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14 08 06

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, Rajasthan; 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-theclock 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.
In 2003, women from the Vijayanagaram Colony in the village of Plachimada, protested that their
wells had dried up because of the over exploitation of groundwater resources by the Coca-cola

plant. They complained that they now had to walk nearly five kilometres twice a day to fetch water.
They also argued that the little which was left was undrinkable and when used for bathing the water
burned their eyes and lead to skin complaints. Aside form these health issues, the depletion of
groundwater resources also affected the ability of local residents to raise their crops of rice and
coconuts.
In April 2003, the Perumatty Grama Panchayat (Village Council) refused renewal of Coca-Colas
licence to operate on the grounds that it was not in the public interest to renew the licence stating:
the excessive exploitation of ground water by the Coca-Cola Company in Plachimada is causing
acute drinking water scarcity in Perumatty Panchayat and nearby places
The Village Council considered revocation of the licence to be necessary in order to protect the
interests of local people.
Permatty Grama Panchayat v state of Kerala
In December 2003, the Village Councils decision was challenged in the High Court of Kerala State.
The Court considered two issues: the question of the over exploitation of ground water, and the
justification for the Village Councils decision to revoke the licence.
The Court recognised that the State as a trustee is under a legal duty to protect natural resources. It
considered that these resources, meant for public use, cannot be converted into private ownership.
The residing judge, Justice K Balakrishnan Nair, asserted that the government had a duty to act to
protect against excessive groundwater exploitation and the inaction of the State in this regard was
tantamount to infringement of the right to life of the people guaranteed under Article 21 of the
Constitution of India.
The High Court ordered the plant to stop drawing the groundwater within a month, ruling that the
amount of water extracted by the plant was illegal. But at the same time, it ordered the Village
Council to renew the licence and not interfere with the functioning of the Company as long as it was
not extracting the prohibited ground water. Coca-Cola refuted the accusations of excessive
exploitation and pollution and lodged an appeal.
The next few years saw a confusing array of legal battle between the Village Council and the
company.
In 2005, the divisional bench of the High Court granted permission for the company to extract
500,000 litres from the common ground water per day in the year 2005-2006. The Court also
affirmed that the Village Council was not justified in cancelling Coca Colas licence to operate until a
full scientific assessment had been made of the facts.
The Plachimada storyMarch 2000 Factory established

April 2002 Agitation by the villagers commences

March 2003 Village Council refuses to renew licence
May 2003 State government stays the Village Council decision
Dec 2003 Single judge bench of the Kerala High court upholds the Village Councils decision
21 Feb 2004 The Government ordered the company to stop drawing ground water from the plant
12 March 2004 Coca Cola company suspended production saying it was left with no option but
to close the factory down in the long run
29 March 2004 Village Council refused to renew licences again saying company had failed to
meet conditions to: stop using ground water; demonstrate that its products were safe, and prove the
non-toxicity of its solid waste
3 April 2004 Irate villagers blocked tanker lorry taking water to the plant and police arrested 44
villagers
April 2005 A High Court Division Bench allows appeal by Coca Cola and permits the company
to draw 500,000 litres of water per day. Orders the Village Council to renew licence
May 2005 Village Council files special leave petition in the Supreme Court
1 June 2005 Company approaches the High Court again as the Village Council did not renew the
licence. The court orders Village Council to renew the licence within 7 days, or it would be deemed
that the licence stands renewed for two years from 10 June 2004
6 June 2005 Village Council informs the company that licence will be renewed for three months;
asks them to remit the fee and collect licence
17 August 2005 A group of about 100 activists from Yuvajana Vedi youth organisation march to
factory gates. Heavy police force severely injured 4 protestors who were hospitalised and arrested
43 activists
19 August 2005 The Kerala State Pollution Control Board ordered the stoppage of production at
the Plachimada factory for failure to comply with pollution control norms
15 September 2005 Kerala State Government lends its support for the people against the company
November 2005 High Court rejects the companys petition that since Village Council did not
keep up the stipulated time frame, it should be deemed that the licence stands renewed for two
years. The company ought to have accepted the opportunity to function for three months. But the
court again orders the Village Council to renew the licence
November 2005 Village Council files against the latest High Court order in the Supreme Court
4 Jan 2006 Village Council reissued a licence to the company for three months but laid out

