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.
Key Findings
- 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.