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

There are no international regulations on transnational corporations (TNCs) that oblige them to respect human rights. There have been, however, several attempts by U.N. agencies to develop codes of conduct to ensure that the activities of TNCs do not contribute to human rights violations.

The first international attempt to regulate corporations was the International Labour Organisation’s (ILO) adoption of its Tripartite Declaration of Principles for Multinationals and Social Policy in 1977. The principles detailed the responsibilities of TNCs to operate in a manner consistent with international human rights and labor rights laws. Later, in 1986, the United Nations Committee on Transnational Corporations developed its own code of conduct for TNCs. Like the ILO’s declaration of principles, the U.N. code of conduct stated that TNCs had a responsibility to respect human rights.

These initiatives, more than a decade old, have been largely ignored. In 1995, however, the recognition that TNCs had a responsibility to respect human rights resurfaced. Unlike the intergovernmental initiatives of the past, this movement was largely driven by nongovernmental organizations (NGOs) based on the perception that governments were unwilling or uninterested in ensuring that corporations were not complicit in human rights violations. While NGO efforts have many disparate foci of attention and are not based on unified doctrine or a guiding document, there are several principles relating to human rights, environmental protection, and equitable economic development that characterize these efforts overall. In the absence of a concerted intergovernmental initiative on this issue, NGOs’ research, documentation, and perspectives have set the tone of this international debate.

In May 1998, acceptable corporate conduct was quantified in a survey of NGOs conducted by the University of Notre Dame (Indiana) and Price Waterhouse. The findings were presented to the World Economic Forum in Davos, Switzerland. The survey detailed clear standards for acceptable corporate behavior on issues such as transparency, accountability, working conditions and environmental responsibility. Specifically, more than 90 percent of NGOs surveyed reported that transnational corporations must be responsible for: ensuring proper working conditions, including nondiscrimination; respect for freedom of association and collective bargaining; prohibitions on forced and child labor; complying with national laws; and avoiding illegal or illicit activities such as corruption. Moreover, NGOs stated that the best method to ensure compliance was throughindependent monitoring of corporate operations and credible reporting by companies to the public.249

NGO investigations and campaigns have had some impact. Two of Enron’s competitors in the oil and gas industry, Royal Dutch/Shell and British Petroleum, responded to pressure and criticism of their operations in Nigeria and Colombia, respectively, by acknowledging that human rights should be an integral part of company operations and by formulating human rights policies. Intergovernmental organizations are reexamining the effect of TNCs’ activities on human rights, as well. For example, on August 12, 1998, the United Nations Subcommission on the Prevention of Discrimination and Protection of Minorities passed a resolution to set up a committee to study the impact of TNCs on human rights.250

Human Rights Watch believes that corporations have a clear responsibility to avoid complicity in human rights violations. Complicity occurs in several cases. First, when corporations benefit from the failure of government to enforce human rights standards. Second, when corporations are involved in systematic violations of rights and the state, aware of such violations, fails to meet its obligations under international human rights law; this constitutes human rights abuse by state omission and corporate commission. Third, when a corporation facilitates or participates in government human rights violations. Facilitation includes the company’s provision of material or financial support for state security forces which then commit human rights violations that benefit the company. In the case of the Dabhol Power project, DPC has facilitated human rights abuses by the state, has benefited from them, and has also benefited from a failure of the government to enforce human rights standards.

As a result of our research, Human Rights Watch believes that the Dabhol Power Corporation—and its parent companies Enron, General Electric, and Bechtel—are complicit in human rights violations by the Maharashtra state government. Human Rights Watch does not take a position on the persistent and pervasive allegations of corruption that surround Enron’s establishment in Maharashtra and its way of doing business there. But, as described above, Enron’s local entity, the Dabhol Power Corporation, benefited directly from an official policy of suppressing dissent through misuse of the law, harassment of anti-Enronprotest leaders and prominent environmental activists, and police practices ranging from arbitrary to brutal.

