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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." Summary and Recommendations
January 23, 2002 Press Release

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


Human Rights Watch’s mission is to protect and advance human rights, and our research and advocacy on corporate responsibility is shaped by these concerns alone. Human Rights Watch takes no position on trade or development policies per se. But in an interconnected world where very large and influential transnational corporations compete for finite resources and new markets, human rights and trade are increasingly intertwined. Companies that trade in essential commodities—oil, gas, or electricity—exemplify this phenomenon. In recent years, the energy industry has been embroiled in controversy because of its alleged involvement in situations of human rights violations throughout the world. Some high-profile examples are Royal Dutch/Shell’s operations in Nigeria; British Petroleum’s development of the Cusiana-Cupiagua oil fields in Colombia; and alleged human rights violations that occurred during Total and Unocal’s construction of the Yadana gas pipeline in Burma and Thailand.

Another energy company that warrants attention is the Enron Power Development Corporation, a subsidiary of the Houston-based Enron Corporation, which is one of the world’s largest energy companies. Traditionally viewed as a natural gas and oil company, it began to develop electricity projects as an outlet for its natural gas in the early 1990s. In 1997, its annual revenues were more than U.S. $20 billion.

This report focuses on a subsidiary of the Enron Development Corporation in India: the Dabhol Power Corporation (DPC). The DPC’s project in the state of Maharashtra constitutes the largest single foreign investment in India, and its history, since 1992, raises questions intrinsic to any serious discussion of the importance of human rights concerns to governments and companies designing investment strategies.

The report details the development of the Dabhol Power project from its inception in 1992 through 1998 in order to illustrate an unbroken continuum: the immense influence that Enron exercised over the central and Maharashtra governments; to describe the company’s interaction with villagers—whose legitimate concerns for their livelihood and environment were ignored or dismissed—leading them eventually to oppose the project; to make clear that various avenues to address their concerns about the project—judicial proceedings and direct dialogue with the company—had been exhausted in ways that raised questions rather than answering them. The local opposition that formed to protest the project’s lack of transparency, its human impact, its threat to villagers’ livelihoods, and its potential to do environmental damage was the affected population’s last recourse. Except in one case of stone-throwing and another incident where a water pipeline was broken, the opposition did not resort toviolence; villagers’ groups did not endorse sabotage, and their methods were peaceful. Yet they were met with serious, sometimes brutal human rights violations carried out on behalf of the state’s and the company’s interests. The relationship between the controversies surrounding implementation of the project, the efforts to challenge its development, and violations of human rights are all described in detail here because each is an integral part of a complex, disturbing situation.

In 1992, as part of an effort to liberalize the economy, the government of India announced that it was privatizing its energy sector. In the middle of 1992, the government of Maharashtra state announced that the Enron Corporation would build the largest electricity generating plant in the world for Maharashtra at a cost of approximately $3 billion. The operating company would be known as the Dabhol Power Corporation—a joint venture of three U.S. companies: the Enron Corporation, General Electric, and the Bechtel Corporation. Enron is the overseer of the company, originally holding 80 percent ownership. General Electric and Bechtel each hold 10 percent. In November 1998, the Maharashtra government’s Maharashtra State Electricity Board (MSEB) bought a 30 percent share of the DPC from Enron, reducing Enron’s stake to 50 percent.

The agreement was fast-tracked, running counter to the reservations of key Indian and international economists and condemned by intellectuals, academics, the Indian press, trade unions, opposition political parties, and nongovernmental organizations throughout India. Criticized for lack of transparency, its projected high costs, and potential environmental impacts, the deal was so controversial that when the Shiv Sena-BJP government coalition was elected to power in 1995, it suspended the project. Then, in an about-face that renewed allegations of corruption surrounding the project, the Shiv Sena-BJP government renegotiated the project and allowed its construction. While the project was the focus of attention nationally and internationally because of the controversies surrounding the project’s suspension, less attention was given to a pattern of serious human rights violations that the project provoked in localities near the project site, in Maharashtra state.

Leading Indian environmental activists and representatives of villagers’ organizations in the affected area organized to oppose the project and, as a direct result of their opposition, have been subjected to beatings and repeated short-term detention. In many cases, they have been detained for periods ranging from several days to two weeks without being produced before a magistrate as required under Indian law. During mass arrests at demonstrations in villages surrounding the project site, protesters have been beaten with canes (lathis) or otherwise assaulted by the police, in some cases sustaining severe injuries. Police have also tear-gassed peaceful demonstrations. Police have frequently used laws providingfor preventative detention to arrest demonstrators in anticipation of protests, sometimes under suspicion of violence.

