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Coca Cola Parches

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By Nityanand Jayaraman

CorpWatch India
May 28, 2002


On 22 April, 2002, more than 2,000 irate protestors, consisting mostly of indigenous people and dalits (oppressed castes), gathered at the gates of the Hindustan Coca Cola factory in Plachimada, Palghat district, Kerala. Residents from the villages surrounding Coke's greenfield soft-drink bottling factory here say that Coke's indiscriminate mining of groundwater has dried up many wells, and contaminated the remainder. At least 50 villagers have maintained a picket outside the factory gate every day since the strike began.

According to local sources, the villagers are angry enough to destroy the factory failing government action to shut down the water-intensive unit. Till date, the Government has taken no action to check groundwater depletion by Coke in the region. Police, however, had arrested several villagers on the first day of the strike. A contingent of police is currently posted at the factory to protect it from any potential trouble caused by the water-starved community.

Coke's recent placatory gesture of supplying a truckload of water each day to the two worst affected villages hasn't impressed the protestors. They say that Coke will have to pay for restoring the damaged groundwater aquifers and for long-term water supply to all the impacted villages.

A Coke spokesperson who declined to be named, dismisses the protests as a non-issue. "There is absolutely no water issue in [Plachimada]. We have not found any change in the water situation. The issue there is highly politicized."

Villagers, on the other hand, say that the company, not the struggle, is politicized. They accuse the local leaders of political parties of colluding with Coke. Lending credence to this allegation is the fact that barring the youth wing of the Congress party, none of the political parties active in the villages have issued a statement in support of the people's struggle against Coke.

Wells Run Dry

Coca Cola's bottling plant was set up three years ago in the middle of fertile agricultural land. "Coca Cola's plant is illegal because they haven't even obtained clearance for putting agricultural land to non-agricultural uses," says M. Swaminathan, a tribal leader from Velloor, one of the tribal villages affected by Coke's activities. Kerala states Land Utilization Act requires prior approval for conducting non-agricultural activities on designated agricultural land.

Given its proximity to a number of reservoirs and irrigation canals, the region has access to healthy groundwater resources. Until recently, Coke was drawing 1.5 million liters/day from the common groundwater resource. This year, the water scarcity has hit even Coke. The company is able to extract only 800,000 liters from the borewells. The remainder is supplied by water trucks that carry water extracted from borewells in neighboring villages. According to local estimates, Coke's water mining has parched the lands of more than 2000 people residing within 1.2 miles of the factory.

Barely six months after the factory set up, villagers and farmers living around the bottling unit began noticing changes in the quantity and quality of well water. Water from a well in Plachimada, a tribal colony with nearly 100 families living along the eastern wall of the factory, rapidly turned brackish and milky white in color. The water was unfit for drinking, cooking and bathing.

"Coca Cola has made life miserable for us, for our women. Our women have had to walk nearly one kilometer to get water from a neighboring village, and return in time to get to work," says Swaminathan. Those who are unable to make the trek for water continue to depend on the contaminated water. Of late, nearly 100 people have reported recurring stomach aches, which they relate to the water they are being forced to drink.

The water crisis has hit the farmers too. Theivathal Gounder and her son R. Krishnaswamy harvest coconuts, paddy and peanuts on their 7-acre farm. Over the last two years, they have seen their wells yield plummet. "Earlier, we had enough water to run the pump for 18-20 hours. Now, after four hours of pumping, the well is dry, and what water we get is rapidly turning brackish like the wells on the other side," says Theivathal.

The Gounders say they spent Rs. 60,000 last year deepening their well after Coke's pumps sucked their water away. This year, the company sunk yet another borewell barely 20 meters from their well. According to Theivathal, the water has receded by another five feet as a result.

"We told them when they sunk the bore. But the Coca Cola people said they'll sink a well wherever they choose on their land," laments Theivathal. The Coca Cola official who spoke to CorpWatchIndia has a similar take on the matter. "We have bought the land. No law regulates us on our use of water. Okay, we may be mining water, but so are others. At least, we have some rain water harvesting," he says. The Gounders say the Coke-induced scarcity of water has resulted in a six-fold decrease in their coconut yield.

CorpWatchIndia sent samples of water from the wells in Plachimada and the Gounders farm for scientific analyses at a Chennai-based Government-approved laboratory. Interpreting the results, Dr. Mark Chernaik, a staff scientist with Oregon-based E-LAW US--a network of public interest environmental lawyers writes: "Water from the village well and the farmer's well would be classified as 'very hard.' Use of this water for bathing and washing would cause severe nuisance and hardship. Water from the [village] well and, to a lesser extent, water from the farmer's well would have an objectionable taste because of the high levels of calcium and magnesium."

