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Heat On Cold Drinks

By Arjun Sen

19 August, 2003

‘The Coca-Cola company exists to benefit and refresh everyone
it touches,” says the home page of the world’s largest soft
drink company’s website. But many in India, and in the 199
other countries that Coke is sold in, are finding out the
truth the hard way.

Coke has been in the news recently for all the wrong reasons;
the latest being the 5 August report of the Centre for Science
and Environment, New Delhi. A CSE test found 12 soft-drink
brands of Coke and its global rival Pepsi contained pesticides
and insecticides in excess of the European Economic Commission’s
limit. The Parliament’s immediate reaction: ban on the brands
on its premises.

On 8 August, a West Bengal government report said sludge and
liquid effluents from Coke’s plants at Dankuni, Taratala and
Jalpaiguri and Pepsi’s at Narendrapur contained toxic metals
and the carcinogen cadmium.

On 6 August, Kerala State Pollution Control Board had confirmed
that Coke’s bottling plant had indeed been polluting the
groundwater and agricultural land in and around its Palakkad

Six months ago, CSE tests had found pesticides in leading
packaged water brands, including those produced by Coke and Pepsi.

These bombshells followed media reports in the UK and in India
of the scorching and environmentally disastrous impact of
Coke’s operations in several regions in India; of allegedly
rigging marketing tests in the USA and using slush funds to
boost equipment sales; of reportedly hiring Right-wing death
squads to eliminate trade union organisers in Columbia and
Guatemala; of causing environmental damage in Panama and of
neglecting health problems of its employees in Africa.

While reports of pesticides’ and insecticides’ presence in
Coke and Pepsi may now deter consumers from enjoying the
soft-drinks, people living in and around Coke’s bottling plants
in India have been feeling the heat in a different way. In
Kerala, Uttar Pradesh, Rajasthan, Tamil Nadu and Maharashtra,
people have been protesting against Coke’s bottling plants
because they’ve depleted groundwater level and damaged the

Villagers of Palakkad’s Plachimada village in Kerala had been
agitating against Coke’s bottling plant for several months
but their plight drew global attention only recently after
BBC Radio 4’s Face The Facts expose. Presenter John Waite
visited Coke’s Plachimada plant after villagers complained
of falling groundwater level in the area after Coke had
started drawing it in huge quantities. Waite carried the
samples of water and wastes sold by Coke as soil conditioner
(but used by local farmers as fertiliser) back to the UK,
where laboratory tests showed that they contained dangerous
levels of cadmium. Tests at University of Exeter too showed
the material was useless as a fertiliser and contained a
number of toxic metals, including lead. But the company has
been denying any wrongdoing. Coke vice-president in India
Sunil Gupta told the BBC that the fertiliser didn’t pose
any risk. “We have scientific evidence to prove it is
absolutely safe and we have never had any complaints.”

But Plachimada’s villagers have a different story to tell.
Three years ago, the little patch of land in the green,
picturesque rolling hills of Palakkad yielded 50 sacks of
rice and 1,500 coconuts a year. It provided work for dozens
of labourers. Then Coke arrived and built a 40-acre bottling
plant nearby. In his last harvest, Shahul Hameed, owner of a
small holding, could manage only five sacks of rice and just
200 coconuts. His irrigation wells have run dry, thanks to
Coke drawing up to 1.5 million litres of water daily
through its deep wells to bottle Coke, Fanta, Sprite and
the drink the locals call, without irony, ‘‘Thumbs-Up’’.
But the cruellest twist is that while the plant bottles a
mineral water, local people – who can never afford it – are
now being forced to walk up to 10 kilometre twice a day for
a pot of drinking water. The turbid, brackish water that
remains at the bottom of their wells contains too high a
level of dissolved salts to drink, cook with or even wash in.
The disruption in life because of depletion of groundwater
and contamination by pollutants have forced villagers to
picket the factory for the past 470 odd days. Over 300
people have been held for demonstrating against Coke and
blackening its hoardings.

On 7 April, the Perumatty panchayat revoked the factory’s
licence to alleviate the villagers’ sufferings despite losing
almost half of its annual income of Rs 7,00,000. But Coke’s
lawyers got the suspension order revoked by appealing to the
local self-government department. Coke could operate its plant
till 6 August – but on that day KPCB made its report public,
confirming the existence of carcinogenic contaminants in the
waste. Now, the government has postponed the hearing, saying
it’s “necessary to… (get) SPCB’s report” confirmed.

