Gustav Mahlerlaan 10
1082 PP Amsterdam

Maling address
P.O. Box 283
1000 EA Amsterdam

Telephone(+31) 20 629 18 18
 (+31) 20 629 91 11

India Committee of the Netherlands
Mariaplaats 4
3511 LH Utrecht

Group Sustainable Development

Our ref.
V.G.P. van Assem
G.K. Pielage
+31 20 6281579
+31 20 6296274
August 1st, 2005

Subject: Vedanta Resources Group

Dear ******,

We would like to thank you for your extensive and detailed letter in which you express your concerns about the engagement between ABN AMRO and our client Vedanta Resources Group (Vedanta). The issues you have raised in your letter are also important to us, as we have indicated during the several (informal) conversations we have had in the last couple of months such as the NGO-meeting on India on June 7th, 2005.

In addressing your questions about the relationship with Vedanta we would like to inform you on the results of our meetings with the company after providing you with some background information on how we approach our clients (in the mining sector) in general.

ABN AMRO’s business approach
ABN AMRO is committed to doing business in a sustainable and responsible way, an approach that is rooted in our Corporate Values and Business Principles. Our Business Principles show that we take the views of our stakeholders into consideration in fulfilling the needs of our organization.
Naturally our clients are one of our key stakeholders. We aim to provide excellent service: one of the key facets in this respect is the confidentiality of our business relationships. In principle, this means that we do not disclose (details of) our business transactions with clients without their consent.

It is policy within ABN AMRO to conduct a financial review of all existing clients within our portfolio at least once a year. In addition to financial criteria we have incorporated environmental and social assessments into the review process for an increasing number of sectors, including the mining industry. Our Metals and Mining Policy applies to all mining clients, initially within the Strategic Business Unit Wholesale Clients only. For client engagements, we apply a client assessment tool, which rates the extent to which clients have processes and policies to address the environmental and social impacts of their business. For projects, the Equator Principles are applied to ensure that projects we finance are developed in a socially responsible manner and reflect sound environmental management practices. For single asset investments, we use a filter to assess whether there are any sensitive impacts associated with the transaction.

In deriving consequences from implementing the policies, where we ultimately aim for a ‘best practice’ approach, we take the reaction of a client into consideration. If an existing client is deemed to have an environmental and social performance that is below average, our first goal is to initiate a dialogue with the client to understand their commitment to raising standards. If the client has the commitment to improve, we will offer support to effect these improvements. Where a client shows no willingness to alter its policies and implementation, we will seek termination of the relationship.

Our engagement with Vedanta
The process described has been applied to our relationship with Vedanta as well. Triggered by your letter several ABN AMRO staff members have been in contact with Vedanta and we have shared your concerns in writing with the company. This has been followed by several one-on-one meetings with Vedanta’s senior management. These contacts have confirmed a commitment by Vedanta to the management of environmental and social issues in general, but also to areas where specific actions are required. Regarding the developments of the specific projects you have mentioned in the letter, we believe it would be appropriate for you to contact Vedanta directly.

In all our contacts, we have experienced Vedanta to be open and willing to discuss the various matters:

  • the company has provided us with information that we have requested, including information from (independent) external parties;
  • the company has also expressed their willingness to engage with the organizations that sent us the letter;
  • the company is paying attention to further improving its environmental and social standards.
Based on our experience we will continue our discussions with Vedanta on financial, social and environmental issues and offer them our support in further developing their business.

We sincerely trust we have updated you satisfactorily on the actions we have taken so far to address and to discuss your concerns with our client.

If you have any questions or remarks, please do not hesitate to contact us.

Yours sincerely,

Vincent G.P. van Assem

Group Sustainable Development
Head Stakeholder Engagement & Business Development
Geert K. Pielage

Group Communications
Head Issue Management

CC:  Novib/Oxfam Netherlands
Milieudefensie/Friends of the Earth Netherlands

Landelijke India Werkgroep - 2 augustus 2005