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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." II. Background: New Delhi and Bombay
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

Political Opposition to the Project

While negotiations between the company and the government reached the point of project implementation, opposition parties, namely the Shiv Sena and the BJP—both Hindu nationalist parties—were vocally criticizing the agreement on the grounds that it was fraught with corruption, was not in the best interests of the state, and pandered to multinational corporations, whose involvement in India these parties generally opposed. The controversial project thus remained in the spotlight. In 1994, as the DPC set up operations in Maharashtra and began to come into contact with the local population, the controversy became acute in the communities directly affected. (See below)

On July 7, 1994, Ramdas Nayak, a member of the BJP, filed a High Court case against the Indian government and the Dabhol Power Corporation on the grounds that projects in “core sectors” should not be implemented without transparency and competitive bidding, and that the counter-guarantees violated provisions in the Indian constitution that regulate government borrowing. The suit sought to cancel the PPA and the counter-guarantees between the government and the DPC. The case, however, was dismissed on August 8, 1994.39

The Shiv Sena and BJP sought to harness popular opposition to the project in order to win control of the Maharashtra state government. Opposition candidates promised that they would review the project and accused the Congress (I) government, led by Sharad Pawar, of corruption, lack of transparency and operating against the public interest. The Enron issue, combined with the Shiv Sena-BJP strategy of accusing the Pawar government of not adequately addressing the Bombay riots and Bombay bomb blasts and of siding with Muslims, eventually won the Shiv Sena-BJP coalition control of the Maharashtra government.

39 Center for Indian Trade Unions and Others vs. Union of India and Others, Special Leave Petition Number 7734 of 1997.