On The Defensive:
Coke And Pepsi
By R. Krishnakumar
Frontline
07 June, 2003
Coca- Cola and Pepsi, arch-rivals
and thirst-busters for millions worldwide, have found common cause in
Kerala against protest groups and Left organisations agitating against
the way the bottling units of the two multinationals are depleting and
polluting groundwater resources to the detriment of people in the drought-prone
district of Palakkad. Coca-Cola has described its critics as a "handful
of extremist protesters" unjustly targeting its business. Pepsi
feels they are politically motivated.
Both Hindustan Coca Cola
Beverages Ltd., which has a bottling plant in Perumatty panchayat in
Plachimada taluk, and PepsiCo India, which has a similar production
unit in Pudusseri panchayat in nearby Kanjikode, deny the allegations
against them. Yet, to the residents of the villages concerned, a substantial
number of them Dalits and Adivasis, the several ways in which such companies
"ensure that `Life Tastes Good' around the world" appear to
be the reason for the depletion and pollution of groundwater resources
in the region. The agitations have been growing in strength, no doubt
also with political intentions.
On April 9, the Opposition
Left Democratic Front-ruled Perumatty grama panchayat (the only panchayat
in the State ruled by the Janata Dal, one of the constituents of the
LDF) decided to cancel the licence of the Coca-Cola company's bottling
unit. Over a month later, on May 16, the Communist Party of India (Marxist)-led
administration of Pudusseri panchayat too announced a similar decision
regarding the Pepsi unit situated in WISE Park, within the Kanjikode
Industrial Development Area.
Coca-Cola promptly approached
the Kerala High Court and obtained a stay order against the panchayat's
decision. At the time of writing, Pepsi was yet to receive "any
intimation about the Pudusseri panchayat's decision". The panchayat
authorities told Frontline that as per their information the company
too was likely to approach the court.
WITHIN two years of its inauguration,
and especially since April 2002, protests had become a regular feature
in front of the Coca-Cola unit in Plachimada, as several places in Chittur
taluk, including 10 colonies of Dalits and tribal people, began to experience
a severe drinking water shortage. Despite the company's claims that
the unit is a "greenfield soft-drink bottling factory", where
a major share of the water not bottled is recycled and used to recharge
the groundwater, residents of the surrounding villages continued to
complain that indiscriminate extraction of groundwater had dried up
many wells and polluted several others. The company's initial attempts
to provide water in truck-loads to some of the affected villages was
not appreciated, and the agitators continued to demand that it should
take steps to restore groundwater aquifers and ensure continuous water
supply in the affected villages, or face the prospect of closure.
Ironically, the bottling
unit was established in 2000 on 38 acres (15.2 hectares) of mostly multi-cropped
agricultural land, barely 2 km away from the river Chitturpuzha and
near a number of reservoirs and irrigation canals. Until recently, according
to the protesters, every day the company drew nearly 1.5 million litres
of groundwater and about 85 truckloads of products left the factory
premises. In 2002, protesters allege, the company also resorted to bringing
water from borewells in neighbouring villages because the borewells
it had sunk on its premises had failed to provide the required yield.
Within months of the establishment
of the unit, local people had started complaining about the quality
of water in the surrounding areas. Independent scientific studies conducted
by some non-governmental organisations (NGOs) too had suggested a deterioration
of water quality, possibly as a result of rapid extraction of water
from the aquifers.
A study conducted by some
well-known environmentalists, all members of the Kerala Sastra Sahitya
Parishad (KSSP), too had warned that the extraction of groundwater by
Coca-Cola at the current rate would stem the possibility of groundwater
recharge because of the peculiar geological character and the deficient
rainfall pattern of the region. The report also warned of a deterioration
in the quality of groundwater as a result of over-exploitation. It said:
"There is every possibility that the reported fall in the quality
of water at Plachimada could have occurred because of the Coca-Cola
company... The situation will become still worse if the over-exploitation
is allowed to continue." According to the study, the groundwater
extracted by the company is enough to satisfy the total domestic needs
of about 20,000 people, about two-thirds of the population of the Perumatty
panchayat.
Another inquiry into the
complaint against Coca-Cola, conducted in January 2003 by the State
Groundwater Department, too had reported a depletion in the level and
a deterioration in the quality of groundwater in some of the open wells
at Plachimada. However, the study attributed it to the "below normal
rainfall in the area". It noted: "Since there is a drastic
fall in rainfall, it is necessary to restrict the exploitation of groundwater
at least till the status improved."
The State government had
refused to take note of the plight of the villagers or to ask the company
to curtail the extraction of groundwater. Meanwhile, Coca-Cola used
the Groundwater Department's report to deny the allegations of the local
community. Defending itself, the company claimed that it had complied
with all Central and State laws and regulations; studies conducted by
independent agencies and the Groundwater Department showed that there
was no over-exploitation of groundwater reserves by the plant; in the
past two years, annual rainfall in Kerala had decreased by about 60
per cent; it had employed an advanced rainwater harvesting technology
to help recharge the area's groundwater reserves; water from the factory's
seven borewells not used in making products was recycled back into the
ground, using "government-compliant irrigation techniques";
the technology used by its waste water treatment plants was "among
the most advanced in the world"; and that the effluents discharged
from the unit complied with the standards and norms set by the State
Pollution Control Board.
