Inside Indian Energy and Mining Giant Vedanta's Campaign to Weaken Key Environmental Regulations
Inside Indian Energy and Mining Giant Vedanta's Campaign to Weaken Key Environmental Regulations
Independent/Alamy Stock Photo
As the COVID-19 pandemic swept across India, major mining and oil company Vedanta quietly lobbied the government to dilute environmental safeguards regulating the oil and mining industries.
Mining and oil giant Vedanta ran a covert lobbying campaign to weaken key environmental regulations during the pandemic.
India’s government approved the changes without public consultation and implemented them using what experts say are illegal methods.
In one case, Vedanta led a push to ensure mining companies could produce up to 50 percent more without new environmental approvals.
Vedanta’s oil business, Cairn India, also successfully lobbied to have public hearings scrapped for exploratory drilling in oil blocks it won in government auctions.
Since then, six of Cairn’s controversial oil projects in Rajasthan have been approved despite local opposition.
It was 2021 and the COVID-19 pandemic was ripping through India, crippling the country’s health system and bringing the economy to a standstill. But for Anil Agarwal, chairman of the energy and mining giant Vedanta Resources Ltd, the crisis presented an opportunity.
The government could add “impetus” to India’s “rapid” economic recovery by allowing mining companies to boost production by up to 50 percent without having to secure new environmental clearances, he wrote in a letter to the then environment minister Prakash Javadekar that January.
“Apart from immediately boosting production and economic growth, this will generate huge revenue for the Government and create massive jobs,” Agarwal wrote, recommending that the change could be made with “a simple notification.”
Javadekar quickly got to work. “VIMP [Very Important],” he scribbled on the letter, directing the secretary of his ministry and the director general of forestry to “discuss [the] policy issue.”
Previous industry efforts to push for a similar change had stalled. But this time, Agarwal would get what he wanted.
In early 2022, after a series of closed door meetings, India’s environment ministry loosened regulations to allow mining companies to increase production by up to 50 percent without needing to hold public hearings, which many in the industry considered the most onerous requirement of the environmental clearance process.
Though the head of a major industry lobby group and India’s mining secretary also pressed for the rules to be loosened, internal documents and government sources suggest Vedanta’s lobbying was key. The environment ministry then changed the regulations by publishing an office memo — meant to be used for inter-office communication — on its website.
Experts say this type of backroom lobbying allows powerful people close to India’s government to shape policies in their favor, even if they hurt local communities and the environment. By modifying important regulations using instruments like office memos, without any public debate, the government may also have skirted the law, according to a study of pandemic-era regulatory changes by the Vidhi Centre for Legal Policy.
Debadityo Sinha, the head of the think tank’s climate and ecosystems team which carried out the study, said these changes raise “concerns about their compatibility with the principles of inclusivity and democratic decision-making.”
To understand how key environmental regulations were modified during the pandemic, OCCRP combed through thousands of government documents obtained using freedom of information requests. The records — ranging from internal memos and the minutes of closed-door meetings to letters like the one from Agarwal — show government officials tailored the rules in line with requests made by the industry, and in particular Vedanta.
Vedanta is one of India’s most powerful companies, reporting more than $18 billion in revenues last year. Its chairman, Agarwal, is a fan of Modi, publicly praising the prime minister and his policies. Vedanta is also an important supporter of his Bharatiya Janata Party (BJP): Contribution reports analyzed by OCCRP show that two Vedanta-linked trusts alone donated $6.16 million to the party between 2016 and 2020.
Loosening environmental regulations for miners wasn’t the company’s only successful lobbying campaign.
The year before Agarwal wrote to Modi, one of the company’s subsidiaries, Cairn Oil & Gas, also started lobbying to scrap public hearings for oil exploration projects. As with mining, the government quietly amended the law with no public consultation. Since then, at least six of Cairn’s oil projects in the northern deserts of Rajasthan have been greenlit for development.
The influence India’s corporate leaders hold over their government may have even broader environmental ramifications. The country is the world’s third-largest emitter of greenhouse gasses, and its ability to regulate its heavy industries is crucial to the global effort to combat climate change.
Publicly, Modi has pledged to reduce India’s carbon emissions by a billion tons by 2030 and reach net zero emissions within 40 years after that. But experts who reviewed OCCRP’s findings say they show his government has prioritized the interests of oil and mining companies over the fight against climate change.
“It is a clear case of corporate capture of environmental governance,” said environmental lawyer Ritwick Dutta.
“Over the last few years, it is clear that most changes in environmental laws and policies have been largely guided in terms of the economic benefit it would bring to certain corporate entities or sectors.”
