Corporate Social Responsibility and Environmental Management

Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)

Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/csr.097

Case Study:
Coca-Cola and Water in India
Jonathan Hills1,* and Richard Welford2,*
1
CSR Asia
2
Corporate Environmental Governance Programme, University of Hong Kong

Introduction to the Case

LL THE MATERIAL IN THIS CASE STUDY IS BASED ON PUBLICLY AVAILABLE INFORMATION. THE CASE

A is intended to be used for both research and teaching purposes. In order to facilitate learning we
have divided the case into three parts. At the end of each part is a set of questions that should be
answered before continuing to study the next part of the case. The authors make no judgement
whatsoever about the conduct of any of the parties involved in this case study.

Part 1

Coca-Cola was founded in 1886 and is a manufacturer, marketer and distributor of non-alcoholic bev-
erages, concentrates and syrups. The company also produces, markets and distributes juices and juice
drinks, as well as water products. Its corporate headquarters are in Atlanta, USA, and the company has
local operations in over 200 countries around the world. Revenues in 2004 totaled US$22 billion.

Coca-Cola in India
Coca-Cola was the leading soft drink in India until 1977 when it withdrew from the country rather than
reveal its formula and reduce its equity stake as required under the Foreign Exchange Regulation Act
(FERA), which the Janta party – committed to a policy of Indian self-reliance – introduced to govern the
operations of foreign companies in India. In 1993, the ban was lifted in pursuance of India’s liberal-
ization policy and Coca-Cola made a comeback.
Since its return in 1993 Coca-Cola estimates it has invested around US$1 billion in India, making it
one the country’s biggest international investors. The company produces its beverages locally with
around 7000 employees at 27 wholly owned bottling operations and 17 franchisee-owned bottling oper-
ations, supplying an estimated 700 000 retail outlets nationwide. In addition to its own employees, Coca-

* Correspondence to: Jonathan Hills, CSR Asia, Hong Kong, Suite A, 13th Floor, Unionway Commercial Centre, 283 Queens Road Central, Sheung
Wan, Hong Kong, China, and Richard Welford, Corporate Environmental Governance Programme, Centre of Urban Planning and Environ-
mental Management, University of Hong Kong, Knowles Building, Pokfulam Road, Hong Kong, China. E-mail: jhills@csr-asia.com,
rwelford@hkucc.hku.hk

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment
Coca-Cola and Water in India 169

Cola says it indirectly creates employment for another 125 000 people via its procurement, supply and
distribution network.

Coca-Cola India (CCI) and CSR

Coca-Cola’s CSR initiatives in India to date have primarily been community, health and environment
focused. The company has set up primary school education projects to benefit poor children in slums
and villages, supported community-based rainwater harvesting projects to restore water levels, and
recently played a role in setting up a water project that involves educating local communities about water
conservation. Other initiatives from 2005 have seen the company participate in the cleaning of the
Dashaswamedh ghat – a cremation site – on the Ganges, one of the oldest in the country, and offer
employment opportunities at its bottling plant near Varanasi to students from a nearby school for the
deaf. In 2004, the state of Tamil Nadu named CCI ‘Best Private Company’ for its employment of 80
physically challenged youth in Chennai, while the government of Andhra Pradesh awarded CCI ‘Best
Management Award’ for its human resources policies in 2005. Coca-Cola was also a major donor to
tsunami relief efforts across Asia.
In addition to these efforts, the company has committed itself to environmental responsibility though
its own business operations including
• environmental due diligence before acquiring land or starting projects
• environmental impact assessment before commencing operations
• groundwater and environmental surveys before selecting sites
• compliance with all regulatory environmental requirements
• ban on purchasing refrigeration equipment containing CFCs
• waste water treatment facilities with trained personnel at all company-owned bottling operations
• energy conservation programmes

