Multi National Corporations, Development Discontent and

Civil Society
The Pathology of Peoples Movement against Coca Cola in India

Dr. K. R. Lakhsmy Devi

Department of Economics, University of Calicut
lakshmy_devipillai@hotmail.com
Thrissur, Kerala, India
March 30, 2006

World Society Focus Paper Series

A Series edited by the World Society Foundation, Zurich

Abstract
The emergence of globalisation along with liberalisation and privatisation has led to a situation hitherto
unprecedented in the history of developing countries. The Structural Adjustment Programmes (SAP)
undertaken by many of these countries, not only opened up their economies, but pulled them to the vortex of
the global system as never before. One of the immediate manifestations of the economic reforms in the
developing countries was a manifold increase in the presence of Multi National Corporations (MNCs) who
were powered by the fundamental capitalist concept of profit. Two things can happen when an external
agency like a MNC intervenes in a local area and community. One, the external agency simply overlooks the
local interests and local initiatives and two it shows a lack of vision and understanding of the dynamics of
the locality and community. Moreover, these MNCs are for most part beyond the control of the local
governments and many of them are more powerful than the local governments. The enormous power of
these MNCs, their fragmented loyalties, their essential non accountability to the larger public and the
abundant examples of many corporate mischieves make them suspicious in the eyes of many in the civil
society. The governments, anxious to have foreign direct investment, are pushed to the bottom line. In this
process, the human, social, environmental and cultural rights of the civil society are violated. In such a
context, civil society has no option rather than to rise and revolt. The peoples movement against Coca Cola
in India is a typical example of civil societys revolt against corporate intervention in civil rights.

1. Introduction: Shift in Development Paradigm

Development is a perception which models reality, a myth which comforts societies and a
fantasy which unleashes passions (Sachs 1997).

It was the Industrial revolution in England in the 19th Century that gave world wide
acceptance to the term development. In fact, the history of development appears to be some
what dialectical. Capitalism being accepted as the world-system, development emerged as
its legitimate offspring opening up tremendous possibilities for industrial development, free
enterprise markets and international mobility. Nation state assumed the role of guardian
angel in the emerging paradigm and liberal democracy was its foundation. Liberty, equality
and fraternity was the slogan of the new nation states which were basically built upon the
constructs of capitalism. But, however, the nation states primary responsibility was to ensure
the civil rights of its citizens, freedom to life and property.
But, the great Industrial Revolution also gave birth to an unwanted child- imperial
colonialism. Rampant colonisation that the world witnessed with a shock during the 19th and
20th Centuries was also another face of development development with a difference.
Several of the so established colonies which had no means for achieving Industrial
Revolution, just became suppliers of raw materials to the mother countries, mostly in Europe,
and markets for selling the finished goods. Underdevelopment of development was the sum
total of colonial experience (Roy 2003). Colonies became breeding grounds for discontent
and revolt. Development became distorted, common masses were in miserable conditions, but
the empires grew and emperors became dictators. Indias 200 years revolt against the British
rule is legendary. It is the story of how subjugated people finally rose to revolt against their
oppressors and won the battle.
During the first half of the Twentieth Century the world went into the grips of two
World Wars in a gap of 30 years. Development came to a stand still and democracy was at
stakes. The end of World War II marked the end of colonialism and the rise of a new era of
democracy, peace, prosperity and community (Kort et al. 2002). A series of national
liberation movements freed the world from the claws of colonialism. Development was the
ultimate goal of the emerging new nation states which were hitherto deprived of the means to
development. Democracies were strengthened and people oriented policies and programmes
became an integral part of the day to day functions of the states. Many of the countries in
South Asia, Europe and Africa were caught up in the new development synergy.
Following Western Europes recovery after World War II, industrial countries turned
their attention to aiding the third world nations in their development efforts. Economic
Growth was the top priority item in the development agenda of most of the third world
countries. United Nations even declared the 1960s as the development decade and set a goal
of 6 per cent annual growth as necessary to raise the poverty stricken to a decent standard of
3

living (Dube 1988). But, two decades later, Morawets evaluating the worlds growth between
1950 and 1975, at the instance of World Bank, came to the conclusion that although the
whole world had experienced relatively rapid growth, the gap between the high income and
poor countries in terms of per capita gross national product (GNP/Pc) was growing wider
(Morawetz 1977). This growing gap between the rich and the poor has become ever imminent
in the development history. Today, as ever, the richest 20 per cent of the world population in
developed countries, have 82.7 per cent of the world GDP, while the poorest 20 per cent have
just 1.4 per cent of GDP (UN 2002). Reviewing this shocking situation, the Nobel economist
Amartya Sen wrote regardless of the trend, the magnitude is unacceptable (Sen 2001).
These signs were sufficient to point out that the development agenda hitherto followed
by developing countries needed a drastic charge. World organisations and nation states
became committed to taking action against poverty, unemployment and social exclusion.
Existing discourses and strategies were questioned as the crisis in paradigm came to be felt
and highlighted. It was time to shift to another development where people came first. In this
new paradigm development strategies were to be people centred and investment in people was
regarded as the key to development. The so called human development approach became a
pet theme for development planners and academics for the last more than a decade. But,
however, the results were disgusting. Apart from producing volumes of literature and
estimates at the international and country/state levels, the new approach could not improve the
living conditions of millions of poor (wherever they are). The poor everywhere were torn
between market economies and local democracies challenging their right to even a decent
livelihood. No wonder, agitations and resistance became a common feature. These agitated
people who have no other alternative gradually began to turn to civil society which they
thought would be their guardian angel protecting their civil rights and environment.
Other serious developments in the world system were also taking place at the same
time. The emergence and rise of socialism was one among them. Socialism emerged as an
alternative to the existing world system, in which the state emerged as the omnipotent,
performing not only its obligatory functions but controlling even the lives of its citizens to the
some extent. The controlling administered economies of Eastern Europe and Soviet Union
were role models, for many of the developing countries including India one time. The fall of
the Berlin Wall marked the beginning of a shift in the development paradigm which became
imminent with the break up of Soviet Union in 1991. Concentration and centralisation of
power led to distortion in development initiatives and policies which could not address the
problems of common people. The result was an inherent threat to freedom, democracy and
security of the people. The centrally administered economies and their development strategies
ultimately collapsed and gave rise to economies based on market relations. The end of
socialism was, incidentally, also the end of one of the major political debates of the Twentieth
Century, namely, the contest between state and market as the dominant institutional from of
society (Harcourt 1996). Markets became the lead actor in the new development paradigm.
4

