MINI PROJECT ON Coca-Cola Plant Shut Down in India BY SMITA PATIL PRIYANKA PENDURKAR MRUNALINI RANE BHAGESHRI SANE

VIVEK PURALKAR

Community Welcomes Decision, Company Cites "Unbearable" Financial Losses For Immediate Release August 14, 2008 New Delhi (August 14, 2008): The India Resource Center can confirm that the Coca-Cola company has shut down another bottling plant in India - in Sinhachawar Illegally Dumped Sludge at Sinhachawar Coca-Cola Plant in Ballia district in Uttar Pradesh. A community-led campaign had demanded the closure of the Coca-Cola bottling plant in Sinhachawar because of indiscriminate pollution by the bottling plant as well as illegal occupation of land. The India Resource Center had led a fact finding team to the plant in June 2007 and found shocking incidences of pollution that were in complete violation of environmental laws and regulations in India. While the community knew that the plant had been un-operational since the fact finding visit, this is the first official confirmation of the closure. The bottling plant in Sinhachawar was a Coca-Cola franchisee owned unit operated by the Brindavan Bottlers Limited, which is owned by India's largest bottler of Coca-Cola, the Ladhani Group of Companies. In a letter to the Uttar Pradesh Pollution Control Board dated October 27, 2007, Brindavan Bottlers informed the Board about the closure of the plant due to "huge" and "unbearable" financial losses. The letter was dated three days after a major protest at the plant. "We welcome the official closure of the bottling plant which we had demanded. We will now hold Coca-Cola accountable for the damages they have caused in the area because of their negligence," said Mrs. Chinta Dewi, sarpanch (head of the village council) and member of the locally based Coca-Cola Bhagao, Krishi Bachao Sangharsh Samiti (Get Rid of Coke, Save Farming Struggle Committee). Another Coca-Cola bottling plant - in Plachimada in Kerala - has been shut down since March 2004 due to community opposition. "Community campaigns in India have shut down Coca-Cola bottling plants in Plachimada and in Balia, and now we will ensure that Coca-Cola bottling plants in Mehdiganj and Kala Dera also meet the same fate," said Nandlal Master of Lok Samiti, a community group challenging Coca-Cola's operations in Mehdiganj, near Varanasi. Lok Samiti worked very closely with the community in Sinhachawar towards the plant's closure.

The CocaCola company is also the target of intense community campaigns in Mehdiganj and Kala Dera in India for creating water shortages and pollution. The company was forced to agree to an assessment of its bottling operations in India as a result of a sustained March Towards Coca-Cola Plant in Sinhachawar, October 24, 2007 international campaign. The assessment, released in January 2008, was a damning indictment of Coca-Cola's water management practices in India. The assessment recommends that Coca-Cola shut down its bottling plant in Kala Dera because the plant contributes significantly to water shortages in the area. "The Coca-Cola company has chosen to embark on an ambitious public relations drive to paint a green image of itself globally. But Coca-Cola's track record on the ground in India is one of dismal environmental and human rights problems, and no amount of public relations can solve the problems it continues to create in India," said Amit Srivastava of the India Resource Center, an international campaigning organization that works directly with communities in India to challenge Coca-Cola. The fact finding team in June 2007 found several cases of pollution, including:

The bottling plant has indiscriminately dumping its sludge, considered to be industrial hazardous waste, across the plant premises, in complete violation of the laws regarding handling and disposal of industrial hazardous waste in India. The Effluent Treatment Plant was non-operational, and the bottling plant was discharging its wastewater into surrounding agricultural fields and a canal that feeds into the river Ganges. The plant did not disclose the amount of hazardous waste being used and generated, as required by the Supreme Court of India for all industrial units in India that deal with hazardous waste.

Coca-Cola in India

Case Study produced by ELS [Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.]

Coca-Cola in India The Coca-Cola Company has operated in India since 1993 through its subsidiary, the Hindustan Coca-Cola Beverages Private Limited). Coca-Cola operates around 49 bottling plants in India. The primary source of water for Coca-Cola bottling plants in India is groundwater. India is already facing a water crisis in large parts of the country and as a result of climate change and mismanagement of water resources the crisis is expected to grow. Coca-Cola has located many of its bottling plants in drought prone areas in India, and its bottling operations in these areas have made existing water crises even worse.

