Coca-Cola: Continuing Battle in Kerala

By Surendranath C
India Resource Center
July 10, 2003

Plachimada, (Palakkad district) Kerala: The Coca Cola story in Plachimada is reminiscent of David versus the mighty Goliath. In the latest twist to the tale, the Kerala Government through the Secretary, Local Self Government Department (LSGD) has stayed the Perumatty Grama Panchayat's decision not to renew the license issued to the Hindustan Coca Cola Beverages Ltd. (HCBL), an Indian arm of Coca-Cola. The LSGD has ordered a status quo till July 18, 2003 before disposing off the appeal filed by HCBL against the Panchayat's decision.

Women Protest Coke in Kerala
Women Protest Coke in Kerala

Under the Indian Constitution (Article 243 G), the legislature of a State may endow the Panchayat (elected body at the village level) with necessary powers and authority to function as an institution of self-government. However, the Kerala Panchayati Raj Act also allows an entrepreneur to appeal to the Government of Kerala, against the decision of a Panchayat.

On April 7, the 15-member Panchayat board decided not to renew the industrial license issued to the Coca Cola factory on the ground of "protecting public interest," as the company was "causing shortage of drinking water in the area through over-exploitation of ground water sources."

"It was a decision that acknowledged the growing resentment against the multinational company," said A. Krishnan, Panchayat President and a member of the Janata Dal, a constituent of the opposition Left Democratic Front (LDF) in Kerala. "The Panchayat's decision was based on Section 232 of the Kerala Panchayati Raj Act, 1994 giving the local body sufficient authority to notify that no place within its jurisdiction shall be used for purposes offensive or dangerous to human life or health," said Mr. K.N.Unnikrishnan, Special Grade Secretary of the Panchayat.

More than a year after local people started complaining of massive extraction of ground water by the bottling unit of HCBL and the consequent depletion and contamination of well water in Plachimada village in Palakkad district, the Kerala State Health Department has come up with data that validate the charges. The medical officer of the Public Health Center in the village recently informed the Perumatty Grama Panchayat that people should not drink water from the three wells neighboring the Coca Cola plant.

Water samples from these wells analyzed at the Regional Analytical Laboratory at Kozhikode under the orders of the District Medical Officer have revealed hardness, chlorides and concentration of total dissolved solids (TDS) beyond tolerable levels for drinking water.

The Public Health Center's letter supports the contentions of the people of Plachimada village. For over a year, women in the Vijayanagaram Colony in the village have been walking nearly 5 kilometers up and down every morning and evening to fetch a pot of water. The open wells in the Colony have either dried up or the little water left in them has become unpalatable.

Before HCBL started bottling operations in 1999, the wells in the colony used to meet the needs of the neighboring colony too. "Now, all nine wells in the colony have become unusable," said Mylamma, a grandmother from the Malasar tribe. "Water tastes bitter. When used for bathing, it leads to itching and swelling on the body and a burning sensation in the eyes. My grandchild was born retarded. I suspect this has got something to do with the water," Mylamma added. She has remained steadfast at the picket in at the HCBL gates for over a year. The agitation is still on, though weakened considerably by internal dissensions and threats from the counter-agitation by factory workers who have organized into an 'employment protection forum.'

Over the past year, the State Ground Water Department, the Central Ground Water Board, the Kerala Legislative Committee on Environment and the Kerala State Pollution Control Board have conducted different studies on depletion and contamination of water in the area. "None of these official institutions acknowledged that there was a problem in the village, leave aside establishing a link between the massive water extraction of water by the Coca Cola company and the depletion and contamination of well water," says Sunderarajan, an activist associated with the Coca-Cola Virudha Samara Samithi (Anti-Coca Cola Agitation Council).

After studying water level trends and quality in 20 wells in and around the factory, the State Ground Water Department had concluded in 2002 that only three wells showed quality problems and a drop in water levels. Observing that there has been a reduction in the average annual rainfall in the area --from 2137 mm in 2000 to 1147 mm in 2001 and just 670 mm in 2002-- the Department's report said the depletion of water in the open wells was due to poor rainfall, the resultant reduced groundwater recharge and the high density of irrigation bore wells.

