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INDIA: Fighting Big Pharma in Little Digwal

Something to Think About When Taking Your Medicine


by Stan CoxCounterpunch
February 15th, 2005

Maliamma waved a Coke bottle at the government official. "Go ahead -- issue the permit! But first I want to see you drink my well water!" Maliamma and her neighbors had traveled the 25 miles from their village of Digwal, in the state of Andhra Pradesh, India, to the district capital Sangareddy for a public hearing. At the hearing, an export-oriented pharmaceutical company was proposing to build a factory only a couple of miles from Sangareddy.

The visitors from Digwal knew firsthand what kind of neighbor a bulk-drug factory can be, and they were determined that Sangareddy not suffer the same fate. Joining forces with local residents and businesses, they made it a pretty uncomfortable meeting for company representatives, who eventually hightailed it from of the room after signing an agreement to get out and stay out of the Sangareddy area.

That hearing, in March, 2001, was one in a string of victories for the people of Digwal -- a winning streak that by 2005 may have halted further pollution of their water and land by the factory across the road from their village.

In this 50-mile-long stretch of rural India west of Hyderabad, the country's fifth largest city, almost 40 percent of the country's bulk pharmaceuticals are produced (a large proportion of them for export). The progress the the people of Digwal have made in protecting themselves against the industry's wastes puts them in a league of their own. Here, the more typical experience is that of the Patancheru industrial area about 30 miles east of Digwal, where toxic effluents from a myriad of drug factories continue to plague more than a dozen villages.

But nobody's celebrating in Digwal. Residents and their legal representatives say that the groundwater remains badly polluted and is ruining their crops and their health. The factory's current owners say they are currently using state-of-the-art technology to control pollution, and that they have gone the extra mile to improve the lives of Digwal's residents. Government authorities say that the factory used to be a serious polluter, but, thanks to tough enforcement, that's all in the past. What's past is past, say the factory owners, and, as we will see, they may have excellent reasons for feeling that way.

Sorting through all the claims and counter-claims are the state's High Court, various blue-ribbon committees, and even the US Food and Drug Administration (FDA).

Digwal and the world

"I'm no activist," says C. Shailaja, the Sangareddy attorney who has been representing Digwal's residents for almost seven years. "But when the people from Digwal first told me their story, I knew we had to do something." Back in 1998, she and some colleagues set up a one-day "camp" in Digwal to provide information on legal services. Such camps are routine, but at this one, Shailaja was thronged by more than 100 people who claimed that Global Drugs Ltd., owner of a drug factory just across National Highway 9 from their village, had contaminated their groundwater, ruined their crops, and wrecked their health. Before long, Shailaja and the villagers had filed a case against the factory's owners -- a case that's currently before the state's High Court.

The village has 6000 or so residents, most of them from the lowest rungs of India's caste hierarchy. The pharmaceutical plant, now owned by Nicholas Piramal India Ltd. (NPIL) of Mumbai (formerly Bombay), manufactures bulk drugs -- technically, "active pharmaceutical ingredients" -- that are used in producing pills, capsules, and other medical products.

NPIL is India's second-largest pharmaceutical company, with numerous factories producing a complete line of finished products as well as bulk drugs. Judging from its published "shareholding pattern", between 21 and 30% of its stock is foreign-owned. The company has a branch office in New York and joint ventures with a wide range of Western drug companies in the U.S., the U.K., Switzerland, and Italy. Approximately 70% of the Digwal plant's production goes into export markets.

India's pharmaceutical manufacturers will tell you that the best thing we in the West can do for the environment in places like Digwal and Patancheru is to keep swallowing our medicine. The more emphasis that India puts on exports, the drugmakers say, the greater the scrutiny they receive from Western regulators. But so far, in Digwal and the villages around Patancheru, the progress made against pollution has been largely the result of agitation and court action by local people who can no longer swallow their own well water.