The NGO Movement and Allegations Against Coca-Cola in India

NGOs, most notably the India Resource Centre (IRC), led by activist Amit Srivastava, claim communi-
ties across India are ‘under assault’ from Coca-Cola’s practices in the country. The IRC alleges a pattern
has emerged as a result of Coca-Cola’s bottling operations in India. Allegations can be divided into four
distinct categories.
1. Water shortages. Communities across India living around Coca-Cola’s bottling plants are experienc-
ing severe water shortages as a direct result of Coca-Cola’s extraction of water from the common
groundwater resources. Wells have run dry and hand water pumps do not work any more. NGOs say
several studies have confirmed the significant depletion of the water table.
2. Pollution. Coca-Cola has been discharging its waste water into the fields around its plants and some-
times into rivers, including the Ganges, in surrounding areas. The result has been that groundwater
and soil has been polluted. Public health authorities have posted signs around wells and hand pumps
advising the community that the water is unfit for human consumption.
3. Distribution of toxic waste. Coca-Cola has been distributing solid waste to farmers in two communi-
ties, Plachimada and Mehdiganj, as ‘fertilizer’. Tests conducted by the BBC found cadmium and lead
in the waste, effectively making it toxic waste. Coca-Cola stopped the practice of distributing its toxic
waste only when ordered to do so by the state government.
4. Products contain pesticides. Tests conducted by a variety of agencies, including the government of India,
found Coca-Cola products contained high levels of pesticides.

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)
170 J. Hills and R. Welford

NGOs have been demanding Coca-Cola permanently shut down its bottling facilities in Mehdiganj, Kala
Dera and Plachimada; compensate affected community members; recharge depleted groundwater; clean
up contaminated water and soil; ensure that workers laid off as a result of their ‘negligence’ are retrained
and relocated in a more sustainable industry and admit liability for the long term consequences of expo-
sure to toxic waste and pesticide laden drinks in India.

Timeline of Events
August 2003
The Center for Science and Environment (CSE), an Indian NGO focusing on environmental sustain-
ability issues, issued a press release on 5 August alleging 12 major cold drink brands sold in and around
Delhi contain a ‘deadly cocktail’ of pesticide residues. Tests conducted by CSE on three samples of 12
PepsiCo and Coca-Cola brands from across Delhi found they contained residues of pesticides surpass-
ing global standards by 30–36-fold. CSE claimed all these pesticides were known to cause a variety of
illnesses, including cancer, damage to the nervous and reproductive systems, severe disruption of the
immune system and birth defects.
The CSE claimed regulations on soft drinks were weak in India as neither the Prevention of Food
Alteration Act (PFA) or the Fruit Products Order (FPO) addressed the issue of pesticides in soft drinks,
and there were no standards to define ‘clean’ or ‘potable’ water. The CSE called on the Indian govern-
ment to implement legally enforceable water standards and hit out at Coca-Cola and PepsiCo for ‘taking
advantage’ of the situation ‘at the expense of consumer health and well-being’.
In response to the report the Indian government immediately banned Coca-Cola and PepsiCo prod-
ucts in Parliament and ordered state governments to launch independent investigations of Coca-Cola
and PepsiCo products in their own regions.
Over the next two weeks, sales of Coca-Cola products dropped by 30–40% on the heels of a 75% five-
year growth trajectory and 25–30% year-to-date growth. Stock in the Coca-Cola Bottling Company (Coke)
and Coca-Cola Enterprises (CCA) dropped by US$5 on the New York Stock Exchange from US$55 to
US$50 in the six trading sessions following the release of the CSE report. A public survey conducted in
Delhi a few days after the release of the CSE report found that a majority of consumers believed the
findings were correct and agreed with parliament’s move to ban the sale of soft drinks.
Coca-Cola and PepsiCo disputed the CSE report and publicly questioned the method of testing at a
joint press conference. The CSE however claimed it had followed standard procedures documented by
the United States Environmental Protection Agency (EPA). PepsiCo later conducted its own tests at an
independent laboratory and claimed to have found no detectable pesticides in its products. It subse-
quently filed a petition with the Indian High Court questioning the credibility of the CSE report. Coca-
Cola meanwhile threatened legal action if the allegations continued. Both companies launched
independent campaigns to reassure the public, taking out full-page newspaper advertisements and
directing consumers to their corporate web-sites to review their own test results and safety protocol.
Later that month the government announced the results of its own tests on Coca-Cola and PepsiCo
products. It found that nine out of 12 soft drink samples produced by Coca-Cola and PepsiCo operators
in India failed to meet European Union (EU) safety standards for pesticide residue (but were still con-
sidered safe under local standards). Indian Minister of Health Sushma Swaraj told Parliament that
residue levels in the drinks fell well within India’s safety limits for bottled water, countering the CSE’s
claim that the drinks contained dangerous levels of toxins. ‘The results clearly show that all the 12 samples
do not have pesticide residues of the high order as was alleged in a report by the CSE’, Swaraj said.
However, she said, ‘The assertion of the soft drink manufacturers that their product is within the EU