Democracy was given due recognition as the sustainable world order and neo-liberalism was
believed to be the single way to achieve prosperity. But, the market oriented strategies of
development also could not deliver the goods in the desired manner. The collapse of the east
Asian tigers bear the best testimony to this. Countries around the world are facing great
challenges: rising poverty and unemployment, increasing gender gap, rising inequalities in
income, social alienation and environmental crisis. People every where are feeling helpless
and isolated.
The world has reached a crisis in development paradigm socialism was long dead and
capitalism was dying. Development like all other Enlightenment Ideals was failing as was
modernity (Roy 2003). The time had come for the world to move to the post-modern,
post-development era. Precisely at this juncture the world was witnessing another far more
material event. Globalisation was sweeping the world across and global village emerged
pulling into its vortex nation sates as never before. This was further accompanied by a
vigorous onslaught on the state as an agency for development and a manifold increase in the
presence of MNCs which were dictating the direction to be taken by the global village. The
proponents of globalisation claim that all national economies stand to gain from integration
with international markets. Integration implies several things, lowering tariffs, removing trade
restrictions, granting privileges to foreign direct investment, welcoming foreign banks, etc.
The integrationist strategy might, perhaps, lead to greater development, but whether this
development will lead to greater welfare of the citizens is highly controversial. The
experience of several developing countries including India is shocking. In many of these
countries, MNCs flourish while several of the indigenous firms are on the verge of shut down,
unable to cope up with international competition. A rising proportion of people in these
countries have become restless and agitated because they find their access to basic
necessities restricted, at the same time they see others driving Mercedes (Wade 2004).
Globalisation and its twin off springs, liberalisation and privatisation, has led to a
situation hitherto unprecedented in the history of developing countries. Many academics and
development experts call the new situation as neo liberal (Roy 2003 ). But we find that the
tenets of globalisation are some what antithetical to both capitalism and liberalism. In the new
scenario the individual is subordinated to the market which does not manifest laissez faire.
Markets are predominantly monopolistic or oligopolistic in character promoting the agenda of
the MNCs. Along with this the state is gradually withdrawing from its fundamental
obligations. The neo classical concepts of welfare state and secure state have been given
away and in its place we find a corporate secure world. A context had come where free
market and state are no more relevant .It was the moment of evolution of civil society.

2.

Civil Society The New Lexicon

Civil society emerged as a major social force, towards the close of the Twentieth Century,
mainly to resist the assault on democracy and as a source of resistance to and the domain of
social life that needs to be protected against globalisation. Civil society refers to the totality of
voluntary civic and social organisations or institutions which form the basis of a functioning
society as opposed to the force backed structures of a state (regardless of that states political
system). There are a myriad of definitions of civil society, among which the London School
of Economics, Centre for Civil Society working definition appears to be the most appropriate.
Civil society refers to the arena of un coerced collective action around shared interests,
purposes and values. In theory, its institutional forms are distinct from those of the state,
family and market, though in practice, the boundaries between state, civil society, family and
market are often complex, blurred and negotiated. Civil society commonly embraces a
diversity of spaces, actors and institutional forms, varying in their degree of formality,
autonomy and power. Civil societies are often propagated by organisations such as registered
charities, , non-governmental organisations, community groups, womens organisations, faithbased organisations, professional associations, trade unions, self-help groups, social
movements, business associations, coalitions and advocacy groups (Centre for Civil Society,
London School of Economics 2005).
Perhaps, the simplest way to see civil society is as a third sector distinct from
government and business. In this view, it refers to the so called intermediary institutions
that give voice to various sectors of society and enrich public participation in democracies.
Governments and corporations form the two great domains of power in the modern globalized
world and between these two domains of power lies the space of civil society. This space is
not formal, there are no institutions to either formalise it or limit it. In fact, it is the sum total
of individuals in it. This is a space where people of all ages, backgrounds and sectors can take
action improve the way their world works. Clearly, it is a third sector that mediates between
our individuality as economic producers and consumers and our abstract collectively as
members of a sovereign state (Barber 1998). In the late 1990s, civil society gained public
visibility primarily as a popular resistance movement challenging the institutions and policies
of corporate globalisation. As a result, the term civil society is currently often used by critics
and activists as a reference to sources of resistance to and the domain of social life which
need to be protected against globalisation. Often, civil society is celebrated as a panacea, a
silver bullet that can cure the ills afflicting post-modern societies, states and economies
(Rudolph 2000).

