Dabhol

Forward on if you find it helpful
----- Forwarded by Steven J Kean/NA/Enron on 02/20/2001 03:25 PM -----

Michael Hicks@ECT
02/15/2001 09:29 AM

To: Steven J Kean/NA/Enron@Enron
cc: Bill Donovan/EPSC/HOU/ECT@ECT
Subject: Dabhol

Steve:

I asked our consultant who provided assistance on the NEPCO project in
Pakistan to give us some thoughts on Dabhol. I have also discussed this with
Pete van de Gohm and he is working with Steve Reistetter at EE&CC. Our
thoughts are that we really need the DPC folks in Mumbai involved, as they
will have to liaise with the authorities. They probably are already
involved, but nobody's bringing me into the loop from that end.

Regards,

Mike Hicks

----- Forwarded by Michael Hicks/EPSC/HOU/ECT on 02/15/2001 09:24 AM -----

PhilEJones@aol.com
02/14/2001 09:25 AM

To: Michael.Hicks@enron.com
cc:
Subject: Dabhol

14 Feb

Dear Mike:

I'm probably not going to tell you anything you haven't thought of, but
here's my response:

Doesn't sound too good. These groups have been losing out in the great
transition between Nehruvian mercantile-socialism and the current effort to
get India--at least half way--into the world economy. Some of their
demonstrations in Andhra Pradesh recently turned violent. These also were
focused on privatization issues and the decline of the state-owned sector
(where these groups dominate). These groups have allies in the more radical
environmental groups. They are trying to revive their political base and, in
India, there's nothing like a big American company to focus on, particularly
on the issue of electricity rates--something that affects everybody.

Not being familiar with the site, access or connections to the outside world,
I can't comment on those aspects. I assume Dabhol has a PR effort going to
show how Maharashtra people and industry need reliable supplies of
electricity, etc.

Generally, I think you have to plan for the worst, but look for avenues to
reduce tensions--open up a back channel to the leaders now, hold any
demonstration well short of the perimeter, but let a small group in to
present petitions, etc.

Make sure the state level politicians and senior bureaucrats guarantee the
facility will be protected. If something really big seems to be in the
works, see if they will put the plant and surrounding area under Section 144
(or whatever the successor emergency regulation is)--it prohibits meetings
and allows the police to break up demonstrations before they get started.
Work with the State Home Secretary and district level Superintendent of
Police to make sure sufficient police will be on site to hold the perimeter
and protect key facilities--the control room, fuel supply, plant.

Above all, make sure an experienced, senior majestrate will be on site
empowered to raise the level of response--but only if really needed. The
Indians have a well-developed command and control system for these kinds of
demonstrations. Escalation starts at baton charging and moves on to tear
gas. If the police are attacked violently and have difficulty holding, the
majestrate can order live firing over the heads of the demonstrators. If
police are in danger of being overrun and suffering casualties, the
majestrate can order firing into the mob. Obviously, you don't want things
to go that far. There are lots of tactical possibilities in the early stages
and cagey police officers will use them.

These are things the police and majestrates can do, but which your own
security force is not legally empowered to do, at least outside the
perimeter. Your counsel in Maharashtra can tell you what are the legalities
of your own security force using force to protect your property. Based on
that, you can take the appropriate steps to deploy your own security force.

In the vast majority of cases, these kinds of demonstrations are contained
without much problem. Very occasionally, they do get out of hand--and one
has to be ready for that.

Hope this helps,

Phil Jones, Ph.D.
Deodar Associates, Inc.