Court Ruling in India Does Not Allow Re-Opening of Coca-Cola Plant

For Immediate Release
April 12, 2005

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

Boston (April 12, 2005): Recent reports, both by the media and non-governmental organizations, have misreported the April 7, 2005 ruling by a division bench of the High Court of Kerala.

The High Court ruling does NOT allow Coca-Cola to re-open its bottling plant in Plachimada, in the south Indian state of Kerala.

The court ruled that Coca-Cola can extract up to 500,000 liters of water per day - under normal rainfall conditions.

The court has also instructed the Perumatty village council (panchayat) to reconsider the granting of a license to the Coca-Cola company to operate - within 15 days of the ruling. Coca-Cola would have to apply for a license to the panchayat again.

The ruling was in response to an appeal filed by Coca-Cola to a decision by the High Court of Kerala on December 16, 2003, which found Coca-Cola's heavy extraction of water from the common groundwater resource to be illegal, and ordered Coca-Cola to seek alternative sources of water for its production.

The community around Coca-Cola's bottling plant in Plachimada has been experiencing severe water shortages in the area since Coca-Cola started operations.

The Coca-Cola bottling plant in Plachimada remains shut down for over a year now because the local village council has refused to renew Coca-Cola's license to operate, citing it for over-extraction of water from the common groundwater resource, and the resulting hardship to the community.

The recent ruling will be appealed to the Supreme Court, and it is very unlikely that Coca-Cola can begin operations in Plachimada.

"One thing is for sure," said Amit Srivastava of the India Resource Center. "It is no longer up to Coca-Cola to decide whether the plant will re-open or shut down permanently. The formidable community struggle in Plachimada has ensured that it is now up to the village council, the courts and the people to make that decision."

Significantly, both the lawyers for the Kerala state government and the village council argued that the report - on which the recommendation of allowing Coca-Cola to extract limited water was made - was inadequate. The Kerala state government argued that Coca-Cola should not be allowed to extract water from the common groundwater resource.

For more information, visit India Resource Center

Journalists may contact us to obtain a copy of the December 16, 2003 High Court ruling and the Perumatty Panchayat letter to Coca-Cola.


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