3.

Theoretical Framework of Civil Society

The notion of civil society is, in fact, western in origin. It came into existence through the
endeavours of western political philosophers to understand the complex relationships among
individuals, state and economy, as western society was undergoing, qualitative and
quantitative changes through the dynamics of industrialisation, urbanisation and
bureaucratisation. The concept of civil society first appeared in the late Eighteenth Century
and reverberated through the intellectual debates of the second half of the Nineteenth Century.
Perhaps, the earliest idea of civil society could be traced back the writings of the classical
economist Adam Smith, who argued that social passions sympathy and willingness to
cooperate are preconditions for self interested exchange which in turn strengthen
cooperation (Smith 1759). The failure of Russian economy was mainly attributed to the lack
of this social passion as envisaged by Adam Smith centuries ago. Participatory
communications existed much earlier as in Rome and Greece during the Fourth Century and
Europe in the Eighteenth Century. The early writings on civil society viewed it as a non-state
autonomous sphere empowering citizens, encouraging associational life and enabling them to
interact with the state rather than being subordinates. The central idea of civil society in the
early evolution stage is thus, associationalism. It was believed that associations empower
citizens each of whom in isolation could not confront the state as agent and participant. The
emphasis on associationalism has a long history and a number of theorists are associated with
this idea. Montesquieu held the view that freedom depended on intermediary associations,
social forms that would mediate between the state and the individuals (Montesquieu 1961).
The contemporary conceptualisations of civil society are rooted in Hegels approach
which viewed it as the manifestation of the bourgeoisies attempt to organise and harmonise
conflicting interests within its body. Marx writing on the Asian mode of production argued
that the absence of intermediate social forms was the basic feature of the Asian mode of
production. In such a society, the members live in similar conditions but without entering
into manifold relations with one another (Marx 1861). Max Webber, another noted theorist,
called the absence of associationalism as passive democratisation (Webber 1946). In a
passive democratic society, he argued that all individuals will be equal but equally powerless.
Antonio Gramsci conceptualised civil society in terms of a super structure which
justifies the socio-economic formation of bourgeoisie capitalism. The ideological
underpinnings of both the state and the civil society are inherent in this super structure. While
the state may function to maximise its authority, the associations of civil society function to
forestall states encroachment on personal autonomy. Civil harmony is possible because of
the ideological compatibility between the state and civil society. Although the associations of
civil society were assumed to be the independent of the state, they could not operate outside
the law as the law is prerogative of the state. A degree of harmony between the state and civil
society was, thus, regarded as the prerequisite for civil harmony.
7

Conceptualised as voluntary associations in the nexus between the state and economy,
civil society constitutes a link between the spheres of personal and public identity in the
institutional infrastructure of the society (Calhown 1993). The main idea underlying the
concept is the plurality of voluntary associations capable of opposing the ideological
monopoly of the political and economic order (Gellner 1990). As an indicator of culture, civil
society manifests the relationship between symbolic meaning and purposeful action in
substantive form (Alexander and Smith 1993).
In the Nineteenth Century, the French theorist Alexis de Toqueville propagated
associationalism as a crude form of civil society, whereby he argued that associations had an
effect on the inner moral life of those who participate,, enhancing their sympathies and
understanding for fellow humans and they have an external effect nurturing their engagement
with a wider community of purposes and making common purposes more effective
(Toqueville 1969). The idea of associationalism is central to the concept of civil society.
James Coleman (1990) and Robert Putnam (1993) taking their cue from Toqueville
came up with the concept of social capital which gained wide popularity in contemporary
social science. Social capital refers to features of social organizations, such as trust, norms
and networks that can improve the efficiency of society by facilitating coordinated action
(Putnam 1993). Social capital that provides the basis for democracy is generated by the rich
web of non-political associations. Both Putnam and Toqueville find a casual relationship
between the social capital constituted by the practice of asociationalism and the capacity for
civic participation and civil government.
Edward Shills, a later theorist on civil society, thought that civility signified solicitude
for the interest of the whole society and a concern for the common good. He viewed the
public spirited citizen as one who thinks primarily of the civil society as the object of his
obligations, not of the members of his family, or his village, or his party or his ethnic group or
his social class or his occupation (Shills 1992). The general perception of the western
theorists as a whole was that civil society is the answer for making democracies work better in
an era of transition to market economies.

4. Civil Society and the Developing Countries

Civil society is often conceived as a third sector distinctly different from government and
business. If so, is it a strictly objective and descriptive term? Does the concept of civil society
imply value judgments, such as a commitment to democracy and equal treatment of all
citizens before the law? Are there distinctively Northern and Southern types of civil society?
Is the character and role of civil society different in developed and developing countries?
These are some of the questions that are pertinent and relevant in any discussion on civil
society.

