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Protest againts Vedanta for its operations in India.

Protest againts Vedanta for its operations in India.

It was a quest for survive that pushed Vedanta to find another, lucrative business. In fact its plan for more than $5.8 billion to increase the Aluminium production has been rejected by the government, due to mounting international pressure to protect the Adivasis in Niyamgiri Hills[1]. The repercussion of that failure is big enough to be the mover for the challenge against Ambani’s Reliance.

 Cairn main assets in India are in Rajastan, a huge field estimated in billions of dollars. That was the jackpot for a small venture like Cairn; But to compete with Reliance, you need to be much bigger and much linked to political power. Requirements that Vedanta matches. On the other hand, to exploit Vedanta’s economy of scale, Agarwal needed to grab any possibility on the market.

The Mannar Basin oil fields were ideal. Unfortunately the Sri Lankan civil war was a major obstacle, with the fierce LTTE ready to go all way for the cause of independence. The Sri Lankan government lacked the political will to annihilate the rebels.

A march of the Balck Tigers, the LTTE special forces for suicidal attacks.

A march of the Balck Tigers, the LTTE special forces for suicidal attacks.

In fact 20 years ago, when the Indian Peace Keepers intervened in the fight, Colombo incredibly re-armed the rebels, just to kick out New Delhi from the island[2]. In 2005 the parties were close to a peace treaty. But while Sri Lanka was ready to devolution, the LTTE wanted a clear path to secession. Meaning: conflict could last for another generation.

So the new President Rajapaksa changed the strategy[3]: now it was complete destruction of the rebels. Why this stance wasn’t adopted earlier? Two reasons: civilian casualties involved in chasing the guerrilla forces. And India. New Delhi never really approved the elimination of the LTTE (though responsible of the killing of Rajiv Gandhi). But in 2006, the Indian position changed. Suddenly New Delhi offered complete support: maritime patrol, electronic surveillance, military and political backing (the Tamil nationalist sentiment in Tamil Nadu were controlled by the then Chief Minister, Mr Karunanidhi, a hard-core supporter of LTTE, but involved in a personal scandal during that period[4]).

In 2009 80000 Tamil civilians have been massacred on the shores of Nandikadal lagoon and in Mullivaikal.

In 2009 80000 Tamil civilians have been massacred on the shores of Nandikadal lagoon and in Mullivaikal.

The rest is history: from the bloody shores of the Nandikadal lagoon, 280 000 Tamil civilian come out, leaving behind possibly more than 80000 dead. The fate of the Tamil population in their land now is the one of an occupied country. The military presence is strangling any activity.

But the Mannar Basin fields are blooming. In 2013 Sri Lanka launched another bidding round, this time everybody in the sector was queuing: Exxon, Total, Gazprom, Eni[5].

Clearly the news of Cairn-Vedanta success reached the big players of oil and gas.

The question now is: who could provoke a radical change in the Indian policy towards Sri Lanka? Cairn is out of the question.

Vedanta entered the game only in 2011, when the war was over since 2 years. If you believe in conspiracy, you could suspect that Vedanta chased the deal much earlier, convinced the Indian government to intervene in its favour and Cairn to spearhead the negotiation to avoid attention.

Of course this is just an exercise of speculation.

The signing ceremony of the agreement of petroleum resources between the Government of Sri Lanka and Cairn India (Pvt. Ltd) . President Mahinda Rajapaksa,  Minister of Petroleum and Petroleum Resources A.H.M. Fowzie and Indrajith Benerjee, Chief Finance Officer and Ajay Gupta Head of Commercial and New Business of Cairn India . Photo Sudath Silva

The signing ceremony of the agreement of petroleum resources between the Government of Sri Lanka and Cairn India (Pvt. Ltd) . President Mahinda Rajapaksa, Minister of Petroleum and Petroleum Resources A.H.M. Fowzie and Indrajith Benerjee, Chief Finance Officer and Ajay Gupta Head of Commercial and New Business of Cairn India .
Photo Sudath Silva

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agarwal ambani

Mr Agarwal, founder of Vedanta and Mr Ambani, chairman of Reliance Industries

With the purchase of Cairn India, Mr Agarwal, boss of the mining powerhouse Vedanta resources, officially challenged the dominance of Reliance Industry, the Ambani’s giant in petrochemicals and refining[1][2]. Vedanta and Reliance were undisputed kings in their respective sectors: complementary and parallel. Both can count on mighty political clout and this feud showed their potential: in defence of Ambani’s Reliance went in Mr Sharma, chairman of the state-owned ONGC and Petroleum Secretary Mr Sundareshan. On the camp of Agarwal’s Vedanta, nobody less than UK’s Prime Minister David Cameron[3].

