Introduction

The opening of India’s trade markets as a result of IMF and World Bank loans in 1991
has helped to create an overall increase in India’s GDP, a rise in levels of FDI and a rising
number of multinational corporations in the country. However, not all the results have
been positive. India has also seen increased class stratification, water privatization and
abuse of natural resources. I will focus primarily on the Coca-Cola Company and its
presence in India as I seek to explore the responsibilities of this multinational
corporation in the country which hosts it.

Water
Water is an incredibly valuable and increasingly scarce resource in the world today. One
of the most pressing current issues in India, a country of now over one billion people, is
diminishing natural resources and water at the top of the list of concerns. “Water
politics” and “water wars” are buzz words today among grassroots social activists and
politicians alike. India is facing a massive water shortage and its citizens are unequally
equipped and affected. As about 3/5ths of India’s workforce is in the agricultural sector
(US Gov’t), groundwater is especially important to the agricultural community, which
consists mostly of small and marginal farmers, dalits (outcastes), adivasis (tribal people)
and the poor.

Water usage is monitored and recorded throughout the country by central, state and
local level government agencies. The Ministry of Water Resources annually determines a
National Water Policy, and in 2002 the policy dictated that drinking water, irrigation,
hydropower, ecology, agro-industries and non-agricultural industries and navigation
should be the top water allocation priorities. It also calls for a participatory approach
involving the gram panchayat (local council), water user’s associations, actors from the
private sector and stakeholders to play a role in the “various aspects of planning, design,
development and management of the water resources schemes” (Indian Gov’t). The
policy also encourages private sector participation in the building, owning and operating
of water resources facilities “wherever feasible” (Indian Gov’t). The state level agencies
function as local actors deem necessary, thus local level agencies such as municipalities
and panchayats in essence control the water supply. The High Courts in each state have
the ultimate authority on water and other natural resource related issues.

Introducing Coca-Cola
The Coca-Cola Company has been a strong player in private sector water resource
usage. First introduced to India in the 1920s, Coke was removed from the country in
1977 “after refusing to dissolve 60% of its operations to Indian ownership” due to the
government’s fear that MNCs were beginning to establish monopolies (Samulon, India
Resource)1. According to the Coca-Cola Company’s records it “decided to opt out” when
the Bharat Janata Party (BJP, a socialist nationalist party) asked the company to “cut its
equity and reveal its formula” (wikipedia.com). The Coca-Cola Company was invited
back into India in 1993 with increasing trade liberalizations and the Congress Party’s
return to government.
According to Coca-Cola India, or Hindustan Coca-Cola Beverages Pvt. Ltd., the current
bottling infrastructure consists of 27 “wholly-owned plants” and another 17 “franchise-
owned operations” (Samulon). As of 2005, Mr. Atul Singh is the president of Coca-Cola
India, replacing previous Briton president Alex von Behr (Kripalani). There exists also an
India Advisory Board, formed to “guide the company on various issues including future
strategies, corporate citizenship and corporate governance” (N’tl Union of Students),
and to advise the president. The board is composed of Indian nationals from various
backgrounds including a former ambassador of India to the US, a former Chief Justice of
India now Chair of the National Forest Commission and a former chief of the Indian
army (N’tl Union of Students). There is also an Environmental Advisory Council
established to “preserve, protect and enhance the environment” (N’tl Union of
Students). As for employment, the Coca-Cola business system directly employs
approximately 10,000 local people in India and indirectly employs for more than
125,000 people in related industries (Coca-Cola India).

Plachimada, Kerala
Allegations
In 2000, the Coca-Cola Company was brought into Kerala by the current state
government’s pursuit of liberalizing reforms. The gram panchayat granted the company
a license; the company then bought 40 acres of land, built a bottling plant, dug six bore
wells and began to produce Coke products (Cockburn).