Nandu Banarjee, Director,
Corporate Communications, and a spokesperson for Coca-Cola, said that
the company had invested over Rs.80 crores in Kerala, had over 32,000
retail outlets, and provided nearly 5,000 jobs in a State with one of
the highest rates of unemployment in the country. Moreover, in 2002
the company had paid indirect taxes to the tune of Rs.32 crores to the
Central and State governments.
On May 16, the Kerala High
Court issued a stay order on the decision of the Perumatty grama panchayat
to cancel the licence granted to the Coca-Cola unit. The company argued
before the court that it was denied a hearing by the panchayat, which
had taken its decision in an arbitrary manner. The court has ordered
the status quo in the matter question of the company's licence and asked
the Secretary, Local Self Government, to take a decision in the matter,
after considering its defence against the panchayat's decision.
Janata Dal State general
Secretary K. Krishnan Kutty and Perumatty panchayat president Krishnan
told Frontline that the decision would not be revoked. They said that
the company "failed to explain satisfactorily even the amount of
water being extracted by the unit from a perennially water-starved region".
They said that the court order asking a government official to sit in
judgment of the decision of the people's representatives went against
the Constitution and democratic principles. "If the government
Secretary issues an order contradicting the decision of the panchayat,
we shall think of approaching the court on this issue," Krishnan
Kutty said.
Explaining the background
to the Pudusseri panchayat's decision to cancel the licence of the Pepsi
unit, president K.G. Jayanthi said that the people of the village and
surrounding areas had experienced one of the worst instances of water
scarcity this year. Jayanthi told Frontline: "There was a severe
shortage of drinking water. While earlier there was enough water to
operate the pumps for four to five hours a day, this year the pumping
had to stop in less than an hour. The panchayat had examined these factors
in detail and found that the Pepsi unit was indulging in over-exploitation
of groundwater sources, given the general drought situation prevailing
in the area. Hence the decision to cancel the licence."
Pepsi's local level officials
refused to comment on the issue, but said that they were yet to receive
any official communication from the local body. Senior officials of
the company were not available for comments. However, M. Abdul Rehman,
managing director, WISE Park, described the decision against the Pepsi
unit as an "instance of political one-upmanship" indulged
in by coalitions. Rehman said: "It was the LDF which invited Pepsi
to invest in the State. The company is the most important customer inside
the 750-acre WISE Park Industrial Development Area, occupying 50 acres,
and it had already invested over Rs.50 crores in the bottling unit and
is providing employment to over 500 people. The company was established
as per the single-window clearance mechanism under the Industrial Development
Area Act, 1999, and the panchayat has no authority to cancel its operations.
It was well known that the bottling unit is a water-intensive industry
and Pepsi had conducted extensive water availability and quality studies
before establishing its unit here. The panchayat's action against such
high-profile units would only send wrong signals to potential investors,
especially at a time when Kerala is desperately seeking industrial investments."
Significantly, even as the
Democratic Youth Federation of India (DYFI) and other Left-oriented
organisations were organising protest marches and seminars against the
Cola factories, on May 16, over 700 workers of the Coca-Cola unit marched
to the office of the Perumatty panchayat under the banner of the Coca-Cola
Thozhil Samrakshana Samity (Coca Cola Employment Protection Committee).
They staged a dharna before the panchayat office demanding protection
for their jobs and protesting against the decision to cancel the licence.
Coca-Cola and Pepsi had barely
survived an anti-Iraq war onslaught on their products, spearheaded by
Left organisations in the State. Curiously, nowhere was the boycott
of soft drinks more effective than in northern Kerala, especially in
the Muslim-majority Malappuram district. In Malappuram, Indian Union
Muslim League (IUML) president Panakkad Syed Mohammad Ali Shihab Thangal
issued a boycott call against products of U.S.- and U.K-based multinational
companies. Barely a month later, the State government, in which the
IUML holds the key portfolios of Industry and Local Self-Government,
looks the other way as allegations are levelled against U.S. corporate
giants such as Coca-Cola and Pepsi. But given its enthusiasm to welcome
ever-elusive industrial investments into Kerala, a State that is struggling
to wish away its investor-unfriendly image, no one expects the government
to go against the interests of the two multi-national market leaders.
So far the reaction of State
government and ruling United Democratic Front leaders to the issue has
been only to point out that it was under the previous LDF government
that the two factories had started functioning. As the issue gets embroiled
in political games and court dramas, it is the rural communities that
are rapidly losing their access to water. As the refrain goes, for such
communities, "there's nothing political about an empty well".
Copyright © 2003, Frontline.