Sterlite Copper:

Business At What
Cost?
Presented by Group 10
A Kevin Silvacus - 23P064 Harshul Jain - 23P088

Abhishek Srivastava - 23P068 Sagaram Pranav - 23P105

Astha Mishra - 23P078 Srivatsa Patnaik - 23P118

Bhavya Bansal - 23P081

Agenda
1. Introduction
2. Background
3. Sterlite Operations
4. Environment & Social Concerns
5. The Protests
6. Legal and Regulatory Battles
7. Government and Community Response
8. Economic Impact
9. Sterlite’s Defense
10. Ethical Dilemma & Considerations
11. Discussion and Conclusions
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Introduction
• Overview: Sterlite Copper India Limited, a unit of Vedanta Limited,
is situated in Thoothukudi, Tamil Nadu, India. It is one of the
country's most significant copper smelting plants.
• Significance: The plant plays a crucial role in India's copper
industry, contributing significantly to the country's copper
production.
• Controversies: Sterlite Copper has been at the center of
environmental and public health controversies, leading to
widespread protests. The most notable of these took place in May
2018, resulting in a tragic clash between protestors and police,
with 13 casualties.
• Current Status: The plant's operations have been subject to legal
and regulatory scrutiny, leading to a series of closures and
reopenings, reflecting the ongoing debate between industrial
development and environmental sustainability.

3
Background
• India's Role: As of 2018, India was one of the top 20 largest copper producers
globally, highlighting its significant role in the copper market.
• Copper Usage: In India, over half the copper demand comes from the telecom and
electrical sectors, with other industries like engineering and construction also reliant
on it.
• Sterlite's Role: Sterlite Copper, a Vedanta Limited company, has been instrumental
in supplying copper domestically and internationally, providing jobs, and supporting
the economy.
• Environmental Issues: The company has been the focal point of environmental
concerns, with its activities sparking protests and legal issues over air and water
pollution impacts.
• Legal Hurdles: Sterlite's history includes several legal and regulatory challenges that
underscore the difficulty of aligning industrial progress with environmental
conservation in a developing economy.

PRESENTATION TITLE 4
Sterlite Operations
Location: Established in 1994 in Thoothukudi, Tamil Nadu, Sterlite Copper started as one of
India's largest copper smelters by Vedanta Ltd. The company operated from within the State
Industries Promotion Corporation of Tamil Nadu (SIPCOT) Complex
Production Capacity: With over 3500 permanent employees and 2500 contractual employees,
Sterlite Copper has a production capacity of 400,000 Tonnes/year. The Company was planning to
double its production capacity and make itself the 2nd largest copper producer in the world.
Economic Contributions: One of the major contributors towards making India a net exporter of
Copper.
Community Initiatives: Sterlite Copper has identified eight areas – Education, Health, Child
Care, Women Empowerment, Infrastructure, Livelihood, Agriculture and Animal Husbandry, and
Employee Volunteerism.
Environmental Considerations: Sterlite Copper was classified under the Red color zone based on
the pollution emissions. Thus, it was not permitted to operate in an ecologically fragile and
protected area.

5
Environment & Social Concerns
Pollution Issues: Sterlite Copper was blamed for dumping wastes in waters and causing pollution,
leading to the destruction of aquatic life and health problems among the residents of the area.
Health Impact: Residents of the villages experienced respiration diseases, miscarriages, birth of
children with congenital disorders and death.
Community Disruption: Loss of livelihood for the fishing communities, salt producers, diversion of
water resources to the production facility affected crop yield.
Regulatory Non-Compliance: Sterlite Copper was charged with non-compliance of several regulations
like Environmental Regulations including emission of pollutions above the permissible limits
Public Protest: Sterlite Copper witnessed protests from local Public which led to shutdown of the plant
and disruptions in the supply of copper. This further affected the operations of the related industries
Sterlite's Response: Sterlite published various reports like "Know the truth: Say no to fake news"
showcasing its compliance with regulations and called the public protests an outcome of misinformation.
The Co. also invited various organizations to visit its facility to convince them.