As we detail below, DPC’s involvement in suppressing dissent was at times more direct, and there can be little question that the company and the police have operated in tandem against the protesters. The Dabhol Power Corporation pays the state forces that committed human rights violations; it provided other material support to these forces; and it failed to act on credible allegations that its own contractors were engaged in criminal activity that rose to the level of human rights violations due to the failure of the state to investigate the crimes.

As early as 1994, the company invoked Section 47 of the Bombay Police Act and entered into a financial arrangement with the state government of Maharashtra for the services of the State Reserve Police officers. DPC disputes that it employs the police, stating:

[T]he Dabhol Power Company does not employ, second or subcontract police officers at the site. By law, we are required to offset the cost of police officers placed near our site if police officials deem it necessary to preserve law and order when protests occur. We have no authority over their actions.251

However, the law itself indicates that the relationship is one in which the company employs the police, although the chain of command remains under state control. Section 47 of the Bombay Police Act states:

Employment of additional police on application of a person—(1) The Commissioner or Superintendent may, on the application of any person, depute any additional number of Police to keep the peace, to preserve order or to enforce any of the provisions of this or any other Act in respect of any particular class or classes of offences or to perform any other Police duties at any place in the area under his charge. (2) Such additional police shall be employed at the cost of the person making the application, but shall be subject to the orders of the Police authorities and shall be employed for such period as the appointing authority thinks fit. (3) If the person upon whose application such additional Police are employed, shall, at any time make a written requisition to the appointing authority to which the application of the employment of additionalPolice was made, for the withdrawal of the said Police, he shall be relieved from the cost thereof at the expiration of such period not exceeding one month from the date of delivery of such requisition as the State Government or the appointing authority, as the case may be, shall determine. [Emphasis added]

From 1994 to the present, between ten and 300 Maharashtra Police and State Reserve Police Force officers, at any given time, have been stationed at the Dabhol Power Corporation site. The cost is 125 rupees a day per officer stationed at the site. The details of the arrangement were explained to Human Rights Watch by the officer who commands these personnel, Police Sub-Inspector P.G. Satoshe:

Payment of the officers by the company is based on fixed rates set by the government for every person there. I calculate the number of officers there and according to the rates, submit a report to the superintendent of police [SP] in Ratnagiri. The SP submits the report to the company who pays the government according to the rates. In the last year, there are between ten and one hundred officers stationed at the site, depending on the law and order situation. I do not handle any money. The company pays directly to the government. The police have been there since 1994, when the project started.252

These forces committed human rights violations in at least thirty demonstrations in 1997 that Human Rights Watch directly investigated; and they were the personnel stationed at the site when police beat protesters at the company gates on three occasions. Moreover, the State Reserve Police Force, whose only function is to provide security for company property and personnel, have committed abuses outside the scope of demonstrations—against Sanjay Pawar and during the Veldur raid on June 3. The role of these officers was detailed by Sub-Inspector Satoshe:

There is a combination of Maharashtra Police [MP] and Special Reserve Police [SRP] at the site. Not within the site, but next to it, in their own compound. The SRP are only around to deal with law and order problems, nothing else... These were due to the anti-Enron agitations... The MP deal with crime and other things. The SRP and MP are under my command.253

The DPC/police relationship also extends beyond security payments. Several eyewitnesses told Human Rights Watch that a helicopter that was reportedly contracted to the company was used to allow police officers and other state officials to monitor protesters during the January 30, 1997 demonstration. S.D. Khare, who witnessed the demonstrations on January 30, told us:

Behind the scenes, Enron has done everything to destroy the movement. For example, during the protests of January 30th, a Gulf Air helicopter was permanently used to survey the protesters with the District Collector T. Chandrashekar and the police inside. If someone were interested, they should check the flight manifestos.254

Other eyewitnesses have similar recollections of the helicopter during protests. Mangesh Chavan, told us that, “Enron’s helicopter was used in 1996-1997 to transport sub-inspectors and to watch local activists. It was used on January 30 and May 20 to survey the area [where protests were occurring] to see if people were approaching the site.”255 Medha Patkar noted that on January 30, “I saw the helicopter with the deputy superintendent of police in it. It was circling overhead. The collector, T. Chandrashekar, was in the helicopter as well. When I was arrested on the scooter, the helicopter was overhead.”256