"Instead of carrying out a comprehensive water balance analysis of the watershed, the State Ground Water Department has come up with a hotchpotch report to justify Coca Cola and eulogize the company's inadequate water harvesting system," said Vinod Kumar of Maithri, a local NGO implementing the World Bank-aided drinking water and sanitation project in the neighboring Mudalamada Panchayat. "The report is based on insufficient field data (only 8 months' rainfall) collected from too small an area (one square kilometer) and lacking in several important parameters, such as soil type, depth, slope, land use pattern, surface run-offs, etc. required for assessing groundwater recharge. No effort has been made to independently verify either the quantity of water extracted daily by the Coca Cola factory or the amount of water the company claims to store and recharge through rainwater harvesting," Vinod Kumar said. "The claim of the Ground Water Department that Coca Cola collected "3.5 million liters of rainwater" from 35 acres of land area in just 3-4 precipitations contradicts scientific principles of runoff and its own rainfall data," he said.

The Ground Water Department report, nevertheless, had said that it was "necessary to restrict the exploitation of ground water regime" and that the "intake of water by the Coca Cola company should be regulated to a bare minimum of 0.3 million liters per day (mld)." HCBL officials did not clarify whether they have accepted the recommendation. When contacted, HCBL spokesperson Vijay Bhaskar Reddy, General Manager, Public Affairs and Communication, said the company officials were "too busy reviewing the business and could not spare time for answering queries from the media."

The quantity of ground water HCBL pumps out everyday is a matter of contention. HCBL officials have been claiming that the Kerala unit consumed between 0.3 and 0.6 million liters of water per day during off-peak and peak seasons respectively. While the company asserts that only six bore wells and two open wells are being used in the plant, civil society investigations have refuted these claims.

A People's Commission chaired by environmentalist Dr. A. Achuthan and another study team of Jananeethi, a Thrissur-based human rights NGO, found eight bore wells on the premises during their site inspection. "Given the capacity of the water pumps (7.5 HP X 4 and 5 HP X2), the company can extract more than 0.1 million liters of ground water in an hour through the bore wells alone," argues the report of the People's Commission, published in November 2002. "Assuming a minimum pumping of 10 hours per day, the company could be extracting close to 1 million liters of water every day," the report says. "Every day the company is siphoning off a quantity of water equivalent to what is needed to meet the minimum requirements of around 20,000 people."

"Considering the huge difference between the amount of water pumped out and the water recharged into the ground by the Coca Cola factory, people's fear of long-term adverse impacts on agriculture seems justified," the Commission observed. The team found that nearly 250 hectares of wet paddy fields in the neighborhood of the factory have already dried up.

"As of now, it is difficult to demarcate the effect of bad weather and the resultant shortage of drinking and irrigation water from the lowering of the water table due to excessive pumping by Coca-Cola," the Jananeethi team observed. Located in a rain shadow region, Plachimada village gets very little rainfall. To make matters worse, a large number of irrigation bore wells had already been dug in the area and competitively deepened by the users. Three reservoirs, a canal from the Meenkara dam and the moderate slope of the terrain have all been helping in ensuring some amount of recharge of ground water in the region. But now the Coca Cola unit has upset the delicate water balance in the village.

Water Contamination

People's wrath against the Coca Cola unit is also on account of the worsening water quality in the village. Independent studies have found that the water left in a few open wells in the neighborhood of the plant contain high amounts of chlorides and total dissolved solids. The chloride content in the water was 540 mg/l in the samples collected by Jananeethi in July 2002, against the desirable standard of 250 mg/l for drinking water. Another study by the Integrated Rural Technology Center (IRTC), Palakkad, found 519.4 mg/l and 489 mg/l of chlorides in water samples drawn on 29 June 2002 from a dug well and a drilled well near HCBL unit. The District Medical Officer's study detected much higher values for chlorides (770 mg/l, 910 mg/l and 860 mg/l) in the three wells that belonged to Pozhanthal, Subramanian and Muthuswamy living near the Coca Cola factory.

Similarly, the amount of Total Dissolved Solids (TDS) have been observed to be high in all the water samples analyzed by these agencies: 551.6 mg/l (Jananeethi); 1100 and 1254 mg/l (IRTC); 1318, 1512, 1434 mg/l (DMO) against a desirable limit of 500 mg/l.The studies also indicate that the hardness (as calcium carbonate) in the water is excessively high: 1120 mg/l (Jananeethi); 1110 and 1240 (IRTC); 1130, 1060,1190 mg/l (DMO) against a desirable limit of 300 mg/l.

