Coca Cola moving out of Plachimada?
The Coke saga in Kerala took a new twist towards the end of 2005
when the company expressed its interest to shift out of Plachimada
to a nearby industrial estate where water consumption may be less contested.
Meanwhile, the tussle between Coke and the Perumatty Panchayat awaits
resolution at the Supreme Court, reports
P N Venugopal.
27 January 2006 -
Adding a new dimension to the ongoing tussle between the people of Plachimada
and the soft drink giant Coca Cola, the company has expressed its willingness to
shift its plant from the region governed by the Perumatty Panchayat in Kerala.
The Hindustan Coca Cola Beverages Pvt. Ltd made this proposal in a letter
addressed to the Minister for Industries, Kerala, in late November 2005.
The proposed site, about 40 kms away from Plachimada and is in the Kanjikode
Industrial Estate, also in the same Palghat district. The company has
demanded at the new site, "a confirmed resolution for meeting the infrastructure
needs such as water and electricity along with an amicable environment devoid of
the problems as have been faced in Plachimada."
Subsequently, a meeting was convened by the Industries Department on the 3rd of
January. It was attended by the representatives of Perumatty Panchayat, the
District Industries Centre, Palakkad, Kerala State Pollution Control Board (KSPCB)
and Coca Cola. Perumatty Panchayat, it is reported, did not have any objection to
the company being shifted. No decisions were reached in the meeting and there will
be further discussions in the coming months.
Meanwhile, following dictates of the Kerala High Court, [see box on Plachimada Saga] on 4
January 2006, the panchayat renewed Coke's license for three months and laid
out thirteen conditions. The first of these is that the company shall not use
groundwater from Perumatty Panchayat for industrial purposes, or for producing
soft drinks, aerated carbonate beverages or fruit juice. The local body quoted
two documents in support of its stance.
File illustration: Sameer Mahoolkar.
One was the Supreme Court judgment in M C Mehta v/s Union of India
2004(12) SCC118. According to this judgment, groundwater is a social asset, and
the right of the citizen to the use of air, water and earth are protected under
Article 21 of the Constitution. It further states that the environmental balance
is to be maintained and wherever groundwater is required for domestic and
agricultural needs, priority is to be given to these. (Incidentally, M C
Mehta vs Union of India was cited in the Division Bench High Court hearings
that went in favour of Coke in 2005, but according to Perumatty Panchayat counsel
K Ramkumar, the judges did not
mention it while narrating the proceedings.)
The second document the panchayat cited was the notification by the Kerala State
Groundwater Department which declared Perumatty Panchayat along with four other
panchayats in Kerala as 'over exploited' with regard to groundwater. The
Panchayat also quoted its own resolution of a fortnight ago, which stipulated
that in view of the acute shortage of water neither surface water or groundwater
can be used for any purposes other than domestic and agricultural.
There is one other commercial consumer of water in Chittoor Block, Kerala Alcoholic Products Ltd.
This brewery is at Meenakshipuram, about 6 kms from Plachimada, and it draws 5 lakh litres of water/day.
The source is groundwater and a nearby canal. (Source: District Industries Centre, Palghat.)
According to activists, the area has not experienced any water scarcity and the company does not
cause any pollution as such.
Effectively, the panchayat was renewing Coca Cola's license, but not allowing
it to draw a drop of water.
Two other stipulations made by the panchayat. One, it asked Coke to reveal the
components used for making the soft drink in order to ensure that no hazardous
items are used and two, it asked Coke to ensure that cadmium or other chemical
pollutants are not taken out of the factory. As the people are being supplied drinking
water in tanker lorries from outside, the panchayat also asked the company to
arrange for supply of one lakh litres of water everyday. It has also asked Coca Cola to implement the
social security measures as suggested by the High Court within a period of one month.
As could be anticipated, the company rejected the conditions as impractical and
not keeping with the spirit of the various High Court orders. It claimed
that it has the right to tap the water sources within its premises and also
quotes the High Court order permitting it to draw 5 lakh litres of water per
day. The company also refused to reveal the components of its soft drink
claiming that no poisonous or hazardous items including cadmium are present in
it. It expressed its willingness to get the drink examined in any
laboratories suggested by the panchayat. The company also further averred
that no waste from its plant is taken outside and arrangements have been made to
treat them within the factory premises. It asked for details of the social
security measures to be implemented and requested for a discussion on the
issues within 15 days.
This is perhaps an indication that the company will try its best to remain
at Plachimada itself, despite the proposal to shift. The company has made
it amply clear in the letter to the Industries Minister and also in the
discussions that relocating will be a last resort. Their letter to the minister
does not wish to relocate the plant if alternate proposition to sort
out the various issues being faced by the company in their present location are
explored favourably by the government." However, Coca Cola has requested the
government for sales tax concessions and also for "other applicable beneficial schemes" to
offset the additional expenditure involved in shifting base.
Proposed new site may be less contested
An interesting aspect of the proposal is that the Kanjikode industrial estate is
in the Puthussery Panchayat from where Pepsi Cola is operating without many
hassles, at least for the time being, even though those opposing it are
gathering forces. However, it is a notified industrial area within the purview
of Kerala Industrial Development Act and also within the meaning of Kerala
Panchayat Raj Act. Hence the likelihood of their being any legal tangles for
either Pepsi or Coca Cola - if it is shifted - is remote.
The Plachimada story
March 2000 - Factory established.
April 2002 - Agitation commences.
March 2003 - Panchayat refuses to renew license.
May 2003 - State government stays the panchayat decision.
Dec 2003 - Single judge bench of the Kerala High court upholds
the panchayat's decision.
