Coke Rejects Panel Report, Rs 216 Crore Fine Likely
Rediff News
March 22, 2010

Coca Cola has rejected the report of the experts' committee set up by the Kerala [ Images ] government to assess losses caused by its plant at Plachimada, saying the panel was set up based on the 'unproven assumption' that the company had caused damage in the area.

Reacting to the report presented to the government on Monday, the company said, "It is our view that any government committee or panel reviewing claims should first determine through a process of law whether any damage was caused to residents of Palakkad, and if such damage was caused, who was responsible."

Numerous investigations sponsored by the state government and others had examined issues concerning the operations of Hindustan Coca-Cola Beverages plant at Plachimada, it said.

Based on scientific evaluation, the Palakkad plant operations had not been shown to be the cause of local watershed issues.

"It is unfortunate that the committee in Kerala was appointed on the unproven assumption that damage was caused and that it was caused by Hindustan Coca-Cola Beverages," it said. In these circumstances, there is little for us to comment upon, given the deliberations of a committee appointed with such a mandate, the company said.

Earlier, an expert panel set up by Kerala government on Monday suggested legal steps to realise Rs 216.26 crore (Rs 2.16 billion) as compensation from it for the 'multi-sectoral' loss caused by its plant at Plachimada in Palakkad district.

The 14-member committee, headed by additional chief secretary K Jayakumar, also recommended setting up of a tribunal to take the legal process forward since it would not be possible to the affected people to individually fight the legal battle.

The panel report, handed over to state Water Resources Minister N K Premachandran in Thiruvananthapuram, held that besides heavy withdrawal of ground water, the Hindustan Coca Cola Beverages Ltd plant had inflicted harm to the farming and environment in the area by dumping solid waste.

It quantified the damage suffered by various sectors due to the functioning of the plant from 1999 to 2004 as agricultural loss (Rs 84.16 crore or Rs 841.6 milliom), pollution of water resources (Rs 62 crore or Rs 620 million), cost of providing water (Rs 20 crore or Rs 200 million), health damage (Rs 30 crore or Rs 300 million), wage loss and opportunity cost (Rs 20 crore or Rs 200 million).

Receiving the report, the minister said it would be placed before the state cabinet to take appropriate steps.

The Left Democratic Front government had set up the high-level panel to assess the 'socio-economic damage' allegedly caused by 'exploitation' of ground water by the plant. The report incidentally came on a day which is being observed as 'World Water Day'.

Panel chairman Jayakumar said the 'dedicated' legal mechanism to fight for compensation could be created by the state government itself either by setting up a tribunal or asking the Centre to create such a mechanism under the Environment Act.

"Once the government decides on a suitable mechanism and it comes into being, individual claims will have to be assessed and actual compensation decreed and the polluter company made to pay it," the report said.

It reported the precedent of Tamil Nadu setting up a tribunal to address the pollution caused by tanneries.

The chairman noted that Coca Cola declined to co-operate with the study by writing that the government had no power to do such an exercise. "We just ignored the contention of the company and went ahead with our task," he said.

The report said the company was culpable under several laws.

By passing sludge as manure, which had contents of cadmium, led and chromium, the company had not only misguided farmers, but has become responsible for soil degradation, water contamination and consequential loss of agriculture.

Besides a steady decline in agriculture in the area dominated by weaker sections and tribals, production of milk, meat and eggs had also suffered, it said.

The general health of the people had been affected with skin ailments, breathing problems and other debilities.

The report said drinking water had become scarce through over extraction by the plant and women had to go long distances to fetch water.

A total of 900 households had been directly affected by the problems caused by the company.

Children had to drop out of schools on account of the social, health and economic factors caused by the pollution and this 'opportunity cost' should be realised, it said.

Daily extraction of over 500,000 litres of water by the plant had upset the natural balance and adversely affected availability of water.

Toxic chemicals in the waste water contaminated groundwater and made it unsuitable for irrigation, the report said.

Coca Cola's Plachimada plant, now dysfunctional, had been the focus of a struggle with local people, environmentalists and anti-MNCs activists agitating for its closure.

At one point, the LDF government in the state had even imposed a ban on sale of Cola brands of various companies, which was later quashed by the Kerala high court.

The plant had been non-operational since 2004 as it faced legal hurdles from the local Perumatty panchayat.

The 14-member experts' committee was constituted by the state government in April, 2009. Jayakumar was made its chairman as he was agricultural production commissioner and water resources secretary then.

The committee comprised legal experts, including a retired district judge, agricultural scientists, environmentalists and health and ground water experts.

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