Government Moves to Claim $48 Million Compensation from Coca-Cola

Will Set Up Claims Tribunal to Process Claims from Affected Parties

For Immediate Release
July 2, 2010

New York: In a major step towards holding Coca-Cola accountable for damages it has caused in India, the state government of Kerala decided on Wednesday to move forward with the formation of a tribunal that will hear and award compensation claims against the Coca-Cola company.

The Kerala state cabinet's decision is based on the report and recommendations of a High Power Committee which released a report on March 22, 2010 holding Coca-Cola responsible for causing pollution and water depletion in Plachimada in the state of Kerala in south India.

Using the "polluter pays principle", the High Power Committee had recommended that Coca-Cola be held liable for Indian Rupees 216 crore (US$ 48 million) for damages caused as a result of the company's bottling operations in Plachimada.

The Coca-Cola bottling plant in Plachimada has remained shut down since March 2004 as a result of the community-led campaign in Plachimada challenging Coca-Cola's abuse of water resources.

The tribunal will consider claims of compensation from the Coca-Cola company relating to "water and air pollution, loss of agricultural crops and animals, diseases affecting human beings in the surrounding area due to the excess drawal and pollution of groundwater and surface water by the Company," according to the report accepted by the state government. The tribunal will also consider claims related to "loss of wages and loss of educational opportunities."

The report noted that the suggested figure of $48 million was "indicative in nature" and "should not be treated as the outer limit of compensation." The report also stated that the "actual compensation will have to be calculated by an Authority duly set up for this purpose."

Local activists engaged in the campaign to shut down Coca-Cola's bottling plant and hold the company accountable for the damages it has caused welcomed the move by the state government. They also called for pursuing criminal charges against Coca-Cola for the various laws it had violated, a course of action also supported by the High Power Committee.

"The Kerala government's integrity and decisiveness can be demonstrated only when it follows up on the other recommendations of the High Power Committee which unequivocally stated the compensation is not to be viewed as a quid pro quo for not initiating criminal charges," said R. Ajayan of the Plachimada Solidarity Committee, a statewide organization that has been instrumental in moving the compensation process forward.

In spite of the overwhelming evidence implicating Coca-Cola in Plachimada, the company denies any wrongdoing in Kerala. Coca-Cola has also questioned the legitimacy of the High Power Committee, a body set up by the state government of Kerala that is one of the highest possible empowered committees to be set up in the state.

Recent reports also suggest that the company will use legal maneuvers to tie up the compensation process in courts.

"Coca-Cola has been forced to shut down its operations in Plachimada since 2004, and no amount of legal maneuvering will help it recover its disrepute or change the final outcome. The best thing Coca-Cola can do is to accept the will of the people and the state - pack up, pay up and leave," said Amit Srivastava of the India Resource Center, an international campaigning organization.

The recommendations of the High Power Committee are here.

A list of the members of the High Power Committee is here.

For more information, visit www.IndiaResource.org

R. Ajayan, Plachimada Solidarity Committee +91 98471 42513
C. R. Bijoy, People's Union for Civil Liberties +91 98431 72584
Amit Srivastava, India Resource Center +1 415 336 7584 (US)


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