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HindustanTimes Sat,19 Apr 2014

Not one-off case, US firms have been at it for long

Charu Sudan Kasturi, Hindustan Times  New Delhi, December 11, 2012
First Published: 23:52 IST(11/12/2012) | Last Updated: 12:01 IST(12/12/2012)
Retail giant Wal-Mart is only the latest among a series of American multinationals that have over the years conceded that they spent crores of rupees lobbying to enter India under governments of both the Congress and the BJP.
 
Wal-Mart’s disclosure has triggered a political standoff with Opposition parties alleging that the Rs. 125 crore the company spent on lobbying since 2007 to enter India may have involved money spent on bribes. 
 
But a series of equally public disclosures from companies ranging from Enron and Westinghouse to Dow Chemicals and Starbucks points to a trend that is established and deeper than just the current debate. While some lobbying efforts – like Enron’s – date back to the 1990s, most others are recent, and come at a time when countries like India and China offer more robust markets than North America and Europe.
 
These disclosures have been made under quarterly lobbying reports to the US Senate required under that country’s Lobbying Disclosure Act. Unlike India, lobbying is legal in the US and there is no evidence yet that any of the money spent by these companies on lobbying was used to bribe Indian officials, though Wal-Mart has faced corruption allegations in Mexico.
 
In 1993, Enron official Linda Powers told the US House Appropriation Committee that the company had spent US$ 20 million ( Rs. 70 crore at the time) “educating Indians on how capitalist business should work.” This was at a time when Enron – which eventually filed for bankruptcy in 2001 -- was negotiating with the Maharashtra government of current agriculture minister Sharad Pawar for the Dabhol power project. Though the Shiv Sena-BJP combine that came to power in the state in 1995 was opposed to the project, Enron successfully lobbied and convinced the government to renegotiate an agreement.
 
Dow Chemical, which bought over Union Carbide – a firm embedded in the Indian psyche as responsible for the Bhopal gas tragedy of 1984 – spent over US$ 8 million ( Rs. 50 crore) in just 2011 on lobbying for projects such as “market access to Thailand, India and China.” This includes US$ 2,185,000 ( Rs. 11 crore) in the first quarter, US$ 1,870,000 ( Rs. 9.35 crore) in the second quarter, US$ 1,825,000 ( Rs. 9.1 crore) in the third quarter and US$ 1,370,000 ( Rs. 6.9 crore) in the last quarter of 2011. 
 
 
In 2006, when the Manmohan Singh government was battling criticism from both the BJP and its outside supporters in the Left over the Indo-US nuclear deal, nuclear reactor manufacturer Westinghouse spent US$ 200,000 ( Rs. 1 crore) lobbying for – among other projects – the “US-India Peaceful Atomic Cooperation Act,” according to the company’s year-end disclosure to the US Senate. One of the world’s largest nuclear infrastructure suppliers, Westinghouse signed an MoU with the Nuclear Power Corporation of India Limited (NPCIL) – India’s only nuclear operator – in June 2012, to build 1000 MW plants.
 
And in the first quarter of 2011, Starbucks Corporation – the world’s largest coffee chain – spent US$ 220,000 ( Rs. 1.1 crore) on lobbying for projects including on “Discussing Market Opening Opportunities in India.” In January 2012, just a year on, it announced its decision to enter India through a joint venture with the Tatas, after the government allowed single-brand retail.
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