The company could not have been ignorant of the human rights abuses committed by police whom it paid; frequently those abuses sparked further protest, company representatives were in contact with government officials, several cases received press attention, there were legal proceedings, and the company had information sources among its contractors in the villages. For example, following the demonstrations in early February 1997 where hundreds of people were arrested, the Times of India reported on the morning of February 28 that the government was “certain to come down heavily on the anti-Enron agitation...” because a water pipeline had been damaged a few days earlier. According to the newspaper, officials from the Dabhol Power Corporation had held “an emergency meeting” with representatives of the state government to discuss the protests and thegovernment had “reportedly assured the officials that firm measures would be taken against agitators....”257

Moreover, DPC and press reports quoting company officials indicate the company was aware of the demonstrations and commented on the protests. But the company did not publicly take a stand for more humane policing on its behalf. Indeed, it blamed anti-Enron villagers for the polarization that took place and viewed their tactics of dissent as illegal. For example, the company published a detailed commentary on the violent protest of January 30, in which isolated incidents of stone-throwing and minor skirmishes took place between protesters and police. Dabhol Samvad: The Monthly Bulletin of the Dabhol Power Corporation noted, of that protest:

[O]ver the past two-and-a-half years we have always been prepared to hold a dialogue with anyone who approaches us in keeping with the democratic tradition. However, this can hardly be said of the groups opposing us. Could it be that they lack our faith in law and democracy? The intimidatory tactics that the opposition is resorting to are not means that can be justified in a society that follows the rule of law.258

The company was aware that villagers were arrested for demonstrating against the project. In the May 1997 issue of Dabhol Samvad, the company cited the village of Peve as a beneficiary of the company’s water programs and noted:

Two months ago [March 1997], the entire village had participated in the anti-Enron agitation. Some of the women from the village were even arrested by police.259

Vrinda Walavalkar, a spokesperson for DPC, following demonstrations against the diversion of villagers’ water supply to the company in which hundreds of people were arrested for violating Section 37 of the Bombay Police Act, restated the company’s position that demonstrations against the project amounted to criminal activity when she told the Times of India that the company had “onlyenough water for drinking and cooking purposes... “ and that “It is hard to proceed with our schedules if such unlawful methods are used against us.”260

Commenting on demonstrations that took place in May 1997, the vice-president of the Dabhol Power Corporation told The Times of India that the agitators did not know why they were protesting and the company saw this as an issue between the government and the protesters.261

Most important, perhaps, is the statement made by the Dabhol Power Corporation to Amnesty International (AI) on November 17, 1997. AI had raised concerns based on the reports of local human rights organizations about abuses committed by police in conjunction with the protest demonstrations against the project. The DPC’s letter detailed the company’s position on human rights and illustrates its belief that human rights are not the company’s problem: “If you have concerns about police actions, we suggest that you take it up with the police or government body that is responsible for their operations.”262

Finally, the conduct of DPC contractors links the company to a pattern of state tolerance of criminal violence that operated to the DPC’s benefit. This report and other reports by Indian human rights organizations contain details of two attacks by contractors on villagers opposed to DPC; one death threat by a contractor and several offers of contracts to a local leader to stop protesting. In response to these allegations, the company wrote:

We found no evidence of wrongdoing by our employees or contractors...

Dabhol Power Company would not tolerate any human rights abuses by its employees and sub-contractors. They work only within the boundaries and would not have interaction while on-duty with individuals outside the perimeter of the DPC site.263

This argument is disingenuous. There is substantial anecdotal evidence that the DPC awarded some contracts on the basis of the recipients’ disavowing prior opposition to the project and that such contracts were offered outside the projectsite. In this respect at least, DPC authorized contractors to act as its agents in the battle of wills surrounding the project. While Human Rights Watch does not have evidence that the company approved of any specific criminal activity by its contractors, the fact that the company sweepingly denied all wrongdoing by its contractors is a shirking of responsibility for actions that directly bear on the company’s relations with villages surrounding the site.