State Passes Law Allowing Compensation from Coca-Cola

State Passes Law Allowing Compensation from Coca-Cola
Coca-Cola Legally Bound to Follow Orders of Tribunal on Compensation

For Immediate Release February 24, 2011

New Delhi: In an unprecedented move, the state legislature of Kerala in India passed legislation today allowing individuals negatively affected by Coca-Cola’s bottling operations in Plachimada to seek compensation from the company.

The legislation sets up a tribunal – a three-member body – that has the powers to adjudicate on matters related to claims of compensation as a result of Coca-Cola’s reckless operations in Plachimada.

The tribunal has also been granted additional legal authority, including the power to summons individuals and documents, as well as seek and examine witnesses.

The adoption of the legislation by the Kerala state legislature legally binds Coca-Cola to follow the directives of the tribunal.

The legislation is based on the report and recommendations of a High Power Committee which released a report on March 22, 2010 holding Coca-Cola responsible for causing pollution and water depletion in Plachimada in the state of Kerala in south India.

Using the “polluter pays principle,” the High Power Committee had recommended that Coca-Cola be held liable for Indian Rupees 216 crore (US$ 48 million) for damages caused as a result of the company's bottling operations in Plachimada.

In its report, the High Power Committee said that, “The Committee thus has compelling evidence to conclude that the HCBPL has caused serious depletion of the water resources of Plachimada, and has severely contaminated the water and soil.” HCBPL is the Hindustan Coca-Cola Beverages Private Limited, a subsidiary of Atlanta based Coca-Cola Company.

“The Committee has come to the conclusion that the Company is responsible for these damages and it is obligatory that they pay the compensation to the affected people for the agricultural losses, health problems, loss of wages, loss of educational opportunities, and the pollution caused to the water resources,” added the report.

“This is a landmark moment for the people of Kerala and India,” said R. Ajayan of the Plachimada Solidarity Committee which has been actively involved in the campaign since its inception. “The passage of the bill means that people’s will in Kerala has now become law of the land,” said R. Ajayan.

Community leaders in Plachimada have vowed to continue the campaign. Activists are demanding that the state government also charge Coca-Cola with criminal offenses because of the laws the company has violated.

Coca-Cola’s bottling plant in Plachimada has been shut down since March 2004 as a result of the community-led campaign which accused Coca-Cola of exacerbating water shortages in the area and pollution.

The campaign against Coca-Cola in Plachimada has also enjoyed tremendous international support, with colleges and universities in the US, UK, Canada and Norway taking action against Coca-Cola. Two other campaigns – in Kala Dera in Rajasthan and Mehdiganj in Uttar Pradesh – are also seeking closure of the local Coca-Cola bottling plant.

“This is a massive victory for the community of Plachimada and their supporters who have campaigned successfully all the way from the community to the state legislature, and that too against a global multinational corporation. This should serve as a powerful reminder to corporations across India that there are severe repercussions for operating recklessly,” said Amit Srivastava of the India Resource Center, an international campaigning group.

ENDS

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