Coke's Water Practice Could Improve: Report
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
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
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."
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