Rajarathnam, a native of Digwal, was one of those who approached Shailaja for help at the legal aid camp. He has been a thorn in the side of the factory's owners since 1995, secretly videotaping the dumping of effluents (he's a videographer by vocation), speaking out on Digwal's pollution problem, and even helping organize a theatrical troupe to spread the word to other villages. He says that a frustrated company official once told him, "Stop complaining! We're saving lives all over the world!" Another shouted, "What's the problem? Your village is becoming world-famous. People are saying, 'We're grateful to Digwal - that's where our medicines come from!'"

The view from the village

Digwal residents told me that since it was built in the early 1990s, the drug plant has discharged wastes into open streams during the monsoon season and has dumped into deep, open wells years round. They claim to have seen barrels of toxic waste buried, with trees planted over the top. They say that chemical analyses have shown their groundwater to be too contaminated for drinking, bathing, or even irrigation, and that it's making them sick. Farmers told me they have had to stop cropping large parts of their irrigated land because of what they call the "chemical water".

(Pharmaceutical manufacturing involves a host of hazardous inputs, solvents, and by-products. For newly built drug factories in the United States, the Environmental Protection Agency puts limits on concentrations of some 32 different toxic compounds in their effluents.)

There is little question that Global Drugs, which owned the plant until sometime in 2003, was a big-time polluter. In 1998, a state court concluded that "allegations to the effect that by reason of discharge of the industrial effluents, the agricultural lands have been affected stands beyond reasonable doubt." I saw one government analysis of water from a Digwal well in that same year that concluded, "Sample is not suitable for potable or irrigation purposes."

A district judge wrote in 1999, "I have personally visited the premises of Global Drugs . . . This is a highly polluting industry." He called on the state Supreme Court to order compensation for the affected farmers. A 1999 court order addressed to Global Drugs noted that "effluents have formed a cesspool which is causing surface and groundwater pollution, and your effluent treatment capacity is not adequate."

An official of the Andhra Pradesh Pollution Control Board, who asked not to be identified, told me, "In those years, Global Drugs was allowed to discharge its effluents on the land. But when NPIL took over the plant a couple of years ago, that stopped. The Board would not allow them to re-open the facility until its effluent treatment capacity was upgraded and its wastes were disposed of properly."

He continued: "And these days, as soon as anyone tries to dump wastes in this area, we get a call, immediately, from a citizen. Everyone is very pollution-conscious now."

NPIL: a white knight?

Global Drugs was strictly minor league: a small, unprofitable local outfit. The plant's new owner, NPIL, is a billion-dollar-plus company that can afford to invest ample resources in pollution control -- and they appear to have done just that. Manoj Agarwalla, General Manager for Finance for NPIL's Digwal operation, says that when it comes to preventing pollution, his is a model company. "This plant has an unconditional seal of approval from the FDA in the United States. Last May, we received an award from the Pollution Control Board. We're on the shortlist for an award from the National Safety Council of India. Around 8 or 9% of our total investment goes to safety, health, and environmental protection.

"Any day of the week, we'll have foreign visitors coming in. Representatives of multinational companies are a dime a dozen around here. Given that, how could we be dumping toxic wastes?"

But Agarwalla goes further. He says that his factory has never dumped its wastes -- not even when it was owned by the notorious Global Drugs. In his view, the villagers are simply putting the squeeze on a rich corporation, and their very poverty gives them a big advantage: "Look, these are people who have so little, they have nothing to lose. So they file a case, see what they can get, and if they come up with nothing in the end, it's no big deal -- for them. But I am forced to spend a lot of time and money to prove myself innocent."

He adds, "We have spent close to $2 million on waste treatment, health and safety measures, and supplying safe water to Digwal." In 2000, under a court order, Global Drugs started hauling drinking water to Digwal in tanker trucks. Now, for an hour each morning, NPIL pipes water directly into the village from wells outside the allegedly contaminated area, at a huge expense.

Agarwalla says the company provides potable water even though -- he claims -- the courts found the undrinkability of Digwal's groundwater to be "not directly attributable" to the drug plant. "We do it because we want to be a good neighbor. We do a lot for them. Last Independence Day, we even distributed sweets to every single schoolchild in Digwal."

(Shailaja notes dryly that while NPIL was not legally compelled to pass out candy, the courts do continue to require that it furnish clean water.)