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)
Coca-Cola and Water in India 171

limits has also not proved to be correct. . . .’ The government said it would insist the companies apply
EU standards for water purity in the future and a parliamentary committee would investigate the matter.

October 2003
Coca-Cola hired PR company Perfect Relations to help rebuild its reputation and sales. One of its first
recommendations was for the company to establish an independent external advisory board. At the con-
clusion of its first advisory board meeting in December 2003, Coca Cola India announced that it had
decided to establish an India Environment Council. Critics said the establishment of the council had
been developed as a strategy to deflect media attention away from controversies involving the company.
The CSR initiative also followed media reports about Coca-Cola India paying former Miss Universe
and Thumbs Up (Coca-Cola India’s local brand) brand endorser Sushmita Sen US$315 000 to stay silent
over an alleged sexual harassment case against its marketing head Shripad Nadkarni.
Between August 2003 and December 2003 communities in Mehdiganj, a village about 20 km from the
holy city of Varanasi, Uttar Pradesh State, staged numerous demonstrations in protest at the local Coca-
Cola bottling plant. In August, community members entered the office of the Regional Pollution Control
Board in Varanasi and dumped sacks full of sludge from the Coca-Cola plant on the regional officer’s
desk. In September 2003, over 500 people marched to the Coca-Cola factory gates and were, NGOs
claimed, physically attacked and beaten by police and private security guards. In October 2003 a march
was organized from the Coca-Cola plant in Mehdiganj to a PepsiCo plant in Jaunpur, about 150 km away,
and in mid-December 2003 ten activists went on a five-day hunger strike in front of the Coca-Cola facil-
ity. They were supported by 50 people sitting with them each day, and about 300 people went on hunger
strikes of varied duration, claim NGOs.

December 2003
Coca-Cola was ordered to stop drawing groundwater for its bottling plant in Plachimada, Kerala, south-
ern India, after a court ruled it was ruining the environment. The state’s high court ordered the company
to close its boreholes and stop drawing groundwater within one month.
The court ruled that extraction of the groundwater at Plachimada village was illegal. ‘Groundwater
under the land of the company does not belong to it’, said Justice K Balakrishnan Nair. ‘Every landowner
can draw a “reasonable” amount of groundwater which is necessary for its domestic and agricultural
requirements. But here, 510 000 litres [110 000 gallons] of water is extracted per day, converted to prod-
ucts and transported, thus breaking the natural water cycle’.
Judge Nair also said the government also had no power to allow a private party to extract such a huge
quantity of groundwater, which could result in it drying up. Environmentalists claimed 1.5 million litres
of water were being extracted every day. Coca-Cola’s divisional president, Sunil Gupta, denied the
figures, saying the plant extracts only 300 000 litres a day and that it has permission from the govern-
ment to use up to half a million litres.
Nevertheless, despite this view the judge ordered the village council to renew the plant’s licence. He
restrained the council from interfering with the functioning of the factory. The village had sought to
rescind its licence and force it to close, but the court said that it had no power to do so.
Protestors claim that three years ago Plachimada produced more than 50 sacks of rice and 1500
coconuts a year and provided employment for dozens of labourers. Then Coca-Cola built the bottling
plant. Local farmers say that the last harvest yielded barely five sacks of rice and about 200 coconuts.
The company said it would appeal against the order and denied that it depleted the water. It claimed
a lack of rainfall, not their operations, had caused water supplies to be exhausted.