Governments have authority to counter any genuine threat to public order; in the case of protests against the Dabhol Power Corporation, some of the charges brought against activists opposed to the company include alleged acts of spontaneous violence—stone-throwing by protesters on one occasion and damage to a water pipeline on another. However, examining the state’s response to opposition to the Dabhol Power Corporation, Human Rights Watch believes that the state government of Maharashtra has engaged in a systematic pattern of suppression of freedom of expression and peaceful assembly coupled with arbitrary detentions, excessive use of force, and threats. In the thirty demonstrations directly researched by Human Rights Watch, and in others studied by Indian human rights monitors, there occurred only two minor, unplanned incidents bordering on violence; the character of the opposition protests were peaceful. The police have also misused preventative detention laws to detain people for the peaceful expression of their views. The state has also tolerated the failure of the police to investigate or prosecute perpetrators of attacks on opponents of the Dabhol Power project. The arrests violate the internationally recognized rights of freedom of expression, assembly, movement, protection against unjust arrest and detention, and they constitute police mistreatment. The failure to investigate or prosecute those who have attacked demonstrators represents negligent and biased behavior by police.

In addition to the state, Human Rights Watch believes that the Dabhol Power Corporation and its parent company Enron are complicit in these human rights violations. 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-Enron protest leaders and prominent environmental activists, and police practices ranging from arbitrary to brutal. The company did not speak out about human rights violations and, when questioned about them, chose to dismiss them altogether.

But the Dabhol Power Corporation’s responsibility, and by extension that of the consortium and principally Enron, goes beyond a failure to speak out about human rights violations by the state police. The company, under provisions of law, paid the abusive state forces for the security they provided to the company. These forces, located adjacent to the project site, were only stationed there to deal with protests. In addition, contractors (for DPC) engaged in a pattern of harassment, intimidation, and attacks on individuals opposed to the Dabhol Power project. When the victims of these acts attempted to file complaints with the police, they were met with official silence. Police refused to investigate complaints, and inseveral cases, arrested the victims for acts they did not commit. When these activities were brought to the company’s attention, the Dabhol Power Corporation refused to acknowledge that its contractors were responsible for criminal acts and did not adequately investigate, condemn, or cease relationships with these individuals.

Other institutions bear responsibility for human rights violations as well. Human Rights Watch considers that the financiers of Phase I of the project’s construction (1992-99) and U.S. government agencies that financed and lobbied for the project are complicit in the human rights violations. In particular, the U.S. government bears special responsibility because of its aggressive lobbying on behalf of the three U.S.-based companies developing the project and because it extended hundreds of millions of dollars in public funds for the project while seemingly indifferent to human rights-related conditionalities that apply to such transactions.

Human Rights Watch also considers that those institutions which have agreed to finance Phase II (set to begin in 1999) will be complicit in human rights violations unless they implement adequate safeguards to ensure respect for human rights. Legal prohibitions on peaceful freedom of expression and assembly are still in force in the districts near the DPC site; many of the cases against activists are still pending, affecting the daily lives, income, and future liberty of the individuals involved; and the company receiving funding has made no attempt to correct the practices that violate human rights.

Human Rights Watch calls on the actors involved in this project—the government of Maharashtra, the government of India, the Enron Corporation, the government of the United States, and public and private financial institutions—to take concrete measures to investigate and punish the perpetrators of these violations; to take specific measures to ensure that human rights protections are integrated into project development; and to prevent further abuses.

This report is based on a six-week investigation in India during January and February 1998 and follow-up investigations in Washington, D.C. and New York. Human Rights Watch interviewed dozens of witnesses and victims of human rights violations; Indian government officials; lawyers knowledgeable about the events; current and former U.S. government officials; and representatives of nongovernmental organizations. Press reports, legal documents, reports by local human rights organizations, and more than 1,200 pages of internal company and government documents were reviewed for the investigation. Appended to the report are the correspondence between Human Rights Watch and the Export-Import Bank of the United States, the Maharashtra government’s Report of the Cabinet Sub-Committee to Review the Dabhol Power Project, selected conclusions and recommendations from the Indian government’s Parliamentary StandingCommittee on Energy, and correspondence between the government of India and the World Bank concerning the economic viability of the Dabhol Power project.