There exists a basic difference in the activities of civil society groups in the developed north
and developing south. In the northern hemisphere, where respect of peoples right and state
accountability is more firmly grounded, the agenda of civil society is mostly directed towards
providing services to the excluded ethnic minorities and promotion of environmental
conservation. In the north, where the states claim to be more democratic, the political agenda
of civil society seems to be more ambiguous. In contrast to this, the activities of many civil
society groups in the developing south are towards ensuring greater accountability of the
state. Their struggles are often in the name of a quite straight forward ideal of democracy,
which would include, state accountability and respect of peoples rights. The struggle is
against corruption in public life,, violation of human rights and of communal property rights
(Amalric 1996).
While civil society in the north is more than two centuries old, it came to prominence in
the south only two decades ago. The failure of communism and military dictatorship in Latin
America, Asia and Africa to provide effective governance, protect civil liberties and facilitate
social and economic development has in fact begun to transfer the political and economic
landscape in developing countries around the world. But, unfortunately in many of the
developing countries, the state has been reluctant to include civil society as a partner. In some
extreme cases, governments in developing countries even view civil society as a rival both in
terms of power and influence and in terms of outside aid which have traditionally been the
domain of exclusive state preserve. But in spite of this, the past two decades have witnessed a
global proliferation of civil society organizations, working at the grass root and policy levels
in the developing world promoting democracy, human rights, development and other
objectives.
Democratic institutions in many of the developing countries, which are in the
transitional phase, are fragile and market forces alone are inadequate to ensure social and
economic equity. It is only the civil society that can come to the forefront to safeguard the
interests of the citizens. There are several examples of a strong civil society taking the lead.
Civil society organizations in the developing countries often face difficulties in securing
adequate funding and access to information while retaining independence and avoiding
accusation of being foreign dominated. But, when democratic institutions fail to include the
common man, who increasingly demand greater participation than that afforded by general
elections and the power of franchise, civil society comes to occupy a more central place.

5.

Civil Society in India

India, one of the largest and most powerful democracies in the entire globe, has a strong civil
society base, the origin of which dates back to the colonial period in the Nineteenth Century.
The most distinctive characteristic of the civil society initiatives in India is that the activities

of civil society are not directed towards installation of democracy but rather directed towards
making the democratic system work up to its ideals. The colonial economy and polity formed
the central theme around which the major violations in civil society started. In order to resist
the colonial oppression, different segments of the society like workers, peasants, press, etc.
were mobilized and they revolted independently against the colonial rule. Later, the National
Freedom Movement unified the disjointed forces into a single force to fight against the
foreign invaders. During the same period, several social and religious reform movements
emerged questioning the rigidities of caste system, the degraded status of women, child
marriage and female infanticide. The world renowned Indian social reformers like Rajaram
Monhan Roy, Dayananda Sarasathy, Govind Ranade, Ishwar Chandra Vidyasagar, tried to
present a synthesis of religion, society and education to reconstruct the social space. In fact,
they sow the first seeds of civil society in the fertile Indian soil which then grew to leaps and
bounds in the subsequent long period. The Indian National Freedom Movement, the only of
its kinds in history, is perhaps the best example of civil societys revolt against oppression and
denial of basic human rights to citizens of a country by foreign powers. Indias two hundred
years old battle against British Empire and its ultimate victory are legends in world history
and in the history of civil society.
But, there was no major stirrings in the civil society space for nearly two decades after
India got independence in 1947. This period was elusively called as the nation building
phase. People believed that the state was the guardian who knew the best way to govern its
citizens. But, by the early 1960s, it became apparent that the state has not been able to keep
up its promises. A number of civil society organisations emerged during this period providing
alternate channels for meeting the basic needs of the common masses. During the 1970s, a
new kind of vibration in the civil society space occurred. A series of movements pertaining to
civil liberty, ecology, women and dalits captured the civil society space to make demands on
the state. These movements reflected the new concerns and new consciousness and heralded
the emergence of new identities questioning the existing paradigms of democracy and
development.
A new phase has come into existence in the civil society relations in India which is of
recent origin. Social movements differ from the old movements in terms of their incisive
analysis of those aspects of poverty and oppressions ecological degradation, subordination
of women and so on that are given short shift by the class based movements (Guha 1989).
Environment, women and oppressed caste movements are the three important categories of
social movements which have filled civil society space in India in contemporary times. Three
such movements stand out as representative of the entire spectrum of civil societys
resistance. They are the Chipko movement, the Narmade Bachao Andolan and the Plachimada
Anti CocaCola movements. While the first two have direct relevance to environmental
degradation by state action, the third one relates to multinationals intervention in an
indigenous area and community.
10

The Chipko movement which became famous as the first environmental movement in
India took place in the early 70s when people, mostly women, in a hilly village of north
eastern India resisted the commercial felling of trees by hugging them. A new language of
struggle emerged when Chipko articulated the stakes of the local people dependent on the
forest resources for their livelihood as their survival problem. This movement for the first
time de linked environmentalism as the preoccupation with nature and wild life and
associated it with the livelihood concerns of a vast majority of people dependent on nature for
their sustenance. It also pointed out the inadequacies in the existing constitutional rights by
giving voice to the hitherto non existent rights like the peoples right over their natural
resources. The Chipko movement could be, perhaps, regarded as a predecessor of the
Plachimada story.
The Narmada Bachao Andolan (Save Narmada Agitation)represents large scale
resistance to the construction of a gigantic multi purpose dam in river Narmada. The
exponents of the movement which include famous environmentalists like Medha Patkar and
Vandana Shiva claim that as high as 245 villages will be completely submerged by the project
which will displace thousands of people from their habitat. This movement raised
importantquestions concerning development and displacement which are interwoven with
state intervention, dominant interest and rights of people over their natural resources.
These movements have not only redefined the civil society space in India but also have
raised important interrelated questions on economy, ecology, society and state.

6.