In the village of Kala Dera in the state of Rajasthan, the Central Ground Water Authority (CGWA) declared the areas groundwater resources as overexploited in 1998. Yet, Coca-Cola built a new bottling plant in Kala Dera in 1999. In the nine years since CocaCola has been operating in Kala Dera, the groundwater levels have dropped 22.36 meters.

The rapidly declining groundwater levels have taken a huge toll on the local population mostly farmers. Agricultural yields have declined significantly, women have to walk longer to fetch potable water to meet the basic water needs. The quality of the groundwater has also deteriorated in terms of smell, color and turbidity.1 Since 2003, communities living around the Coca-Cola bottling plant in Kala Dera have organized a campaign to demand the closure of the plant. Massive demonstrations have taken place against Coca-Colas bottling plant.2 Despite the opposition, Coca-Cola has continued to extract groundwater, and that too for almost free, paying a few hundred dollars a year.

The CGWA in 2004 also confirmed that the company not only depletes the groundwater but also pollutes it by pumping contaminants.3

Similar to Kaladera is the situation in Mehdiganj. Coca Cola started to operate here in 2000. The community of Mehdiganj started to experience sharp drops in groundwater levels soon after Coca-Cola started bottling operations. The groundwater levels at CocaCola's bottling plant were at 23.75 meters below ground level in 2008. Independent studies have confirmed in 2006 that in the area closest to the factory, contamination by heavy metals was much higher than the rest of the area.4

The company defends itself by any means, and claims the water depletion is caused by agriculture and lack of rain. That is however not enough for protesting organizations and many universities worldwide, that are banning contracts with Coca-Cola because of company's irresponsible attitude towards environment and human rights. The University of Michigan demanded a third party study on Coca-Cola's water management practices in India and Coca-Cola asked TERI, a renowned scientific institute to conduct the study. Findings of the study in many cases confirmed the claims of affected communities. For Kala Dera, TERI suggested that Coca-Cola shut down the plant or relocate it or get water Report on environmental quality monitoring in surrounding areas of Hindustan Coca Cola bottling plant at Mehdiganj, Varanasi; Peopless science institute, Dehra doon hazard centre, New Delhi, 2006 from surplus aquifer outside the area.5 Coca-Cola has not complied with any suggestion as of today. Coca-Cola in India has been already criticized for its irresponsible behavior. In 2003, one of Coca-Colas largest bottling plants in India was shut down by the government because of pollution after a sustained campaign by the community. A government committee has just recommended that Coca-Cola pay US$47 million as compensation for the damages caused.6

None of this would happen to the company or the local people if more responsible approach was undertaken. But the situation in India is complicated and possible influence on Indian authorities is not out of question. The official that had granted the license to Coca-Cola in Mehdiganj was caught getting bribed.7 And despite the evidence against Coca-Cola in the case of Plachimada, a US official commented it as unlucky for Indian economic climate.8 Under the pressure of economic progress, business is prior to human rights and environment. Without a complex legal framework of corporate responsibility, results of such approach will lead to losses in terms of environment and human rights abuses, but also to losses on side of the companies such as bad corporate name or high penalties.

The case study above demonstrates why the Rights for People Rules for Business campaign aims to hold companies legally accountable for their operations in and outside the EU. The campaign calls for the EU and its Member States to change European law in order to:

Ensure that companies operating in the EU are legally accountable for any harm they cause to people and the environment in and outside the EU.

Many European companies are multinational corporations. Many others are owned by or do business with foreign companies. Multinational corporations operate through many subsidiaries, subcontractors and suppliers. Currently, a corporations headquarters makes profits without having to consider how its companies negatively impact peoples lives and the environment. Examples include profiting from unfair labour conditions, human rights violations and environmental destruction. Ensure that European companies disclose accurate information about their impacts on people and the environment. They should be transparent about what they have

done, what they are doing and what they plan to do.

Generally, companies are not obliged to report on the social and environmental impacts of their operations and future activities. Since there are not enough reporting rules, the information disclosed is often misleading or incomplete. What are the impacts of a steel mill on neighbouring farmland? How do suppliers of European fashion brands treat their workers? Mandatory disclosure of such information would allow affected and concerned people to hold companies to account.

Ensure that non-EU citizens, who are victims of the operations of European companies, have access to justice in the EU.

