Village Council Rejects Coca-Cola's Application to Resume Operations

For Immediate Release
April 27, 2005

Amit Srivastava, India Resource Center (US)
Email: amit(AT)IndiaResource.org Tel: 415 336 7584

Plachimada, Kerala, India: The Perumatty panchayat (village council) has rejected Coca-Cola's application to continue operations in Plachimada, in the southern state of Kerala in India.

Perumatty panchayat officials indicated that the Coca-Cola company's application for license renewal did not include the necessary permits, including a permit from the Kerala Pollution Control Board.

"The company informed the panchayat that it has the license issued under the Factories Act and the clearance of the State Pollution Control Board. But it has not produced the documents to the panchayat," Perumatty Panchayat president Mr A.Krishnan told the media.

A division bench of the Kerala High Court had ruled on April 7, 2005 that Coca-Cola could extract up to half a million liters of water per day, and had instructed the company to re-apply for a license from the village council. The Court had also instructed the village council to reconsider the granting of the license if Coca-Cola met certain conditions, such as permits under the Factories Act as well as a permit from the Pollution Control Board.

The Coca-Cola bottling plant in Plachimada has remained shut down since March 2004 because the village council has refused to renew Coca-Cola's license, citing it for over-extraction of water, and the resulting hardships to the community.

Coca-Cola, in an anti-democratic move, has challenged the authority of the village council, insisting that the state government has jurisdiction over its local operations.

Coca-Cola's plant in Plachimada and the community resistance to it has received considerable international attention. The community has enjoyed significant victories in the past, and the panchayat's decision to revoke Coca-Cola's license is a major move towards local governance and the rights of communities over natural resources. "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, on the occasion of the first time that the panchayat cancelled Coca-Cola's license on April 7, 2004.

A pattern has emerged as a result of Coca-Cola's operations in India. Communities around Coca-Cola's bottling operations are facing severe water shortages, and the remaining water as well as soil has been contaminated as a result of Coca-Cola's operations. At least four communities across India have organized to hold Coca-Cola accountable, and literally tens of thousands of people, mostly rural, are involved.

A significant movement has also emerged internationally to hold the Coca-Cola company accountable for its crimes in India, and a major focus of the international campaign is to revoke Coca-Cola's contracts at colleges and universities in the US and the UK. Coca-Cola's liabilities in India and Colombia dominated Coca-Cola's shareholder meeting on April 19, 2005. Coca-Cola sent nine high ranking representatives to the University of Michigan on April 25 to publicly debate students and representatives of the India Resource Center and the United Steel Workers of America.

The panchayat has also filed an appeal of the most recent Kerala High Court decision to the Supreme Court of India, and it seems very unlikely that Coca-Cola can resume operations in Plachimada.

April 22, 2005 also marked the third year anniversary of a constant vigil the community has set up directly in front of Coca-Cola's factory gates in Plachimada.

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