Mr Cameron pubblicly lobbied in favour of Vedanta with Mr Singh.

Mr Cameron pubblicly lobbied in favour of Vedanta with Mr Singh.

The bone of contention is simple: oil. In Sri Lanka[4]. Offshore of the Mannar Basin lie reserves up to a billion barrels. Reliance Industry was drilling on the Indian side of the Strait, but when the government of Sri Lanka offered the exploration rights in 2007, they Ambani’s group declined. Why?

Well there are always a lot of risks associated with oil extraction, first of all, there is no guarantee of discovery, second it could be not commercially viable to extract it.

But the Mannar Basin case was even riskier: it was the theatre of a civil war. The area was under the control of the LTTE, one the fiercest guerrilla army in the world. Surely if you buy, you want some guarantees that your will be able to access your property.

The LTTE navy, the Sea Tigers, guaranteed the security of sea lane supply for more than 30 years.

The LTTE navy, the Sea Tigers, guaranteed the security of sea lane supply for more than 30 years.

Now the company that was awarded the concession was Cairn, a small venture based in Edinburgh (with the bulk of their interests in India). What was the level of political leverage that Cairn could exercise to demand for assurance? Null. The management of Cairn, we are supposed to believe, bought the exploration rights with no further collateral for their purchase, no political promise that their property will be their hand soon.

But in 2011 Vedanta saved the “Scottish” company with their offer[5]. The operation was hardly contested by the Indian government; as we have seen, the move was an aggressive entrance in the landscape of Reliance and Ambani’s clan didn’t particularly welcome the new comer[6].

Agarwal acknowledged the leading role of Ambani: “They (Reliance) will continue to be the largest player. But, at the same time, there is enough water in the sea for other players to also do business.” [7]

If you are familiar with the Indian capitalism, you know very well that the big players are running monopolies supported by political protection. Competition is sacrilegious. So why Agarwal decided to challenge so directly Ambani?

Adivasis fighters.

Adivasis fighters.

Rumours go that he was concerned for his venture in Orissa[8]. Vedanta was involved in a billion mining project; they received of course all the authorization from the central government, but a small detail was blocking the operations: 80 million of Adivasis, the Indian Aborigines. The inconvenience was due to be quickly removed with mass evictions; this led the Adivasis to join the Maoist guerrilla, but Vedanta wasn’t worried: in fact the central government declared this insurgency (sometimes the Adivasis attacked with bows and arrows) as the nation’s main security threat: more than the archenemy, atomic-armed Pakistan. Operation Green Hunt was launched to eradicate the Maoist[9] and incidentally, any obstacle to Vedanta manoeuvres. Unfortunately for Vedanta, public and international outcry sprung in favour of Adivasis and suddenly the big deal, despite all the political support, was in peril[10]. The Orissa crisis urged Vedanta to look for alternative business[11]. Quickly.


mullivaikal

More than 80000 Tamil civilians were killed during the last attacks of the Sri Lankan civil war.

One may be tempted to say that it is not the first case of impunity, not even in recent history. True: in Syria for example there are concurrent narratives of propaganda blaming alternatively the government and the rebels. But the novelty in respect of Sri Lanka is the absence of competitive perspectives. It is well known that China protects Sri Lanka; a little less divulged is the Indian protection of Sri Lanka. But the real point is that the West is actually not interested in accusing Sri Lanka. The US made very bland recommendations to Colombo, in comparison what is at stake. The impression is that the Sri Lankan government shall be charged for mishandling the behaviour of its troops. The boys went too far in certain circumstances, but we don’t have the political will to scold our naughty soldiers.