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)
172 J. Hills and R. Welford

February 2004
A parliamentary committee found that drinks made in India by PepsiCo and Coca-Cola Co. contained
unacceptable amounts of pesticide residue. The panel urged the Indian government to set new and
stronger health standards for all beverages sold in the country. The report also criticized Indian regula-
tions on pesticide residue and public safety, and called on the government to set stringent safety stan-
dards for food and beverages. ‘The fact that pesticides were found in PepsiCo and Coca-Cola bottles is
beyond doubt’, said Prithviraj Chavan, a member of the parliamentary committee. ‘But the question we
need to ask is, did they break any Indian law? Are the Indian laws strong enough? The answer is no.
Indian safety standards are very poor’.

March 2004
Coca-Cola’s application for a fresh five-year licence for its bottling plant at Plachimada was rejected by
the local panchayat on 29 March. Earlier, on 9 March, the company had halted its operations after the
Kerala High Court upheld a State Government order restricting it from drawing groundwater from the
plant area until 15 June in view of the severe drought in the district.
The panchayat president, M. N. Krishnan, said the local body had set three preconditions for allow-
ing Coca-Cola to continue operations, including that the plant should not draw groundwater from the
region. The company was asked to ensure that sludge being discharged from the plant did not have toxic
substances. It should also ensure that Coca-Cola products did not contain toxic elements.
Coca-Cola termed as ‘unilateral’ the panchayat’s ruling, as 20 other companies were functioning in
the region utilizing groundwater. Krishnan, however, said the local body was prepared to review its deci-
sion if the company accepted all three conditions. PepsiCo, which operates a plant in the same district,
was exempted from the ruling.
Coca-Cola workers in Plachimada who lost their jobs after the plant shut down subsequently staged
a demonstration outside government offices, demanding the government allow the company to draw
water to restart production.

Questions
1. Review and assess the actions of Coca-Cola with respect to both the issues of pesticide contamina-
tion and unsustainable use of groundwater.
2. If you were a director of CCI what would be your next step?
3. What, if anything, should be done by Coca-Cola in Atlanta?

Part 2

June 2004
On 1 June Coca-Cola issued a lengthy statement addressing allegations made about its business in India.
On the issue of bio-solids or ‘sludge’, the company said this is the end result of the waste water and
water treatment processes and is made up of organic and inorganic material. The use of bio-solids as a
soil amendment is not an uncommon practice around the world, the company said. It added that ‘for
the avoidance of doubt’, it had suspended disposal of the bio-solids until standard testing protocols were
agreed and accepted by all constituents.
The company also claimed to be talking to the Indian central government to ensure that the issue of
a uniform and consistent national regulatory framework is given the full review that it deserves. Fur-

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)
Coca-Cola and Water in India 173

thermore, the company said, the Kerala State Pollution Control Board had concluded that the concen-
tration of cadmium and other heavy metals in the bio-solids are below prescribed limits and, therefore,
are not considered hazardous.
On the issue of water resources, Coca-Cola claimed that allegations that its bottling plant in
Plachimada, Kerala, had been misusing local water resources are false. The company said that neigh-
boring communities, tribal leaders, non-government organizations (NGOs), environmental scientists
and government officials had repeatedly rejected protestors’ allegations as totally groundless.
The company said that since the Kerala plant had been built in 2000, Coca-Cola had complied with
all federal and state laws and regulations in India. Several scientific studies were citied to support these
claims. In October 2002, Dr. R. N. Athvale, emeritus scientist at the National Geophysical Research
Institute in Hyderabad, India, stated in his report ‘There is no field evidence of overexploitation of the
groundwater reserves in the plant area’. A report from the local Palakkad District Environmental Pro-
tection Council and Guidance Society in June 2002 concluded ‘We declare that there is no environment
harassment to the public by the factory at any level’.
Coca-Cola said that over the previous two years, annual rainfall in Kerala had decreased by about 60%,
and that this was the cause of depleted water and drought conditions. It said the latest investigation by
the Kerala State Groundwater Department had rejected the allegation that one of the reasons for water
shortage in the area was ‘overexploitation’ by the plant. In an effort to combat this, the company said is
had installed ‘advanced rainfall harvesting technology’ to help recharge the area’s groundwater reserves.
To supplement existing water sources, Coca-Cola also dug a bore well for the neighboring village, which
it supplies with two tankers of fresh water daily. The company said that by rapidly expanding the capac-
ity of its rainwater harvesting technology at the plant its aim was to become a net contributor to water
in the area by the end of 2004.
On the issue of waste water, the company said the technology its waste water treatment plant used
was among the most advanced in the world. The technologies are also equivalent to most Coca-Cola bot-
tling plants in the United States and Europe, the company claimed. The effluents comply with standards
and norms set by the Kerala State Pollution Control Board and the company said it constantly moni-
tored the quality of the effluents to prevent pollution.
Later that month, some 2000 residents of Kaladera, Rajasthan, staged a demonstration demanding
the closure of a Coca-Cola plant they said was responsible for the depleting water table.

