Coca-Cola lawsuit (re India)

In May 2003, the Perumatty Grama panchayat, in the Indian state of Kerala, revoked Hindustan Coca-Cola Beverage’s (the India subsidiary of Coca-Cola) licence to operate its factory in Plachimada village, alleging that the company’s activities resulted in drinking water scarcity and environmental problems.  In July 2003, Coca-Cola appealed the licence revocation to the state government, which ordered the panchayat to organise a group of experts from relevant state departments to investigate the allegations and only then take a decision based on the outcomes of the report.  On 29 October 2003, the village council of Plachimada filed a writ petition with the High Court of Kerala against the government of Kerala state and Hindustan Coca-Cola Beverages.  The writ challenged the legality of Kerala governmental interference with the functions of the panchayat. 

In December 2003, before the single bench of the Kerala High Court, the company argued that there was no statutory prohibition on digging bore-wells at the time it started operating in Plachimada.  The court did not accept this argument, underlining that such assertions are incompatible with emerging international environmental jurisprudence around the right to life and that it is the State’s duty, as the trustee of natural resources, to protect groundwater resources.  Although the court invalidated the panchayat’s decision to close down the factory, it decided that the current water extraction by the company was illegal.  The ruling also recognised that individuals’ right to life and right to livelihood are likely to be infringed by the over-extraction of groundwater by a person or a company.

Both the panchayat and the company appealed the court’s decision.  In April 2005, the division bench of the Kerala High Court reversed the decision of the single bench.  It held that groundwater was a private water source and that the landowner had proprietary rights over it and was free to extract the groundwater from its land, without permission from the panchayat or the State.  The allegations of pollution were rejected by the court and the panchayat was ordered to renew the licence of the company.  In November 2005, the panchayat appealed the High Court’s decision in the Supreme Court.  The appeal is currently pending before the court.

In February 2011, the state legislature of Kerala passed legislation establishing a three-member tribunal to adjudicate compensation claims related to Coca Cola's activities in Plachimada.  The formation of this tribunal is based on the 2010 report of a High Power Committee that recommended the company be held liable for US$48 million in damages.  

- "Plachimada's claims", R. Krishnakumar, Frontline [India], 17 Jul 2010
- “State environment agency tells Coca-Cola to shut plant in southern India”, U.S. Water News Online, Sep 2005
- “India: Coca Cola ordered to close Kerala plant”, Business Respect, 19 Aug 2005
- “Coca-Cola plant must stop draining water”, Paul Brown, Guardian [UK], 19 Dec 2003
- “India: Coca-Cola threatened with Kerala plant closure”, mallenbaker.net, 20 Sep 2003

- Georgetown International Environmental Law Review: “Searching for Human Rights to Water Amidst Corporate Privatization in India: Hindustan Coca-Cola Pvt.Ltd. v Perumatty Grama Panchayat”, Saby Ghoshray, Summer 2007
- International Environment Law Research Centre: [PDF] “Legal Implications of Plachimada - a case study”, Sujith Koonan, IELRC Working paper, 2007

- Coca Cola:
- The Coca-Cola Company Addresses Allegations Made About Our Business In India, 1 Jun 2004
- Comment From The Coca-Cola Company On The Christian Aid Report, 20 Jan 2004
- The Facts About The Coca-Cola Company in India
- Water Management - Our Approach to Water

- India Resource Centre:
- Providing the Facts for Mr. Tharoor on Coca-Cola in India, Amit Srivastava, 23 Mar 2009
- Coca Cola: Continuing Battle in Kerala, C. Surendranath, 10 Jul 2003
 - CorpWatch India Responds to Coca-Cola, 13 Aug 2002
 - No Water? Drink Coke!, Nityanand Jayaraman, 28 May 2002

- Hindustan Coca Cola Beverages vs Perumatty Grama Panchayat, High Court of Kerala, 7 Apr 2005
Perumatty Grama Panchayat vs State of Kerala, High Court of Kerala, Judgment, (Single Bench decision) 16 Dec 2003

