Both Congress & BJP Received Funding From Sterlite’s UK-Based Owner Vedanta

The Logical Indian Crew

May 25th, 2018

Image Credit: Financial Express, India

Death of the 12 protesters in Tuticorin during their protest against Vedanta’s Sterlite Copper Plant has drawn nation-wide criticism for unfair use of power by the state government and also because of ‘sniper-style shooting’ using semi-automatic rifles.

PM Narendra Modi was also heavily criticised by the opposition for not making a statement condemning the deaths. Rahul Gandhi, president of Indian National Congress (INC) too, minced no words in condemning the act, calling the deaths “a brutal example of state-sponsored terrorism”, even calling the AIADMK government acting on the behest of Narendra Modi government.

However, what remains to be noted is that both BJP and Congress have received funds from Vedanta. In what seems to appear as a mutual co-operative set-up, both the parties kept their silence on the issue of Foreign Contribution Regulation Act (FCRA), under which political parties are not permitted to accept contributions from foreign companies or companies controlled in India by foreign companies.


Both BJP and Congress received funds from Vedanta

EAS Sharma, the former secretary to the Government of India and the Association for Democratic Reforms (ADR), an NGO which works in the area of political and electoral reforms, filed a Public Interest Litigation (PIL) in the Delhi High Court in 2013 claiming that both Congress and BJP had accepted donation from UK-based Vedanta Group. Thereby, violating both Representation of People’s Act 1951 and FCRA, 1976 and 2010.

In 2014, the Delhi HC held both Congress and BJP guilty of violating FCRA. The Court then directed the then Government of India (UPA) and Elections action against the two parties within six months.

With the HC’s verdict, it was established that Vedanta Group was the single largest donor to the two parties during the period.

Sterlite Industries India Limited donated Rs 6 crore to the Congress and Sesa Goa Limited of the Vedanta Group contributed Rs 2.785 crore. Vedanta’s Madras Aluminium Company donated Rs 3.50 crore to BJP in two instalments and Sesa Goa Limited contributes Rs 1.415 crore during 2004-2015.

The parties challenged the Delhi High Court judgement by moving to Supreme Court on March 28, 2014. Both BJP and Congress were united in opposing the Delhi High Court order saying that the court delivered its verdict on the basis of a 1976 Act and did not take the amendment from 2010 (which was done in 2016) into purview.

Under the 2016 amendment, it was established that a company will “not be deemed a foreign source” if the “nominal value of share capital is within the limits specified for foreign investments”.

Another respite for the two parties already accused of accepting foreign donations came with the amendment in FCRA in this year’s finance bill which made all the donations from the foreign companies, which aren’t considered foreign anymore, undisputed.


Close ties with the political parties helped Vedanta

Vedanta’s original copper smelter was built inside the Tuticorin Industrial Complex of SIPCOT (State Industries Promotion Corporation of Tamilnadu Ltd). The complex came up before the environmental clearance regulations of 2006 were put in place. In 2009, Vedanta sought permission from the Union environment ministry for expansion.
The environment ministry under UPA gave clearance without the public hearing. The clearance was valid for the next five years. In 2013, when Vedanta again approached the Union minister for an extension, the government then said that expansion would require consultation from people.
In December 2014, the NDA government made an interpretation to green regulations in December 2014 in support of this.

This interpretation by the NDA government was fortuitous for companies because the environment ministry under UPA government had insisted in May 2014 that projects such as Vedanta’s in Tuticorin were required by law to first go through public consultations.

In 2016, the National Green Tribunal found the flaw in the December orders of NDA government and eventually got the orders quashed, however, by then Vedanta had secured an extension of the green clearance to its expansion project in Tuticorin without the need for a public hearing.


The Logical Indian Take

Corporate funding of political parties has already strengthened the corporate – politics nexus. Accepting such donations dilutes the power the political party might want to have. The corporate would want cases and laws to be passed in their favour, even if guilty of any wrongdoing. For example, Mining giant Vedanta consistently violated several laws in bauxite mining at Niyamgiri, encroached upon government land, got clearances on the basis of false information and illegally built its aluminium refinery at Lanjigarh, Orissa. As the company engaged in these violations, the Orissa government colluded with it and the Centre turned a blind eye. These are some of the findings of the four-member N C Saxena committee, which recommended that the company not be allowed to mine in the hills.

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