Coca-Cola's Own Report Implicates Company for Abuses in India

by Amit Srivastava
India Resource Center
March 13, 2008

The Coca-Cola company is up to its old tricks again.

The company has just announced that it has received the Golden Peacock Global Award for corporate social responsibility. The award, which is sponsored by the Coca-Cola company itself, ostensibly "recognizes the Company's efforts in water conservation and management and its community development initiatives" and "the continuing commitment by business to behave ethically", according to the announcement.

Banner at Coca-Cola Museum
Banner at Coca-Cola Museum Photo: A. Samulon/India Resource Center
Ethical? Water conservation? Community development? And Coca-Cola? Ask the communities in India left thirsty as a result of Coca-Cola's operations, and they will tell you that this is a cruel joke, perhaps a hoax. And that is exactly what it is. In spite of the growing evidence implicating the Coca-Cola company for causing water shortages in India, the company's public relations department has done what it is paid to do - manufacture an image of the company that it clearly is not.

A couple of days after awarding itself the Golden Peacock award, the Coca-Cola company announced a US$10 million corporate social responsibility fund that will focus on water management in India. At first glance, such an initiative would be welcome. But the Coca-Cola company first must tackle all the water and environmental problems that it has created (and continues to) in India. The announcement of the fund is clearly a response to the growing campaign against Coca-Cola, and it is meant as a way to divert attention from the real issues in India-exacerbating the water crises in India and pollution.

The Coca-Cola company has continued to accuse us of making erroneous statements "not based on facts" and have claimed that the only reason they are targets of the campaign is because they are a well known brand. Earlier this year, however, Coca-Cola got a rude awakening when an assessment of their operations in India that they paid for and conducted by an ally of Coca-Cola validated what the communities have been saying all along.

As a result of the formidable student-led campaign in the US (in which the India Resource Center has represented the India issues), the Coca-Cola company was forced to agree to an assessment of its bottling operations in India. Specifically, it was the University of Michigan which demanded that Coca-Cola agree to an assessment if it wanted to continue business with the university. While we were not pleased with the choice of the assessor (the Energy and Resources Institute- TERI) because they are funded by the Coca-Cola company, the findings of the assessment were a strong rebuke to Coca-Cola.

The assessment by the Energy and Resources Institute (TERI) of six Coca-Cola bottling plants in India released in January 2008 validate the concerns being raised by the communities in India.

What were some of the key findings of the assessment?
  • Community Concerns Validated

  • The report states that "In general, the community perceptions were found in conformity to the results obtained from the detailed technical assessment of groundwater resources."
  • Assessment Recommends Closure of Kala Dera Bottling Plant

  • Sign at Kala Dera
    Sign at Kala Dera Plant Photo: India Resource Center
    The assessment has recommended a key campaign demand - the closure of the Kala Dera bottling plant in Rajasthan. The assessment notes that the water resources in Kala Dera are overexploited and that the Coca-Cola bottling plant would continue to worsen the water situation.
  • Coca-Cola Has Sited its Bottling Plants Without Due Consideration to Community Impacts

  • The assessment is very clear that the Coca-Cola company has sited its bottling plants in India from strictly a "business continuity" perspective that has not taken the wider context into perspective.
  • Coca-Cola Has Not Respected Rights of Farmers and Groundwater Conditions

  • Taking note of the fact that three of the six sites assessed were either in overexploited or critical groundwater areas, the report notes that "Siting policies need to recognize and respect the existing (formal and informal) riparian rights."
  • Coca-Cola Also Warned on Mehdiganj, Another Key Campaign Demand

  • The assessment also validates the concerns of the communities around the Mehdiganj bottling plant who have been campaigning against the local Coca-Cola bottling plant for creating water shortages. Using the logic offered for Kala Dera, the Coca-Cola company should also be making plans to shut down the bottling plant in Mehdiganj - another key campaign demand as well as the bottling plant in Nabipur. The report notes that the water tables in Mehdiganj have been declining towards a semi-critical state, and in Nabipur, the aquifer is already over-exploited.
  • Coca-Cola has Not Met its Own Waste Management Standards at Plants Surveyed