Since 22 April 2002 residents of the small town of Plachimada in the mid-east district of
Palakkad in Kerala state have been participating in a demonstration against Coke India.
The list of allegations against Coke is long, and the Coca-Cola Company denies
responsibility for or the existence of each of the following issues: depletion of
groundwater, overdrawing aquifers, privatizing water, undermining local governance,
selling products with high levels of pesticides, packaging and selling toxic waste to
village farmers as fertilizer and investing in an extensive publicity campaign to deny
issues and to aggressively market Coke products. Coca-Cola has also allegedly privatized
India’s water resources by extracting 1.5 million liters of deep well water which they
bottled and sold as one of the following brands: Coke, Diet Coke, Limca, Maaza, Sprite,
Dr. Pepper, Odwalla, Thums Up, Kinley and Dasani2. The protestors demand that four of
Coke’s Indian factories must close, that Coke should compensate all affected parties,
including farmers, for damages done, that all legal cases put forth by Coke should come
to an end and lastly that Coke takes responsibility for the retraining and relocation of
workers from the closed plants (Samulon).

According to other sources

The Kerala State Pollution Control Board as well as other external sources obtained and
tested some of the sludge the Coca-Cola Company was distributing to local farmers. The
board found “dangerous levels of cadmium3 ” in the sludge and deemed it useless as a
fertilizer. At the same time, Coke’s Indian Vice President swore the sludge was
“absolutely safe” and “good for crops” (Cockburn), however Coke’s attempts to dry and
market the “foul smelling” solid waste failed when “farmers started to develop sores on
their skin and noticed that their coconut palms were dying” (countercurrents coke vs
people).

The BBC and the Centre for Science and Environment, an NGO based in Dehli, also
tested levels of pesticides in Coca-Cola and Pepsi sold in India and found that Coke
products contained levels that were 30 times what is acceptable in the United States
and the European Union in Coke and 36 times in Pepsi products4 (Singh; Venugopal).
The Coca-Cola Company’s use of water also depleted the aquifers and left thousands of
communities with water shortages. The Coca-Cola Company was also charged with
drawing as much as 1.5 million liters of water per day from its wells, all of which are dug
deeper than those in the villages and is much more than the allotted amount
(CorpWatch: India). Runoff chemicals used to wash and reuse the glass bottles
contaminated the water remaining in the groundwater system with high levels of
chloride and bacteria (CorpWatch: India). BBC Radio 4 tested water from wells near the
Plachimada plant and determined that in addition to high cadmium content, the water
contained lead “at levels that ‘could have devastating consequences’” (Cockburn). The
water caused to sores and vision and intestinal problems among residents in the
affected communities (CorpWatch: India). Village women also testify that instead of
cooking food, water used from the affected wells made rice and dhal tough and hard.
The water itself turns “turbid or milky on boiling” and is unfit even for washing clothes
(People’s Resistance Forum).

What began as a grassroots level struggle against Coca-Cola India became first a national
and then an international concern. In Plachimada, the villagers formed a “struggle
committee” of people directly affected by the water shortages and depletion of water
quality. Protesters began by gathering the distributed “fertilizer” and dumping it on the
ground in front of the Coke plant (CorpWatch: India, People’s Resistance Forum). They
were met with opposition from the Coca-Cola Company and many were arrested for the
protests (People’s Resistance Forum). Not deterred by the police arrests, families joined
the struggle committee and the protests began to spread to other parts of India
(Samulon).

In addition to arresting protestors, the Coca-Cola Company also embarked on an

extensive public relations endeavor to “develop a new image for them” in the country.
This led to the replacement of the company’s Briton president with Indian Atul Singh,
who was moved to India from Hong Kong to deal with the resistance (India Resource).
The company also hired two famous and very recognizable Bollywood figures to endorse
Coke’s products- Aishwarya Rai and Amir Khan5.