Globalisation, Multi National Corporations and Civil Society

The emergence of globalisation along with liberalisation and privatisation has led to a
situation hitherto unprecedented in the history of developing countries. One of the immediate
manifestations of the economic reforms in the developing countries was a manifold increase
in the presence of Multi National Corporations. Corporate globalisation is increasingly being
accepted as irreversible and capitalism has become a monolithic force and its ideology of
growth a form of economic fundamentalism. Both conservatives and liberals uphold corporate
led globalisation as the harbinger of economic growth and prosperity. Global resources and
wealth are more and more concentrated in the hands of a few large corporations based in the
industrialised north. The top 200 corporation account for nearly 30 per cent of global
economic activity. The 500 biggest corporations of the world contribute one fourth of total
world production and control 70 per cent of the world trade. In addition only 49 of the top
world entities are sovereign states while 51 are multinational corporations. The 20 per cent
or so of the global population living in the north, which includes most of the white minority in
the world, control over 85 per cent of all global wealth, whereas the majority of the worlds

11

population living in the impoverished south, predominantly people of colour subsist on about
15 per cent of total global income (Bandarage 1997; Anderson et al. 2005).
The giant multinational corporations have their presence in the entire globe including
the poverty stricken nations of the south. Their concept of development is so insidiously
violent that it completely ignores the environmental aspects of growth and sustainability of
life in the planet. The enormous power of MNCs, their fragmented national loyalties and
conflicting interests, their essential non accountability, their undue political influence and
their little or no regard for social, cultural and environmental concerns makes for much of the
mistrust civil society has towards the MNCs in general. The business world ignored it as just
a form of paranoia. But, abundant examples of corporate mischief (from Nestles baby milk
powder to the Bhopal disaster and from the Exxon Valdes to Enron, Halliburton and World
Com, to name a few) reveal the truth. When many of these large MNCs are not prepared to
fulfil basic civil responsibilities in their home countries (Johnson 2000) how can one expect
them to behave responsibly in areas of the developing world where the governments in their
quest for foreign direct investment are pushed down to the bottom line. Moving on global
scale, many of the MNCs are more powerful than the local governments and for the most part
they are beyond their control also. Quite often, the negative impact of globalisation is blamed
on global corporations that are seen to be more powerful than most governments (Serrano
2001). No wonder, these MNCs in their race for profit and power, in an increasingly
vertiginous, cut-throat and competitive market, are least bothered about the human, social,
environmental and cultural rights of the local citizens.
The oft repeated clich about MNCs as thinking global but acting local is purely a
myth. They seldom act locally. As large corporations rushed to establish manufacturing sites
around the world, chemical effluents and pollution started messing up the life of common
people in the rapidly growing economies of East and South Asia. Conflict over land, water
and other common natural resources became a serious issue in the development paradigm of
many nation states in the south adding new dimensions to democracy and civil society. The
rights of people over their natural resources address a wide array of issues associated with the
existing development paradigm and practice. They very objective of development that
depletes the resource base on which poor people subsist, displaces them from their original
habitat and ruptures their life style came under severe criticism. Popular movements by
environmental groups and trade unions in developing countries like India strengthened during
the late 1990s and early 2000. These contemporary movements concern for socio economic
equity and environmentally sustainable development has led to the exploration of an
alternative development paradigm that ensures socio economic equity and environmental
sustainability.

12

7.

Globalisation and the Water Wars

The ancient Roman Empire had developed a legal theory called the doctrine of public trust.
The doctrine rests primarily on the principle that certain natural resources like air, sea, water
and forests have such a great importance to the people as a whole, that it would be wholly
unjustifiable to make them objects of private ownership. Among all the natural resources,
water is the most precious and most useful to mankind. No wonder, water is referred to as the
blue gold of the future (Barlow and Clarke 2003). But, unfortunately this blue gold of the
future is under a siege and the worlds water resources are increasingly being depleted by
either natural disasters or by the activities of MNCs. The destruction of Ogallala Aquifer in
North America, the conversion of Oasis of Azraq in Jordan into a garbage dump and
mysterious drying of wells in China and India are a few examples of the gradual
desertification of the mother earth and depletion of groundwater resources. This is in fact a
spreading disaster which is accentuated by the human driven assaults on the earths fresh
water systems. Many environmentalists have already raised their concern in several forums
that unless taken seriously tomorrows wars will not be nuclear wars or star wars but instead
will be the more powerful water wars.
The problem becomes all the more complex by the growing trend in commercialisation
of water resources by MNCs. The corporate interest in water and its commodification alienate
water from the common people to which it belongs and raises the fundamental issue whether
water is a human need or a fundamental human right. If we are to go by the doctrine of
public trust then we have to follow the doctrine that water is a fundamental human right.
But, however, the activities of MNCs like Coca Cola seem to have flown this dictum into thin
air. Today the ideas of welfare state and national security state of the Twentieth Century
have been replaced by corporate secure state. Where globalisation is the dominant economic
model and MNCs its power engines, the priority of the state will be to provide a safe
environment to investors and corporations rather to its citizens: No matter how responsibly a
transnational carries out its business, such commercial enterprises are just not designed, first
and foremost, to serve the public interest (Barlow and Clarke 2003). This is exactly the story
of Coca Cola in Plachimada, India.

8.