Too often people, whose lives have been affected by companies, face many barriers in taking legal action. For example, it is too expensive, it is very difficult to find legal representation and sometimes impossible to obtain all required evidence. In addition, they can face serious intimidation for taking action.

The Rights for People Rules for Business campaign aims to change European law. The campaigns legal proposals have been developed by The European Coalition for Corporate Justice.

The European Coalition for Corporate Justice (ECCJ) promotes corporate accountability (CA) by bringing together national platforms of civil society organizations (CSOs) including NGOs, trade unions, consumer advocacy groups and academic institutions from all over Europe.

ECCJ represents over 250 CSOs present in 15 European countries such as FIDH and

national chapters of Oxfam, Greenpeace, Amnesty International and Friends of the Earth.

ECCJ believes CA and also Corporate Social Responsibility (CSR) mechanisms should be based on international legal frameworks and principles, serving as the foundation for and of corporate justice.

Overall, ECCJ aims to increase European co-operation among NGOs working on CA. The coalition seeks to raise public awareness about the role of the European Union (EU) in regulating companies both in and outside the EU.

Given the global reach of European companies, it is crucial to ensure that they are held legally accountable for the impacts their operations have on people and the environment. This can be achieved though not exclusively through the endorsement and implementation of European and international standards. Legal standards provide the potential to better ensure global social justice, poverty alleviation and environmental conservation. ECCJ is convinced that turning the EU into a leading actor on CA would, in turn, greatly influence discussions on CA and CSR at the global level.

ECCJ is convinced that a regulatory approach towards CA is needed. The EU should establish legal measures to hold EU-based companies accountable for the costs and impacts their operations have on peoples human rights and the environment worldwide.

Case against Coca-Cola Kerala State: India In a number of districts of India, Coca Cola and its subsidiaries are accused of creating severe water shortages for the community by extracting large quantities of water for their factories, affecting both the quantity and quality of water. Coca Cola has the largest soft drink bottling

facilities in India. Water is the primary component of the products manufactured by the company. There have been numerous public protests of The Coca-Cola Companys operations throughout India, involving thousands of Indian citizens and several non-governmental organizations. Protests against the Coco Cola factories have taken place in a number of districts including: Mehdiganj near the holy city of Varanasi; Kala Dera, near Jaipur, Rajistan; Thane district in Maharashtra; and Sivaganga in Tamil Nadu. The protests by villagers from Plachimada, in the southern state of Kerala have shown the strength of community-led activities, even against this global multi-national company. Through round-the-clock vigils outside the factory gates, they have managed to temporarily shut down Coca-Colas local bottling plant. As of early 2007, the factory had remained closed for a number of years and a combination of community action and legal redress was aimed at permanent closure. Background to Coca Cola ground water exploitation case in Kerala In 1999, the Hindustan Coca-Cola Beverages Private Limited, a subsidiary of the Atlanta based Coca-Cola company, established a plant in Plachimada, in the Palakkad district of Kerala, southern India. The Perumatty Village Council gave a licence to the company to commence production in 2000. Coca Cola drew around 510,000 litres of water each day from boreholes and open wells. For every 3.75 litres of water used by the plant, it produced one litre of product and a large amount of waste water. Two years after production began protest by local residents became common place. Local communities complained that water pollution and extreme water shortages were endangering their lives.

After being forced to halt operations of its soft drinks plant at Plachimada near Palakkad, in Kerala, following allegations regarding misuse of groundwater, Coca Cola's bottled water business in Kerala is hit by an agitation on the same issue. NeST Foods & Beverages, CocaCola's ally in the State, which manages Kinley, has suspended operations of its plant near Perumbavoor in Kochi district even as a local village welfare standing committee - in the wake of mounting political pressure and accusations about it depleting the water table passed a resolution recommending a ban on the use of groundwater for Kinley.

The Vazhakulam panchayat committee now wants an expert panel to look into the allegation of misuse of groundwater by the NeST plant before giving a final ratification to the standing committee's move to ban drawing groundwater. In Feb 2004, the Government of Kerala told Coca-Cola that villages in the Plachimada area were facing an acute drought and that the soft-drink company should not use groundwater until 15 Jun 2004. This followed a High Court order in Dec 2003 instructing Coca-Cola to stop using local groundwater. Surita Narain, Down to Earth Editor, writes in a recent editorial that the Coca Cola plant shutdown could and should trigger groundwater reform.