500 000 Tamil civilians were chased out,through shelling and starvation.

500 000 Tamil civilians were chased out,through shelling and starvation.

The accusation is far from this insipid criticism: the government of Sri Lanka launched a heavy military offensive against hundreds of thousands of civilians. Again, it’s better to have clear in mind that we are not speaking of isolated episodes: the plan was to bring war in the middle of Tamil inhabited areas. The operation was designed to bring havoc in every Tamil house. At the peak of the Vanni operation, almost half a million of people has been chased, starved and bombed out. It is less about the casualties and more about the intentions. The carnage of 80000 civilians is still not the most horrible part of the truth. Soldiers massively brainwashed and put under extreme psychological stress, can eventually go crazy and out of control. This is still criminal and to blame. But the Sri Lankan case is worst: the government planned to massacre the civilians. We are not discussing episodes of crossfire: we are accusing the government of Sri Lanka of heavy shelling on harmless population. Repetitively. It was a decision, it was planned.

united nations

The silence of the United Nations is a crucial accomplice in the massacres.

And the United Nations, the government of USA, UK, India, France, Norway and Japan know what happened. The UN actually published a report where it estimates at 40000 the number of civilian casualties[1]. Moreover an internal inquiry from the UN provided even more critical observations about the accomplice negligence[2].

New Delhi provided military intelligence, electronic surveillance and field support on the ground: India was informed in real time. Actually, it was New Delhi that was informing Colombo about the development of action.

Now such carnage won’t be sanctioned.

Why? Several reasons for the convenience of geopolitical equilibrium. We have some suspicions that the oil discovery in the LTTE[3] controlled area could have been a game changer, especially for India (with Vedanta and Cairn) and European countries, like the UK (again with Cairn and Vedanta, both London-listed), France (with Total); but also Malaysia, with its powerful Tamil presence, was involved through Petronas[4].

The estimated reserves of the Mannar Basin oil field  are up to a billion barrels.

The estimated reserves of the Mannar Basin oil field are up to a billion barrels.

Aside this allegation, the undisputed outcome is that Sri Lanka will walk away from a planned massacre with total impunity, because it made the right diplomatic move. Namely, it sought agreement with every power involved. With the US, Colombo justified the operation with war on terror (it was actually a civil war). With China, it sold out a port facility (to be included in the String of Pearls). With the other Sri Lanka exchanged attractive economic deals (the exploration rights have been ceded at bargaining price). In fact during the final phase of the war, the duo Kouchner-Miliband improvised a timid protest[5], but already in 2011 France was pledging support to Sri Lanka[6] (in 2012 Paris collaborated with Sri Lankan secret service in the extra-judiciary killing of an Ex-LTTE member Parithi[7] and in 2013 Total is ready to join the Mannar Basin deal[8]), while UK was deeply compromised with Colombo for arm trade (see the scandal that led to the resignation of Defence minister Liam Fox[9]) and economic interest (Cameron lobbied in favour of Cairn and Vedanta with Indian government[10]).

This episode will establish an important precedent in international jurisprudence: heavy diplomacy with all the parties, with all the regional and global powers will give you clearance on everything you do. Everything.

Mullivaikkal Massacre May 2009

Mullivaikkal Massacre May 2009


chavezIt is nice to have legions of commentators, punters, analysts to discuss and to deconstruct the international relations of states. All this convoluted deployment of intellect is a way to entertain the public opinion, which is growing more and more educated and can be fooled easily.

Take the Bolivarian revolution of Chavez in Venezuela: roaring speeches on one side, “world public enemy number one” on the other. 70% of Venezuelan oil goes to the US; Chavez has been Swissly through and precise in the repayment of Venezuelan bonds: Goldman Sachs and the other made a fortune with the socialist revolution[1].

In Sri Lanka, the government of Rajapaksa is strenuously resisting the siege of Western powers; Sri Lanka stands the assault of foreign interference in national sovereignty. But the substance of the critics is: where are the 80 000 civilians missing. Of course nobody mentions this; the confrontation in the diplomatic sphere is about government-sponsored recommendations that the government doesn’t implement. President Rajapaksa is using the international stage to re-affirm the right to develop: de-colonized nations to choose their own destiny. Standing ovation.

