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Communities Reject Coca-Cola in India

by Amit SrivastavaIndia Resource Center
July 10th, 2003

Coke protestors, India
Protestors at Mehdiganj, near Varanasi, India. 

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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."

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 neighbor."

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 Coca-Cola.

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 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 untouchables) 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 Network.

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 the union, Sinaltrainal. The suit has been brought under the Alien Tort Claims Act, which allows corporations to be sued in the US for crimes committed overseas.

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 Panama.

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 down.

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.

This article originally appeared on India Resource Center/CorpWatch India. For more information on corporate globalization in India, check the India Resource Center.

Amit Srivastava is the coordinator of India Resource Center and Global Resistance.