thirteen conditions, the first of which is that the company shall not use groundwater from Perumatty
Panchayat for industrial purposes, or for producing soft drinks, aerated carbonate beverages or fruit
juice
June 2006 Meeting with community leaders ends in major commitment from Kerala state officials
for pro-active action against Coca Cola
10 August and 11 August 2006, the Government of Kerala and the State Food (Health) Authority,
respectively, banned the manufacture and sale of Coca-Cola in the State on the grounds that it was
unsafe
September 2006 High Court of Kerala set aside the orders of the Government of Kerala and the
State Food (Health) Authority
SOURCES: Based on article by P.N. Venugopal, 27 Jan 2006, Quest Features and Footage, Kerala,
cited on Together India website, with additional information from Asian News International 20
August 2005; the Hindu Newspaper 20 August 2005; the Indian Resource Centre, 17 August, 2005;
The Hindu newspaper, 25 October, 2005; Coca Cola Company Website, Press releases.
In August 2005, the plant was closed once again, this time by the Kerala State Pollution Control
Board. The Board had sought clarification from Coca Cola of the excessive amount of Cadmium in
the effluent. G Raja Mohan, the President of Kerala State Pollution Control Board stated:
In the waste water treatment sludges we have found contents of Cadmium abnormally high. It goes
up to 600 percent above the permissible limit. In the ground water the content of Cadmium is not that
much. So, there is something which they are using in the raw materials.
In October 2005, the State Government of Kerala announced it would support the Village Council
local activists by challenging Coca Colas right to extract water from common groundwater resources
in the Supreme Court of India. In an official press release, Health Minister K. K Ramachandran said:
the Government will stand by the people in whichever court the company goes. The right over water
and air is the right to live. The Government will not allow stopping of these two lifelines of the
people.
On 4 January 2006, following decisions of the Kerala High Court, the Village Council renewed the
Coca Cola companys licence for three months but laid out thirteen conditions. The first of these was
that the company shall not use groundwater from Perumatty Panchayat for industrial purposes, or for
producing soft drinks, aerated carbonate beverages or fruit juice. The Village Council cited the 2004
Supreme Court decision of M C Mehta v Union of India and the notification by the Kerala State
Groundwater Department that village is over exploited with regard to groundwater.
Supreme Court Judgement recognises the right of citizens to use waterIn M C Mehta versus Union
of India 2004(12) SCC118, the Supreme Court of India recognised that:
Groundwater is a social asset
Citizens have the right to the use of air, water and earth as protected under Article 21 of the
Constitution (the protection of life and personal liberty)

