Initial report from meeting with bankers funding Vedanta

This is an initial report on meeting with banks financing Vedanta held on September 22, 2009 in London. GOAMAP was represented at this meeting by H.Bedi. Read on...

I wanted to let you know that the workshop itself went really well. Eight banks attended from Australia, France, Germany, Italy, the Netherlands and the US. It was conspicuous though that no British banks attended (they had all declined beforehand in spite of the fact that the workshop was in London). There were, however, three UK investors who attended. Vedanta of course did not come. (In so far it was actually quite good that we had invited them).

There were great presentations from Simon Chase on Zambia, H. Bedi on Goa, Ritwick on Niyamgiri and Roger gave an scathing overview of Vedanta's corporate culture. The discussion was quite lively. One could tell that several of the bank representatives seemed quite shocked about the facts that were presented. Some of them, however, tried to sound us out regarding a policy of "engagement" towards the company (i.e. trying to reform Vedanta). Here, we almost didn't need to answer the question, because one of the Dutch banks (who have in the meantime disinvested from Vedanta) relayed their experience. They had tried engaging with the company and found that their questions were not answered and that the company is not willing to acknowledge any of the problems it is causing. Their conclusion was that the company is not reformable. This obviously made a big impression on the other banks and investors. We of course added that we also see no room for reforms as the company is truly a serial offender and has absolutely no respect for communities' rights or host country environment laws.

The banks, naturally, did not say what they are now going to do. But most of them took extensive notes and also asked us to send them copies of the presentations and other materials, so that they can circulate them internally. A representative of one of the big French banks questioned us about Vedanta's operations in Australia (none of us had however looked into these). When I talked to him later on privately, he said that while it would be hard for his bank to reject all future financing for Vedanta, he could well imagine that they would refrain from general corporate loans or from loans to Vedanta's operations in developing countries. Some banks (for example from Germany) indicated that they would not be willing to give any future assistance to the company.

Since the bankers were mainly representatives of sustainability departments, they were quite honest in saying that the main reason not to give further financing to Vedanta is reputational risk (i.e. that the banks themselves fear becoming the target of NGO or media campaigns).

I'm sorry that I can't give you the exact details of which banks said what, but the meeting was conducted under the so-called Chatham House Rule, which means that we aren't allowed to quote statements in a way that makes them attributable to an individual bank.

I think the meeting definitely had an impact, even with some of the banks who did not attend. Many of them asked for a report of the workshop (we will send them all the presentations) and I know of several, who have already written to Vedanta and are asking the company detailed questions. Our hope is that the workshop and the ongoing campaigns will make it much harder for the company to raise money for its future operations.

We of course pointed out that in cases where the banks have already given assistance to Vedanta, we hold them responsible for the ongoing impacts of the company's operations and that the banks need to examine the possibility of calling back these loans.

I guess we now need to think about possibilities for follow-up (aside from compiling a report of the workshop). One aspect which we discussed with some of the British NGOs afterwards is the possibility for a campaign on the British banks as some of these are major financiers of Vedanta. It looks like Amnesty International is interested in taking this up in the UK.

Anyway, if you have anything that you'd like us to include in the package we send out to banks, please send it to me sometime next week.

All the best,
Heffa