Growing Resistance Against Coke and Pepsi

Popular struggles against two multinational soft drink giants in Palakkad district gather momentum

By R. Krishnakumar
June 7, 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".

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