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Lawsuit

Coca-Cola lawsuit (re India)

Status: ONGOING

Incident date
May 1, 2003
Unknown
Community
Location of Filing: India
Location of Incident: India
Type of Litigation: Domestic

Companies

Coca-Cola United States of America Food & beverage

Sources

In 2003, Coca-Cola Beverage appealed its license revocation to the state government in India. The license was allegedly revoked because of the company's activities resulting in drinking water scarcity and environmental problems. The case is still pending in court. In 2011, the legislature approved a tribunal to mediate claims for compensation resulting from Coca-Cola's environmental activities.


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.  

Coca Cola:

India Resource Centre:

Case Timeline