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The Protests
• Expansion Announcement: In January 2018, Vedanta Limited announced plans to expand Sterlite Copper by
building an additional copper smelter plant in Therkuveerapandiyapuram village, aiming to double its production
capacity.
• Public Outcry: By March 2018, the expansion plans became widely known, leading to significant protests in
Kumarettiyapuram, with residents living close to the proposed site voicing concerns over environmental violations
and demanding the plant's complete shutdown.
• Escalating Protests: The protests, which had been growing over 100 days, reached a peak on May 22, 2018, when
approximately 20,000 protesters gathered at the Sterlite gates, leading to a violent confrontation with the police.
• Deadly Confrontation: The situation escalated as the police used force to control the crowd, resulting in 13
fatalities and several injuries among the protesters.
• Legal Measures: In response to the violence, the police implemented Section 144 of the Criminal Procedure Code,
restricting the assembly of more than four people in the area and charging rule violators with rioting.

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Legal and Regulatory Battles (1/2)
• 1994: TNPCB granted a No Objection Certificate with conditions, which Sterlite violated by constructing the plant
too close to the Gulf of Mannar without a green belt.
• 1996: TNPCB set a production limit, which Sterlite exceeded, also expanding the plant without approval.
• 1998: Found guilty of insider trading by the Securities and Exchange Board of India, leading to a two-year ban from
the capital market.
• 2003: Unauthorized expansion of the copper refinery came to light, but no objections were raised by authorities
despite usage of expanded units.
• 2009: Granted environmental clearance for expansion without public consent, despite the land being outside
designated industrial areas, raising legal questions.
• 2013: Accusations of excessive sulfur dioxide emissions leading to TNPCB ordering a shutdown; massive toxic gas
leaks affected over 5,000 people, leading to a shutdown order by Madras High Court, which was later overturned by
the Supreme Court despite acknowledging violations, resulting in a fine of ₹1 billion but allowing the plant to
reopen.

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Legal and Regulatory Battles (2/2)
• 2014: Public Interest Litigation revealed political donations to major parties from Sterlite,
highlighting potential conflicts of interest.
• 2018: TNPCB refused to renew operation consent due to environmental concerns, followed by a
permanent shutdown order from the Tamil Nadu government, which was later contested and
temporarily overturned by the NGT, only for the Supreme Court to order a shutdown again in 2019.
• 2019: Continued legal battles as Sterlite appealed to the Madras High Court for reopening after the
Supreme Court's shutdown order, reflecting ongoing legal and regulatory challenges.

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Government and Community Response
Plant Shutdown (2013)-
TNPCB accused Sterlite of releasing noxious gas into the air. Emissions beyond the norms. Madras High Court, issued the
plant to be shut down. National Green Tribunal turned in favor of Sterlite and fined it Rs. 1bn

Plant Shutdown (2018)-

Government ordered the plant to be shut down, NGT again overturned it however Supreme Court was against the ruling and
had shut down the plant

Local Community-
Initially local communities were hopeful of gaining from Sterlite copper plant however, soon farmers starting complaining
of the problems they were facing.

Expansion without public hearing-

Sterlite expansion of 400,000 tonnes was already approved without a public hearing that Environment Impact Assessment
Rules of 2006 normally required

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Economic Impact
Post Sterlite Shutdown (Accounted)-
Increase in country’s import of copper by 118.3%,
Exports dropped from the 2017-18 amount of 46% of all refined copper produced in India to only 10.7% in 2018-19
Domestic chemical manufacturers and allied businesses that relied on the raw materials from Sterlite took a hit
Combined revenue loss from all impacted companies was estimated to reach Rs. 243.45 bn, according to Chemical
Industries Association
Capital employed by Vedanta was lost due to the shut down of the plant

Post Sterlite Shutdown (Unaccounted)-

Localites lost their jobs and sources of income
People were affected due to gas leaks
People of village contracted respiration diseases, there were events of deaths, miscarriages and birth of children with
congenital diseases
Destruction of local vegetation and impact on local water bodies