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Company response
24 April 2016

Coca-Cola statement re compensation

Author: Coca-Cola

The Hindustan Coca-Cola Plant at Kerala has been non-operational since 2004. The Company halted operations at the Plant, of its own volition, despite having all licenses and permissions to operate the Plant, at that time. In spite of halting operations, the Plant continued to distribute drinking water to surrounding villages for more than 4 years after it discontinued operations. The plant distributed approximately 60,000 liters of purified drinking water free of cost every day through dedicated tankers to villages within the Perumatty Panchayat, despite there being no obligation to do so. Several independent scientific studies have been carried out over the last decade, have substantiated that there were no truths in the allegations made against the Plant operations at Kerala. The studies include those that were conducted by regulatory bodies of the Govt of Kerala itself. As regards the claims of compensation, a Committee set up by the Kerala Government did issue a report alleging our plant had violated environmental laws. The Committee invited claims of compensation that added up to $35 million. We categorically deny each allegation in the Committee's report. They lack factual and legal merit. We also object to the process, as the Committee arrived at its assumptions without any scientific proof and did not give us an opportunity to present the relevant facts, rebut their allegations or present our side of the story. In fact, the Solicitor General of India and the Ministry of Home Affairs, Govt of India, have said that the State Government lacks legislative competence and that the Bill contradicted existing laws. 

Article
21 March 2016

Plachimada - Still waiting for justice and compensation

Author: Beena Govind, Mathrubhumi

The protesters are still around, the fire is still alive but the protest pandal in front of the closed-down company gates of Coca Cola is empty...The people who led the protests from the front are still around...will tell one thing in common - "We haven't yet got clean drinking water, nor justice we sought"...to date there has been no compensation for the ecological, social and environmental losses suffered by the villagers...The company shut down in 2003 but not a penny has been paid in compensation to the people who suffered the damage at the hands of the corporate. ......The most recent setback was in February 2016 when the President's office sent the bill back refusing assent on unspecified reasons...The protesters are now left in a lurch wondering who their real opponent is- the company or their own elected governments.

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Article
14 March 2016

High time Plachimada Bill got Presidential consent

Author: Vandana Shiva, Mathrubhumi

It is a tragedy that even after five years this important Bill has not got Presidential assent. Since the state has a duty to protect the Right to Life of citizens under Article 1 of the Constitution, Kerala should go ahead and implement the Bill...Since the state has a duty to protect the Right to Life of citizens under Article 1 of the Constitution, Kerala should go ahead and implement the Bill...There is a tendency, under the pressure of giant corporations like Coca-Cola and Monsanto to deregulate corporate activities...In the case of Coca-Cola, corporate freedom translates into theft of water, its pollution with heavy metals, disease, longer walks by women in search for clean drinking water. 

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Article
6 February 2016

A lost battle: Plachimada’s victims may never get Coke’s compensation

Author: KPM Basheer, Hindu

Bringing relief to Coca Cola and turning to nought the long agitation by residents of the Plachimada, a village in Kerala’s Palakkad district, the Plachimada Tribunal Bill has failed to win the President’s assent...The Rashtrapati Bhavan on February 1 returned the Plachimada Coca Cola Victims Relief and Compensation Claims Special Tribunal Bill 2011 – which was unanimously passed by the Kerala Assembly five years ago – to the Ministry of Home Affairs...Hindustan Coca Cola Beverages, the Indian subsidiary of the multinational, has thus been spared of paying compensation to the nearly 1,000 Dalit and Adivasi families from Palakkad’s Perumatty and Pattancherry gram panchayats, the victims of the hazardous effects of its huge bottling plant at Plachimada.