According to Coke
A heading on the Cokefacts.org website, the self-described “truth about the Coca-Cola
Company around the globe,” reads, “allegations against Coca-Cola India don’t hold
water.” Furthermore, the site reads that these claims “are without any scientific basis
and are also not supported either by the government authorities who regulate our
water use in India, academics, or the local communities in which our plants are located”
(N’tl Union of Students.) The official Coca-Cola India website purports that “A typical
Coca-Cola plant uses just two or three bore wells for its water needs and extracts that
water with pumps of a similar capacity as those used by other industries and farmers in
the same community” (Coca-Cola India). The company denies responsibility for any
issues surrounding the Plachimada plant in a report from its US headquarters in Atlanta
saying, “We would like to emphasize that, to the best of our knowledge, [the]
allegations made against the plant in Kerala are untrue” and that furthermore, they
believe that “the allegations are politically motivated” (as quoted on the CorpWatch:
India; Vallely). The report goes on to explain that this particular plant distributes water
free of charge to residents of the village to supplement their existing water sources, and
point to good deeds such as developing rainwater harvesting systems in Kerala and
other plants around the country. The company attributes the problem of depleted water
sources to a decrease in rainfall in the state. Statisticians disagree on whether the
rainfall has actually decreased- those cited on the Coke website say it has not, while
those cited elsewhere say that it has, and that decreased rainfall is not the only issue6.

As for the toxic sludge issue, the Coke India Company makes a great deal of effort to
distinguish between “sludge” and “bio-solids” on its website. “Bio-solids are treated
sewage sludge. Bio-solids are carefully treated and monitored and must be used in
accordance with regulatory requirements” (Coca-Cola India). If not used directly on the
land, the bio-solids must be dumped in a landfill or another disposal facility. Because
they are supposedly filtered and processed, they are acceptable to use as fertilizers. As
all of the harmful contents of the material have been removed, the company is actually
doing the villagers and farmers a favor by distributing it to them for little or no charge.

Local politicians, authorities and Coca-Cola Company employees were surprisingly

supportive of the company’s presence in the state, saying that the MNC provides jobs in
an area with high unemployment. During the anti-Coke demonstrations, employees
were in a protest of their own- to show their support for the company they orchestrated
a counter-protest.

Legal Rulings
The struggle against the Coca-Cola Company has spanned years. In August of 2002, the
local court in Kerala ruled that Coke must stop its productions for nine months- until the
beginning of the monsoon rains. In addition, in December of 2003 the High Court ruled
that the Coca-Cola Company must find alternate water resources and “extract only as
much water from the common groundwater resource as a farmer owning 34 acres of
land could7 ” (India Resource). The High Court also ruled that the national government
“had no right to allow a private party to extract such a huge quantity of ground water
which was ‘a property held by it in trust’” (India Resource). In August of 2004, the Kerala
State Pollution Control Board ordered the Coca-Cola Company to begin distributing
supplemental water to all those in communities affected by the water shortage, drawn
from the deep wells the company owns in the area.

Kala Dera, Rajasthan and Mehdiganj, Uttar Pradesh

Communities outside of Kerala have also been affected by the actions of the Coca-Cola
Company. The town of Kala Dera near the capital city of Jaipur in Rajasthan state is
home to another Coca-Cola bottling plant. About 2,000 people marched in protest for
three weeks in November of 2004 before the High Court of Rajasthan ruled that soft
drink labels must indicate the level of pesticides contained in the beverages. Rajasthan
is well-known for its hot, dry deserts which cover most of the state, and villages in the
Kala Dera area have experienced severe water shortages even before the bottling plant
was built. 32 villages have formed struggle committees similar to that in Plachimada
after the Rajasthan Ground Water Board, a governmental agency, confirmed the
declining water table and “ecological imbalances” as a result of Coke’s water usage
(India Resource) as well as unacceptably high levels of pesticides contained in Coca-Cola
soft drinks.

The agricultural village of Mehdiganj in Uttar Pradesh state, near the Hindu holy city of
Varanasi, has had much more difficulty in its struggle against the Coca-Cola Company.
The water table here has declined drastically as a result of the bottling plants in the
area. Coke is also suspected of dumping polluted water into a tributary of the Ganges
River, and for dumping its solid waste sludge into nearby farming fields (India Resource).