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Sterlite’s Defense
Claiming against Allegations:
Sterlite issued a report on its website titled Know the Truth: Say No to Fake News. Sterlite
claimed to have been victimized by misinformation and inaccurate news reports on social
media networks that it claimed had triggered the plant’s closure. It refuted all negative
allegations, including:
• increased cancer rates due to waste discharge
• loss of marine life due to the plant’s proximity to the Gulf of Mannar
• lack of compliance in creating a sufficient greenbelt, and inadequate employment support
for the local community
• It claimed that the local cancer rate was the lowest in the entire state of Tamil Nadu
• The report also claimed that Sterlite had been a “zero liquid charge” plant since its
inception
• It also claimed that it discharged no effluents in the ocean, and kept all marine life
unharmed

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Sterlite’s Defense
Compliance about environmental regulations:
Sterlite also invited environmental activists and community members to visit the plant and
become convinced about the company’s compliance with environmental regulations and the
absence of toxic discharge into the air

Awards and Recognition:

The company also cited its numerous awardsas proof of its commitment to the environment
and the community, including the:
• Frost & Sullivanand FICCI’s India Manufacturing Excellence Award for operational
excellence
• BT CSR Excellence Award for promotion of education
• GoldenPeacock HR Excellence Award
• Excellent EnergyEfficient Unit Award by CII Five Star Rating for excellence in
environment, health, and safety practices;
• British Safety Council’s Sword of Honour
• Five Star Rating for reaching the pinnacle of health, safety, and environmental
management.

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Ethical Dilemmas
Economic Development
Sterlite Copper is integral to India's copper industry,
bolstering the economy with key exports and fostering
local employment with over 3.5k full-time and 2.5k
contract jobs
Corporate Profitability
Sterlite Copper prioritized profit and shareholder
value, focusing on operational efficiency and
expansion.
Rights of the Community
Local residents were entitled to a clean environment,
unmarred by industrial pollution or ecological harm
Environmental Protection
Sterlite Copper's activities have led to significant air
VS. and water pollution concerns impacting public health
and the ecosystem, with effects on wildlife, natural
habitats, and local livelihoods such as fishing
Social Responsibility
VS. The firm was tasked with safeguarding local
communities against its operations' negative impacts
through environmental and social initiatives.
Corporate Rights
VS. Sterlite Copper maintains the right to operate within
legal bounds, despite potential opposition from local
communities.
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Ethical Considerations (1/2)
Utilitarian Perspective
• Benefit vs. Harm: Sterlite Copper's economic contributions weighed against the health and environmental
damage to determine if overall societal welfare increased or decreased.
• Outcome Maximization: The ethical directive to maximize positive outcomes; if Sterlite's operations cause
more harm than good, they would be deemed unethical by utilitarian standards

Stakeholder Theory
• Inclusivity: Recognizing that not only shareholders but also employees, local communities, government
bodies, and the ecological environment are stakeholders in the Sterlite Copper operations.
• Impact Analysis: Decisions made by Sterlite Copper should be analyzed for their impact on all stakeholders,
not just for their profitability. This includes considering the health implications for local residents, the
environmental consequences, and the economic effects on local and national scales.

PRESENTATION TITLE 15
Ethical Considerations (2/2)
Precautionary
Principle
• Proactive Measures: Even if there is no absolute scientific certainty about the environmental and health
impacts of Sterlite Copper's operations, the company should take proactive steps to prevent potential harm
• Risk Management: Sterlite Copper should not wait for irrefutable evidence of harm before taking action to
mitigate or eliminate risks, especially when the stakes involve public health and ecological integrity

3 Domain Model of CSR

• Economic Responsibilities: Sterlite Copper should have ensured its operations bolstered the economy by
creating jobs and contributing to India's copper industry, while also adopting sustainable practices
• Legal Responsibilities: The company was obligated to comply with all relevant environmental, labor, and
operational laws, ensuring legal adherence amidst environmental concerns
• Ethical Responsibilities: Beyond legal compliance, Sterlite Copper should have proactively safeguarded the
environment, prioritized community health, and maintained transparent and equitable practices

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Discussions and
Conclusions

1. Weakening of Environment laws

2. Non-inclusive growth
3. Aatmanirbhar Bharat vs Bharat that
matters
4. Need for businesses to focus on
sustainable & inclusive growth –
Focus on ESG boosts firm
performance
Tata Steel Tribal Cultural Society, ITC e-
Choupal, Lijjat Papad, HUL Project
Shakti
17
Thank you!!