Case Study - Environmental Management

8/9/2019 Case Study - Environmental Management

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HEAT ON COLD DRINKS

The Coca-Cola company exists to benefit and

refresh everyone it touches, says the homepage of the worlds largest soft drinkcompanys website. But many in India, and inthe 199 other countries that Coke is sold in, arefinding out the truth the hard way.

Coke has been in the news recently for all the

wrong reasons; the latest being the 5 Augustreport of the Centre for Science andEnvironment, New Delhi. A CSE test found 12soft-drink brands of Coke and its global rivalPepsi contained pesticides and insecticides inexcess of the European Economic Commissionslimit. The Parliaments immediate reaction:

ban on the brands on its premises.

On 8 August, a West Bengal government reportsaid sludge and liquid effluents from Cokesplants at Dankuni, Taratala and Jalpaiguri andPepsis at Narendrapur contained toxic metalsand the carcinogen cadmium.

On 6 August, Kerala State Pollution ControlBoard had confirmed that Cokes bottling planthad indeed been polluting the groundwater and


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agricultural land in and around its Palakkadplant.

Six months ago, CSE tests had found pesticidesin leading packaged water brands, includingthose produced by Coke and Pepsi.

These bombshells followed media reports in theUK and in India of the scorching andenvironmentally disastrous impact of Cokes

operations in several regions in India; ofallegedly rigging marketing tests in the USA andusing slush funds to boost equipment sales; ofreportedly hiring Right-wing death squads toeliminate trade union organisers in Columbiaand Guatemala; of causing environmentaldamage in Panama and of neglecting health

problems of its employees in Africa.

While reports of pesticides and insecticidespresence in Coke and Pepsi may now deterconsumers from enjoying the soft-drinks,people living in and around Cokes bottlingplants in India have been feeling the heat in a

different way. In Kerala, Uttar Pradesh,Rajasthan, Tamil Nadu and Maharashtra, peoplehave been protesting against Cokes bottlingplants because theyve depleted groundwaterlevel and damaged the environment.


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Villagers of Palakkads Plachimada village inKerala had been agitating against Cokesbottling plant for several months but their

plight drew global attention only recently afterBBC Radio 4s Face The Facts expose. PresenterJohn Waite visited Cokes Plachimada plantafter villagers complained of fallinggroundwater level in the area after Coke hadstarted drawing it in huge quantities. Waitecarried the samples of water and wastes soldby Coke as soil conditioner (but used by localfarmers as fertiliser) back to the UK, wherelaboratory tests showed that they containeddangerous levels of cadmium. Tests atUniversity of Exeter too showed the materialwas useless as a fertiliser and contained a

number of toxic metals, including lead. But thecompany has been denying any wrongdoing.Coke vice-president in India Sunil Gupta toldthe BBC that the fertiliser didnt pose any risk.We have scientific evidence to prove it isabsolutely safe and we have never had anycomplaints.

But Plachimadas villagers have a differentstory to tell. Three years ago, the little patchof land in the green, picturesque rolling hills ofPalakkad yielded 50 sacks of rice and 1,500


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coconuts a year. It provided work for dozens oflabourers. Then Coke arrived and built a 40-acre bottling plant nearby. In his last harvest,

Shahul Hameed, owner of a small holding,could manage only five sacks of rice and just200 coconuts. His irrigation wells have run dry,thanks to Coke drawing up to 1.5 million litresof water daily through its deep wells to bottleCoke, Fanta, Sprite and the drink the localscall, without irony, Thumbs-Up. But thecruellest twist is that while the plant bottles amineral water, local people who can neverafford it are now being forced to walk up to10 kilometre twice a day for a pot of drinkingwater. The turbid, brackish water that remainsat the bottom of their wells contains too high a

level of dissolved salts to drink, cook with oreven wash in.The disruption in life because ofdepletion of groundwater and contamination bypollutants have forced villagers to picket thefactory for the past 470 odd days. Over 300people have been held for demonstratingagainst Coke and blackening its hoardings.

On 7 April, the Perumatty panchayat revokedthe factorys licence to alleviate the villagerssufferings despite losing almost half of itsannual income of Rs 7,00,000. But Cokes


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lawyers got the suspension order revoked byappealing to the local self-governmentdepartment. Coke could operate its plant till 6

August but on that day KPCB made its reportpublic, confirming the existence ofcarcinogenic contaminants in the waste. Now,the government has postponed the hearing,saying its necessary to (get) SPCBs reportconfirmed.

