Ever since the re-introduction of Coca-Cola to Indian consumers since the late 1990s, the company had attracted criticism from activist and advocacy groups. While the high level of pesticides contained in its products has given rise to controversies recently, the charges against Coca-Cola for usurping and depleting water resources have been a more persistent issue. In fact, Coca-Cola’s operations in India since its inception have seen many ups and downs. The lowest point of the company’s history in India was reached in 1977, when the then ruling Congress government, under the leadership of Indira Gandhi, forced out the company. This essay will detail the Achilles Heel of Coca-Cola’s operations in India, namely its competition with native inhabitants over limited water resources, and critically evaluate the company’s strategy for handling of these criticisms.
Description of criticism:
The competition for water between Coca-Cola manufacturing plants and local inhabitants was nowhere more blatant than in Plachimada – a rural part of the state of Kerala in South India. A subsidiary of Coca-Cola – Hindustan Coca-Cola Beverages – set up a manufacturing plant here in the year 2000. Plachimada and its surrounding areas were prone to periodic droughts. Yet, the governing authorities approved the project, apparently reasoning that the plant will stimulate the local economy and increase the speed of development in Plachimada. Coca-Cola promptly dug six bore wells for drawing water and before long the water table in the entire region dried up. This meant that the local inhabitants have to walk (or cycle) nearly seven kilometres to reach drinkable water. For example, according to the first hand report of Mark Thomas,
“People I spoke to said they used to earn about 1 [pounds sterling] a day as harvesters, and they used to get about 20 days’ work a month. Now they are lucky if they get five days’ work a month, because the local crops have failed. They felt they had no option but to fight the company, and set up a 24-hour vigil opposite the plant. At the end of the month, they will have been there for 647 days.” (Thomas, 2004)
Hence, the grievances expressed by local villagers and social activists are not confined to the issue of drinking water. The operation of the manufacturing plant gives rise to a myriad of challenges to the environment, agricultural productivity and people’s livelihoods. The Plachimada episode was only the first of many run-ins between Coca-Cola and rural communities in India. Following the tumult in Kerala, a similar situation emerged in the North Indian village of Mehdiganj, on the outskirts of Varanasi. Here, the protests are directed at Coca-Cola’s illegal occupation of village public property. A local court has already declared the company guilty of tax evasion. Moreover, the plant in Mehdiganj “enjoys heavily subsidized electricity and is accused of spewing toxics into surrounding agricultural fields as well as causing serious water shortage as a result of its operations” (Thomas, 2004). While in Kerala, the company at least tried to placate the protesters through token measures, its approach in Mehdiganj further dented its image in India. About two hundred policemen alongside gun-wielding private security personnel were deployed to intimidate the protesters. The policemen used violent methods to disperse the crowd. The other rural community that was severely affected by Coca-Cola’s environmentally unsustainable approach to profiteering is that of Kudus village in western Maharashtra state. Here,
“villagers are forced to travel long distances in search of water which has dried up in their area as a result of Coca-Cola’s operations. Villagers are questioning the subsidized water, land and tax breaks that Coca-Cola receives from the state, only to leave them thirsting for water. Coca-Cola has built a pipeline to transport water from a river to its plant, and an activist opposing the pipeline was detained by police authorities for a week”. (Srivastava, 2007)
From studying the operations of Coca-Cola in India, an obvious pattern emerges. According to Amit Srivastava of India Resource Center, the rural communities were left with no drinking water even as Coca-Cola continued to draw water from the fast disappearing underground sources. Furthermore, its plants are constantly dumping effluents into surrounding areas causing irreparable damage to the environment.