Challenging Corporate Globalisation - The Plachimada Story

India, with its over a billion population, offers a huge market for soft drinks. Coca Cola, the
US based giant soft drink multi national and its close rival Pepsi, no wonder found a
comfortable market in India until recently. In fact, Coca Cola started its Indian operations in
the mid-seventies but was ordered to leave the country in 1977 by the then ruling party Janta
Dal. However, Coca Cola re-entered the Indian soil in 1993 in the wake of globalisation and

13

subsequent liberalisation. It has so far invested 1 billion dollars in India and its close rival
Pepsi which made its debut in 1989 has also invested 1.5 billion dollars. Coca Colas
production in India include Mirinda, Thums Up, Coke and Kinley mineral water. Coca Cola
has set up four bottling plants in India under the common trademark Hindustan Coca Cola
Beverages Ltd (HCBL). They are Plachimada (Kerala), Mehdiganj (Uttar Pradesh),
Sivaganga (Tamilnadu) and Kala Dera (Rajastan). Of these four, Plachimada stands out not
only as the largest, but also as the unit that had to be shut down due to strong resistance from
local communities.
Plachimada is a small hamlet in the Palakkad district of Kerala state in India. It was little
known to the world outside till the Coca Cola factory established its bottling plant in the
village in 2000. Majority of the local community in Plachimada consist of Adivasis (Tribal
People) and Dalits (lower castes) who are predominantly agricultural labourers with low
incomes and low levels of subsistence. The topography of the region points out to mostly dry
land with rains below the state average during many years. Bore-wells are a common sight in
the village which is symbolic of water scarcity that is rampant in many parts of the state
during summer. In Plachimada, the Coca Cola company was drawing at least 3,50000 litters
of ground water everyday for a period of three years continuously. At full capacity, the
bottling plant at Plachimada required 1.5 million litters of water per day. On an average, 85
truck loads of different Cola products, each load containing 550-600 cases and each case
containing 24 bottles of 300 ml. used to leave the factory premises everyday. For doing this
large scale business, the Coca Cola factory had taken only 34 acres of land in Plachimada.
But, deep bore-wells dug in the factory premises were drawing water that the factory required
for making its products. The land taken by the Coca Cola factory was highly fertile, multi
crop paddy field, which was a source of living for at least about 200 people. In compensation,
about 70 persons got permanent employment in the factory and about 100 were employed as
casual workers. This points out to the typical tactics of multi nationals everywhere, to transfer
production to capital deficient labour surplus third world countries under the pretext of
globalisation. In this process, the cost of production goes down drastically enabling the multi
nationals to reap huge profits. But labour and other precious life giving resources like water in
these developing countries gets exploited indiscriminately.
Indian legal system, based on English Common Law, includes the Doctrine of Public
Trust which rests on the principle that certain resources like air, sea, water and forests have
such a great importance to people in general that it would be wholly unjustifiable to make
them objects of private ownership (Alam 2004). This is precisely what the Coca Cola factory
is doing in Plachimada and elsewhere in India.
Coca Colas Indian operations is the best example of how corporate interests in water
can lead to brutal assault of fresh water systems in a local area without any concern for the
people afflicted by such operations. The company was causing severe hardship to the local
communities and is accused of
14

causing severe water shortages for communities around the area of operations

polluting ground water and soil around the area

distributing toxic waste as fertiliser to the farmers and

selling drinks with high levels of pesticides including DDT sometimes 30 times higher
than the European Union Standards.

Coca Colas indiscriminate pollution of common groundwater sources is a major long

term problem for India because it is extremely difficult, if not impossible, to clean the ground
water resources through technology and future generations will have to drink polluted ground
water, the disastrous effects of which will take years to come out. Distribution of toxic waste
as fertiliser to farmers around the bottling plants has created a public health nightmare
because of the consequences of exposure to toxic waste is not yet known. Water scarcity and
polluted soil and water created by Coca Cola have directly resulted in crop failures in the area.
Over 70 per cent of Indians make a living related to agriculture for which water and land are
crucial. Crop failures have led to loss of livelihood for thousands of people in India. In a
country, where nearly half of the people are still below the poverty line, disrupting farming is
a matter of life and death for many. Stealing water and poisoning it is a sure recipe for
disaster and Coca Cola is spreading disaster in India. There is a general feeling among the
common people that Coca Cola is committing a big crime against humanity in India and a
powerful force has emerged to challenge Coca Cola in India. It is neither the government nor
the judiciary it is the awakening of a civil society conscience.
Thousands of people all across India is protesting against Coca Cola. Led primarily by
women, Adivasis, Dalits, agricultural labourers and farmers, a significant grass root
movement has emerged in India to hold Coca Cola accountable for its crimes. The campaign
is growing and winning many important battles in its quest for justice. One such a significant
victory is the closing down of the Coca Cola bottling factory at Plachimada.

9. David vs. Goliath The Battle at Plachimada

Of all the civil battles against Coca Cola in India, Plachimada stands out as unique. It is the
story of how the local community ultimately won the battle against a huge multi national and
was able to shut down its operations. The shut down of the Coca Cola bottling plant at
Plachimada has made international news and is often characterised as a David vs. Goliath
Story. Due to the relentless efforts of several groups of activists, David was able to beat
Goliath and the Coca Cola plant has remained shut down since March 9, 2004.
In the beginning, the local communities in Plachimada warmly welcomed the Cola
factory as it offered some jobs for the locals and loved the company even more when it
offered them the factory sludge as fertilizer. But, it took them more than an year to realise
15

