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Dhabhol Power Plant - India
"Many energy companies have invested in closed or repressive countries -- arguing that their investment would help develop the local economy and thereby improve the human rights situation. But in this case, Enron has invested in a democratic country -- and human rights abuses there have increased. Enron hasn't made things better for human rights; it has made things worse." Background to the Protests: Ratnagiri District
Table of Contents

Key Individuals Named in this Report

I. Summary and Recommendations

II. Background: New Delhi and Bombay

III. Background to the Protests: Ratnagiri District

IV. Legal Restrictions Used to Suppress Opposition to the Dabhol Power Project

V. Ratnagiri: Violations of Human Rights 1997

VI. The Applicable Laws

VII. Complicity: The Dabhol Power Corporation

VIII. Responsibility: Financing Institutions and the Government of the United States

IX. Conclusion

Appendix A: Correspondence Between Human Rights Watch and the Export-Import Bank of the United States

Appendix B: Report of the Cabinet Sub-Committee to Review the Dabhol Power Project

Appendix C: Selected Recommendations and Conclusions from the Parliamentary Standing Committee on Energy, May 29, 1995

Appendix D: Correspondence Between the Government of India and the World Bank

III. Background to the Protests: Ratnagiri District

Local opposition to the Dabhol Power project stems from the same issues that made it controversial at the outset—allegations of corruption, lack of transparency, lack of competitive bidding, and the high cost of the tariff—and, in addition, a series of issues directly affecting the livelihoods of local people and the degradation of the local environment. Professor Sadanand Pawar is a recognized local leader of the opposition to the Dabhol Power project. He is an economics professor in Bombay, who is from Pawarsakari village—about six kilometers from the DPC site. Pawar, who was arrested and harassed on several occasions due to his opposition and participation in protests against the project (see below), explained the impact of the high cost of power and corruption at the local level:

People say we are opposed to power projects; this is basically wrong. We are opposed to the pricing of power and the project. We would be for a good power project. It [the project tariff] is linked to dollars. Forty years ago, four rupees equaled one dollar. When the PPA was signed, thirty-two rupees equaled one dollar. Today, thirty-eight to forty rupees equals one dollar. Since the contract forces the state to pay in dollars, the price of Enron power will be one of the most expensive... Pricing of electricity determines which industries will enter nearby areas. With Enron’s tariff, only chemical industries can survive— which will destroy the environment and survival of people. Engineering, electrical, and heavy industries cannot afford to pay the price charged by Enron. What we are afraid of is that the area, post-Enron, will be a chemical zone... It could be another Bhopal in the making.70

Coupled with the deal-making process, land acquisition and environmental degradation are at the center of local concerns and opposition to the project. Human Rights Watch does not have the expertise to assess environmental concerns, but we note that environmental degradation is a major cause of opposition to energy projects around the world, and the subsequent human rights violations that take place are inappropriate responses to individuals seeking to preserve or improve their environment.

The area surrounding the Dabhol Power project consists of several talukas (groups of villages) comprising the agricultural villages of Aareygon, Borbatlewadi, Katalwadi, Nagewadi, Pawarsakari, and Ranavi and the fishing villages Anjanvel and Veldur. These communities, home to more than 92,000 people, are wholly dependent on natural resources.71 According to the Center for Holistic Studies, a Bombay-based nongovernmental organization that specializes in research and documentation, the Dabhol Power project would produce large-scale displacement and economic disruption in the surrounding villages. Citing the DPC’s own environmental impact assessment— conducted by the Bombay-based firm, Associated Industrial Consultants—the Center for Holistic Studies reported that the project would displace approximately 2,000 people. The DPC’s consultants had also estimated that land acquisition for the project and the environmental impact of construction and operation would affect at least 92,000 people, that is, the entire populations of the villages named above.72

On March 12, 1993, during a meeting between Enron officials and the state government, a discussion took place about the project’s land requirements and its impact on local communities. According to the minutes of the meeting, the government decided to begin acquiring land after consultations with the company, but not the public. The minutes state:

Mr. Bobby Farris, General Manager, Enron, indicated that a suitable development plan is still to be worked out. However, approximately 400 hectares of land will be required for the plant...

Mr. Bobby Farris informed that as storage of LNG [Liquefied Natural Gas] tankers are involved, shifting of residents of Veldur as well as Anjanvel villages may be necessary. Chairman requested the District Collector to identify the suitable site for rehabilitation of the people...