This is actually a David and Goliath battle:some of the worlds poorest people versus amultinational giant. The Centre classifies manyof the suffering villagers as primitive tribals orDalits. Few took notice when the villagers firstbegan complaining of the changes in thequantity and quality of well water. But theircomplaints mounted, for they not only losttheir water but, with the dried-out farmsclosing, also their jobs. A reasonable number ofcrippled labourers would be 10,000.

Coke, of course, denies responsibility for all

this, and it has the support the localauthorities; they argue that the companycreates jobs. Politicians even threatened theagitationists with dire consequences if theydidnt stop. Though Coke claims to have carried


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out the mandatory Environment ImpactAssessment report before setting up the plant,none so far has seen the report. Waites

repeated requests to the company to produce acopy of the report met with failure.

In UP, sustained protests against Coke haveprompted the Central Pollution Control Boardto initiate a probe into the pollution beingcaused allegedly by Bharat Coca-Cola Bottling

North East Private Ltd a bottling arm of Coke in Mehdiganj, 20 km from Varanasi. Troublestarted in early May when a court found thefirm guilty of not paying land revenue worthmore than Rs 15 lakh. An equal amount ofpenalty under Section 47 (A) of the IndianStamps Act has also been imposed on thecompany. The case, filed in April 2001 by theUP government, was the outcome of lobbyingby protesting local residents. They allege theplant has been discharging hazardous wastesand heavy consumption of groundwater hasdepleted the water level, from 15 feet to 40

feet. Result: severe drinking water scarcity.

In Maharashtra, villagers of Kudus in Thanedistrict now have to travel long distances insearch of water because it has dried up, thanks


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to Coke. Villagers have began questioning thesubsidised water, land and tax breaks that Cokegets from the state, only to leave them more

thirsty. A man was detained for protestingagainst Cokes pipeline, built to carry waterfrom a river to its plant.

In Tamil Nadu, more than 7,000 peoplegathered in Sivaganga recently to protest

against a proposed Coke plant. Protests arealso building up against the sale of majorCauvery tributary Bhavani by Tamil Nadugovernment to Poonam Beverages for bottlingCokes packaged water, Kinley. Despite thestate facing drought conditions, thegovernment effected the sale. At places theground water level is beyond reach resulting inwater riots and even killings.

In Rajasthan, villagers of Kala Dera near Jaipurhave been protesting against the fall in thegroundwater level after a Coke plant started

drawing water. After the firm set up a bottlingplant, the areas wells and ponds dried up.The water level has fallen by more than 150feet in the area, said a villager. Locals havesubmitted a memorandum to the chief


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minister, demanding the plant be shifted. Butthe unfazed $-20-billion, Atlanta-based softdrink giant claims local communities have

welcomed our business as a good corporateneighbour. But this should not come as asurprise, for Coke is accustomed to having itsway withgovernments. Under the rules of entry intoIndia, Coke was to divest 49 per cent of itsequity stake within five years. But now thegovernment seems to have given in to the softdrink giants pressure; its on the verge ofchanging its policy to suit Cokes interest. WillIndian investors own 49 per cent of Cokesoperations in India, but have no votewhatsoever?

Remember Enron! In Cokes case too, the USgovernment played a significant role. USambassador to India Robert Blackwill wrote toPrime Ministers principal secretary BrajeshMishra: I would like to bring to your attention,

and seek your help in resolving, a potentiallyserious investment problem of somesignificance to both our countries. The caseinvolves Coca-Cola, one of the largest singleforeign investors in India. But around the


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world, Coke has increasingly become the targetof local communities ire around because of itsdisregard for man and his environment. The

worlds most well recognised brand namesLatin American bottler is facing trial forallegedly hiring Right-wing paramilitary forces(death squads) to kill and intimidate tradeunion organisers, especially fromSINALTRAINAL. The suit has been brought underthe Alien Tort Claims Act, that allowscorporations to be sued in the USA for crimescommitted overseas.

Holding Coke responsible for the harms itcauses is nothing new. In May 2003, Coca-Colade Panama was fined US $300,000 for pollutingMatasnillo river in that country.

Coke may not got the Enron way for it is notbased on assumptions and speculation. But bothshare some uncanny similarities: Enron andCoke top the US foreign direct investment (FDI)list in India. Enrons Indian operations (Dabhol

Power Corporation, joint venture with Bechteland General Electric and others) was thelargest single FDI in India and became thetarget of activists across the country becauseof various irregularities. Enron was forced to


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shut down its Indian operations long before thefinancial scandal broke out in the USA andbrought the entire company down.

The company that started life in 1886 as theresult of a search for a headache remedy maysoon join Enron if it fails to stop giving peoplemore headaches than it can cure.

Discuss the environmental impacts.

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Case Study - Environmental Management