Cairn India Chairman Sundeep Bhandari and Executive Director/CFO Indrajit Banerjee presents the documents to President Mahinda Rajapaksa. Prime Minister Ratnasiri Wickramanayake and Petroleum and Petroleum Resource Minister A. H. M. Fowzie are also in the picture.

Cairn India Chairman Sundeep Bhandari and Executive Director/CFO Indrajit Banerjee presents the documents to President Mahinda Rajapaksa. Prime Minister Ratnasiri Wickramanayake and Petroleum Resource Minister A. H. M. Fowzie are also in the picture.

In private he sold at bargain prices concession for oil exploration. Cairn-Vedanta will pocket 90% of the sales from the Sri Lankan oil[2]. Now, if you are a colonial power, will you prefer to have a hard confrontation on the matters that count, like oil or empty speeches about principles and human rights?

Rajapaksa is working hard for colonial powers and the colonial powers are benefitting with sound, material profits. In public they accuse each other, reinforcing the perception of a clash: European citizens are satisfied of fighting (diplomatically) the right cause and unknowingly (?) pocketing the money; Sri Lankan citizens are happy of maintaining their independence and unknowingly (!) to be stolen once again by the Europeans. When the two parties are extremely happy of the contract, either the deal is very good or it is a scam.

bidding oilOn the 7th of March 2013 Sri Lanka’s government held an international road show to facilitate the bidding process for the offshore exploration rights for several blocks[1], locations: Houston, London, Singapore.

It may be interesting to note two facts: in this round there is almost a unanimous interest: Exxon, Total, Eni, BP, Gazprom, Petronas[2].

This enthusiasm probably derives from the successful operations of Cairn-Vedanta. The Anglo-Indian company in 2011 found oil.

This leads to the second interesting fact: the previous road show was held in 2007[3], same locations (Houston, London, Singapore). Did anybody hear about the Eelam War? It ended quite bad for the LTTE, the separatist army, which was annihilated and also for more than 360 000 Tamil civilians, chased out like wild animals. More than 80 000 civilians are supposed to have died in the final stage of the conflict. Well, in 2007 the war had just re-started. Not a surprise that the bidders were a bit more cautious.

rajapaksa oil cairn agreementIn fact the LTTE was one of the best trained, motivated and fierce liberation army in the world, with an exceptional navy. During the civil war, the LTTE navy, the Sea Tigers have been able to evenly match the Sri Lankan one. The region controlled by the Tamil Tigers was run like a state, with banks and post offices. And it was rely heavenly on sea supply lane. So it was vital for the LTTE to have a successful protection from the sea. Then in 2007 India started patrolling. India’s position has been ambiguous, to say the least, with the LTTE.

But in 2007 the idea of buying exploration rights in war zone was simply mad. Unless the government pledged beyond any reasonable the certainty of the deal…

How can you guarantee such agreement during a conflict?

Probably you planned carefully to eliminate any resistance, any dissent. And with 1 billion barrels of oil, you can buy international support and help.

Adivasis revolutionary fighters

Adivasis revolutionary fighters

What is the biggest threat to India’s security? You could think of further terrorist operations orchestrated by their arch-enemy Pakistan, the so called containment strategy of China with the String of Pearls, but no, you would be wrong. Surely the Indian armed forces and the RAW, the secret service are taking into account these issues as future menaces. But the current, biggest threat to internal security is the Maoist guerilla of the Naxalites, which count amongst its file indigenous warriors armed with bows and arrows. Members of the Adivasis, the indigenous ethnicity of India, more than 80 millions, are fighting back against the oppression by the central government and joined the Maoist militia in several states. The some of the Adivasis are tired of being discriminated and most of all expropriated of their land rights.

Adivasis's rally

Adivasis’s rally

And New Delhi, the biggest democracy of the world, the strong ally of the good Western government amongst the dodgy, authoritarian Asian states, responded with a responsible, measured, contained military operations, called Green Hunt. In collaboration with the regular forces there are also paramilitary troupes, funded by private stakeholders. These are the best practices exported by the USA during the Afghanistan and Iraq wars and we should admire the consistency of India in aligning itself with the best Western policies.