"The high alkalinity, total hardness, chloride content, Total Dissolved Solids and MPN (Most Probable Number, a measure of bacterial contamination usually expressed in no/100 ml) values of the water in the area do not conform to drinking water standards. The water is very hard. Its dissolved oxygen content is low. Since the MPN value is high, bacterial contamination could be suspected," said the Jananeethi study, concluding that "the water of the wells of this area are polluted and unfit for domestic use."

"How could such a water-intensive unit have been allowed in a drought-prone area," asks Arumughan Pathichira, a member of the Agitation Council. "At the time of construction of the factory, the Ground Water Department was not consulted as it was not mandatory," admits the Ground Water Department report. While the report claims that Coca Cola had conducted an environmental impact assessment (EIA) prior to setting up the unit, none of the civil society groups had ever been shown any such report.

Panchayats Politico-legal Battle

The Public Health Center's letter is so far the only official document with the Perumatty Gram Panchayat that supports its contentions against the Coca Cola bottling plant. Nevertheless the Panchayat has sought to take on the Cola giant, and the outcome of the battle will have far reaching implications. In its petition filed before the High Court, HCBL had claimed that the Panchayat's decision was malafide, predetermined and unsupported by any documentary evidence of depletion of ground water and environmental pollution. In support of its argument, the company produced before the High Court several documents from the Director of Factories, the State Pollution Control Board, Director of Ground Water Department, National Geophysical Research Institute and a few local NGOs.

In a similar, earlier case, the Kerala High Court had ruled that "if an entrepreneur produced sufficient positive certification from the competent authorities, then the Panchayat President was liable to act on the same and issue permission/license unless bound by valid policy reasons." However, reversing the High Court verdict, the Supreme Cort of India had upheld (in the case of Action council, Poovathode Vs. Bennyny Abraham, SCC, 2002 (9) 493) the right of a panchayat to refuse an industrial license.

Without commenting on the merits of the technical data, the High Court of Kerala on 16 May, 2003 had granted permission to HCBL to move the appellate authority. "The concerned authority shall consider the representation and pass appropriate orders within one month," ordered Justice K.Thankappan of the High Court. As per the Panchayat Act, an independent tribunal should have been constituted as the appellate authority. However, in its absence, the Secretary, Local Self Government Department, is the designated appellate authority.

"The court order asking a government official to sit in judgment of the decision of the people's representatives is against the Indian Constitution and democratic principles," argues the Panchayat president. "If the government Secretary issues an order contradicting the decision of the Panchayat, we shall think of approaching the court on this issue," says Krishnan Kutty, president of Janata Dal, the political party that rules Perumatty Panchayat.

Close on the heels of the Perumatty Grama Panchayat, the Pudussery Grama Panchayat, also in Palakkad district, decided on May 15 to cancel the license of the other soft drink major, PepsiCo India Holdings Pvt. Ltd. operating at the Kanjikode Industrial Estate. The Panchayat's decision was an extension of the Communist Party of India (Marxist) policy of boycotting the products of the multinational corporations in the wake of the US-led war on Iraq and its campaign against globalization.

"The decision of the Pudussery Panchayat would not stand legal scrutiny as the Pepsi plant had obtained a license through the single window clearance mechanism under the Industrial Development Area Act, 1999 introduced when the same Marxists were in power," said Abdul Rehman, Managing Director, Western India Kinfra Industrial Estate.

"The Plachimada unit of Coca Cola is a typical case of footloose capital bent on exploiting the natural resources till the last and then packing off from the scene," says Dr. RVG Menon, former president of Kerala Sastra Sahitya Parishad (KSSP), the People's Science Movement.

"However hasty and motivated by short-term political considerations and rivalries, the Perumatty Panchayat's decision is a landmark in the people's struggle for rights over their natural resources," says Sunderarajan. He feels that if not for the local resentment, at least on account of the drastic depletion of water resources in the area, the Coca Cola company will shut down the plant soon and move to greener pastures. The company has already been forced to cut down the number of casual workers at the plant and reduce production on account of being forced to bring water from outside.

It remains to be seen who the Kerala Government will stand by -- whether the local self-government or the MNC.


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