Vedanta told OCCRP that as “one of the leading natural resources organizations in India” the company operated “with an objective of import substitution by enhancing domestic production in a sustainable manner.”
“In view of the same, continuous representations are submitted for consideration to the Government in the best interest of national development and India’s march towards self-reliance in natural resources,” a spokesperson wrote in an email.
Modi’s office and India’s current environment minister did not respond to requests for comment. The former environment minister, Javadekar, did not respond to questions sent to him.
In April, the Central Bureau of Investigation filed charges against environmental lawyer Ritwick Dutta, claiming he uses foreign funds to “take down” coal projects. Legal watchdog Article 14 cited experts describing the case as “replete with factual errors and misrepresentations” and saying it would “have a chilling effect on environmental litigation in India.”
This year, the Centre for Policy Research, a think tank, had its license to receive foreign funding suspended and tax authorities started looking into their records for alleged violations, reportedly due to its “involvement” with environmental causes.
A June report by the Washington Post found the government also cracked down on critics of a huge coal mine owned by Adani Group, run by one of India’s richest men and a key Modi ally, with tax authorities raiding three nonprofits simultaneously last September.
“The pandemic made it easier for the authorities to limit people campaigning on ground, this continued even after the pandemic restrictions were eased,” said environmental activist Disha Ravi, who was arrested in 2021 for campaigning for farmers.
“A democracy that doesn’t allow a healthy flow of criticism and suggestions is a democracy in danger.”
Indian officials contacted by OCCRP declined to comment on the allegations.
Loosening Mining Regulations
By the time the pandemic hit India, the mining industry had already spent years trying to scrap regulations that required new environmental approvals when companies increased production.
In particular, the industry wanted to do away with the requirement to hold public consultations, where local people could raise their concerns about how an expansion would impact their lives and livelihoods.
The idea of abandoning that process was raised in 2018, but multiple industry and government sources told OCCRP nothing was done as both state and federal governments said it wasn’t in their purview. Internal documents show it was only discussed seriously again when Vedanta’s chairman wrote to the environment minister in January 2021.
Two weeks after Agarwal wrote to Javadekar, the environment ministry received a letter from the head of the Federation of Indian Chambers of Commerce & Industry lobby group making a similar request. Both pointed out that the government had done as much for coal mines a few years earlier, so it would be a simple matter of applying the rules to other types of mining.
Then the secretary of mining took up the call for loosening regulations, asking his counterpart in the environment ministry to consider a “similar relaxation as that of coal.”
In June, Vedanta’s chief executive, Sunil Duggal, wrote directly to Modi, arguing the prime minister could “boost the economic engine immediately” by scrapping the current method of granting environmental approvals. This would not only drive growth, he promised, but create jobs and help to “alleviate poverty” in “backward” parts of the country.
Modi’s office forwarded the letter to the environment secretary, who was already trying to set up meetings and committees to discuss the issue. But even then the idea faced internal opposition.
Vedanta chief executive Sunil Duggal wrote directly to Prime Minister Narendra Modi on June 13, 2021.
Modi’s office forwarded the letter on to the then environment secretary.
Minutes from one meeting in July show officials feared loosening the rules would break the law, and give a free pass to unrestrained mining in ecologically sensitive areas. A summary of an internal meeting by the Joint Expert Appraisal Committee — made up of ministry officials and mining experts — noted similar concerns, and said any increase in mining production should require some form of public consultation.
In October, the environment ministry, now led by Bhupender Yadav, published a memo that allowed mines to expand production by only 20 percent without public hearings — less than half what Agarwal and the mining industry lobby group had wanted.
But the issue was revived when Cabinet Secretary Rajiv Gauba, who reports directly to Modi, spearheaded an internal push to cut government red tape.
Minutes from a meeting on December 9, 2021, show he instructed the environment ministry to review its process for approving projects to determine if it had “achieved the desired objective.” An official with knowledge of what happened said that Gauba’s instruction was understood as an order to alter a variety of regulations, including for the mining sector.
“The cabinet secretary had asked us to make changes to the EC [environmental clearance] and FC [forest clearance] processes, so it had to be done,” the official, who asked not to be named to protect their job, told OCCRP.
In April 2022, the environment ministry published a memo scrapping the requirement for miners to hold public consultations when expanding production by up to 40 percent, and requiring only written feedback up to 50 percent. Experts said this would exclude a large section of the Indian public who cannot read or write, or who struggle to negotiate government bureaucracy.
Dutta, the environmental lawyer, said implementing a major change to India’s environmental legislation using a memo, without holding any public consultation process, is illegal. “An Office Memorandum is not a law and cannot be treated as a law,” he wrote in an email.
