Coke's Water Practice Could Improve: Report
Wall Street Journal
January 14, 2008

A new report assessing Coca-Cola Co.'s water management practices in India says the beverage giant is generally in compliance with government standards, but that it needs to do more to help improve local water supplies, particularly in areas suffering from chronic shortages.

The study also didn't detect pesticides in the water at six Coke bottling plants, despite testing from an Indian environmental group in recent years that showed dangerous levels of pesticides in some Coke drinks.

The report, released Monday in New Delhi by the Energy and Resources Institute, known as TERI, a nonprofit organization that researches and promotes sustainable development, comes as criticism from activists and student groups have presented challenges to Coke's thirst for growth in an important emerging market. Coke has invested more than $1 billion in India over the past decade, and recently said it plans to invest another $250 million over the next three years.

The TERI report is the result of an inquiry launched by the University of Michigan after students there filed a complaint arguing that the company's water management practices violated the university's code of conduct for vendors. The university and Coke agreed together to commission TERI to conduct a third-party assessment of Coke's practices. Coke paid for the $2 million, 16-month study, and communicated with TERI through an outside facilitator.

TERI conducted its assessment of Coke's water management practices at six of the company's approximately 54 bottling plants in India. While the study found the plants to be complying overall with government regulations, it said Coke needs to take overall community water needs more fully into account when deciding where to locate and operate bottling plants.

For example, a watershed in Kaladera, where one of the six plants is located, has been so "overexploited" that Coke should consider either transporting water from another aquifer to that plant, using stored water, relocating the plant, or shutting it down, the report said.

Coke "should try to be net water positive with respect to its own operations from a watershed perspective, especially in stressed areas," the report concluded.

TERI also recommended that Coke improve its own standards for treating effluent from its plants, after testing at some plants detected excess levels of some bacteria and other pollutants.

Coke said it is making changes to its practices to address the report's concerns. "We take this report very seriously," said Atul Singh, president of Coca-Cola's India operations. "We need to go beyond compliance and continuously improve our management practices and standards."

In a Jan. 11 letter to the University of Michigan, Coke said it is setting global guidelines for plants operating in areas with chronic water shortages, investing $10 million to support sustainable development in India, improving its wastewater treatment standards, and plans to reach a "zero water balance" in India by 2009.

Peggy Norgren, assistant vice president for finance at the University of Michigan, said the university is "very pleased with the report overall" and will continue to do business with Coke. The university is also awaiting an assessment of Coke's labor practices in Colombia.

Amit Srivastava, director of the India Resource Center, a critic of Coke's water use in India, said the TERI report validates his organization's belief that Coke plants are contributing to local water shortages. "We will demand the closure of the plant in Kaladera," he said. "There's not enough rain there, and they can't bring in enough water."

FAIR USE NOTICE. This document contains copyrighted material whose use has not been specifically authorized by the copyright owner. India Resource Center is making this article available in our efforts to advance the understanding of corporate accountability, human rights, labor rights, social and environmental justice issues. We believe that this constitutes a 'fair use' of the copyrighted material as provided for in section 107 of the U.S. Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond 'fair use,' you must obtain permission from the copyright owner.




Home | About | How to Use this Site | Sitemap | Privacy Policy

India Resource Center (IRC) is a project of Global Resistance -- "Building Global Links for Justice"
URL: http://www.IndiaResource.org Email:IndiaResource (AT) igc.org