From Tehelka Archives January 24, 2002 – Enron: a history of human rights abuse in India

According to Human Rights Watch, the US multinational paid local enforcement agencies to suppress opposition to its Dabhol power plant, reports VK Shashikumar

The human rights abuses that plagued the Enron Corporation’s Dabhol power plant in India from 1992 to 1998 demonstrate the need for US government agencies to scrutinise such controversial projects more closely, the Human Rights Watch said.

In 1999, Human Rights Watch charged in a 166-page report, “The Enron Corporation: Corporate Complicity in Human Rights Violations,” that Enron subsidiaries paid local law enforcement agencies to suppress opposition to its power plant in Maharashtra.

“Enron is now being widely accused of arrogance and lack of transparency, but the people of Dabhol have known that all along,” said Arvind Ganesan, director of the Business and Human Rights Program at Human Rights Watch. “Enron was complicit in human rights abuse in India for several years.”

Local opposition to the Enron project began in 1992 over concerns about corruption and the hasty negotiations over the terms of Enron’s investment. Farmers complained that the power plant had unfairly acquired their land and had diverted scarce water for its needs. Local activists had raised concerns over potential environmental damage. The US government bears special responsibility for the human rights consequences of Enron’s investment because of its aggressive lobbying on behalf of the three US-based companies developing the project, Ganesan said.

Although the Indian press widely reported the human rights violations around the power plant, US officials failed to investigate the matter.

The World Bank repeatedly refused to finance the project because it was “not economically viable,” but the US government extended between $290 million and $300 million in loan guarantees to Enron for its investment in Dabhol. The Export-Import Bank requires an analysis of the human rights implications of its loans. But the State Department’s entire human rights assessment for one Export-Import Bank loan for the Dabhol project read, “The State Department has no objection to this case on political grounds or on the basis of human rights issues.”

The 1999 Human Rights Watch report documents how contractors for the Dabhol Power Corporation harassed and attacked individuals opposed to the power plant. Police refused to investigate complaints, and in several cases, actually arrested the victims on trumped-up charges. The Dabhol Power Corporation, under provisions of law, reimbursed the abusive state forces for the security they provided to the company. These forces, located adjacent to the project site, were stationed there largely for the purpose of dealing with protests. While they reported to local police, their expenses were paid by the company, a subsidiary of Enron.

In one instance in June 1997, Maharashtra Police raided a fishing village where many residents opposed the power plant. They arbitrarily beat and arrested dozens of villagers, including Sadhana Bhalekar, the wife of a well-known protester. They broke down the door and window of Bhalekar’s bathroom and dragged her naked out into the street, beating her with batons. Bhalekar was three months pregnant at the time. In another instance in May 1997, police beat and arrested nearly 180 protesters who were demonstrating peacefully outside the company gates. The protests had largely ended by 1998.

Since the project’s inception in 1992, Enron and the Maharashtra government repeatedly ignored public complaints. “Dabhol Power Corporation would not tolerate any human rights abuses by its employees and sub-contractors,” the company said in a 1997 statement.

Because of the plant’s high cost of power, the Maharashtra state government announced in June 2001 that it was terminating its agreement with the Dabhol Power Corporation (DPC). Shortly thereafter, the DPC ceased operations and insisted that the government repay its debts. The dispute continued, but was further complicated when Enron declared bankruptcy on December 2, 2001. On January 17, 2001, Enron filed an approximately $200 million claim with the US government’s Overseas Private Investment Corporation in an attempt to recoup losses from the Dabhol Power Corporation. The project is up for sale to other investors.