Indian beneficiaries

Published : Aug 25, 2006 00:00 IST

Trucks headed for Iraq under the U.N. Oil-for-Food programme, at Mumbai port. A file photograph. - ARKO DATA/REUTERS

Trucks headed for Iraq under the U.N. Oil-for-Food programme, at Mumbai port. A file photograph. - ARKO DATA/REUTERS

THE Justice R.S. Pathak Inquiry Authority's frame of reference during its eight-month-long examination of some Indian dimensions of the United Nations Oil-for-Food programme in Iraq covered only two cases - Contract No. M/09/54 and Contract No. M/10/57 pertaining to former Union External Affairs Minister Natwar Singh and the Congress respectively.

Sections of the Indian polity, including the largest mainstream Left party in the country, the Communist Party of India (Marxist), had maintained even as the Justice Pathak Inquiry Authority was set up in November 2005 that the frame of reference should cover all non-contractual Indian beneficiaries mentioned in the Volcker report. This demand has acquired more importance in the background of the criticism that the methodology and frame of reference adopted by the Justice Pathak Inquiry Authority has evoked.

The Volcker report had, in fact, mentioned four non-contractual beneficiaries, which included Bhim Singh of the Jammu Kashmir Panthers Party and Reliance Industries Ltd. Bhim Singh is on record as saying that he did not lift any oil on the contracts assigned to him. The fourth beneficiary, Reliance, had got three oil contracts - M/09/35, M/10/17, M/11/25 - totalling 19 million barrels. According to the Volcker report, Reliance lifted 15.78 million barrels of this. In comparison, Natwar Singh was allotted only four million barrels, of which two million barrels were lifted.

The contention of the United Progressive Alliance (UPA) government at the time of setting up the Justice Pathak Inquiry Authority seemed to be that there was no need to look into the Reliance deal since there was no political controversy about it. Representatives of corporate bodies and a large number of trade-corporate sector analysts advanced the view that the Volcker report had findings on about 135 Indian companies including Tata and Cipla and that their participation in the Oil-for-Food transactions need to be seen in terms of legitimate commercial activity. In fact, it has been pointed out by many trade-corporate analysts that Reliance, Tata, Cipla and many other Indian firms figuring in the Volcker report have admitted to securing the quantities of oil mentioned in the report by paying a "commission", which they thought was legitimate.

But, according to the CPI(M) Polit Bureau, the case of Reliance cannot be clubbed together with that of the 125-odd other Indian companies that supplied goods to Iraq under the Oil-for-Food programme. These companies had paid the taxes levied by the Iraqi government and these transactions were recorded and legal. The suggestion is clear. Volcker's identification of Reliance as a non-contractual beneficiary necessitates a closer look than other companies, which have not been classified as non-contractual beneficiaries.

The Polit Bureau also says that the silence of the Bharatiya Janata Party on this issue is illuminating since the allotments to Reliance were made during the tenure of the BJP-led National Democratic Alliance (NDA) regime. Interestingly, former Foreign Secretary Romesh Bhandari alleged in November 2005 that a "very close" associate of former Prime Minister Atal Bihari Vajpayee was involved in the scam. But he did not link this "close relative to any specific deal. The BJP had denied any wrongdoing during NDA rule. But there is little doubt that the demand for a more broad-based inquiry will grow more vociferous, especially since NDA allies such as the Janata Dal (United), want one.

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