September 2004
Environmental groups announced a nationwide campaign against PepsiCo and Coca-Cola in India. They
planned to form a human chain around the 100 manufacturing units across the country on 20 January
2005. This would be followed by a ‘jan adalat’ (people’s court), which would serve a formal notice to the
managements of these units asking them to quit. Preceding the ‘Quit India Movement’ would be a week-
long programme of ‘defacing’ all PepsiCo and Coca-Cola hoardings from 12 January. ‘Coca-Cola and
PepsiCo are engaged in a water war against the people of India. Their bottling plants are daily stealing
millions of litres of water, thereby denying local communities their fundamental right to water’, said
Vandana Shiva of the Research Foundation for Science Technology and Ecology.
Later that month, the IRC reported on an ‘agitation’ building up against a Coca-Cola bottling plant in
Kaladera and adjoining villages near Jaipur, Rajasthan. It claimed that 30 villages and a number of orga-
nizations had mobilized under the banner of Jan Sangharsh Samiti (People’s Committee for Struggle).
Farmers from these villages held Coca-Cola primarily responsible for declining groundwater levels in
the region and the resultant harm to local agriculture. Reports said groundwater had fallen sharply in
the previous few years and the area had been a declared a ‘dark zone’, which means that digging new

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)
174 J. Hills and R. Welford

wells and installing pumps is illegal. NGOs claimed Coca-Cola had extracted vast amounts of water and
received the water free except for US$110 it pays the government per year. A Coca-Cola representative
admitted that the plant had used about 0.15 million cubic metres of water over the previous year.

October–November 2004
Rajasthan High Court dismissed an appeal by PepsiCo and Coca-Cola against an order to list contents
of their products, thus upholding an original ruling. The court had originally directed the companies to
disclose the composition and contents of the products, including the presence, if any, of pesticides and
chemicals. The soft drinks manufacturers had filed an application that implementation be delayed by
two months on the grounds that it would force their clients to compromise their ‘commercial confi-
dentiality’. They further argued that since their products were bottled at different places, it was not fea-
sible to fulfill the court directive as pesticide content in water varied from place to place. The court
however ruled that people have the right to know about the product they are buying and consuming and
that ‘commercial interests are subservient to fundamental rights’.
Later that month a series of protests against Coca-Cola’s operations in India took place in seven major
cities in the United States. The action was timed to coincide with a major non-violent protest in
India where thousands of people gathered to demand an end to what they said were abuses by the
multinational.
IRC reported that a protest, outside a Coca-Cola bottling plant in Mehdiganj, ended when demon-
strators were attacked by police. When the 1000 demonstrators, half of whom were women and chil-
dren, attempted to march up to the factory gates, they were met by a baton charge by local police. Over
350 of the marchers were arrested, with 100 suffering injuries, IRC claimed.
Subsequently, it was reported that a hedge fund had been launched with an investment strategy
of shorting shares of companies with which it took issue. The London-based fund’s first target was
Coca-Cola.

December 2004
The Indian Supreme Court dismissed two petitions filed by PepsiCo and Coca-Cola, challenging a
Rajasthan high court order asking them to print on containers the extent of pesticide residues in their
products.

February 2005
Reports said students in the United States were calling on universities to cancel contracts with Coca-
Cola over its environmental record in India and also over alleged human rights violations in Colombia.
Activists later designated April as a ‘month of action’ against Coca-Cola for what they said were the
multinational’s ‘crimes’ in India and Colombia. From 4 to 19 April, a Speaking Tour to Hold Coca-Cola
Accountable was planned across the East Coast of the United States. The tour was to culminate with a
demonstration at the Coca-Cola shareholders meeting on 19 April in Wilmington, DE, USA.
Meanwhile, the largest trade union in the UK, Unison, called for a week of action targeting Coca-Cola
from 10 to 16 April. Protestors claimed Coca-Cola operations in India were guilty of creating severe
water shortages, polluting soil and groundwater, distributing toxic waste as fertilizer to farmers and
selling sub-standard drinks that contained high levels of pesticides, sometimes higher than 30 times
those allowed by European Union standards, on the Indian market.

