Coke and Pepsi Vandalize the Himalayas

By Ann Ninan
India Resource Center
December 1, 2002

International soft-drink rivals Pepsi and Coke spend millions of rupees on a marketing war in the mammoth Indian market. Between them they have five of the biggest Hindi film stars endorsing their companies. Kareena Kapoor, Shahrukh Khan, Aishwarya Rai, Amitabh Bachchan and Aamir Khan have a fan following not just in India but across South Asia that would be the envy of many world leaders. The most prominent cricketers have also been roped in. As brand ambassadors their well-known faces are splashed on billboards, newspaper pages and TV screens. The Coke-Pepsi rivalry is such that nearly every shop, bus-stop stall and roadside eatery has been annexed into the one or the other's empire. Each transnational company (TNC) marks its territory in either the bright red or the blue colour that is associated with the two brands.

Until September this year, Coca-Cola Co. and PepsiCo Inc. were pitted against each other on the winding mountain road from Manali to the 4,000-metre-high Rohtang Pass in Himachal Pradesh, northern India. Bus- and car-loads of Indian families and couples the Himalayan town is a perennial favourite with newly-weds stream up daily to see the ice-clad pass above the beautiful evergreen forests. But with an average of 4 to 5 ads per kilometre either painted on to rock faces or nailed on to trees on the mountainsides, the billboards are an eyesore along the 56-km stretch. Now India's Supreme Court has put a stop to the advertising, and hauled up 41 companies, the most prominent being Coke, Pepsi and a Delhi-based publishing house, for flouting India's Forest Conservation Act 1980.

In what is being called variously as the Coke Case or the Pepsi Case, the Court was acting on behalf of an application filed by Harish Salve, Amicus Curiae (Friend of the Court) and then Solicitor General of India, on the basis of an article 'Rape of the Rock', in the Indian Express newspaper on August 11 this year. The intervention brought to the notice of the Supreme Court the painting of huge Pepsi and Coke logos on rocks that has "destroyed...... geological evidence dating back to 45 million years." Geologists understand the geology of the area by studying and observing rocky outcrops. If the area has been painted over they cannot do research. The newspaper quoted a professor in the Geology Department of Punjab University saying "these mountain facades have a huge eco-system. There is moss that grows on these rocks, then there are innumerable species of microorganisms. All that is completely destroyed when the rock surface is painted."

On September 23, a three-judge bench of the Supreme Court headed by the then Chief Justice of India B.N. Kirpal upheld the report submitted by an investigation committee and deemed the advertisers were guilty of "large-scale vandalism" by defacing the rocks and putting up unauthorised hoardings. The Court also said the Amicus Curiae would decide the quantum of punitive damages (suggested at Rs 50 million rupees or $1.04 million) which have to be imposed. A decision is likely before the Court closes for winter vacations. [The Supreme Court has fined Coca Cola and Pepsi since this article was written. For an update, see Supreme Court Orders Coke, Pepsi to Pay for Forest Law Violations - CWI Editor]. In addition, the judges ticked off the state government of Himachal Pradesh for "dereliction of duty" for "taking no action so as to check the same (vandalism)" and ordered it to deposit Rs 10 million "which will go towards meeting the expenses necessary for restoration of ecology." The government has complied with the Court order.

For Coke and Pepsi, the judgement has been a slap on the face. High-powered lawyers represent both multi-billion dollar businesses: Arun Jaitley, the previous Law Minister in the Atal Bihari Vajpayee government for Pepsi and Ashok H. Desai for Coca-Cola. When the story broke in the newspaper, company officials tried to pass the buck with Pepsi saying it was in the territory of their "bottlers" (local Indian franchisees) and Coke claiming it had been unaware of the practice and would ensure it never happened again. Clearly the Supreme Court judges were having none of that when they pinned the responsibility on the parent companies, Coke and Pepsi, and issued legal notices charging them with violation of Indian environment laws.