  • The assessment found that while Coca-Cola has met most, BUT NOT ALL, government regulatory standards with regard to water quality, the company has failed to meet its own standards on waste management at all the plants surveyed. What is the point of having the Coca-Cola company standards on pollution, we ask, if the company does not meet them?
  • Coca-Cola Does Not Have Adequate Pollution Prevention Measures

  • The assessment also pointed out the deficiencies in managing waste in Coca-Cola's plants in India. The report stated that the Coca-Cola company needed to develop additional requirements for treated wastewater quality. The assessment also found shortcomings in the effluent discharge in four of the six plants assessed.
  • Increased Pollution in Immediate Vicinity of Coca-Cola Plants

  • The assessment also confirmed an alarming trend that the communities living around Coca-Cola's bottling plants have identified - pollution. However, the assessment is not able to identify the source of the pollution, and has called for further studies.
  • Coca-Cola Continues to Act in Bad Faith

  • The TERI assessment makes it clear that the fact that the Coca-Cola company did not share the Environmental Due Diligence (similar to an environmental impact assessment) with TERI has hampered the scope and effectiveness of the assessment. The TERI assessment also points to a disturbing question. Did Coca-Cola company officials know (as they should have) that the area around the Kala Dera bottling plant was already classified as an overexploited block? The Environmental Due Diligence should have alerted them to the fact that the area was classified as overexploited. Regardless, the Coca-Cola company located its plant in Kala Dera, which has resulted in increased water shortages for the community.

Sign at Plachimada Bottling Plant
Sign at Plachimada Bottling Plant Photo: India Resource Center
Remember, the assessment was paid for by the Coca-Cola company. And the assessor was TERI. TERI is funded by the Coca-Cola company, has co-organized Earth Day and seminars on sustainable development together, and has also named Coca-Cola as one of the most responsible companies in India in the past.

Clearly, the assessment findings would have shook the Coca-Cola company because they felt they could have somehow "managed" the findings. But the situation is so bad that even an allied organization gave Coca-Cola failing marks.

The Coca-Cola company's public relations department went into overdrive, and tried to "manage" the news. In India, they were very successful. Some newspapers in India headlined the news "Coke Gets TERI Clean Chit on Eco Compliance", probably never having bothered to read the assessment and going directly with what Coca-Cola's press officers said.

Some foreign media, however, got the story right. New York Times headlined it "Coca-Cola Urged to Close an Indian Plant to Save Water", the Wall Street Journal headlined it "Coke Must Boost Efforts to Improve Water Supplies in India, Report Says", and the Atlanta Journal Constitution headlined it "Report Faults Coke Water Use in India".

Regardless of the Coca-Cola company's efforts to mislead the public once again, the campaign to hold Coca-Cola accountable has strengthened.

Even a Coca-Cola funded study conducted by a Coca-Cola ally has implicated the Coca-Cola company for causing water shortages and pollution. The concerns that the communities have raised against Coca-Cola have been completely validated.

But will Coca-Cola do the right thing and actually admit that it has done wrong in India, and take genuine measures to address them? Unfortunately, no. The Coca-Cola company will continue to treat the serious problems it continues to create in India as a public relations problem, and announce grand schemes to conserve and manage water when its own track record shows a dismal relationship with water.

Communities in India will continue to apply pressure on the Coca-Cola company to end their abuses in India, and solidarity groups internationally will continue to let Coca-Cola know that business is not as usual until it cleans up its act in India.

The community of Mehdiganj and Coca-Cola affected communities in India have announced a conference to challenge the eroding right to water and asserting the fundamental human right to water. The conference will take place in Mehdiganj on March 28 and 29 and will be followed by a march and demonstration against the Coca-Cola bottling plant on March 30.

The community of Kala Dera seek your solidarity in demanding that the Coca-Cola company follow one of the key recommendations of the Coca-Cola funded assessment - that Coca-Cola shut down its bottling plant immediately.

For more information, visit www.IndiaResource.org

Amit Srivastava is the coordinator of India Resource Center, an international campaigning organization working to challenge abuses by multinational corporations.

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