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)
Coca-Cola and Water in India 175

Questions
4. Review and assess the actions of Coca-Cola with respect to both the issues of pesticide contamina-
tion and unsustainable use of groundwater.
5. If you were a director of CCI what would be your next step?
6. What, if anything, should be done by Coca-Cola in Atlanta?

Part 3

April 2005
The High Court of Kerala ruled that Coca-Cola can extract up to 500 000 litres of water per day from
common groundwater resources at its Plachimada facility in southern India. The bottling plant had been
shut down for over a year due to intense community pressure. The local village council (panchayat),
which had refused to renew Coca-Cola’s license to operate, citing it for over-extraction of water, was
given 15 days to reconsider its decision, and Coca-Cola subsequently filed for a renewal of the license to
the local panchayat.
Coca-Cola welcomed the ruling and claimed inadequate rainfall in the previous three years was the
major culprit for drought conditions. It said it was being demonized by anti-globalization activists and
claimed that a nearby Indian brewery, which they said used more water than Coca-Cola’s Plachimada
plant, had been left alone by activists.
On 19 April activists delivered a series of messages to Coca-Cola’s annual shareholders’ meeting,
calling on the company to ‘stop stealing water’. ‘Ensuring that people have access to water is an emerg-
ing global crisis. In draining water from communities for soft drinks and bottled water, Coke is an indus-
try leader that threatens this very basic human right. The soft drink giant gets away with these
irresponsible and dangerous actions because of its political and economic clout. Our members are
joining with people around the world to reject Coke’s abuses’, said Corporate Accountability Interna-
tional associate campaigns director Gigi Kellett.
Meanwhile, students in the United Kingdom voted to take what could be the first steps to boycott
Coca-Cola products from students’ union bars and shops across the country. The passing of an emer-
gency motion at the National Union of Students (NUS) Annual Conference in Blackpool meant that
the NUS would investigate further the allegations that were being made against Coca-Cola regarding
the reported assassination, imprisonment, displacement, kidnapping and dismissal of trade unionists
in Colombia, and drought inducing illegal groundwater extraction in India. Student unions at SOAS,
Middlesex, Leeds and Bristol Universities already had a policy to boycott the company from their
campuses.
Later that month the Times of India reported Coca-Cola was facing opposition to a bottling plant it
was setting up in southern Tamil Nadu. Critics said Coca-Cola’s South India Bottling Company in
Tirunelveli district would strip several villages, the temple town of Gangaikondan and neighbouring
areas of drinking water. Many parts of the area reportedly already faced a drinking water problem.

May 2005
IRC reported that a proposal by South India Bottling Company Limited (SIBCL) – a Coca-Cola fran-
chisee – to set up a US$6 500 000 soft-drinks unit in the Gangaikondan village of Tirunelveli district
in southern Tamil Nadu had run into trouble. The NGO claimed local residents, political parties and
environmentalists had raised concerns that the water-intensive plant would deplete and contaminate

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)
176 J. Hills and R. Welford

groundwater, and draw from the Tamiraparani River, which could not fully meet the drinking water and
agricultural needs of local communities.
Campaigners in the United Kingdom had revealed plans to organize a boycott of Coca-Cola products
in protest at the multinational’s conduct in India, reported the London Line (19 May). The IRC would
open an office in London in July, from which it would organize its anti-Coke protest.
Earlier that month, the 51 000-student Rutgers University in the US cancelled its US$17 million con-
tract with Coca-Cola.