It is unclear if any specific Vedanta project has benefited from the new mining guidelines.
Because India is a democracy, any proposed changes to the law should be put out for public consultation. Office memos are forms of inter-governmental communication, so should not be used to change or introduce legislation.
Environmentalists and lawyers told OCCRP it was illegal for the government to use an office memo to allow mining companies to increase production by up to 50 percent without needing to hold public meetings.
"In my view the OM [office memo] will have both short-term and long-term implications that are not good for the environment,” said Madan Lokur, a former Indian judge whose ruling in a key mining case in Odisha forced Modi’s government to change its minerals policy in 2019.
Lokur said public hearings acted as “guardrails” to stop development from damaging the environment, so the government was promoting “unsustainable development” by scrapping them when mines significantly increased output.
Ritwick Dutta, a prominent environmental lawyer, also criticized the ruling by India’s National Green Tribunal, which upheld the regulations, saying it was "contradictory.”
Experts had similar criticisms of changes made to allow oil and gas companies to carry out explorative drilling without having to hold public hearings, which they warned could cause severe environmental damage.
Veteran environment activist Rajeev Suri challenged the changes at India’s National Green Tribunal –– a judicial body which hears environmental cases –– soon after they were published. In his petition, he argued that public hearings are “one of the most important safeguards for the general public” under environmental law.
The court ruled against Suri, agreeing with the government’s argument that the changes were only procedural.
But Suri’s lawyer, Vanshdeep Dalmia, said he considered some of the details in the documents OCCRP obtained to be grounds for appeal — specifically, minutes from one meeting that show the government’s own Joint Expert Appraisal Committee recommended that mining companies consult with anyone affected in writing at every stage of ramping up production.
Not disclosing this information to the court was “tantamount to suppression and concealment” of facts that could have had “a material bearing on the merits of the case,” Dalmia said.
Suri added that OCCRP’s investigation “brings to light the complicity between big business houses,” which use their money and “power to access the decision-making authorities.”
But the changes to the mining laws weren’t Vedanta’s only surreptitious lobbying effort during the pandemic.
A storage facility for crude oil owned by Cairn India at Barmer in the desert Indian state of Rajasthan in 2009.
Oil and Gas
Emotions were running high when Jor Singh, a local politician for the district of Barmer, in the dusty Rajasthan region on India’s border with Pakistan, took to the stage in September 2019 to speak out against the damage caused by Vedanta’s oil and gas projects.
Protesters were already shouting near the tent where the meeting was being held. They had tried to get it canceled, arguing the meeting hadn’t been sufficiently publicized and the hearing had too broad a mandate, but their pleas were ignored.
Singh started by listing a slew of environmental problems allegedly caused by one project operated by Vedanta’s oil and gas business, Cairn India.
“The company disposes of polluted water in agricultural fields and this polluted water causes difficulty in breathing,” Singh told the people gathered in the tent, according to minutes of the meeting.
He also criticized Vedanta for only publicizing the meeting in the newspapers, which not all local people could read. “Don’t take undue advantage of illiterate villagers,” he said.
Local resident Priyanka Chowdhary stood up next, saying polluted water from the company’s operations was being dumped on farmland. “Prime Minister Narendra Modi-ji is talking about the environment,” Chowdhary said, using a common Indian honorific. “How conscious is [Cairn] about the environment?”
A spokesperson for Cairn said the company follows all environmental regulations in its projects.
“We strongly believe in protecting the sustainability of the environment in which we operate and follow the highest standards of ESG compliance in our business operations to keep the environment and people safe,” they said in a statement.
The six blocks in Rajasthan are among dozens where Vedanta bought extraction rights in government auctions. OCCRP’s analysis of official data shows Vedanta was the top benefactor of a recent government push to boost domestic oil exploration, scooping up 62 of the 220 blocks put up for sale across the country between 2018 and 2022.
But several of the projects, including the blocks in Rajasthan, had been held up by local opposition. By the time of the Barmer meeting, Vedanta was already working to have the requirement to hold public consultations scrapped.
In March 2019, while seeking approval to begin work in its Rajasthan blocks, Cairn wrote to the environment ministry saying that no public hearings should be needed because the exploration projects were only “temporary and short-term.”
A few months later, the cabinet secretariat formed the Empowered Co-ordination Committee, led by Gauba, with the mandate to resolve regulatory issues faced by oil and gas companies that won blocks in the auctions.
It was at a meeting in July 2019 that the director general of hydrocarbons, V.P. Joy, first proposed exempting oil exploration from public hearings. Though not all his proposals were in line with Cairn’s specific requests, his reasoning on the exemptions — that the projects involved were only short term — echoed the company’s arguments.