This is actually a David and Goliath battle: some of the
world’s poorest people versus a multinational giant. The
Centre classifies many of the suffering villagers as primitive
tribals or Dalits. Few took notice when the villagers first
began complaining of the changes in the quantity and quality
of well water. But their complaints mounted, for they not
only lost their water but, with the dried-out farms closing,
also their jobs. A reasonable number of crippled labourers
would be 10,000.

Coke, of course, denies responsibility for all this, and it
has the support the local authorities; they argue that the
company creates jobs. Politicians even threatened the
agitationists with “dire consequences” if they didn’t stop.
Though Coke claims to have carried out the mandatory Environment
Impact Assessment report before setting up the plant, none so
far has seen the report. Waite’s repeated requests to the
company to produce a copy of the report met with failure.

In UP, sustained protests against Coke have prompted the
Central Pollution Control Board to initiate a probe into the
pollution being caused allegedly by Bharat Coca-Cola Bottling
North East Private Ltd – a bottling arm of Coke – in Mehdiganj,
20 km from Varanasi. Trouble started in early May when a court
found the firm guilty of not paying land revenue worth more
than Rs 15 lakh. An equal amount of penalty – under Section
47 (A) of the Indian Stamps Act – has also been imposed on
the company. The case, filed in April 2001 by the UP government,
was the outcome of lobbying by protesting local residents.
They allege the plant has been discharging hazardous wastes
and heavy consumption of groundwater has depleted the water
level, from 15 feet to 40 feet. Result: severe drinking water

In Maharashtra, villagers of Kudus in Thane district now have
to travel long distances in search of water because it has
dried up, thanks to Coke. Villagers have began questioning
the subsidised water, land and tax breaks that Coke gets
from the state, only to leave them more thirsty. A man was
detained for protesting against Coke’s pipeline, built to
carry water from a river to its plant.

In Tamil Nadu, more than 7,000 people gathered in Sivaganga
recently to protest against a proposed Coke plant.
Protests are also building up against the sale of major Cauvery
tributary Bhavani by Tamil Nadu government to Poonam Beverages
for bottling Coke’s packaged water, Kinley. Despite the state
facing drought conditions, the government effected the sale.
At places the ground water level is beyond reach resulting
in water riots and even killings.

In Rajasthan, villagers of Kala Dera near Jaipur have been
protesting against the fall in the groundwater level after a
Coke plant started drawing water. After the firm set up a
bottling plant, the area’s wells and ponds dried up. ‘‘The
water level has fallen by more than 150 feet in the area…,’’
said a villager. Locals have submitted a memorandum to
the chief minister, demanding the plant be shifted.
But the unfazed $-20-billion, Atlanta-based soft drink giant
claims “local communities have welcomed our business as a
good corporate neighbour.” But this should not come as a
surprise, for Coke is accustomed to having its way with
governments. Under the rules of entry into India, Coke
was to divest 49 per cent of its equity stake within five
years. But now the government seems to have given in to
the soft drink giant’s pressure; it’s on the verge of
changing its policy to suit Coke’s interest. Will Indian
investors own 49 per cent of Coke’s operations in India,
but have no vote whatsoever?

Remember Enron! In Coke’s case too, the US government played
a significant role. US ambassador to India Robert Blackwill
wrote to Prime Minister’s principal secretary Brajesh Mishra:
“I would like to bring to your attention, and seek your help
in resolving, a potentially serious investment problem of
some significance to both our countries. The case involves
Coca-Cola, one of the largest single foreign investors in
India.” But around the world, Coke has increasingly become
the target of local communities’ ire around because of its
disregard for man and his environment. The world’s most well
recognised brand name’s Latin American bottler is facing trial
for allegedly hiring Right-wing paramilitary forces (death
squads) to kill and intimidate trade union organisers,
especially from SINALTRAINAL. The suit has been brought
under the Alien Tort Claims Act, that allows corporations
to be sued in the USA for crimes committed overseas.

Holding Coke responsible for the harms it causes is nothing
new. In May 2003, Coca-Cola de Panama was fined US $300,000
for polluting Matasnillo river in that country.

Coke may not got the Enron way – for it is not based on
assumptions and speculation. But both share some uncanny
similarities: Enron and Coke top the US foreign direct
investment (FDI) list in India. Enron’s Indian operations
(Dabhol Power Corporation, joint venture with Bechtel and
General Electric and others) was the largest single FDI in
India and became the target of activists across the country
because of various irregularities. Enron was forced to
shut down its Indian operations long before the financial
scandal broke out in the USA and brought the entire company down.

The company that started life in 1886 as the result of a
search for a headache remedy may soon join Enron if it fails
to stop giving people more headaches than it can cure.

(The author is former News Editor of The Economic Times.)