Sterlite Copper: Business at What Cost?

Since its inception in 1994, Sterlite Copper (Sterlite), a subsidiary of UK-based mining and metals conglomerate Vedanta Resources plc, had encountered many controversies. Sterlite’s difficulties included accusations of manipulative compliance practices, legal issues arising out of land acquisition, gas leaks, and the depletion of the environment around its plant in Thoothukudi (also known as Tuticorin) in the Indian state of Tamil Nadu. Sterlite planned to expand and double its copper production, but various stakeholders raised concerns regarding alleged misconduct by the company and the adverse impact of its actions on the lives of the community surrounding the plant.<br><br>In May 2018, these agitations took a violent turn. The public protest led to the death of 13 citizens, and the events attracted negative media exposure. As Sterlite awaited Madras High Court’s ruling which was due in August 2020, the possibility of the plant’s permanent closure seemed likely.<br><br>While Sterlite Copper had been an organization of national importance, contributing to the GDP and creating employment, it suffered from adverse community opinion of allegedly being unethical while remaining in the realm of legality. The entire incident had Sterlite fighting more for its image than its environmental and legal positions. What had gone wrong for Sterlite by August 2020?

This case is suitable for undergraduate- and graduate-level courses on business sustainability, business ethics and leadership. In a business sustainability course, the case can help students develop the triple bottom line framework of sustainability—people, plant, and profit—and appreciate their interrelationship and importance in a sustainable business. In courses on business ethics, it will enable students to learn the challenges and benefits of ethical business conduct. In courses on leadership, it will help students learn the importance of stakeholder management, effective perception, image building, and being a responsible business.<br><br>After working through the case and assignment questions, students will be able to:<ul><li>Discuss the overall approach to ensuring the business has minimal adverse impact on the environment, community, society, and the economy.</li><li>Develop an understanding of the fine line between ethics and legality arising from the actions of a corporation, and appreciate the resulting ramifications for society and for the business.</li><li>Assess the role of leadership and of a responsible business to ensure that business objectives are met while compliance and stakeholder satisfaction are also achieved.</li></ul>

• Sustainability, Ethics, Leadership
• Responsible Business