I toured NPIL's Digwal installation with Agarwalla and other managers. Their pollution-control infrastructure, which includes three independent effluent treatment facilities, is impressive indeed. Incineration is done at high temperature with rapid cooling to prevent dioxin formation. Smokestacks are all scrubber-equipped. Liquid effluents run through channels and ponds lined with high-tech, impervious polymers.

Organic wastes go into large tanks where they are broken down anaerobically by bacteria, producing useful biogas fuel in the process. Heat, water, and steam are all conserved and recycled. Both solid and liquid wastes are hauled to government-approved facilities after treatment.1

S.R. Mittal, NPIL's General Manager for Safety, Health, Hazards, and Environment, oversees all this activity. He is absolutely fervent about pollution control. He lives and breathes his profession (breathes, literally -- the air that assaults the nostrils and lungs anywhere near the effluent treatment facilities is strong stuff indeed.) Let a single toxic molecule slip his grasp, and he'll take it as a personal failure. The chief concern of other drug industry people I have spoken with appears to be their corporate image, but Mittal is different. He's precisely the kind of person I'd want to hire were I in charge of a company truly committed to environmental responsibility.

At the time of my visit in January 2005, the management was preparing for a visit by FDA officials from Washington, who would recommend whether or not the plant's permit to export to the U.S. should be renewed. I'm no expert, but from what I saw and heard at NPIL, I expected the permit to be issued promptly.

A phantom report ... and a phantom company?

But what about the villagers, and their ailments, and their crops? Is their water and soil still polluted by past or even present-day dumping? Or, as Agarwalla maintains, are they just greedy? Maybe they're victims of mass paranoia?

There is a document that could go a long way toward clearing up the controversy: a report by a committee of experts appointed by the state High Court to study the situation in 2002-2003. Almost everyone I spoke with, on both sides of the dispute and in the middle, mentioned the report's findings and leaned on it for support. But no one I spoke with had a copy of the report or had ever even seen a copy.

Agarwalla says the report proves that Digwal's water is no longer polluted, and it recommends that the Court award no compensation to farmers.2 But neither he nor his fellow NPIL managers have actually seen the report. The folks at the state's Pollution Control Board office in Sangareddy said they don't have a copy, and more senior officials at the Board's headquarters couldn't provide one either. Shailaja hasn't seen the report, but doubts its reliability because, she alleges, committee members were too chummy with the company people. (NPIL denies this.) In her capacity as a legal representative of the villagers, she requested a copy, but never got one.3

And, of course, no one in Digwal has seen the report. One farmer, Nagarathnam, told me, "People come all the time and take water samples, but they never come back to show us any results."

A Pollution Control Board official in the area says the water supplies are fine now, but he could show me no data. Completion and publication of a comprehensive survey, with full chemical analyses of Digwal's water sources, would answer many questions. Agarwalla would like to see such a study, but he emphasizes, oddly, that it should be done only after the court case is resolved.

In the villagers' view, present-day water samples wouldn't tell the whole story anyway. They say the company already owes them for their decade of hardship. Here, a precedent -- far more ghastly but still a precedent -- comes to mind. Dow Chemical bought the Union Carbide Corporation in the 1990s . Thousands of families still seeking compensation for Carbide's deadly 1984 gas leak in Bhopal, India claim that Dow can't have acquired Carbide's assets without also taking responsibility for the Bhopal carnage -- Carbide's biggest unresolved liability by far. Does NPIL likewise owe the residents of Digwal for what its predecessor did to them?

Clearly, Agarwalla's unconvincing assertion that Global Drugs never dumped effluents is meant to head off compensation demands based on pollution that occurred before NPIL came on the scene. But the villagers say there's a bigger reason for NPIL to want to forget the past. As Rajarathnam puts it, "The name they put on the signs out front doesn't matter. They keep changing the factory's name just to avoid responsibility." That assertion may be inaccurate in a legal sense, but there may also be some truth in it. It turns out that the plant has changed hands more than once in its twelve-year lifetime. Global Drugs was the third in a series of owners, having acquired the plant from none other than Nicholas Piramal India Ltd.4

It's tempting to speculate, so let's do just that: Was Global Drugs created to supply NPIL with bulk drugs while keeping the big company's good name untarnished by pollution? (Some pharmaceutical companies in Patancheru have been accused of such shell games.) And, faced with villagers' protests and a government crackdown, did NPIL make a virtue of necessity and convert the plant into clean, green facility that can now freely export into regulated markets?5

At this point, it is left to the High Court to weigh whatever evidence it has gathered and decide whether NPIL is responsible for past pollution by the plant -- whatever the past connection (or lack thereof) between NPIL and Global Drugs.