It further states that the environmental balance is to be maintained and wherever groundwater is
required for domestic and agricultural needs, priority is to be given to these.
Source: PN Venugopal, 27 Jan 2006, Quest Features & Footage, Kerala, cited on Together India
website
In June 2006, the newly elected State Government of Kerala assured community leaders that it will
take proactive measures against the Coca-Cola bottling plant in south India. On June 15th 2006,
Chief Minister Mr. V. S. Achutanandan and other cabinet members submitted a memorandum
outlining their demands. These demands included the permanent closure of the bottling plant in
Kerala, compensation for the affected community members and prosecution of the Coca-Cola
Company for criminal offences.
In August 2006, this brought a new twist to the ongoing saga. The Kerala State Pollution Control
Board ordered a ban on the manufacture and sale of Coca Cola in the State questioning the safety
of the product itself, based on allegations that it contained pesticides and harmful chemicals in a
report by an NGO, the Centre for Science and Environment, New Delhi.
Coca Cola put out a press release stating:
We are completely confident in the safety of our soft drinks in India because they are produced to
the same level of purity, regarding pesticides, as the stringent EU criteria for bottled water.
We support the adoption of stringent, science-based rules by the Indian government regarding levels
of pesticides in soft drinks. The rules should be based on sound and validated testing
methodologies. We continue to work with relevant government bodies, industry associations, non
government organizations (NGOs) and the scientific community to develop and finalize criteria and
associated testing methods for pesticides in soft drinks.
We have the same uncompromising commitment to product safety and quality in India and
everywhere we offer our beverages around the world, and independent third parties regularly audit
all plants for compliance. The Coca-Cola Company has stringent criteria for all of the ingredients
used in our beverages. These criteria are backed by internationally accepted analytical testing
protocols for these ingredients.
Our soft drinks in India have been regularly tested and evaluated by the world renowned and
independent Central Science Laboratories (CSL) and all tests show no detectable level of
pesticides. Coca Cola Media Statement Regarding the Safety of Coca Cola Soft Drinks in India, 9
August 2006.
However, in September 2006, the High Court of Kerala set aside the orders of the Government of
Kerala and the State Food (Health) Authority banning the manufacture and sale of Coca-Cola in the
State. The High Court observed that the ban could not be justified since it was based solely on a
report by an NGO.
The State Government of Kerala has now challenged the extraction of water by Coca Cola in
proceedings before the Supreme Court. The State Government argues that the company is taking

water from poor communities, but according to a press article in October 2006, the Village Council
was not pressing for the case in the Supreme Court to be listed for hearing. It appears to believe that
as long as the conditions imposed by the Village Council are not fulfilled, the plant cannot reopen.
Nevertheless, water remains a problem for the villagers. With its groundwater still polluted,
Plachimada now gets its drinking water through pipes, that provide water for only a few hours once
in two days, and through tanker lorries which also arrive once in two days. Fifteen tanker-lorries of
water are supplied by the government, and 15 more by the company.
Villagers remain particularly concerned at the pollution of the scarce remaining groundwater and
land which they blame on the discharge by the Coca-Cola company of its waste into the surrounding
fields.
Although the Coca Cola factory in Plachimada has remained closed since 2004, locals are not
satisfied with simply closing the plant; they want justice for the damage caused to health and the
environment. As the protestors complain:
Its true that the company is not functioning, but that is not enough. We must get compensation for
all the crimes committed by the company.
Whether or not the ban finally stays, the agitation in front of the factory gate is continuing. As
Kaliamma, one of the several tribal women squatting in the temporary agitation tent says: Our
problems have not been solved.
Global protests against Coca Cola
Protests about over-extraction of ground water in India and Sri Lanka by Coca Colas subsidiary
companies are impacting on the parent company. Strong concerns dominated the companys annual
general meeting on 19 April, 2006, in Delaware, USA. A group of protesters shouted outside the
meeting, waving banners with messages such as: Coca-Cola: Stop De-Hydrating the World and
Coca-Cola: Destroying Lives, Livelihoods and Communities.
Inside the meeting, nearly 20 shareholders spoke on behalf of campaigns from India and Colombia.
A proposal tabled by a shareholder called on the company to prepare a report on the potential
environmental and public health damage of each of its plants, affiliates and proposed ventures
extracting water from areas of water scarcity in India, but failed to receive any positive response
from the company.
In its statement against the proposal, Coca Cola stated that it recognizes that water is a precious
natural resource under growing stress around the world. It set out the actions that the company has
taken to address the risks associated with water extraction and dealt with the complaints in Kerala.

