THE UNIVERSITY OF ZAMBIA

INSTITUTE OF DISTANCE EDUCATION

BUSINESS ENVIRONMENT, SOB 1052 Test 2
Answer All Questions

QUESTION 1

Zambian Villagers Sue Mining Giant Vedanta in UK Court Zambian villagers claim a giant copper mine
under UK-based Vedanta has polluted their waters. They've now won the right to have their case
heard in British courts. 1,800 villagers living downstream the Konkola Copper Mines (KCM) in the
Zambian Copperbelt region are demanding an end to 12 years of pollution near the town of Chingola
and KCM’s Nchanga copper mine, which has turned the adjacent Kafue into a river of acid. The
villagers are suing Vedanta, a London-based mining group, and its subsidiary KCM in the UK for
personal injury and loss of livelihood, having won a previous High Court hearing that decided they
could pursue the case in the country’s courts. People from the four villages of Shimulala, Hippo Pool,
Hellen and Kakoso are seeking compensation for loss and damage to their land and health. They claim
their primary sources for drinking, washing, bathing and irrigating farms are surface water and
shallow wells next to the giant Nchanga copper mine. A number of scientific papers have documented
the extent of contamination of these, with acidity and heavy metal contents regularly tens and even
hundreds of times above legal limits. One villager, Judith Kapumba, gave video testimony of how
contamination has destroyed local community’s livelihood and lives, claiming that many have
“collapsed and died” as a result of illnesses caused by drinking contaminated water, and that crops
can no longer grow, leading to starvation and poverty. During the UK court hearing, Vedanta argued
that the case against it and KCM should be heard in Zambia. But High Court judge Sir Peter Coulson
dismissed the multinational’s claims, saying he feared that villagers wouldn’t get justice in their own
country because they wouldn’t be able to afford lawyers and adding that the Zambian legal system
wouldn’t be able to cope with such a large and long trial. KCM is guilty of financial secrecy, historical
dishonesty and attempts to pervert the course of justice, according to Judge Coulson’s sentence, as
reported by the Phulbari Solidarity Page 3 of 7 Group, which opposes a proposed open-pit mine in
Bangladesh’s Phulbari region. During the trial, in fact, it was revealed that KCM has never filed annual
accounts to the Zambian government in accordance with the Zambian Companies Act. Meanwhile,
Vedanta has issued an announcement to the London Stock Exchange indicating that it is considering
whether to appeal the decision. The full trial is likely to take place before the end of 2017.

(Author: Mike Mwenda, 10th January, 2017)

TURN PAGE FOR QUESTIONS

Required :

a) Using the knowledge you acquired in business environment, justify the

villagers’ action to sue Vedanta.
b) Operating an environmentally friendly business helps to reduce its impact on
the environment, preserves natural resources and improves the sustainability of
the business. Discuss five (5) environmentally-conscious business practices
Konkola Copper Mines (KCM) should consider as mitigating factors in the case
above?
c) Bearing in mind that Copper is a finite nonrenewable resource, outline any five
(5) sustainable measures that the Zambian government could put in place to
ensure that KCM’s mining activities do not cause harm to the Zambian people as
well the natural environment.
d) KCM has never filed annual accounts to the Zambian government in
accordance with the Zambian Companies Act. Is this act legal or ethical? Give a
justification for your answer.
e) KCM is guilty of financial secrecy, historical dishonesty and attempts to pervert
the course of justice, according to Judge Coulson’s sentence. What advice would
you give management at KCM Plc on this matter in view of its legal structure as a
Public limited company?

QUESTION 2

Discuss with examples the strategies a Business can use to enter an international
market?

QUESTION 3

Write short notes

a) E-business
b) Use of demographic information on Business
c) Life style patterns and Business