Sterlite Copper Ethics Case Study

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INTRODUCTION AND STAKEHOLDER ANALYSIS

Sterlite copper is a secondary of Sterlite industry, the company is owned by Vedanta Limited it

practices metal mining and it was founded in the year 1975 at Calcutta in India. The company

serves worldwide and is world’s largest producer of copper and one of the biggest importers

alongside China, South Korea, Japan and Germany. The industry was incorporated in Tuticorin

previously known as Thoothukudi in 1994 and was the main copper producing unit of Vedanta

Limited which was Vedanta Resource’s plc subsidiary.

Sterlite copper under the name Sterlite Copper began operation in 1988 and was the largest

copper smelter plant in India located in Tamil Nadu state. The company housed several facilities

including a phosphoric acid plant, a refinery, a sulphuric acid plant and three captive power

plants and hence it was the largest employer in India employing over 3,500 people plus an

additional 2600 workers who were in contract. The company was categorized as a pollutant

therefore it was not permitted to perform its operation in an area with a fragile ecology and

protected area.

The company’s board of directors consisted of nine members: five independent directors, the

executive chairman, two full-time directors and a non-executive director. The company

acquired Metallurgica Bresciana Technologies on 24 September 2015 in all cash that was worth

€47 million and acquired an Impact Data solutions group enterprise worth €15 million on 26

September 2019.

Sterlite copper company owns over twenty sales and marketing offices, state of development

art centers and 6 manufacturing units across the world with major presence in United States,
India, Brazil, Italy and middle East. Sterlite copper is a good company with good working

environments and machineries which are in good condition for working with.

The company has existed over 20 years in the port city and people are complaining that the

company has run afoul of regulations of the environment. The company is a division of

billionaire Anil Agarwal’s Vedanta Ltd and is a copper smelter at Thoothukudi in Tamil Nadu the

residence had protested peacefully so as to stop the Sterlite copper’s plan to increase it copper

production twice as it affects their environment.

The smelter produces a capacity of 400,000 tons currently per year and they are planning to

increase the production to 80,000 tons per year but the residences are complaining that the

company will pollute the town’s air and water the chances of getting cancer and respiratory

diseases will be increased.

The protest grew for like hundred days and a large crowd assembled near the Sterlite Copper

gates, as the people who were protesting became more impatient and angrier at the impasses

build a violence between them and police and some people were killed while others were left

with injuries, the company had been in and out of the legal battles from its incorporation in

19193 until its shutdown in 2018.

When the company started operations in 1996, people who are in its surrounding areas were

hoping about gaining employment with the industrial development. However, what they were

hoping for were dimmed by the effects the company brought such as pollution that people felt

it was severe and life-threatening than unemployment.

A research was carried out by Environment Law Alliance Worldwide and they carried a test on

soil that was surrounding the plant area and traces of toxin were found and some carcinogenic
substances were found too which were above the permissible limit. The toxic substances found

were said to be harmful to both human beings and livestock.

Problem statement

The Sterlite copper company should be opened but its operation should be limited to

production of a lower capacity than 40,000 tones to reduce the rate of pollution, the company

should not be shutdown completely as it is India’s copper most reliable copper producer and it

will lead to increase in country’s copper importation which will lower country’s foreign income

earnings. Closing the company will also lead to increase in costs in other allied businesses that

relied on Sterlite company products such as Sulphuric acid due to high prices for raw materials

and reduced employment levels.

The closure of the Sterlite company brought a negative impact on the businesses that relied on

the company’s products and the same companies lobbied government to help Sterlite to re-

open and make the company to compile with all regulations.

Since talking both directions as in closing or re-opening the company have both almost the

same effects I proposed that the company should split into two so as to have two companies in

different areas and reduce its capacity of production by half in each company and in that the

company would have maintained it capacity of production and will still not pollute environment

at large.

The opportunities that the company have is that there is presence of other small businesses

which greatly rely on its products such as Sulphuric acid and hence it may get a support from

such companies so as to be retained and not closed. The company have also employed many

youths and therefore the youths will be jobless incase the government closes the company.
Identification of the alternatives

The company should be re-opened but given strict rules following its pollution effect on soil

and air which has affected livestock and human beings and the role of the local community, the

government and the civil organizations should not be underestimated by the company incase of

any complains the company should be ready to abide as per the community’s request the

company should be warned of maintaining its effect as a zero discharge facility and claiming to

have secured all the essential approvals.

The best action that should be taken so as to satisfy all parties; those who are supporting the

closing of the Sterlite and those supporting re-opening of the company is minimizing the

production capacity of the company so as to reduce the pollution rate and also maintain the

governments foreign income as a result of exportation of the Sterlite company products, some

businesses which relies largely on the products of the sterile would also benefit as the cost of

importing their raw materials will reduce.

Alternative 1 Alternative 2 Alternative 3 Alternative 4 Alternative 5

Closing the Reducing Splitting the Treating Siting the

company company’s company into company company far

completely. production two effluents from

capacity before settlements

emission

Pros Pros Pros Pros Pros

It will It will reduce The pollution It will reduce The company

completely end the rate of rate will go the will be far

the effects of pollution and down since poisonous from

pollution since every party the nature of the people’s

no operation will be production company settlement

that will cause satisfied with will be effluents and hence the

the pollution this solution. Splitted into hence pollution

will take place. The small two too. pollution will effect will not

People will businesses People from be rendered reach them.

cultivate and which the area the harmless. The pollution

rare their depends on second Pollution of rivers and

livestock the industry will effects will sources of

without any company’s be launched be reduced water around

fear of being products will will benefit and hence will cease

poisoned. be shifted to from people will hence people

other areas. employment. live in a good wont

and encounter

conducive water

environment. shortage at

all.

Cons Cons Cons Cons Cons

Unemployment The The pollution Some of the The company

will increase company’s effect will be company will not be

since the performance now affecting waste are not accessible to

company is the will not be two areas pollutants workers and

largest profitable even though because of the effect of

employer in since the it will be at a their toxic pollution will

India. product lower rate. nature but it affect those

Small might no be Siting two is because of who are

businesses enough for companies the way they working in

relying on exportation might be very may hinder the company

Sterlite copper expensive some only.

company also. processes in

products will our bodies.

stop.
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