June 2005
On 5 June the local panchayat reluctantly renewed the licence for Coca-Cola’s bottling facility at
Plachimada for three months and with 13 conditions. Coca-Cola later rejected the three-month condi-
tional licence, describing it as a violation of a High Court order. The company filed another application
for a licence for two years. The 13 conditions mentioned in the panchayat order were ‘well outside the
powers entrusted to the Panchayat under the Panchayati Raj legislation for governance within the geo-
graphical boundaries’, said the company in a letter to the panchayat.
Subsequently on 9 June around 700 community members and supporters marched to the Coca-Cola
factory in Plachimada, Kerala, to demand that the plant be permanently shut down. Protesters were
met at the gates by a large cordon of police officers, and close to 500 people were arrested. NGOs
claimed police also attacked a woman protester, who had to be taken to a nearby hospital for
treatment. All protesters were released by the end of the day. ‘The people of Kerala will not allow the
factory to reopen’, said R. Ajayan, convener of the Plachimada Solidarity Committee. ‘Coca-Cola must
respect the wish of the community, and the community does not want the plant to restart’, continued
Ajayan.
NGOs reiterated that the community in Plachimada had been experiencing severe water shortages
since Coca-Cola had started operations in the area, and the remaining groundwater as well as soil had
been polluted as a result of Coca-Cola’s bottling operations.
The Supreme Court of India was set to hear an appeal from the village council in the near future, and
the Coca-Cola company had not decided whether it would reopen the plant, according to reports.
On 10 June it was reported in the Indian Financial Express that the US Food and Drug Administra-
tion (USFDA) had rejected consignments from Coca-Cola India on the grounds that they were ‘unsafe’
or did not conform to US laws. According to information sourced from the USFDA, a shipment of Fanta
sent by Coca-Cola India from Mumbai to the US was rejected on 19 May on the grounds that it con-
tained ‘unsafe colour’. The regulator said the ‘article appears to be, or to bear or contain a colour addi-
tive which is unsafe’.
Also in that month the Wall Street Journal (7 June) ran a front page article on Coca-Cola in India and
noted that while NGOs have flagged some serious issues, such as Coca-Cola’s onetime practice of giving
away waste material to local farmers that some studies later showed contained toxic materials, they had
made some dubious claims as well, with Amit Srivastava of the IRC recently comparing Coca-Cola’s
environmental practices to the industrial accident at Bhopal, which killed thousands.
Significantly, the Wall Street Journal report claimed water allegations remained unproven. It said
Kerala’s highest court had rejected water abuse claims in April of that year, noting that wells there con-
tinued to dry up the previous summer, months after the local Coca-Cola plant stopped operating. More-
over, a scientific study previously requested by the court found that while the plant had ‘aggravated the
water scarcity situation’, the ‘most significant factor’ was a lack of rainfall. The NGOs responded that
Coca-Cola should not be locating bottling plants in drought-stricken areas.

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)
Coca-Cola and Water in India 177

Coca-Cola’s Asia Director of Communications David Fox told the Wall Street Journal that activists such
as the IRC ‘are making false environmental allegations against us to further an anti-globalization
agenda’. Cox also accused Sunita Narain, who heads up the CSE, whose report on pesticide content in
August 2003 first put Coca-Cola India in the spotlight, of ‘brandjacking’ and using Coca-Cola’s brand
name to draw attention to her campaign against pesticides.
To further publicize the pesticide issue, some NGOs last year began publishing stories online and to
the news media relating to Indian farmers spraying Coca-Cola on their crops as a pesticide. However,
the IRC now admits the stories were merely a publicity stunt by local activists and farmers. The Wall
Street Journal article also claimed a Boston-based NGO called Corporate Accountability International
posted on its website a ‘Coca-Cola fact sheet’ suggesting that as a result of Coca-Cola’s extraction of
water in Kerala ‘water riots and water-related murders are now an everyday occurrence as water becomes
scarcer’. Asked to back up the claim, the group admitted it could not and later removed the statement.
Interestingly, NGOs such as the IRC refuse to even sit down with Coca-Cola officials, despite repeated
invitations. ‘There’s no space for dialogue right now’, says Srivastava.

Questions

7. Review and assess the actions of Coca-Cola throughout the whole case study.
8. Assess the roles and actions of the government, NGOs and other activists.
9. What are the lessons to be learned from the case?
10. Assess the actions of Coca-Cola and suggest a strategy for the future.

Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 12, 168–177 (2005)