Joy followed this up with a letter to the environment secretary in September the same year. His successor sent another in early January 2020. Just a few days later, India’s environment ministry published an amendment to the country’s Environmental Impact Assessment (EIA) law that exempted oil and gas exploration projects from having to hold public hearings.
The change also downgraded the risk ratings of these projects meaning they only had to be greenlit by state authorities, rather than experts in the environment ministry. Despite widespread opposition, internal letters show all of Cairn’s projects in Rajasthan were approved in 2021.
A senior government official with knowledge of what happened, who requested anonymity since he is not authorized to speak with reporters, said the combined influence of the director general and Cairn led to the law being changed.
“In addition to the requests made by the DGH [director general of hydrocarbons], another reason why the EIA law was amended for encouraging oil and gas exploration projects is the repeated requests sent by Cairn India to the environment ministry,” said the official.
Normally the ministry puts any proposed amendments to the law out for public feedback before implementing them. But in this case it bypassed further consultations using a rule that is only supposed to be used to streamline activities of “public interest” that protect the environment.
Lawyer and researcher Kritika Dinesh said it was evident that the environment ministry “prefers to listen to the voices of industries more than people displaced and impacted by pollution from development projects.”
“The [ministry’s] mandate is to protect the environment, but increasingly they are promoting business interests,” she said.
Peter Marshall/Alamy Stock Photo
Protesters outside India’s High Commission hold a mask of Prime Minister Narendra Modi and above a grotesque parody of Vedanta chairman Anil Agarwal in 2018.
Today, work on Cairn’s oil projects is getting underway. Compliance reports show that three of the planned 29 wells had been dug in one of them searching for oil or gas as of March this year.
A spokesperson for Cairn said the company had received all the necessary approvals for its oil and gas projects, including convening public hearings and engaging with local stakeholders in line with the advice of the state government.
Though Vedanta lobbied hard for the pandemic-era changes to India’s environmental regulations, it’s hard to say whether Modi’s government was acting specifically to benefit the company, as other companies also stood to benefit.
OCCRP did find evidence that Vedanta has been an important donor to Modi’s BJP party. Two entities linked to a Vedanta subsidiary
The Bhadram Janhit Shalika, a nonprofit set up by a Vedanta subsidiary to provide employees with welfare benefits; and the Janhit Electoral Trust, a nonprofit for political donations.
The Janhit Electoral Trust was registered at the address of a Vedanta subsidiary and listed a Vedanta official as its contact person. Vedanta listed the trust in an annual report under a category for entities “with whom transactions have taken place.”
gave a combined 43.5 crore rupees (around $6.16 million) to the party between 2016 and 2020, according to contribution reports filed with India’s election commission by the BJP and one of the entities.
The donations from just one of these trusts, Bhadram Janhit Shalika, put it in the top ten donors to the BJP between the fiscal years 2016-2017 and 2021-22, according to data compiled by the Association for Democratic Reforms, an Indian advocacy group.
The true amount could be far more because Vedanta has also made political donations through “electoral bonds” — an opaque method using bank promissory notes brought in by the BJP-led government in 2018. Between 2021-2023, Vedanta’s annual reports show it bought more than $35 million of these bonds though it’s unclear how much, if any, of this may have gone to Modi’s party.
Vedanta’s political donations had run into legal troubles in the past.
Two months before Modi was elected, New Delhi’s High Court ruled that its donations to the BJP and to the former ruling Congress Party — totaling to over 160 million rupees between 2004 and 2012 — breached the law restricting foreign companies from funding Indian political parties, because Vedanta was incorporated in the U.K.
Two years later, the government redefined what is considered a foreign company. The Association For Democratic Reforms, an advocacy group, alleged in a petition to the Supreme Court that the change was an attempt to shield the beneficiaries of Vedanta’s donations from scrutiny.
“These Amendments pose a serious danger to the autonomy of the country and are bound to adversely affect electoral transparency, encourage corrupt practices in politics and have made the unholy nexus between politics and corporate houses more opaque,” said the petition.
The case is pending.
Activist Disha Ravi, who has been arrested for her campaigning on behalf of farmers, said the influence of companies like Vedanta must be curbed if India is to protect its environment.
“Allowing big corporations to influence environmental policy is like allowing tobacco manufactures to influence policy on health and well being — their interests lie in increasing their bottom line,” she said.
“There is a strong need to remove them from places of power to achieve solutions.”
Fact-checking was provided by the OCCRP Fact-Checking Desk.