Indian Groups Rebuke US Statement on Cola Ban in India

Coca-Cola Using US Political Influence in India to Avert Sanctions

For Immediate Release
August 18, 2006
R. Ajayan, Plachimada Solidarity Committee (India) T: +91 98471 42513
Nandlal Master, Lok Samiti (India) T: +91-542-2632433, +91 94153 00520
Sawai Singh, Jan Sangharsh Samiti (India) T: +91 141 2552878
Amit Srivastava, India Resource Center (US) +1 415 336 7584 E: info@indiaresource.org

San Francisco: Groups campaigning against Coca-Cola and Pepsico in India have criticized comments made by a top US official that actions against Coca-Cola and Pepsico in India are a "setback for the Indian economy."

At least seven Indian states have imposed full or partial bans on the cola companies in the last week, citing public health concerns. The bans have come about as a result of new studies by the Centre for Science and Environment which found that pesticide residues in Coca-Cola and Pepsico products in India were 24 times higher than European Union (EU) standards.

"This kind of action is a setback for the Indian economy," said US Under Secretary for International Trade, Franklin Lavin. "In a time when India is working hard to attract and retain foreign investment, it would be unfortunate if the discussion were dominated by those who did not want to treat foreign companies fairly."

"The United States government should let the Indian government decide what is safe for the Indian public. Suggesting that the sale of colas continue even after finding high levels of pesticides is a threat to our freedom, our democracy and our sovereignty," said R. Ajayan of the Plachimada Solidarity Committee in Kerala.

The state of Kerala has banned the sale and production of Coca-Cola and Pepsi, and Coca-Cola's bottling plant in the state - in Plachimada - has remained shut down since March 2004 because of community opposition. The community has accused the Coca-Cola bottling plant of causing severe water shortages and pollution.

"American companies cannot get away with exploitation of natural resources or subversion of the standardization process in the name of foreign investments. We will not tolerate any exploitation by companies such as Coca-Cola and Pepsi. If the American government wants to reduce the investment, we welcome such a move," said Nandlal Master of Lok Samiti in Mehdiganj, Uttar Pradesh.

The community of Mehdiganj has challenged the Coca-Cola bottling operations in the area because of severe water shortages and pollution as a result of the company's operations.

"Maybe it is time for the US to reduce its investments in India," said Sawai Singh of the Jan Sangharsh Samiti, an organization challenging the Coca-Cola bottling plant in Kala Dera in Rajasthan. "The US companies have gobbled up many Indian owned companies, and destroyed livelihoods for large numbers of Indians. The products they sell itself is destructive, as studies have found."

Political Influence for Sale

The US Undersecretary for International Trade, Franklin Lavin, will be leading a business delegation to India in November 2006 to open up more opportunities for US corporate investment in India. Mr. Lavin, who has also served in top management positions for Citibank and served as US ambassador to Singapore, was appointed the US Under Secretary for International Trade in November 2005 by the Bush administration.

Mr. Lavin is a "Pioneer", a term given to Bush fundraisers who have raised over US$ 100,000 for the campaign to elect George Bush as president. According to the Center for Responsive Politics, at least 20 "Pioneers" have been appointed to ambassadorships by President Bush, including Mr. Lavin.

In the 2004 elections, contributions of US$ 387,692 were made to George Bush and the Republican party by the Coca-Cola company, Coca-Cola Enterprises, and their affiliates.

"The Coca-Cola company has strategically bought its way into the good side of the Bush administration, and the US government is returning the favor to Coca-Cola for its financial support to re-elect George Bush," said Amit Srivastava of the India Resource Center, an international campaigning organization that works closely with communities in India being impacted by Coca-Cola's practices. "Mr. Lavin's plea that somehow the US companies are being treated unfairly in India is outrageous. It is the other way around."

"Americans should firmly protest the U.S government support and promotion of such predatory U.S investments that destroys lives and livelihoods for profits in other countries," said C.R. Bijoy of the Peoples Union for Civil Liberties in Kerala.

This is not the first time that US government officials have intervened on behalf of Coca-Cola. In 2002, the Indian government, in a surprise move, waived the mandatory public listing of Coca-Cola in India - a condition that had been placed on Coca-Cola's entry into India. The US ambassador to India at the time, Robert Blackwill, as well as the Assistant Secretary in the US Commerce Department, William Lash, contacted senior Indian government officials to seek the waiver, after it was initially refused. Mr. Lash wrote, "I understand that this is the second time that Coca-Cola's waiver request has been denied. I find this to be very unfortunate, not just for the company but also for India's investment climate."

The US government also used its clout to push through a controversial power plant project in India headed by Enron. The project, initiated in 1992, was mired with corruption, secrecy and human rights abuses, and was never completed. The US ambassador to India at the time, Frank Wisner, was a major proponent of the project. Mr. Wisner joined the Board of Directors of Enron Oil and Gas in October 1997, just a few months after leaving his ambassadorial position. Dick Cheney, the US Vice President, also brought up the issue of Enron in his meeting with Sonia Gandhi, the leader of the opposition in India at the time.

Human Rights Watch published a report on the human rights violations surrounding the Enron project in India, and on the political influence of the US government in the project, it wrote: "It suggests a willingness on the part of the United States government to discount human rights when commercial interests are at stake."

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