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A Publication
on The Status of
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Coca Cola Compensation Bill: Government Of India Subverts The Constitutional Process

By Dr S Faizi

26 May, 2015

When a piece of legislation unanimously passed by a State legislature in difference to massive public demand is sent to the Centre for Presidential assent it is held up in the Home Ministry for long four years, without even passing it to the President, it represents a subversion of the Constitutional process raising worrying questions about the Centre’s utter disregard for the Constitutionally endowed legislative powers of the State Assemblies and the whole Constitutional process itself. All on behalf of a recalcitrant multinational corporation once totally expelled from the country.

The environmental and social devastation of the Plachimada area in Palakkad district of Kerala had forced the government in 2009 to set up a High Power Committee (HPC) of fourteen experts and chaired by the Additional Chief Secretary and its nine months of work resulted in an exhaustive report scientifically establishing, with robust evidence, that the devastation was caused by the operation of the plant established by the Coca Cola company in the area, and valuing the ecological and social losses thereby caused.

The Plachimada Coca Cola Victims Compensation Claims Tribunal Bill (the Bill)was unanimously passed by the Kerala Assembly on 24 February 2011, following the submission of the report of the HPC, to establish a tribunal to adjudicate claims of compensation from the multinational company by the victims of Plachimada. On a conservative estimate the HPC has put the cost of the damages at Plachimada at a minimum of Rupees 2162.6 million.
What has happened to the Bill thereafter provides a text book case of how powerful multinationals, with the aid of their home governments, subvert the statutory procedures in the global South. The Manmohan government did its best to wither this critical piece of legislation, and it is being followed up more vigorously by the Modi regime.

The Kerala Governor sent the Bill for Presidential assent via the Ministry of Home Affairs a month later. Although there was no issue of repugnance with any of the central laws, it was sent for Presidential assent to obviate any future arguement of repugnance in a court of law. The Home Ministry forwarded the Bill to various related ministries for comments, and five ministries have duly submitted their categorical approval of the Bill. These are the ministries of agriculture, rural development, water resources, food processing industries and the Department of Justice under the Ministry of Law. Beyond categorical approval, some ministries have in fact recommended to take stronger measures than the contents of the Bill. Yet, it is shocking that the Bill was not passed to the President by the UPA government as they were yielding to the US pressure, and the then Home Minister Chudambaram was particularly keen on subverting the legislation and his successor Shinde worked under his guidance, once he even uttered that he was not even aware of such a pending Bill a week after the Kerala Chief Minister met him to convince him to expedite the assent issuing process.

The Modi regime is working overtime to subvert the Bill. The Home Ministry has recently sent a letter to the Kerala government ‘requesting’ it to withdraw the Bill, an act the UPA had not dared. The reasons raised by the central Home Ministry are an outlandish repeat of the multinational company’s ‘legal opinion’ it had submitted to the UPA government.

The Home Ministry provides gratuitous advice to the State govt- in line with the multinational’s ‘legal opinion’- to approach the National Green Tribunal (NGT). This betrays the sad fact that the Home Ministry officials have not even read the National Green Tribunal Act, 2010. Section 15.3 of the Act requires the petitions for compensation to be filed within a period of 5 years, with a grace period of 6 months. The most critical damages to groundwater and toxic contamination caused by the Cola company at Plachimada occurred during 2000-2004, way before the five yearsand six months time bar set by the Act and therefore obviously this Act cannot be used to redress the tragedy at Plachimada. This is the reason why the Bill waspassed by the Assembly in the first place. And it may be recalled that the NGT became operational only in May 2011. The Home Ministry officials and their legal advisors should be held accountable for deliberately misinforming a State government.

The Cola company’s initial response to the HPC was one of intimidation as contained in a letter it sent to the HPC chairman, and then they turned into a ludicrous misinformation campaign. The Cola CEO Muhtar Kent had falsely informed the annual shareholders meeting in Atlanda that the Plachimada plant could be reopened any time while in actual fact it was closed by an order of the State Pollution Control Board in February 2004 for its failure to install the required facility for treating the toxic sludge, in line with the order issued by the Supreme Court in October 2003. The company has refused to install this facility and also declined to comply with the direction of the Supreme Court Monitoring Committee to provide piped drinking water to the residents of Plachimada. Now the Modi regime is acting as a client of the Cola company by venturing to dish out unfounded advice to the Kerala government.

There is absolutely no conflict between the NGT Act and the Bill, primarily due to the difference in the temporal coverage, in fact by filling the time gap in regard to the Plachimada locale the Bill provides an excellent complement to the NGT Act. The Home Ministry repeating the challenge of the Cola company that the State Assembly has no legislative competence to enact legislation to redress the damages in the areas of health, agriculture, labor (loss), animal husbandry, groundwater etc, all listed in the State List (II under the Seventh Schedule) is posing a serious question on Centre- State relations, and all democratic forces should be concerned about this. The Home Ministry has no powers to decide on the legislative competence of a State Assembly, that power is vested with the judiciary alone.

The Plachimada Bill does not by any means comes in conflict with the Centre’s powers in regard to implementation of international treaties as provided by Articles 253 and 246 as the Cola lawyers had vainly sought to argue in their ‘legal opinion’; it flows from the State’s Constitutional responsibility to act upon the violation of the Article 21 and has got nothing to do with any international declaration.Besidesfulfilment of the State's obligation in terms of Article 21 as interpreted by the Supreme Court, it is also based on the polluter pays principle that has become an integral part of our jurisprudence. The enactment of this law will remain a critical contribution in enforcing a legal regime for the sustainable management of the scarce natural resources of the country as a public resource as underlined by the Supreme Court judgment in the G2 scam and to remedy the deprivations suffered by the victims, and in pursuance of Article 39b of the Constitution. It also fills an important legislative gap in terms of time bar for the Plachimada locale and complements the NGT Act.

It is surprising that while the Home Ministry’s new letter refers to the responses of the Department of Legal Affairs and the Solicitor General that favour the Cola company, it tactically ignores the categorical support to the Bill expressed by the relevant ministries long time ago.The Plachimada Bill represents a new low in Indian polity, exposing its pathologically illegitimate ways of manoeuvring to protect the interest of multinationals as opposed to India’s poor. This subversion of the Constitutional process must be challenged by the democratic India even as the establishment is set to do a pan India replication of the Gujarat model that has turned the State into an ecological nightmare.

Author is an Ecologist specialising in international environmental policy, was the Environment Expert Member of the Plachimada High Power Committee Email: s.faizi111@gmail.com


Dr S Faizi

Coca Cola

Plachimada Struggle








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