Hills near Lanjigarh in the Kalahandi and Rayagada Districts of Orissa, India, a region inhabited by a local indigenous tribe called the Dongria Kondh, with many children present. Survival International alleged that the planned mine and refinery construction infringed the Guidelines because the company failed to “engage in adequate and timely consultation” with the local people, who consider the area as sacred, and because the company failed to respect and consider the implications of its business activities on the rights and freedoms of the Dongria Kondh. Issues and resolution: Impact of business activities on indigenous peoples. Whether the company had fulfilled its obligations under the Guidelines to consult the local community and to consider the impact of its activities on indigenous peoples. The UK NCP found that the company had not acted in accordance with the Guidelines and recommended them to immediately engage in an effective consultation with the local community and to include a human and indigenous rights impact assessment in its project management process.
Court reasoning: The UK NCP found substantial evidence indicating that the Dongria Kondh inhabited the proposed mine site in the Niyamgiri Hills and that the Niyamgiri Hill is regarded by them as a “God” and “sacred”. It was, therefore, clear that the mining project would severely affect the environment in which the Dongria Kondh lived and could even cause the displacement of the Dongria Kondh community. The UK NCP also found that the decision to construct the mine appeared to have been taken without adequate and timely consultation with the Dongria Kondh. Despite Vedanta’s best efforts to argue that a number of consultations with local tribal groups had taken place, the UK NCP found them to be inadequate. The first consultation in June 2002 made no mention of the construction of the bauxite mine and, whilst the consultation in 2003 did cover the construction of the bauxite mine, it was very poorly attended, with only ten people signing the attendance sheet. The poor attendance of these meetings may have been due to the fact that the notice of the meeting was only given in English, and not in the native language of the Dongria Kondh. Further, Vedanta had failed to assess the impact of the mine construction on the livelihood of the Dongria Kondh or any other indigenous community which might be affected. Ultimately, the decision to build the mine was taken purely on economic grounds, in particular the presence of large quantities of good quality bauxite, and without regard to the rights of the local community. Therefore, the UK NCP upheld Survival International’s allegations and concluded that the company did not take adequate steps to respect the rights and freedoms of those affected by its activities as required by the Guidelines. It recommended that the company: Vedanta should immediately and adequately engage with the Dongria Kondh seeking, in particular, the Dongria Kondh’s views on the construction of the bauxite mine. At a minimum, the company has expected to advertise the consultation in a language and form that could be easily understood by the Dongria Kondh. Vedanta should include a human and indigenous rights impact assessment in its project management process.
Notes: The Organisation for Economic Co-operation and Development is an intergovernmental organisation, comprising 43 countries, which develops social and economic policies. The OECD’s Guidelines for Multinational Enterprises set recommendations to ensure that companies undertake business responsibly in their worldwide operations. The Guidelines represent a collection of voluntary principles and standards which should be pursued in order to ensure the responsible business conduct of multinational enterprises. The Guidelines advocate sustainable development throughout the supply chain, respect for the human rights of those affected by the activities of the enterprise and the abolition of child and forced labour. Whilst the Guidelines are not legally binding, OECD governments and a number of non-OECD governments are committed to encouraging multinational enterprises operating in or from their territories to observe the Guidelines wherever they operate, whilst taking into account the particular circumstances of each host country. For more information about this OECD grievance process, read the joint guide by CRIN and ICJ for civil society on the General Comment no. 16 of the UN Committee on the Rights of the Child.
Link to full judgement: http://www.oecd.org/investment/mne/43884129.pdf