According to Dr. Chernaik, the results lend some corroboration to villagers claims that the water problems are caused by Coke's over-exploitation of the groundwater. "Excessive calcium and magnesium in groundwater usually is the result of the dissolution of limestone that is associated with the groundwater deposit. Therefore, this water quality analysis supports the following hypothesis . . . [that] rapid extraction of water from the aquifer (after the arrival of the Coca-Cola bottling plant) would increase the rate at which water is flowing through the limestone or clay. Faster flowing water would break apart some of the limestone or clay, resulting in the addition of limestone or clay particles to the water supply."

Coke's Track Record

Community complaints about Coke's exploitation of common groundwater resources are not peculiar to Plachimada. Neither does its track record in India and elsewhere corroborate its claims of "responsible corporate citizenship."

Capt. J. Rama Rao of Hyderabad-based NGO Samriti writes about Sri Sarvaraya Sugars, a bottling unit dedicated to producing Cokes Kinley brand of water located in Khammam district of Andhra Pradesh. The factory draws 225,000 liters of water per day. "As a result, the borewells in certain areas of Sattupalli village, having a population of 25,000 are reported to have dried up," writes Rao. The Coke spokesperson dismissed these allegations as politically motivated.

M.V.R. Mineral Water and S.R. Minerals, both of whom are contract bottlers for Cokes Kinley brand of water, have also been accused of depleting the groundwater in Athur village, 40 kilometers northwest of Chennai. M.V.R. Mineral Water reportedly extracts 132,000 liters of water each day. "The bottling units have sunk very deep borewells and are sucking out so much water that farmers are suffering," says A.V. Chandra, a local activist with Redhills-based NGO Womens Collective. Disturbingly, Kinley's bottling units are located in an area that has been declared sensitive because of the plentiful sweet water available underground and because of the areas importance to the water security of the region and the city of Chennai. Local pollution control board officials fear that the highly saline effluent from the factorys water purification plant will gradually turn the local aquifers brackish. "This is a drinking water area. It is not good to have industries that generate and discharge high-salinity wastes in this area," says Sheela Rani Chunkath, chairperson of the Tamilnadu Pollution Control Board.

In 1999, the Goa Pollution Control Board issued a notice to the multinational for operating its new factory without securing the official consent. The company functioned for more than 40 days without the prescribed effluent treatment systems.

The Big Picture

"The trouble with Coke [in Plachimada] cannot be seen in isolation," says Dr. S. Janakarajan, an economist working on groundwater issues with the Madras Institute of Development Studies. "In this case, a community may have lost its access to water for drinking or agricultural purposes for the sake of supplying Coca Cola. The same has happened in other places where industries have privatized common groundwater resources or polluted them," he says.

In the absence of any law to regulate the extraction of groundwater, people or companies with resources can privatize entire aquifers just by virtue of owning a small piece of land. "In this race, those who have the resources are the winners; the poor are the losers," Janakarajan explains.

The term "competitive deepening" was coined by Dr. S. Janakarajan to describe the virtual competition that exists among users sharing a common aquifer. If one user deepens his/her borewell, the water level in neighboring wells drops, forcing other users to deepen their wells or lose out.

Competitive deepening of wells or borewells by water-intensive agricultural or industrial users has already laid waste the groundwater in large tracts of India. Many other freshwater sources have been contaminated by agricultural runoffs, and rampant sewage or industrial pollution.

Ironically, the resultant scarcity of clean drinking water has spawned yet another water-intensive industry that exploits one communitys water and sells it at a profit to consumers who can afford to buy it. In Chennai alone, more than 200 legal and 400 illegal bottled water manufacturers operate.

Indias packaged water industry, which is barely a decade old, is already a Rs. 8 billion ($170 million) market, and is expected to grow to Rs. 12 billion ($250 million) by 2004. Brandnames such as Coke's Kinley, Pepsi's Aquafina and the Indian bottled water giant Parle's Bisleri enjoy a Rs. 4 billion ($85 million) market, according to the Coke official.

The profitability of this business is beyond question. Coke's Indian operations took a beating in the first few years of operation after fizzy drinks failed to perform to company expectations. But after Kinley, Coke's water brand, was launched in mid-2000, the multinationals revenues nosed up. In fact, Coca Cola Indias third quarter 2001 results mention that "its growth of 11 percent had been led by the successful expansion of Kinley water."

Unfortunately, despite acute, and sometimes perennial water scarcity in many parts of India, the government is yet to legislate effectively to conserve groundwater resources. Soft drink and bottled water companies pay next to nothing for the water they extract.

Given that the primary raw material comes free of cost, wastage in the industry is ridiculously high. At Coca-Cola's bottling unit in Nemam village of Tamilnadu, more than 2.5 million liters of water are extracted. Of this, 1.2 million liters is used for washing bottles, crates, equipment and the floors. Only 692,000--less than 30 percent--is used for actually manufacturing the soft drinks.

Despite the large quantities of water drawn, the company paid approximately $50 as water cess for a five month period recently. Meanwhile, plans are afoot in several states of India to force urban and rural consumers to pay real costs for drinking water.

Contact for this article: Nityanand Jayaraman is the India organizer for CorpWatch India.


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