When it comes to the cost of patented prescription drugs in the United States, the sky's the limit. But in the global bulk drug market, price competition is fierce, and every dollar or rupee not spent on pollution control gives a company a bit more room to maneuver. The people of Digwal have fought hard to stop such corner-cutting in their own backyard, and they appear to have succeeded. But they plan to keep pushing; they're still seeking recompense for a decade's worth of poisoned water.

So, when drug-company officials tell Rajarathnam that drugs being made in Digwal are improving the health of tens of millions of people, this is his retort: "What? So are you doing this for free? And how many rupees are the lives of 6000 people in Digwal worth to you?"

Stan Cox is a plant breeder and writer who lives in Salina, Kansas. He lived in Hyderabad, India in 1980-82 and 1996-2000 and just completed a two-month trip there. Translation by Priti Cox during interviews is deeply appreciated. He can be reached at: t.stan@cox.net

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Notes

1. NPIL's daily output of liquid effluents fills 14 or so tanker trucks, each with a 10,000 liter capacity. They transport those wastes 20 miles to a Common Effluent Treatment Plant (CETP) in Patancheru that handles wastes from all of the area's drugmakers. After treatment, NPIL management says, pollutant concentrations in the liquid wastes are less than half the legal upper limit. A 2003 court-ordered study in which repeated samples were taken from tanker trucks arriving at the CETP from 35 different factories confirms the claim that NPIL's treated effluents have concentrations much lower than the limit for raw sewage (the standard that applies to wastes brought to the CETP). But a single sample of "treated effluent" obtained during the study on a surprise visit to the factory itself exceeded that upper limit.

2. Agarwalla said the committee recommended no farmer compensation because records show that the land in question had lain idle before Global Drugs allegedly polluted it: "Those guys were producing zilch then, and they are producing zilch now, and they want to be paid fo it." Shailaja laughs off that argument: "The committee members were looking at land that had been taken out of irrigated production in the dry season precisely because the water was too polluted to use. And they concluded that the farmers were just lazy." She asks the obvious rhetorical question: How had more than a thousand families in a village surrounded by nothing but open countryside been surviving if they weren't farming?

3. One Pollution Control Board official told me that the report is evidence in the pending court action against NPIL and therefore unavailable. But as a foreigner with no legaI standing here at all, I had little trouble obtaining a 2004 report by a similar High-Court-designated committee that had investigated the pollution situation in nearby Patancheru. That case is also still pending.

4. I had read and had been told that NPIL "acquired" Global Drugs two years previously, and in the interview questions I put to Agarwalla, it would have been obvious to him that I believed that NPIL's role in the Digwal saga began only at that time. In his answers, Agarwalla said nothing to cause me to doubt that assumption. Subsequently, a person knowledgeable about the matter told me, "NPIL or Global Drugs -- it's all the same thing." He told me that it had been an NPIL plant, then they formed Global to take it over, then they after a few years, they took it back over. When I asked one Pollution Control Board official -- a vigorous defender of NPIL who asked not to be named -- about it, he first asked, "What was the name of the person who told you that?"; then, he said that, yes, NPIL had owned the plant in the mid-1990s, and then he said, no, that was wrong, they didn't. I called Agarwalla, and after another round of Twenty Questions, he confirmed that, yes, NPIL did own the plant before Global Drugs.

5. Agarwalla told me he was unsure about the legal technicalities of how Global Drugs had come into being. He said Global Drugs had sold bulk ingredients to a variety of companies, but said he didn't have the figures to show whether or not the plant's bulk drug output during that period had supplied NPIL primarily.





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