Adivasis' protest against Vedanta

Adivasis’ protest against Vedanta

You may ask why the Indian government is so upset with indigenous populations, who lived for millennia in their forest, with unchanged habits and astonishingly sustainable behaviour, why they are fighting these groups rather than picking them up as global models? Easy to answer, it is the case that they live where there are enormous reserve of metals and minerals. And given the needs of the growing Indian economy and the worldwide prices, many companies are salivating at the idea of grabbing those mines. In particular the giant Vedanta secured vast concessions. And they want to exploit them, so they supported this massive campaign to evict the Adivasis from their property.

Sri Lanka Defence minister Gotabaya Rajapaksa, with alleged blood stains on his shirt.

Sri Lanka Defence minister Gotabaya Rajapaksa, with alleged blood stains on his shirt.

A generous offer of consulting about the matters arrived from Sri Lanka. Gotabaya Rajapaksa, brother of the president Mahinda and plenipotentiary minister of Defence, not to mention acclaimed leader of the army and potential war criminal for the massacres of 2009, offered his help1.

Mr Rajapaksa exposed his rationale: we have matured an extensive experience in counter-insurgency and we learned how to deal with fighters mingled with civilians. You have only to control the media and position yourself wisely in the international scenario, then you can do whatever you want. Seriously, you can slaughter hundreds of thousands (yes, around 3 times the victims in Sirya) of civilians and nobody will mind your business.

If you think that I’m exaggerating, many Indian commentators thoroughly studied the Rajapaksas’ strategy and compiled a brief guideline that is precisely mentioning control over the media, international relations and steel determination to achieve the goal, regardless of civilian casualties2.

Gen. Bikram-Singh visits Sri Lanka President Mahinda Rajapaksa.

Gen. Bikram-Singh visits Sri Lanka President Mahinda Rajapaksa.

Finally Rajapaksa can offer an already integrated plan of action: Sri Lankan and Indian forces not only conducted joint operations in the past. During the IV Eelam war, military officer from the Indian forces were actually on the field, monitoring, observing, advising and cooperating with the Sri Lanka’s Army. New Delhi is perfectly aware of what happened in 2009 and the fate of the so called “brethren” Tamil. Tamil Nadu politics is based on the support to the Tamils on the other side of the Strait. At least this is the main characteristic of one of the most important politician, Mr Karunanidhi, who was Chief Minister of Tamil Nadu during the final days of the war and who didn’t move a finger to safe his beloved bretheren because was involved in a massive scandal of corruption.

In a matter of days, India answered, that, yes, they are quite interested in the Sri Lankan offer to train them on counter-insurgency. Quoting Gen. Singh: “With significant experience on both sides, we have a lot to learn each other and we look forward to reinforcing our cooperation in the military domain further”3.

Sri Lanka granted exploration right to Cairn back in 2008

Sri Lanka granted exploration right to Cairn back in 2008

A final note: in the Mannar Basin, offshore from the coast controlled by the LTTE and scenario of the massive, brutal counter-offensive of the Sri Lankan army, in which almost 440 000 civilians have been chased like wild animals for months, it has been found oil.

And guess who is taking control of those oil field? You’ll never get it. It’s Vedanta again!

So Vedanta is conducting paramilitary operations in India to evict Adivasis, and then it turned to Sri Lanka to expropriate the Tamils because of the oil, using the ruthless Rajapaksa regime as (happy) executioner of the dirty job. If it was a Hollywood movie, you had say that the figure of the evil company exploiting natural resources and killing poor indigenous would have been too clichè to be true. As usual reality is more surprising than fiction, much more.

290 000 Tamil civilians come out from the last siege of the Sri Lankan army.

290 000 Tamil civilians come out from the last siege of the Sri Lankan army.