March 2004 - Coca Cola factory shut down on Kerala government's orders.
April 2005 - A High Court Division Bench allows appeal by Coca Cola and permits the
company to draw 500,000 litres of water per day. Orders the panchayat to
May 2005 - Panchayat files special leave petition in the Supreme Court.
1 June 2005 - Company approaches the High Court again as the panchayat did not renew the license.
The court orders panchayat to renew the license within 7 days, or it would be deemed
that the license stands renewed for two years from 10 June 2004.
6 June 2005 - Panchayat informs the company that license will be renewed for three months; asks them to remit the fee and collect license.
November 2005 - High Court rejects the company's petition that since panchayat did not keep up the stipulated time frame, it should be deemed that the license stands renewed for two years. The company ought to have accepted the opportunity to function for three months. But the court again orders the panchayat to renew the license.
November 2005 - Panchayat files SLP against the latest High Court order in the Supreme Court.
Colas: dissent at home, abroad
Save groundwater, ground d'cracy?
Rain or no rain, water for Coke
JPC report on Colas
Coke case in decisive phase
Keral soft-pedals cola ban
At the same time, everything about the Kanjikode Industrial Estate does not
appear to be above board. The Kerala government has recently published a
document which is to be the basis for all future groundwater utilisation in the
state. "The Dynamic Groundwater Resources of Kerala As On March 2004" has been
jointly prepared by the Groundwater Department of Kerala and the Central Ground
Water Board. The report is a reassessment of the groundwater resources and its
present utilization, block-wise and also classifies the blocks as 'safe',
'critical' and 'over exploited.' It is based on this report that 5 blocks
including Chittoor block have been declared 'over exploited.' Plachimada
falls in the Chittoor block. However,
the report has not disaggregated
commercial water usage at the level of individual firms (commercial consumers
of water) in the various blocks.
There are concerns about the report itself. Because the current groundwater usage
figures are not available, the report has gone by projections based on
the average increase in use for the period 1992 to 1999. Some data
could be considered stale, and this raises questions on the reports
conclusions and assumptions. However, it's not as if all the data are stale. The
report's findings are also not a mere repetition of earlier figures. And what
is astonishing is that the report has left out one block out of the total 152
blocks of the state and that block is Malampuzha block. Kanjikode Industrial
Estate and Puthussery Panchayat are in Malampuzha block. As noted earlier, this
is where Pepsi and a number of others water reliant firms are operating and
where Coke proposes to move to as a last resort,
and it is very difficult not
to attribute motives.
The reason given in the report for this omission is that Malampuzha block is a
'new' one and hence required data is not available. However, Malampuzha block
was formed in 1990 and it is unbelievable that data is not available.
Even though it cannot in anyway be taken for granted that the soft drink
giant is shifting from Plachimada, the anti Coca Cola agitation committee
Velur Swaminathan has already demanded that Coca
Cola adequately compensate the
damage done to the people. Apart from the contention that Coke caused water
scarcity, the company had distributed hazardous sludge to gullible farmers as
fertilizer polluting water bodies. The committee also criticized the government
for helping the company to relocate within the state. However, Perumatty Panchayat
President Risha Premnath said that no formal demand for compensation has been
made till now. An oral submission was made in the meeting, but there were no discussions
Supreme concerns rest at the apex court
There are 5 Special Leave Petitions (SLP) pending at the Supreme Court,
challenging various High Court judgments. Three were filed by the panchayat and
one each by the Kerala Government and the KSPCB. All of them will be bunched
and heard together, said Advocate K Ramkumar, counsel for Perumatty
Panchayat. But the SLPs have not been listed, as yet, so hearing dates are
not available. Asked about the M C Mehta vs Union of India judgment not
having a bearing on the High Court's
Division Bench proceedings, Ramkumar said
that, "This omission too has been questioned
in the SLP."
There is another curious angle to the litigation at the High Court. All the petitions
filed by Coca Cola in the Kerala High Court are being heard by a bench comprising
of the same two judges -- M Ramachandran and K P Balachandran. Queried about this, Ramkumar
said: "It is very unusual. The panchayat had filed a written complaint about this to the
Chief Justice. But no action was taken. Again, I had very clearly objected to this in the
counter affidavit filed in the latest case which was decided on the 16th of November."
However, ruling on 16 November and asking the panchayat to renew Coke's license, the
bench dismissed his objection saying: "Mr K Ramkumar, appearing for the first
respondent-Panchayat submits that the Rules of the High Court of Kerala as well
as the precedents do not permit such applications to be entertained and the
sinister attempt was to get the matter posted before the same Bench, who had
been party to the judgment, as favourable orders could have been solicited, as a
soft approach could have been reasonably expected. The suggestion was that if at
all there was any cause of action, such grievances should have been
adjudicated by fresh proceedings. Although the affidavit filed contains allegations
and innuendos and per se discloses bad taste, we do not
think we have to invest or
strain ourselves to be bothered about such irrelevant
All in all, the situation continues to remain murky, and the question of Coke's
liabilities to the people and the
land of Perumatty Panchayat stemming from over
exploitation of natural resources remains unsettled. Even though the Plachimada
agitation had begun as a local
issue, it changed qualitatively during the last four
years and has come to
symbolise third world resistance to corporate giants. It will
irony if all that the struggle results in is not a just and speedy resolution to
the dispute, but instead merely pushes Coca Cola out of
Plachimada, 40 kms
away, where it will continue to draw hundreds of thousands of
litres of groundwater each day, along
with a number of others firms including its
competitor, Pepsi Cola.
(Quest Features & Footage.)