As to groundwater issues in southern India specifically, the Kerala High Court ruling released in
April 2005 (the result of a year-long independent study) stated that our facility was not the cause of
water shortages in that community. The study showed that a cycle of three years of short monsoon
seasons in the Kerala area was the main contributor to the local water shortages. Through our
rainwater harvesting efforts in several communities and plant operations in India, we currently are
returning a significant portion of the water we remove from aquifers for production purposes.
Additionally, the Company has initiated partnerships to set up local rainwater harvesting projects in
communities around the country and to mobilize local residents behind these water conservation
efforts. These projects combine modern technology with the reinstatement of traditional methods of
water management that had fallen into disrepair in some local communities.
The Board understands the need and desire for transparency in all matters including environmental
safety and health issues related to our operations in India and elsewhere. However, we feel that this
proposal is unnecessary at this time because our above-described existing environmental, health
and safety policies, practices, and reporting methods provide a wide range of information regarding
the impacts of our operations throughout India and the world. Furthermore, the Board believes that
producing the report called for in this proposal would create a redundant use of Company human
and financial resources.
The campaign against Coca Cola has spread, particularly on college and university campuses, as
well as among trade unionists and religious organisations. The India Resource Centre published a
press release the day following the Shareholder meeting stating: Even as Coca-Cola officials were
trying to deal with the scores of protesters at its meeting, the campaign to hold Coca-Cola
accountable was producing damning results for the company. The Union Theological Seminary in
Manhattan, New York, a graduate school of theology which trains students to be ministers in the
Christian faith, just announced on Tuesday that it was banning the sale of Coca-Cola products on its
campus.
In India, a new campaign was announced in Gangaikondan, in the southern state of Tamil Nadu,
against a Coca-Cola bottling plant under construction. And a massive rally is planned in Plachimada,
Kerala on April 22, where Coca-Colas bottling plant has remained shut down for over a year
because the village council has refused to renew Coca-Colas license to operate.
In November, 2006, the Chairman and CEO, The Coca-Cola Company, E. Neville Isdell, spoke
about the challenges to Coca Cola in India at the Nature Conservancy in Atlanta, Georgia, USA. He
remarked:
In India, we have been challenged to demonstrate our commitment to water stewardship. While we
are not even close to being one of the largest users of water, we are certainly one of the most
visible, and have been subject to criticism that we are depleting groundwater aquifers in the State of

Kerala. Let me be very clear: Coca-Cola has a shared interest with the communities where we
operate in healthy watersheds because they sustain life and our business. And the last thing we
would ever do is spend millions of dollars to build a plant that would run itself dry.
Accordingly, we are working with many partners across India to improve watershed management,
and with the Central Ground Water Authority, local governments and communities to expand the use
of simple and effective rainwater harvesting technology. To date, we have installed rainwater
harvesting systems in 200 locations, including schools and farms, that are helping recharge aquifers
when the rains come.
Sources: This section is based on a wide variety of sources including court judgements, press
releases and official statements from Coca Cola. These include: Permatty Grama Panchayat vs
state of Kerala, High Court of Kerala 2003; Coca-Cola: Continuing Battle in Kerala, Coca-cola plant
must stop straining water Indian Resource Centre July 10, 2003; Coca-cola plant must stop straining
water, The Guardian 19 December 2003; W.A.N0.2125 of 2003 and W.A.N0215 of 2004 Judgment
7th day of April 2005, M. Ramachandran and K.P Balachandran, JJ High court of Kerala 2005;
Coca-Cola Protestors Attacked by police: four hospitalized, R. Ajayan, Plachimada Solidarity
Committee (India) Amit Srivastava, India Resource Center, August 2005; Kerala Pollution Board
orders Coke plant to close, Asian News International 8/20/2005; State defends village council
decision to revokes Indian licence, Indian Resource Centre, September 2005; Health Minister: Coke
plant will not be allowed to function The Hindu, 25 October2005; Kerala Government Assures
Proactive Action Against Coca-Cola Meeting with Community Leaders Ends in Major Commitments
from State Officials, Indian Resource Centre : 19 June, 2006; Kerala assures proactive action
against Coca-Cola one world. South Asian; Article by M Suchitra and O.N. Venugopal, 03 Oct 2006,
The Quest Features & Footage, Kochi, cited on the India Together website; Shareowner Proposal
Regarding Environmental Impacts of Operations in India (Item 7)by William C. Wardlaw, III, Annual
Meeting of Coca Cola Shareholders, 2006; press releases, Coca Cola Company; articles from the
India Resource Centre website.