Coca-Cola Shareholders Warned of Liabilities in India

“Company Management Being Seriously Derelict in its Duties”

For Immediate Release
April 21, 2010

Amit Srivastava, India Resource Center +1 415 336 7584 E: info@IndiaResource.org

Atlanta (April 21, 2010): It is only a matter of time before the Coca-Cola company will be held financially and criminally liable for their operations in water-stressed areas in India, Coca-Cola shareholders were told today at the company’s shareholder meeting in Atlanta.

“The company management is being seriously derelict in its duties by not acknowledging the real extent of the liabilities Coca-Cola has incurred and continues to incur in India,” said Amit Srivastava of the India Resource Center, an international campaigning organization, at the shareholders meeting.

Srivastava referred to a March 22, 2010 announcement by a government initiated high-level committee in the state of Kerala which has recommended that Coca-Cola be held liable for US$48 million in damages to the community and the environment around its bottling plant in Plachimada.

The Coca-Cola bottling plant in Plachimada has been shut down since March 2004 as a result of government orders, spurred by a strong local community opposition.

In spite of a series of studies and investigations, including government studies, that have found Coca-Cola guilty of water depletion and pollution, the company has refused to take responsibility for its negligent operations in Plachimada.

“The report is very clear that Coca-Cola is responsible for damages in Plachimada, and the committee was appointed by the state government. What else does Coca-Cola need to admit its wrongdoing in Plachimada and compensate for the damages it has caused?” asked R. Ajayan of the Plachimada Solidarity Committee, a statewide group that has been key in pushing the state to move forward on compensation.

The High Level Committee comprised of very senior representatives from the state government, including directors from the departments of Agriculture, Health, Animal Husbandry, Groundwater Board and the Pollution Control Board.

The High Level Committee also reinforced the campaign demand that Coca-Cola should be held criminally liable for the damages it has caused in Plachimada as a result of over-extraction of water and pollution of water and land.

The Coca-Cola company is also embroiled in controversy in Kala Dera in the north Indian state of Rajasthan. Kala Dera is in a desert area, and the area’s groundwater resources were declared as “over-exploited by the government in 1998. Yet, the Coca-Cola company built a new plant in 2000, leading to severe water shortages for at least 40 villages in the vicinity of the plant.

In the nine years prior to Coca-Cola’s bottling operations in Kala Dera, groundwater levels fell just 3 meters. In the nine years since Coca-Cola has been operating in Kala Dera, the groundwater levels have dropped 22.36 meters, according to government figures.

A study paid for by Coca-Cola and conducted by the Energy and Resources Institute (TERI) in 2008 confirmed that Coca-Cola was a significant contributor to the water crisis in the area. The study recommended that Coca-Cola shut down the plant, relocate the plant, bring in piped water from outside the area, or use the rainwater it harvests to meet its water needs.

Coca-Cola has refused to implement any one of the recommendations, and the company continued to extract groundwater even in the summer of 2009 when Kala Dera was declared a drought hit area.

“Coca-Cola has no business operating in Kala Dera when children, women and even farmers don’t even have enough water to drink and to make a living,” said Mahesh Yogi of the Kala Dera Sangharsh Samiti, a local group spearheading the campaign against Coca-Cola.

“It is difficult to fathom why Coca-Cola located some of its plants in water stressed areas in India. It was either sheer incompetence on the part of the company or sheer arrogance. Experience tells us it is a lot of both,” said Amit Srivastava.

“It is only a matter of time before Coca-Cola will have to shut down its plants in water stressed-areas and pay compensation for the damages it has caused. Arrogance and incompetence are not traits suited for long term sustainability, and that is where the company has gone wrong.” said Srivastava.

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