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Article
10 July 2011

Indians force Coca-Cola bottling facility in Plachimada to shut down, 2001-2006

Author: Nathalie Schils in Global non-violent action database

IIn 1998, Hindustan Coca-Cola Beverages Pvt Ltd, a subsidiary of the multinational beverage company, was granted a license to operate a bottling plant in Plachimada, a small village in the state of Kerala in southern India. Within two years of the plant's opening in 2000, indigenous people living near the plant, known as the Adivasi people, began protesting the bottling plant's presence in their community....The campaign was successful in closing the plant, and in 2011 Coca-Cola was declared financially liable up to $48 million dollars for damages and clean up from operation of the Plachimada plant. However, the Plachimada plant has been used since its closure to make non-cola products and it's unclear if this is having the same environmentally-devastating impact seen when Coca-Cola was operating the plant.

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Article
25 February 2011

Lawsuits Against Coca-Cola Approved in India

Author: Associated Press

An Indian state has passed a law allowing residents to seek compensation from soft drink giant Coca-Cola for alleged environmental damage from a former bottling plant. Coca-Cola Co.'s Indian subsidiary, Hindustan Coca Cola Beverages, says the legislation passed Thursday by Kerala state is "devoid of facts, scientific data or any input from or consideration given to" the company. Environmental activists and local residents say the plant in Palakkad district contaminated ground water, caused severe water shortages and leeched dangerous chemicals before it was shut down in 2004…

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Article
1 January 2011

[PDF] Access to Justice: Human Rights Abuses Involving Corporations [India]

Author: Intl. Commission of Jurists

This report aims to critically examine legal remedies, both judicial and non-judicial, available under Indian law to victims of human rights abuses by companies. There are three main objectives of this examination: (i) to assess the efficacy of the existing regulatory framework; (ii) to identify major obstacles that victims experience in holding companies accountable for breaching their human rights obligations; and (iii) to outline recommendations that should help in overcoming these obstacles. [refers to Enron, Coca-Cola, ICICI Bank, PepsiCo, POSCO, Tata, Union Carbide, Vedanta Resources]

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Article
17 July 2010

Plachimada's claims [India]

Author: R. Krishnakumar, Frontline [India]

It may seem surprising that the decision of the Kerala government to establish a tribunal to judge the compensation claims of people affected by the activities of the Coca-Cola factory at Plachimada village in Palakkad district has received only a muted response…On June 30, Chief Minister V.S. Achuthanandan announced the Cabinet's decision to set up a dedicated legal agency “to assess the actual compensation due to every applicant and issue orders to the company for compliance”…It was the first time in the State that such a tribunal was being proposed to offer compensation to victims of industrial pollution…The 13-member [high-power committee]…had consulted experts in various fields, held public hearings and drawn on several earlier studies before submitting its detailed report in March.

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Article
30 June 2010

Kerala to set up tribunal to get compensation from Coke

Author: Times of India

The LDF government in Kerala…decided to set up a special tribunal to realise compensation from…Coca Cola for the "serious losses" caused to people, environment and agriculture by its plant at Plachimada in Palakkad district. The state cabinet took the decision based on the report of a government appointed high-power committee which quantified the losses inflicted by the plant…at Rs 216.26 crore…However, the company, which had run into legal tangles quite often over the issue, stuck to its position that the committee was set up with "a pre-determined and unproven conclusion" that operations of the plant had caused loss to the residents of Plachimada.

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Article
25 April 2010

Plachimada activists vow to keep Coca-Cola plant shut

Author: Hindu

 Activists who have successfully campaigned for the closure of a Coca-Cola plant at Plachimada have expressed anger and dismay over the statement made by Muhtar Kent, chief executive officer of the company, at its recent annual shareholders meeting in Atlanta, U.S., that it “could open the Plachimada plant any time.”..leaders of the Janata Dal (Secular) faction that rules the Perumatty grama panchayat which cancelled the licence of the Plachimada plant resulting in its closure in 2004 said they would not allow the reopening, as it would invite disaster to the whole of Palakkad district.

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