The grassroots struggle here began in August 2003 where villagers appealed to the
Regional Pollution Control Board in Varanasi by dumping the solid waste “fertilizer” onto
the desks of officials on the board. Citizens of the Mehdiganj area have been more
successful in garnering support of politicians and lawmakers and the state government
was able to forced Coke to stop the distribution of toxic-waste fertilizer (CorpWatch:
India). Varanasi area have been largely unsupportive of the protest efforts, local support
has been very successful. Villages in the area have begun a solidarity movement and
orchestrated a nine-day march in November 2004 to demand the Mehdiganj plant’s
closure (India Resource). Coca-Cola stopped the practice of distributing its toxic waste
only when ordered to do so by the state government (CorpWatch: India).

A Larger Problem
The Coca-Cola Company is certainly not the only multinational corporation responsible
for issues in India. In 1984, a Dow Chemical Company pesticide plant was responsible for
a chemical leak in Bhopal, India. The leak gassed thousands of people to death and left
more than 150,000 seriously injured or disabled (Global Exchange). More recently, the
Bayer and Monsanto corporations, both active MNCS in India, are connected with
forced child labor (CorpWatch: India).

The complaints and legal action against the Coca-Cola Company in India and around the
world extend beyond health concerns and water usage. For instance, in 2002 both Coke
and Pepsi’s companies were among twelve companies responsible for painting
unsolicited advertisements on a particularly ecologically sensitive span of rock in the
Himalayan Mountains near the town of Manali in Himachal Pradesh state (BBC News”
Coke, Pepsi”). When asked to remove their ads, both Coke and Pepsi responded not by
scraping the affected rocks bare but instead by painting over them with yellow paint
(BBC News “Coke ‘Repaints’). On various occasions Indian citizens have reported finding
dead lizards or insects inside sealed bottles of Coca-Cola- some occurrences are as
recent as April of this year (Times of India). Coke’s treatment of its employees has at
times also come into question. In 2000, 2,000 African- American Coca-Cola employees
sued the US Coca-Cola Company for “race-based disparities in pay and promotions”
(Global Exchange). Coke also currently stands accused of human rights abuses at an
uprising over worker’s unions at a plant in Colombia8 and for discrimination on the basis
of sexual orientation at a plant in Mexico (Global Exchange).

CONCLUSION
The Coca-Cola Company’s official statements and its reactions to the protests and
allegations in India are contradicted by numerous sources. If the accusations against
Coca-Cola are true, and based on reports from these various, reliable and (mostly) non-
partisan sources I believe they are, the company’s reactions speak very plainly for
themselves. Regardless of who owns the company, who holds stock, who presides over
the board and who owns the logo, Coca-Cola clearly believes it is responsible for some,
if not all, of the actions for which it is being blamed. If Coke did not believe it was
responsible, it would have reacted very differently. That Coca-Cola is involved in a legal
battle against the governments of Kerala, Rajasthan and Uttar Pradesh states not over
false accusations and unfair treatment but over a right to continue its practices is also
very telling.