that the companys operations was causing them much hardship that was in no way
compensate by the petty jobs offered to them. The water table in the area was lowered
dramatically and several wells dried up causing water shortage to the people. Women in the
village had to walk miles and miles to fetch water which they used to get at their door step
earlier. Even the available water was highly contaminated. Moreover, the sludge that was
distributed in the name of fertiliser was in fact the highly toxic waste which was quite harmful
to agriculture. Majority of the communities living around Plachimada factory are
marginalised groups. Ironically, the communities most impacted by Coca Colas bottling
operations are those who cannot even afford to buy cola products.
The struggle by the indigenous people against the exploitation and pollution of water by
the Coca Cola company at Plachimada started on April 22. 2002. Since then, the residents of
Plachimada have been on the vigil 24 hours a day, 7 days a week outside the gates of the
Coca Cola factory in their village. The vigil has crossed the mark of 1280 days on October 22,
2005. The struggle still continues to make the temporary shut down of the factory a
permanent affair.
On January 15, 2005, which marked the 1000th day of a permanent vigil in front of the
factory by the local community groups, thousands of people belonging to several groups led a
demonstration demanding the permanent closure of the factory. The Coca Cola Virudha
Samithy (Anti Coca Cola Peoples Struggle Committee) and the Plachimada Solidarity
Committee are the two strong forces that lead the movement against Coca Cola in
Plachimada. Another 25 grass root organisations have already announced their support to
Plachimada Solidarity Committee in its fight against Coca Cola. On April 22, 2005, which
marked the completion of the three years of struggle against Coca Cola, an anti Cola Peoples
Confluence was organised at Plachimada. This was attended by a large number of activists
from all over India.
Over extraction of groundwater by Coca Cola company in Plachimada in fact violates
three international legal regimes, American Common Law Reasonable Use Rule, the
Restatement (Second) of Torts Reasonable Use and Doctrine of Correlative Rights, governing
the use of groundwater. In addition, it also violates Article 21 of Indian Constitution in which
right to water is a Fundamental Right. The poor villagers of Plachimada who started their
battle against Coca Cola in 2002 was however completely unaware of these legal
underpinnings. What they knew was that their livelihoods were seriously threatened. Their
voices would have gone unheard, had it not been for the bold initiative of the village council
which simply refused to renew the licence to Coca Cola company to operate in Plachimada,
arguing that the company had not only destroyed the water system in the area but also had
polluted the area with its toxic waste. The village council in India known as Panchayat is an
elected body at the village (lowest) level and forms the building blocks of democracy in India.
Coca Cola, in an act to undermine democracy chose to appeal to the court against Panchayat
stating that the Panchayat has no jurisdiction over the plant and that the decision should come
16

from the state government. In December 2003, the High Court, in an extremely significant
decision ruled that Coca Cola had to seek alternative sources of water and that it could extract
only as much water from the common groundwater resource as a farmer owning 34 acres of
land the justification being that the plant is located in 34 acres of land. The High Court also
held that the groundwater belonged to the people and the government had no right to allow a
private party to extract such a huge quantity of groundwater which was a property held by it
in trust. This limited operations licence given by High Court which Coca Cola thought as a
victory could not be sustained for long. In March 2004, the Perumatty Panchayat (Village
council) refused to renew the licence issued to Cola company forcing it to shut down its
operations. The Cola company again appealed to High Court which on April 7,2005 gave a
further ruling allowing the company to extract 500,000 litres of water per day, under normal
rainfall conditions.
The State Government of Kerala as well as the village council of Plachimada have
appealed the April 7, 2005 Kerala High Court ruling to the Supreme Court, the highest legal
authority in India. The State Government has challenged the companys right to use
groundwater arguing that water is being taken from poor communities to produce drinking
water for the rich. The state government also argued that the village council was within its
rights to cancel the licence of Coca Cola plant because it was protecting the interests of the
community. The Kerala State Pollution Control Board, on August 19, 2005, has also ordered
the Coca Cola Plant at Plachimada to stop production of all kinds of products with immediate
effect because of high levels of cadmium around the plant.
While the various court and government agencies are validating and acting upon
community concerns, the civil society groups are going strong, continuing their 24 hours vigil
before the factory gates to see that it never reopens! Whatever may be the legal outcome of
the war, they are bent upon achieving their goal packing up Coca Cola for ever from the
Plachimada soil. Despite Coca Cola suspending its operations, the Anti Coke Agitation
Council has persisted with its sit-in-strike in front of the factory revealing the strength and
solidarity of the grass root movement. Several people have individually and collectively
contributed to this. Mylamma, who is an elderly tribal woman, is one of the leaders of the
water war against the multinational giant Coke. She continues to inspire the community with
her bold actions and expressions. In the wee hours of April 3, 2005, irate villagers blocked a
tanker lorry brining water to the factory and later emptied it out to the parched paddy fields.
In the draught hit Chittur region where Plachimada is located, three farmers have committed
suicide during the last one year unable to bear the pangs of acute draught, crop failure and
accumulated debts. This further aroused the indignation of the local communities and
strengthened their solidarity to fight against Coke.
Coca Cola is in trouble in India. In all its four bottling plants, protests and agitations are
going on continuously and like Plachimada the other three are also on the verge of shut down.
In a historic march on January 18, 2004, over 500 protestors including international
17

supporters marched and rallied before the World Social Forum in Mumbai, India. Coca
Colas actions are symbolic of the vulgar arrogance and criminal power of corporations that
are looting people of their basic needs said Medha Patkar, coordinator of National Alliance
of Peoples Movements in India. Civil societys success in Plachimada owes a goods deal to
this grass root organisation. It is almost 20 months since the Coca cola factory at Plachimada
has been shut down. In spite of the multinational giants endeavours at all levels, the factory
still remains closed, thanks to the efforts of the civil society. Plachimada story does not end
here. It continues as an inspiration for the generations to come telling them how a strong civil
society can not only ensure social justice, responsible governance and unconditional human
rights, but also the much needed and valued sustainability of life on this planet.

