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Coca-Cola lawsuit (re India)

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.  

- "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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