As the 2002 Indian National Water Policy prescribed, private sector actors should play a
role in water usage and planning, but final decisions are ultimately with the High Courts
of each state. Officials are elected to state offices by citizens, thus governments have a
responsibility to those who voted them into office. Economic prosperity should not take
precedence over peoples’ wellbeing, nor should it cause people to be means to a
greater end rather than ends in and of themselves. The Coca-Cola Company’s pursuit of
legal action against the government is not in accordance with this policy, and threatens
the legitimacy of the elected government. I believe that in addition to irresponsible
usage of natural resources, the Coca-Cola Company’s conduct regarding distribution of
its toxic waste is inexcusable. Neither of these issues would or could occur in the United
States without serious legal action against the company. The company should take
responsibility and should dictate codes of conduct and behavior for its subsidiaries or
franchises if Coke India is not American owned9. If the company is American owned, its
practices of human and resource exploitation are contrary to every value the company
projects to the public, and is engaged in immoral and irresponsible practices which
would and should be absolutely unthinkable in this country.
Furthermore, the Coca-Cola Company is in a position of tremendous privilege in Indian
society, and water is a precious resource in India, particularly to the agricultural sector.
The Coca-Cola Company has access to resources and a freedom of movement the
citizens in the communities in which it operates does not. The costs and benefits of MNC
presence in India, and Coke in particular, are not evenly distributed throughout class
and caste. As those who are most deeply affected are the poor and thus the Dalit
community, they who must bear the costs of a particular company’s presence will not
share in the benefits.

The Coca-Cola India Company is hardly representative of all multinational corporations;

however when MNCs conduct themselves in a manner similar to Coke in India, their
actions are inexcusable. MNCs certainly have a responsibility to their host countries, and
the pervasiveness of corruption and the transcendence of borders (that is, from India to
Latin America) with legal infractions proves that at least with Coke, these instances are
not isolated, one-time occurrences. The Coca-Cola Company shows that it is aware of
the immorality of its actions and that it clearly feels responsible through its reactions to
allegations made. If Coke is to have a positive affect on India’s economy, it should cease
its overuse of resources and certainly its distribution of toxic sludge to farmers.
____________________________________________
ENDNOTES
1. IBM was also expelled from India in the 1970s (India Resource Center).
2. All owned or under license: A&W, Bacardi Mixers, Barqs, Canada Dry, Citra, Crystal,
Crush, Dannon, Dasani, Diet Coke, Dr Pepper, Eva water, Evian, Fanta, Fresca, Fruitopia,
Limca, Maaza, Minute Maid, Mr Pibb, Nescafe, Nestea, Odwalla, Powerade, Schweppes,
Seagrams, Sprite, Tab, Thums Up and Viva. For a complete listing of Coca-Cola brand
names, see: <http://www2.coca-cola.com/brands/brandlist.html>
3. According to The Hindu Newspaper, the Kerala State Pollution Board observed that
the presence of cadmium in the toxic sludge was 400 to 600 times above the
permissible limit. The Coca-Cola Company offered no explanation regarding the source
of cadmium. See: <http://www.countercurrents.org/gl-coke200805.htm>
4. Ironically, farmers have been using Coke and Pepsi as better, cheaper alternatives to
pesticides. See: <http://news.bbc.co.uk/1/hi/world/south_asia/3977351.stm> and also
<http://www.countercurrents.org/glo-vidal091104.htm>
5. To view Coca-Cola India’s latest commercial ads, see: <http://www.coca-
colaindia.com/media/video.asp>
6. Many argue that “Rainfall is not the issue; how much additional load you add to the
aquifer is” (India Resource).
7. The High Court ruled that because the plant is located on 34 acres, it could use as
much water as a farmer with the same amount of land.
8. Between 1989 and 2002, eight union leaders from Coca-Cola bottling plants in
Colombia were killed after protesting the company’s labor practices. Hundreds of other
Coca-Cola workers who have joined or considered joining the Colombian union
SINALTRAINAL have been kidnapped, tortured, and detained by paramilitaries who are
hired to intimidate workers to prevent them from unionizing. (global exchange) An
international campaign against Coca-Cola has been mobilized in response to the
corporation’s ongoing labor and human rights violations in Colombia. In July of 2003, an
international consumer boycott campaign was launched by SINALTRAINAL (Colombian
Food and Drinks Workers’ Union), which represents Coca-Cola workers in its Colombian
factories. Coke is accused of complicity in the assassination of 8 SINALTRAINAL trade
union leaders in Colombia since 1990 (Samulon).
9. Throughout my research, I was still unable to determine who actually owns Hindustan
Beverages Pvt. Ltd.