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Coca-Cola Ally Recommends India Plant Closure

Coca-Cola Ally Recommends Bottling Plant Closure in India

New Delhi (January 15, 2007): In a major blow to the Coca-Cola company in India, a report by its ally, the Energy and Resources Institute (TERI), has called for the closure of one of its bottling plants in India - in the village of Kala Dera in the state of Rajasthan.

Citing the widespread water shortages being experienced by villages around Coca-Cola's bottling plant, the report by TERI released yesterday recommends that either the Coca-Cola bottling find alternative sources of water - a highly impractical option - or either relocate or shut down the plant altogether.

The 500 page report, - "Independent, Third Party Assessment of Coca-Cola Facilities in India" - came as the result of high profile student-led campaigns in the US, Canada and the UK. Over twenty colleges and universities have removed Coca-Cola products as a result of the international campaign which aims to hold the Coca-Cola company accountable for creating water shortages and pollution in the areas where it operates in India. The report assessed only 6 of Coca-Cola's 50 bottling plants in India.

The University of Michigan had placed the Coca-Cola company on probation in 2006 and had asked for an independent assessment of its operations in India.

"We are absolutely thrilled that finally the source of so many of our problems, the Coca-Cola bottling plant, will be shut down," said Rameshwar Kudi of the Kala Dera Sangharsh Samiti, the local group that has led the campaign for the plant's closure.

It remains to be seen how the Coca-Cola company will respond to the recommendations by TERI. But activists in India have vowed to ensure that Coca-Cola meets the recommendations for Kala Dera.

The report by TERI is a damning indictment of Coca-Cola's operations in India.

The report takes the company to task for siting its bottling plants in already water stressed areas, without much thought given to the impacts on communities. The report also validates the concerns of water scarcity and pollution that have been raised by communities in Kala Dera, Mehdiganj as well as others. A list of Coca-Cola's shortcomings, according to the report, follows this press note.

"The report confirms what we have been saying all along. The groundwater situation in Mehdiganj is deteriorating, and we are not going to wait till we also become like Kala Dera. The company must stop its operations immediately," said Nandlal Master of Lok Samiti which is leading the campaign to shut down the Coca-Cola plant in Mehdiganj.

The report points out the heavy pollution present in the immediate vicinity if the Coca-Cola bottling plants and calls for additional studies. The report also shows that the Coca-Cola company has failed to meet its own standards regarding waste management, and that the company has hampered the TERI assessment because it has refused to share the Environmental Impact Assessments for any one of the six plants.

It remains unclear as to why the six plants were chosen. Community activists would have expected to see the Coca-Cola bottling plant in Plachimada in Kerala, which has been shut down since March 2004, also included because the Coca-Cola company is still trying to re-open the plant. Similarly, a franchisee operated Coca-Cola bottling plant in Ballia in Uttar Pradesh should have been included in the assessment because community members found industrial waste scattered all across the plant premises less than a year ago.

"Enough is enough. Now even Coca-Cola's ally in India has found the company to not be up to the mark when it comes to protecting water resources and preventing pollution," said Amit Srivastava of the India Resource Center, an international campaigning group.

"The Coca-Cola company is part of the UN Global Compact and as a result, it has agreed to uphold the precautionary principle," Srivastava continued. "The Coca-Cola company must apply the precautionary principle and cease its operations in water stressed areas as well as areas with excessive pollution around Coca-Cola plants in India."

The precautionary principle states that "where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation."

The India Resource Center has opposed the choice of TERI as the "independent" assessor of Coca-Cola because the two groups have worked together in the past, including funding from Coca-Cola to TERI, co-organizing Earth Day, and TERI naming Coca-Cola as among the most responsible companies in India in 2001.

Among others, the report notes that:

  • The Coca-Cola company's decision to site their plants is strictly driven by business and comes at a heavy cost to the communities. The report notes that "the basic focus of the Coca-Cola Company water resource management practices is on business continuity­community water issues do not appear to form an integral part of the water resource management practices of the Coca-Cola Company."
  • The concerns being raised by the community about water scarcity and pollution have been validated by the report. The report notes that, "In general, the community perceptions were found in conformity to the results obtained from the detailed technical assessment of groundwater resources."
  • In Mehdiganj, the site of another vibrant community-led campaign against Coca-Cola, the report acknowledges that "the water tables have been depleting and the aquifer may move from a safe to semi-critical situation." The Coca-Cola company, on the other hand, has actually claimed that groundwater levels are rising as a result of its operations in the past.
  • The report also found excessive pollution in the immediate vicinity of the Coca-Cola bottling plants, and has recommended additional studies to establish the reasons. "Regional water quality assessment of four out of six sites (Kaladera, Mehndiganj, Nemam, and Sathupalle) revealed that villages located in the immediate vicinity of the plant showed the excess presence of certain parameters. However, since this assessment here could not relate the regional groundwater quality to the operations of the Coca-Cola plant, there is a need to carry out a further detailed study to establish/rule out the reasons for such presence."
  • The Coca-Cola company hampered the assessment by not sharing the Environmental Due Diligence reports (environmental impact assessments) with the assessment team, citing "legal and confidential" reasons.
  • The report noted that farmers' rights to groundwater for farming must be respected, and given precedence over industrial demands for water, particularly in areas that have been declared critical or overexploited in terms of groundwater resources.
  • The report also noted that while the bottling plants assessed may have met some, but not all, of the government regulatory standards, the plants had not achieved the wastewater standards set by the Coca-Cola company itself. "The presence of faecal coliform and several other physico-chemical pollutants in the treated wastewater in almost all the plants calls for an urgent and stringent definition (and implementation) of standards and practices as well as source identification."


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