Can the extensive damage to the eco-fragile mountain area be reversed? The two members of the Central Empowered Committee who were given the task of advising the Supreme Court on the matter have recommended that the restoration work should be handled only by the Indian National Trust for Art Culture and Heritage (INTACH), "who have considerable expertise in such matters." The Second Report of the Central Empowered Committee, dated September 22, states: "The total estimated expenditure indicated in the Report is to the tune of Rs 178 lakhs (Rs 17.8 million)."

But already the job has been made more difficult by panic-stricken advertisers who have sought to escape the strong arm of the law (and the huge penalties) by indiscriminately chipping and painting over the adverts. Siddharth Choudhary, who assists Salve on forest matters, said the Court has taken serious note of this further damage being done to natural rock outcrops by the illegal advertisers. In India, it is prohibited to advertise anywhere without permission, unless it is on a balloon floated from above a private residence.

The Coke/Pepsi Case has country-wide implications. The Supreme Court has issued notices to companies responsible for defacing rocks on National Highway IV, outside Bangalore city. These companies include ACC, Coromandal King, Rasna, Fertiliser Chemicals-Travancore, Alpine, Indo-tex and Indo-Chem. The Court has ordered the Ministry of Environment and Forests to report back on whether such vandalism is prevalent in other states also, and to what extent.

The case was admitted by the Court while hearing a case on forest conservation in India, which has had 900 interventions since it began in 1996. Based on a writ petition the T.N. Godavarman vs. Union of India case led in 1998 to a ban on all kinds of tree felling in any state without prior permission from the Indian government. "I was surprised at the sweep of the judgement," Godavarman recalled in an interview in a recent issue of Down to Earth, a Delhi-based environment magazine. The three-judge bench, comprising Justice Kirpal, Justice Y.K. Sabharwal and Justice Arijit Pasayat, has taken decisions that rigorously apply the law to stop non-forest activity in India's forests.

The most recent rulings were of October 30 wherein the Kudremukh Iron Ore Company in Karnataka was told to wind down mining operations by 2005. ".....The greenery of India should not be allowed to perish and be replaced with deserts," the judges said while disposing of an application which among other things sought to stop the open cast mining that is polluting the Bhadra River. And a senior politician, B.L. Shankar of the Janata Dal (United) party in Karnataka asked to vacate from forest lands he had encroached along with many others. An estimated 611-acres of land that belongs to the Thatkola Reserve Forest, part of the state's Chikmangalur Forest Division, have been taken over by big coffee and cardamom planters.

The Godavarman case has seen some giants kiss the dust, including Pepsi and Coke. The beverage TNCs have been in India for roughly a decade since the government began liberalising the economy. Like other big corporations their eyes are on the vast rural Indian market, where 700 million (70 percent) of India lives. Purveyors of everything from detergents to mobile phones and life insurance are flocking to India's villages where economic growth last year was over 7 percent, compared with 3 percent in the industrial sector. According to the National Centre for Applied Economic Research in New Delhi, half the durables and consumer goods are now sold in rural markets.

Big businesses have swamped the consumer and services industries, and wield enormous political clout. 'US "dictates" Coke Divestment', the Business Line newspaper reported on September 17. Coke had put pressure through the US Ambassador to India, Robert Blackwell, to arm-twist the Commerce and Industry Minister Murasoli Maran to waiving a divestment clause in its 1997 investment plan in India. The TNC was under agreement to abide by an entry-level condition of making a 49 per cent divestment of its India holdings by July 2002. In a letter made public by Business Line, Blackwell had urged the government for "some flexibility" on the issue. The divestment clause is included in all foreign investment plans to ensure that wealth is shared with the Indian public. Coke, seeking a complete waiver, cited huge accumulated losses, estimated at over $400 million, and the fact that the Indian government has let several of its peers, including Pepsi, off the hook. Indeed, it is big corporations that control government policy.

Ann Ninan is a Delhi based freelance journalist.

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