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India: Coke Adds Life?

Impoverished Farmers are Fighting to Stop Drinks Giant "Destroying Livelihoods"

by Paul Vallely, Jon Clarke and Liz Stuart in KeralaIndependent/UK
July 25th, 2003

Three years ago, the little patch of land in the green, picturesque rolling hills of Palakkad in the Indian state of Kerala yielded 50 sacks of rice and 1,500 coconuts a year. It provided work for dozens of labourers. Then Coca-Cola arrived and built a 40-acre bottling plant next door.

In his last harvest, Shahul Hameed, the farmer who owns the modest smallholding, could coax only five sacks of rice from the land, and a meagre 200 coconuts. His irrigation wells have run dry. Meanwhile, the huge factory extracts up to 1.5 million litres of water a day from the deep wells it has drilled into the aquifer to produce Coke, Fanta, Sprite and the drink the locals call, without irony, Thumbs-Up.

But the cruellest twist is that the plant bottles a brand of mineral water while local people - who could never afford it - have to walk up to six miles twice a day to fetch water. The turbid, brackish water which remains at the bottom of their wells is now too high in dissolved salts to be healthy to drink, cook with or even wash in. Some claim it made them ill.

As the summer and the water crisis intensifies, the hardship of the local people is worsening. So is the row between them and the company whose name is for many a synonym for the global power of transnational capitalism. For the past 459 days, there has been a daily picket of the factory. There have been street demonstrations and rallies, and spontaneous blackening of Coca-Cola hoardings. More than 300 people have been arrested.

Then earlier this year the Perumatty panchayat (local council) revoked the factory's licence to operate. It did so despite losing almost half of its annual income - some 700,000 rupees (about ?9,000) - from the decision. Coca-Cola's lawyers appealed to the next level of government, which suspended the revocation and allowed the factory to continue operating. The matter comes to a head at an appeal before the state government next week.

It is an iconic dispute, a David and Goliath battle between multinational power and some of the world's poorest people. Many of those affected are classed by the Indian government as "primitive tribals". Most of the rest are dalits - "untouchables". Few in power took much notice when they began to complain, six months after the factory opened, of changes in the quantity and quality of well water. So the anger of the local people grew.

Shahul Hameed looked out over one of his bone-dry paddy fields this week and visibly shook with anger. "My irrigation pump, which I installed with a bank loan in 1980, used to run for 12 hours throughout the night; now it runs dry after 30 minutes," he said, above the noise of clinking glass from the factory next door. "Coke managed to acquire all the lowest lying land in the area and after digging a series of deep wells they took all the water. It is downright theft."

Every day 85 lorryloads leave the premises, each containing 550 cases of 24 bottles. To produce them the company siphons off enough water to meet the minimum requirements of about 20,000 people. They have not only lost their water but, with the dried-out farms closing, also their jobs. Those worst affected are up to 10,000 landless labourers.

Coca-Cola denies responsibility for all this. In a statement from its headquarters in Atlanta, it said: "We would like to emphasise that, to the best of our knowledge, these allegations made against the plant in Kerala are untrue.

"In fact, we believe that the allegations are politically motivated. The plant concerned has not drained the aquifers and uses only six bore wells. In fact, the local villages receive tankers of free water supplies each day from the plant to supplement their existing water sources." And, it said, the company was establishing an elaborate system for rainwater harvesting.

The real culprit, the company says, is a reduction in rainfall in the area - from 1,213 mm in 2000, to 1,147mm in 2001 and just 670mm in 2002. It quotes India's National Geophysical Research Institute in Hyderabad as saying: "There is no field evidence of overexploitation of the groundwater reserves in the plant area."

All of this is disputed. A local human rights and development organisation, VAK, which is funded by Christian Aid, claims state meteorological reports show rainfall rose between 2000 and 2001. Another campaign group, CorpWatch India, challenges Coke's claims about rainwater harvesting, saying "how much you save through your rainwater harvesting is not the issue; how much additional load you add to the aquifer is".

The quality of the water is an issue too. CorpWatch sent samples for analysis to the United States. The resulting report concluded that high levels of dissolved salts were produced by the fast rate of depletion of the aquifer - and that washing in it would cause "severe hardship"..

Then there is pollution. Chemical effluents produced by bottle-washing contaminate the groundwater, protesters say. Early attempts to dry the foul-smelling slurry and market it as fertiliser failed when farmers started to develop sores on their skin and noticed that their coconut palms were dying. The plant tried to give it away but no one wanted it. Protesters have been gathering it up and dumping it in front of the plant.

The company denies there is a problem. It says: "Technologies are also equivalent to most Coca-Cola bottling plants in the United States and Europe. Further, our effluents comply with standards and norms set by the Kerala State Pollution Control Board."

The local authorities have backed the multinational, arguing that it creates jobs. A wide spectrum of politicians shared a platform at a rally outside the factory last year to threaten "dire consequences" if the protests did not stop.

Demonstrators took no notice. Local council tax records, they said, showed that there are only 134 permanent staff at the plant. Indeed, some of the protesters had once worked there but quit. "'I used to get terrible headaches working there," Saraswathi Kaliappan, 38, who worked as a bottle washer for two years, said. Conditions were so poor she claimed she wouldn't go back if the pay was doubled.

But then, in April, the local council changed its mind. Prompted by new data from the Kerala State Health Department that people should not drink from wells neighbouring the plant, it acted. The panchayat decided not to renew the industrial licence issued to Coca-Cola on the ground of "protecting public interest".

"We were persuaded the company would bring money and jobs to the area," Arychami Krishnan, the council's president, said. "But the reality is few local people have been employed and the water situation and pollution is a calamity."

The decision did not stand for long. Coca-Cola workers set up a counter-protest outside the council headquarters and 1,000 demonstrators marched on the town hall. The US ambassador to India wrote to the Indian Prime Minister, stating: "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." The Kerala Local Self Government Department ruled the factory could stay open pending next week's appeal hearing.

Aid agency campaigners have protested. "This is a shocking situation where it appears that the rights of a big corporation are being put above those of poor communities," an Action Aid spokesman said. "This is a classic case of corporate irresponsibility," said Christian Aid, which is calling for "binding international regulations".

But few expect that the final verdict for the waterless people of Kerala will be anything other than "Let them drink Coke".

How Search for Headache Remedy Spawned Global Industry

By Oliver Duff

  • Coca-Cola started life in Atlanta in 1886, the result of a search for a headache remedy.

  • It is now the biggest selling and most popular soft drink in history.

  • The first international bottling plants opened in 1906 in Canada, Cuba and Panama.

  • Among its brands are Sprite, Dr Pepper, Bacardi Mixers, Nestl?, Nescaf?, Schweppes and Fanta.

  • More than 13,000 Coca-Cola beverages are consumed every second of the day, reaching six billion consumers.

  • 70 per cent of its income comes from outside the US.

  • In 2000 Coca-Cola paid out $192.5m (?120m) to African-American employees who accused the company of racial discrimination.

  • Coke remains the biggest-selling soft drink brand in America, but sales there slumped by 2 per cent in 2002.





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