15.Jul.03    Análisis y Noticias


By Amit Srivastava

India Resource Center
July 10, 2003

Coca-Cola is in trouble in India. Ever since the
first allegations arose
in Kerala, India, of water scarcity and polluted
water resulting from its
bottling operations, Coca-Cola’s public relations
department has churned
out denials, insisting that the charges are false
and that it is the
“target of a handful of extremist protesters.”

Related Links
Coca-Cola: Continuing Battle in Kerala
Coke in Varanasi: Facing Local Ire
Villagers Blame Coca Cola for Water Woes in Thane
Communities Protest Coca-Cola in Tamil Nadu
CorpWatch India Responds to Coca Cola

Coca-Cola’s global website carries their position
on the issue and claims
that the “local communities have welcomed our
business as a good corporate

Nothing could be further from the truth.

It is time for Coca-Cola to seriously examine and
address the adverse
impacts of its operations in India. In fact,
Coca-Cola needs to stop
treating the issues in India as a public
relations problem and assign it
to the appropriate department that will genuinely
address the issues of
over-exploitation of water (leaving the community
with scarce water
resources) and pollution of water sources as a
result of its operations.
Hindustan Coca-Cola and Bharat Coca-Cola are the
Indian subsidiaries of

To highlight these issues, we are profiling a
series of community
struggles against Coca-Cola in India, all of
which point to a pattern in
the company’s operations. The communities are
being left thirsting as
Coca-Cola draws water from the common water
resources. Its operations are
polluting the scarce water that remains. The
emergence of local,
grassroots struggles against the cola giant’s
operation in India should
also serve as a reminder to Coca-Cola’s bosses in
Atlanta that this is not
a public relations problem that one can just
“spin” and wish away. Rather,
the heart of the issue is a serious concern about
control over natural
resources and the right of communities to
determine how business is done
in their communities.

Close to a year after our report on Coca-Cola’s
operations in Plachimada,
Kerala, the communities in and around Coca-Cola’s
facility continue to
hold the factory responsible for their water
woes. In fact, the local
panchayat (elected body at the village level)
decided in April NOT to
renew the license issued to the Coca-Cola
factory, on the grounds of
“protecting public interest.” Protests, led
primarily by Dalits (formerly
untouchable) and Indigenous Peoples, have
continued for over a year
against the factory, and new data validates the
charges that Coca-Cola’s
bottling operations have depleted and
contaminated the ground water.
Surendranath C visited the area and filed a
report on the latest stage of
the struggle in Plachimada, Kerala.

Local residents in Mehdiganj, near the holy city
of Varanasi, are also
gearing up for a struggle against Coca-Cola.
Coca-Cola has illegally
occupied a portion of the common property
resources of the village and was
found guilty of evading payment of land revenue
by a local court.
Protesters were met at Coca-Cola’s factory gates
by about 200 police
personnel, sent to “protect” the plant along with
50 gun-toting private
security guards. This was not all for show– the
demonstrators were beaten
up. The Coca-Cola plant in Mehdiganj enjoys
heavily subsidized electricity
and is accused of spewing toxics into surrounding
agricultural fields as
well as causing serious water shortage as a
result of its operations. We
have a report from Mehdiganj.

In yet another community, this time in Kudus
village in Thane district,
villagers are forced to travel long distances in
search of water which has
dried up in their area as a result of Coca-Cola’s
operations. Villagers
are questioning the subsidized water, land and
tax breaks that Coca-Cola
receives from the state, only to leave them
thirsting for water. Coca-Cola
has built a pipeline to transport water from a
river to its plant, and an
activist opposing the pipeline was detained by
police authorities for a
week. We carry a story from the Times News

And in a proactive move, more than 7,000 people,
mostly women, turned out
to protest a proposed Coca-Cola factory in
Sivaganga, Tamil Nadu.
Residents are justifiably worried that Coca
Cola’s operations in the area
would lead to scarcity of water and contamination
of water. We carry an
article from Frontline.

For Coca-Cola to claim, after being made aware of
the community protests
all over India, that “local communities have
welcomed our business as a
good corporate neighbor,” is nothing short of
arrogance. But then, Coca
Cola’s arrogance should come as no surprise as it
is accustomed to having
its way with governments.

Under the rules of entry for Coca-Cola into
India, it was agreed that
Coca-Cola would divest 49% of its equity stake in
India within 5 years. In
an unprecedented move, the government of India
seems to have given in to
Coca Cola’s pressure, and is on the verge of
changing its policy in this
regard to suit Coca Cola’s interest. We are faced
with a situation where
Indian investors will own 49% of Coca Cola’s
Indian operations, but have
no vote whatsoever! Just like in the Enron case,
the US government played
a significant role. Robert Blackwill, the US
ambassador to India, in a
letter to Brajesh Mishra, Principal Secretary to
the Prime Minister of
India, stated that, “I would like to bring to
your attention, and seek
your help in resolving, a potentially serious
investment problem of some
significance to both our countries. The case
involves Coca-Cola, one of
the largest single foreign investors in India.”

For a company that has had its way and has access
to top US officials,
things are not so rosy after all. Coca-Cola may
very well be the most
recognizable brand name in the world but it is
also increasingly becoming
the target of ire of local communities around the
world as a result of its
disregard for communities and the environment.
Community struggles in
India against Coca-Cola are just a few of many
that exist and are
emerging. Coca-Cola was also identified as a
target of boycott to protest
the US led invasion of Iraq. Sales of Coca-Cola
plummeted in certain areas
in India, such as Kerala.

In an extremely significant case, Coca Cola’s
main Latin American bottler
is facing trial for allegedly hiring right wing
paramilitary forces (aka
death squads) to murder and intimidate trade
union organizers, especially
from SINALTRAINAL. The suit has been brought
under the Alien Tort Claims
Act, which allows corporations to be sued in the
US for crimes committed

Coca-Cola is also the target of an international
campaign demanding that
Coca-Cola guarantee access to care and treatment
for all their employees
and their families living with HIV/AIDS,
especially in the African
continent where Coca-Cola is a major employer.

Holding Coca-Cola accountable for its pollution,
as various communities in
India are trying to do, will not be the first
such instance. In May 2003,
Coca-Cola de Panama was fined US$300,000 for
polluting Matasnillo River in

Coca-Cola, it seems, is on its way to soon
earning the reputation that
Enron enjoyed in India. Both Enron and Coca-Cola
top the Foreign Direct
Investment list from the US in India. Enron’s
Indian operations (Dabhol
Power Corporation, a joint venture with Bechtel
and General Electric,
among others) was the single largest foreign
direct investment in India
and became the target of activists across the
country due to
irregularities in its manner of carrying out its
business, including the
use of armed thugs to suppress opposition.
Indians had shut down Enron
long before the financial scandal in the US
brought the entire company

Coca-Cola could soon join that list.
The India Resource Center will focus on
supporting community struggles
against Coca-Cola in India. Check back regularly
for updates.

Amit Srivastava is the coordinator of India
Resource Center and Global
CorpWatch India
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Berkeley, CA 94704 USA
Tel: 510-849-2423
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accountable locally and globally”