Advance: A line of British soldiers in camouflage during the Falklands WarPhoto mirror.co.uk

Advance: A line of British soldiers in camouflage during the Falklands War
Photo mirror.co.uk

The Falklands war was not oil-driven. In the first place, it was started by a military dictatoriship in Argentina to distract public attention. Second, the UK response was equally motivated to captivate the electorate and to twist public sympathy towards the Tory. It was risky? Probably yes, but it paid wonderfully well for Margareth Tatcher.

These were the driving forces in 1982 to catalyse an armed conflict. And yet everybody at the time knew that around the Falklands it was plenty of oil. How much? Well, these are always estimates, but it seems that the reserve could amount to 60 billions (almost a quarter of Saudi Arabia reserves. Not bad) but probably only 3.5 are commercially recoverable1. Since the 1994 Argentina and UK have been in negotiations to settle the matter after the conflict. But Buenos Aires walked away and from 1998 British companies have started to try their luck2.

Falkland Oil & Gas shares halved after an update on operations around the Falkland Islands. Photograph: Gary Clement/Reuters

Falkland Oil & Gas shares halved after an update on operations around the Falkland Islands. Photograph: Gary Clement/Reuters

Nowadays oil exploration is at an advanced stage in some platform and production in at least on well (Rockhoppen Sea Lion, almost 1,3 billion barrels, expects to start its first shipment by 20173).

The question is: did the Brits have a good idea about oil presence in the Falklands? The answer is a sound and round yes. The first time the British government knew about oil in the Falklands was in the remote 1969. At the time Richard Crossman, member of the cabinet, wrote in his diaries that the Foreign Office wanted to conceal the thing and prevent any further testing4. The Foreing Office feared of a possible aggravation of the territorial dispute with Argentina. Why? In public the British government was confident and bold about legitimacy of its claim. In private not so much. In 1936 John Troutbeck, head of Foreign Office American Department summarized difficulty of Britain’s position:

“Our seizure of the Falkland Islands in 1833 was so arbitrary a procedure as judged by the ideology of the present day. It is therefore not easy to explain our possession without showing ourselves up as international bandits.”5falkland capture

By 1975 almost 50 companies had applied to Britain for exploration rights. So when in 1982 Gen. Gualtieri invaded the islands, London proclaimed to intervene to safeguard the independence of the Falkland inhabitants and give them freedom of choice. Beside the fact that after the seizure in 1833 they evicted all the Argentinian citizens, so in the Falklands were living only British descendants, few years earlier, they had no problem in forcing the evacuation (against their will) of the inhabitants of the Diego Garcia, an island in Indian Ocean. Moreover all the inhabitants of the Falkland are working for a private company, which is basically the sole employer and land owner of the island: the Falklands are basically private property6.

 The war is still remember as a tremendous success for the British army and it represented a turning point for the electoral success of a Tory party that was depressing an entire generation of workers. 30 years later those military operations proved to be also a good investment. And it didn’t happen accidentally.

Cairn Lanka is commencing seismic acquisition in Mannar Basin with an investment of over US $ 100 million. President Mahinda Rajapaksa flagged off the first ever 3D Seismic activities in the Mannar Block from the Colombo Port recently. Photo dailynews.lk

Cairn Lanka is commencing seismic acquisition in Mannar Basin with an investment of over US $ 100 million. President Mahinda Rajapaksa flagged off the first ever 3D Seismic activities in the Mannar Block from the Colombo Port recently.
Photo dailynews.lk

Now, 1 billion of barrels are lying in the Mannar Basin, with commercial production expected by 20147).

Exploration rights were sold before the end of the war and when the block was still in an area under the control of the LTTE. The company, Indian Cairn, listed in the UK, has been sold to another Indian corporation, the giant Vedanta, listed in the UK as well.On its side of the Strait India has oil operations (it was even speculated that it could stolen from the Sri Lankan reserve).

Are we still asking why India helped Sri Lanka in slaughtering 70 000 Tamils? Or why the UK remained silent and recently invited president Rajapaksa for the Diamond Jubilee?

Nothing new under the sun, nothing.

Sri Lankan Tamil regugees (IDP) from the Mannar region.Photo AP

Sri Lankan Tamil regugees (IDP) from the Mannar region.
Photo AP