The Royal Bank of Scotland (RBS) is facing a welter of fresh allegations about its multi-million pound investments in dirty and dangerous industries as campaigners prepare to protest at its annual general meeting in Edinburgh this week.
The bank, which is 84% owned by British taxpayers, has now been accused of backing a highly controversial mining operation in India. It is also said to have invested in companies which make cluster bombs, which are to be banned worldwide because of their “horrific” impacts.
Campaigners are demanding that RBS totally rethinks its investments to respect human rights and the environment. The bank, however, believes it is being unfairly targeted, and is becoming privately frustrated at the attention it is receiving.
The human rights group, Amnesty International, says that RBS or its subsidiaries have provided financial support worth £163 million to Vedanta Resources, a British-owned mining company, since 2004-05. The company runs a large aluminium refinery in Orissa, an impoverished region in central India.
An investigation by Amnesty found that the refinery had flouted the law and undermined the rights of local communities in the Niyamgiri Hills. Vedanta was accused of displacing landless workers without compensation, and polluting water used by people for drinking and bathing.
Plans by Vedanta to excavate a new 1,700-acre bauxite mine in the area have run into fierce opposition. The indigenous Dongria Kondh community, who rely on the land for their livelihoods, are trying to stop the mine, claiming it will bring pollution and destruction.
Amnesty also pointed to evidence that RBS has invested £147 million in Lockheed Martin and L-3 Communications, US companies accused of helping to make cluster bombs. The bombs, which scatter explosives over a wide area, have killed or maimed thousands of civilians over the last 40 years, a quarter of them children.
More than a hundred countries have signed the Convention on Cluster Munitions banning the use, production or stockpiling of the weapons. It is due to come into force as binding international law on 1 August this year.
“In its public statement on human rights, RBS commits to respecting and upholding human rights standards in all their operations and spheres of influence,” said Graeme McGregor, Amnesty’s campaigner in Scotland.
“If that's the case, then how does RBS justify its financial relations with Vedanta? RBS also has a history of funding arms manufacturers who produce cluster bombs, a shockingly indiscriminate weapon.”
Amnesty is urging RBS to use its influence to ensure that Vedanta changes its ways by meeting international standards on human rights and the environment. It also wants the bank to sever its ties with the makers of cluster bombs.
Amnesty is part of a coalition of campaign groups that are planning a series of protests against RBS’s use of “public money for dirty investments” to coincide with the bank’s annual general meeting (AGM) in Edinburgh on Wednesday. They will be joined by First Nation activists from Canada, angry about the bank’s backing for the exploitation of polluting tar sands in Alberta.
Their concerns are likely to be raised by shareholders inside the RBS AGM, and then afterwards at an alternative “public shareholders meeting” in a nearby hotel. Other protest groups under the umbrella of the Climate Camp have said that “thousands” are planning to take direct action against RBS, though how and when has been kept secret.
The bank responded to the crescendo of criticism by inviting representatives of the campaign coalition including Amnesty to meet their chairman, Philip Hampton, before the AGM. But so far that hasn’t proved possible because of conflicting commitments.
Privately, bank insiders are concerned they are being “played” to publicise causes. They point out that they also face strong criticism for not lending enough to companies struggling to survive after the economic recession.
“We are committed to conducting our business in a sustainable manner by assessing lending, investment and services decisions through defined risk and credit committee procedures, taking into account social, ethical and environmental issues,” said an RBS spokeswoman.
“We expect that all our customers conduct their business strictly in accordance with the legal and regulatory framework set out by their relevant operational jurisdiction.”
RBS recognised that a wide range of groups took a legitimate interest in their business. “Although we will not always agree with the many different opinions expressed, we welcome feedback and constructive engagement with interested parties,” the spokeswoman added.
Vedanta strongly denied that it had caused pollution or abused human rights in India. It pointed out that it had invested £49 million over the last five years in health, education and other projects to benefit local communities.
The company was disappointed that the Church of England and other shareholders had decided to sell their stakes in the business. “Vedanta remains fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights,” said a company spokeswoman.