(New York, January 23, 2002) -- The human rights abuses that plagued the Enron Corporation's Dabhol power plant in India from 1992 to 1998 demonstrate the need for U.S. government agencies to scrutinize such controversial projects more closely, Human Rights Watch said today.
"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 raised concerns over potential environmental damage.
The U.S. government bears special responsibility for the human rights consequences of Enron's investment because of its aggressive lobbying on behalf of the three U.S.-based companies developing the project, Ganesan said. Although the Indian press widely reported the human rights troubles around the power plant, U.S. officials failed to investigate the matter.
The World Bank repeatedly refused to finance the project because it was "not economically viable," but the U.S. 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."
"U.S. taxpayers funded corporate complicity in human rights abuse," said Ganesan. "Congress should make sure that never happens again." Ganesan urged the U.S. Congress to establish a human rights assessment office at the U.S. Export-Import Bank to report to Congress.
A provision was introduced in the U.S. Congress during 2001 to strengthen the Export-Import Bank's human rights oversight. But the Bush Administration, the head of the Export-Import Bank itself, and many members of the U.S. business community opposed the provision, which was "killed" by a committee of the House of Representatives in November 2001.
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 against the plant. 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 government of Maharashtra state, where the power plant is located, 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. "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." In 2000, Enron began to take steps to address future violations, but those efforts ended when the company collapsed.
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 after, 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, 2002, Enron reportedly filed an approximately $200 million claim with the U.S. 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.