10. Conclusion
Plachimada is not just a local issue, but a global one. It shows how large multinationals get
away with huge profits at the expense of people, putting their right to life precious national
resources like land, water and forests at stake. The poor without potable water and the rich
with cola consumerisms are a pathetic pathological human rights contradiction (Iyer 2004).
When millions of litres of water are indiscriminately assaulted by multinationals everyday, it
is nothing less than multinational terrorism. The rationale and objectives of such terrorism
and the ensuing development paradigm needs to be questioned vigorously. The world
definitely needs an alternative development path that is democratic in nature, ensures socio
economic equity is both environmentally sustainable and participatory in nature. This is the
realm of civil society. Not only that, a strong civil society alone can save the world from the
claws of corporate globalisation. This is the message that emerges from Plachimada.
The Environment Summits at both Rio De Janeiro and Stockholm had raised its serious
concern for the preservation of natural resources by stating that Every generation should
leave water, air and soil resources as pure and unpolluted as when it came to earth, and each
generation should leave undiminished all the species of minerals it found existing on the
earth. Let us not forget this ancient wisdom in our march towards progress.
To conclude, we stand at a critical moment in Earths history, a time when humanity
must choose its future To move ahead, we must recognise that in the midst of the
magnificent diversity of cultures and life forms we are one human family and one Earthcommunity with a common destiny. We must join together to bring forth a sustainable global
society founded on respect for nature, universal human rights, economic justice and a culture
of peace (The Earth Charter 2002).

18

References
Alam, Jayanthi (2004), Water Not for Private Ownership, Economic and Political Weekly,
July 24.
Alexander, J.C. and Smith, P. (1993), The Discourse of American Civil Society: A New
Proposal for Cultural Studies, Theory and Society, Vol.22, No.2.
Analric, franck (1996), In Search of a Political Agenda for Civil Society in the North,
Development, No.3, September.
Anderson, Sarah; Lee, Thea and Cavanagh, John (2005), Filed Guide to the Global Economy,
Institute for Policy Studies, Washington D.C.
Bandarage, Asoka (1997), Women, Population and Global Crisis, St. Martins Press, New
York.
Barber, Benjamin (1998), A Place for Us: How to Make Society Civil and Democracy Strong,
Hill and Wang, New Jersey.
Barlow, Meade and Tony, Clarke (2003), The Blue Gold: The Fight to Stop the Corporate
Theft of the Worlds Water, Left Word Books, New Delhi.
Calhoun, C. (1993), Civil Society and Public Sphere, Public Culture, Vol.5, No.2.
Dube, S.C. (1988), Modernisation and Development: The Search for Alternative Paradigm,
Zed Books, London.
Earth Charter (2002), Quoted in Global Civil Society: The Part Ahead by David C. Corten,
Nicanor Perlas and Vandana Shiva, Discussion Paper Noverber 20, 2002, International
Forum on Globalisation.
Gellner, E. (1990), Civil Society in Historical Context, International Science Journal,
Vol.43, No.3.
Guha, Ramachandran (1989), New Social Movements: The Problem, Seminar No. 355.
Harcourt, Wendy (1996), Editorial, Development, Vol.46, No.1, March.
Iyer, Krishna V.R (2004) quoted in Alam (2004) op.cit
Johnston, David Cay (2000), New York Times, October 20.
Korten, David C, Nicanor, Perlas and Shiva, Vandana (2002), Global Civil Society: The Path
Ahead, A Report from the International Forum on Globalisation.
London School of Economics (2005), Working Paper, Centre for Civil Society, London.
Montesquieu, Charles D. (1961), De L Esprit des Lois, 1, Paris.
Morawetz, D (1977), Twenty Five Years of Economic Development: 1950 1975, World
Bank, Washington D.C.
Roy, Indrajit (2003), Development and Its Discontents: Civil Society as the New Lexicon,
Development, Vol. 46, No.1, March.
Rudolph, Susan Hoeber (2000), Civil Society and the Return to Freedom, Economic and
Political Weekly, May 13.
Sach, W. (Ed.) (1997), The Development Dictionary: A Guide to Knowledge as Power, Orient
Longman, Delhi.
Sen, Amartya (2001), If Its Fair, Its Good: 10 Truths About Globalisation, International
Herald Tribune.
19

Serrano, Isagave (2001), Cross Sectoral Collaboration for Sustainable Change, Paper
presented at the 4th Civicus World Assembly, August.
Shills, Edward (1992), Culture and Civil Society In Edward, C. Banfield (Ed.), Culture and
Citizenship in Liberal Democratic Societies, Paragon House, New York.
Smith, Adam (1759), The Theory of Moral Sentiments In Raphel, D.D. and Macfie, A.L
(Ed.), Works and Correspondence of Adam Smith, Vol. I., Oxford University Press,
Oxford.
United Nations (2002), Human Development Report, UNDP, New York.
Wade, Robert Hunter (2004), The Rising Inequality of World Income Distribution in
Seligson, Mitchell A and Smith, John T. Passe (Ed.), Development and
Underdevelopment- The Political Economy of Global Inequality, Viva Books, New
Delhi.

20