Chairman (MSEB) requested MIDC to go ahead with the process of land acquisition and arrangements for fresh water as well as construction water...Chairman, MSEB and Mr. Joe Sutton, VicePresident, Enron Power Development Corporation, thanked the participants.73

Following the agreement between the company and the government to acquire land and water, the company was legally required to post a notice in newspapers stating that it was constructing a power plant and that it would entertain any inquiries or complaints for a two-month period following the publication of the announcement. This requirement is part of the Electricity (Supply) Act, 1948.74 The company’s announcement states:

Any licensee or any other person interested in taking objection, if any, in respect of the above scheme may please make representation to that effect within two months from the date of publication of this Notification. Any representation received after two months shall not be entertained. The representation or concerned correspondence in this regard, may please be addressed to the Chief Engineer, Dabhol Power Company, “Nirmal” 17th floor, Nariman Point, Bombay 400 021. For any additional information on the above Schemes, please write on the above address.75

The notification was published in local papers on September 21, 1993. On November 21, 1993, the last day the company was required to entertain letters of inquiry or complaint, the Dabhol Power Corporation sent a letter to the government of Maharashtra’s undersecretary of energy, stating that they had complied with the act. This was detailed in a letter from the undersecretary of energy to the Central Electricity Authority:

Please find enclosed a letter from M/s Enron in which they have said that they have not received any objections pursuant to the publication of the Notification about the proposed Dabhol Power Project. It would, therefore, appear that the requirements of Section 29 of the Electricity (Supply) Act have been met.76

The company’s statement to the government—if correctly reflected in the official correspondence—was entirely misleading. The company had in fact received thirty-four complaints and queries from NGOs, journalists, local residents whose land had been acquired, and government officials within the statutorily defined two-month period (September 21 to November 21, 1993). 77 Several individuals informed the company that their land was bulldozed, ruining their crops, and requested that the company stop acquiring land from them.

The company’s response to villagers’ letters reinforced criticism about the project’s lack of transparency. DPC chose not to provide specific responses to the letters. Instead of detailed information, the company issued a form letter stating that the villagers’ inquiries would be looked into and that there would be no negative impacts on the area.78 The district collector, the most senior government official in the district, was also unaware of the company’s activities and sent a letter himself asking for more information about the project.

Many of the local residents’ letters to DPC requested more information about the project in order for local organizations and individuals to determine whether the project was beneficial for the community. For example, this excerpt is from a letter written by Yashwant Bait, then Mandal (the village-level government)secretary for the villages of Anjanvel, Borbatlewadi, Katalwadi, Ranavi, and Veldur, to the Dabhol Power Corporation:

[T]he government of Maharashtra has approved [the] Dabhol thermal power project in [the] villages [of] Anjanvel, Ranavi and Veldur in Guhagar Taluka... In [the] Maharashtra Times, dated 26th July, 1993, it was reported that since the project would cause pollution, the environmentalists have been opposing this project. These reports have caused considerable concern and anguish in the minds of the local villagers. Now you have published a notice...and called upon interested person to file their objections, if any, to the project... I request you furnish me information about the above project. Please give information about [the] population from the village (to be shifted), lands required for the project, possible pollution...from the project, various advantages and disadvantages to the local people from the project, and the exact area over which the project would be located. These details would enable the local villagers to form their opinion about the project and they can decide whether the project should be allowed or not.79

Several of the letters detailed objections to the methods of land acquisition and the potential environmental impact of the project. These issues are discussed below.

70 Human Rights Watch interview with Professor Sadanand Pawar, Bombay, February 16, 1998. 71 Center for Holistic Studies, “Enron: The Power to Do It All,” Indranet Journal (Bombay), Vol. 3, No. 2-4, 1994, pp. 10-11. 72 Ibid. 73 Minutes of the meeting between government officers and Enron held on 12.3.93 at MSEB’s Head Office to discuss about the Dabhol Power Project, transcribed March 26, 1993, pp. 3-4. Minutes of meeting on file at Human Rights Watch. 74 Section 29(1) and Section 29 (2) of the Electricity (Supply) Act, 1948, state: Submission of schemes for concurrence of Authority, etc.—(1) Every scheme estimated to involve a capital expenditure exceeding such sum, as may be fixed by the Central Government, from time to time, by notification in the official gazette, shall, as soon as may be after it is prepared, be submitted to the Authority for its concurrence. (2) Before finalisation of any scheme of the nature referred to in sub-section (1) and the submission thereof to the Authority for concurrence, the Board or, as the case may be, the generating company shall cause such scheme, which among other things shall contain the estimates of the capital expenditure involved, salient features thereof and the benefits that may accrue therefrom, to be published in the official gazette of the State concerned and in such local newspapers as the Board or the generating company may consider necessary along with a notice date, not being less than two months after the date of such publications, before which licensees and other persons interested may make representations on such scheme. 75 Letter of Public Notification written by the chief engineer of the Dabhol Power Corporation, Bombay, September 21, 1993. Letter on file at Human Rights Watch. 76 Letter from the undersecretary of energy of the Maharashtra state government, U.K. Mukhopadhyay, to the Central Electricity Authority, November 23, 1993. Letter on file at Human Rights Watch. 77 These letters are on file at Human Rights Watch. 78 Letter from the Dabhol Power Corporation to Sharish V. Deshpande, November 1993. Letter on file at Human Rights Watch. 79 Letter from Yashwant Bait, secretary of the Borbatlewadi-Katalwadi Mandal, to the chief engineer of the Dabhol Power Corporation, September 22, 1993. Letter on file at Human Rights Watch.