Enforcing Environmental Accountability: Coca Cola to Pay
by Sandhya Jain on 08 Mar 2011 7 Comments

In a rare move expected to go a long way in ensuring environmental accountability by giant multinational corporations, the Kerala Assembly on 24 Feb. 2011 unanimously passed a bill to set up a Special Tribunal to determine the compensation to be paid by Coca Cola for pollution caused in Plachimada, Palakkad district. As of now, however, the issue of the company’s criminal liability in degrading the environment has not been addressed.


The Assembly passed the bill on the last day of its otherwise stormy current and final session, which reflects rising political consciousness about the criminal pollution of the environment by profit-driven corporations that willfully disregard the deleterious impact of their activities on the population and environment.


The Special Tribunal will decide the quantum of compensation to be paid by Coca Cola for over-exploitation of ground water and polluting of the environment by distributing contaminated sludge as manure, among other issues. The bill followed the March 2010 recommendations by a high powered committee headed by additional chief secretary K. Jayakumar. The Jayakumar Committee estimated that the Coca Cola unit at Plachimada caused losses to the tune of Rs. 216.26 crores to the inhabitants of the area by way of environmental degradation, pollution, and water shortage caused by operation of the plant. The Kerala cabinet cleared the proposed bill on 17 Feb.


The Hindustan Coca Cola Beverages Pvt. Ltd., a subsidiary of Atlanta based Coca-Cola Company, opened its first bottling plant in Kerala in 1999, during the LDF regime. Within just six months of its functioning, local residents began to experience peculiar side effects, such as skin problems after bathing, breathing ailments, and failure to cook rice and dal in water. These naturally affected daily life at a very basic level.


An adivasi woman, Mayilamma, raised her voice against the soft drink giant and the Plachimada Anti-Coca Cola Struggle Samithi led by Vilayodi Venugopal was the consequence of her efforts. As other NGOs and activists joined the struggle, the group expanded into a Solidarity Committee. It set up sub-groups in all districts and soon this grassroots activism forced the company to stop production (in 2005).


The local activists claimed that over-extraction of ground water by the company led to environmental and soil degradation and water contamination. This in turn caused drinking water scarcity and decline in agriculture due to disposal of sludge which contained metals like cadmium, lead and chromium. The sludge disposal further affected the health of people causing skin ailments, breathing problems and other debilities.


In the court cases that followed, a single judge bench of the Kerala High Court ruled in favour of the local people. But a division bench took a very questionable stand that “the right of a company to draw water from its property even for commercial purposes is the same as the right of an individual to draw water from his property for personal consumption”. This matches a dangerous trend in American jurisprudence to treat multinational corporate entities at par with individuals, with the same rights, ignoring their misuse of money and muscle power to trample over all opposition to their illegitimate activities.


In Kerala, the division bench went to the extent of directing the company to presume the permission of the Gram Panchayat as given if the permission is not given within 15 days of the order! The Panchayat acted with diligence and gave a conditional licence. But these conditions were not acceptable to the MNC and the matter is now with the apex court. Local activists P.M. Ravindran and Dr P.S. Panikkar said the court seemed to have learnt nothing from the Bhopal disaster.


In this period, a BBC team visited the district and exposed the company’s crime of selling contaminated sludge as manure to gullible farmers! This has polluted all the agricultural land. The so-called watchdogs like the Pollution Control Board, Ground Water Authority all failed to perform their roles, and even after the exposure by BBC, failed to make records of the water contaminants!


After a prolonged political and judicial see-saw, finally in 2009, the state government set up a high powered committee headed by K Jayakumar. It submitted its report in 2010, suggesting an estimated compensation of Rs 216 Cr and recommending a tribunal to decide individual claims. Thus, the Plachimada Coca Cola Victims Relief and Compensation Claims Special Tribunal Act 2011was cleared by the present Assembly on the last day of the last session.


Dr S. Faizi, Environment Expert Member of the Plachimada High Power Committee, hailed it as an historic legislation. The future of Kerala, which is one of the most densely populated places in the world, he observed, depends wholly upon the sustainable use of its scarce natural resources, especially water; hence corporate forces must not be allowed to deplete these resources for quick profit.


Kerala has set a sterling global example by legally requiring the erring American cola company to pay compensation to the villagers for the massive damage caused in Plachimada. In the future, this will reinforce a nascent trend of making recalcitrant environmental culprits pay compensation for their misdeeds, as in the case of the Gulf of Mexico disaster when the US Government demanded that British Petroleum pay compensation to the tune of Rs 90,000 crores ($20 billion) for the pollution in the Gulf. Similarly, an Ecuadorian court directed the American company Chevron two weeks ago to pay about Rs 38,000 crores ($8.6 billion) in compensation for the pollution of the Amazon.


It is worth mentioning that Coca Cola took a very belligerent attitude towards the demand for compensation. Indeed, it issued a statement saying the legislation was not based on scientific data or settled processes of law, but offered to engage with stakeholders on the issue. Therefore, it must be noted that criminal liability is different from the compensation issue. Hence the Kerala Pollution Control Board must move fast and initiate criminal proceedings against the company under section 15.1 of the Environment (Protection) Act 1986 for violation of the Hazardous Wastes (Handling and Management) Rules 1989.


The Plachimada Tribunal that will address the decade long water/livelihood crisis is timely as the National Green Tribunal Act 2010 limits the scope of its coverage to five years in retrospect, Dr Faizi said. The three-member tribunal will be chaired by a district judge with the power to adjudicate claims for compensation as a result of Coca-Cola’s operations in Plachimada. It has the power to summon individuals and documents, to seek and examine witnesses; the bill legally binds Coca-Cola to follow the directives of the tribunal.


The tribunal will apply the principles of sustainable development, the precautionary principle and the “polluter pays” principle. Once compensation is awarded, the company will have to deposit the entire award amount with the tribunal. Appeals can be made to the High Court.


The Kerala movement is expected to impact two other community campaigns - Kala Dera in Rajasthan and Mehdiganj in Uttar Pradesh – which are similarly demanding the closure of their local Coca-Cola bottling plants.


[The author is Editor, www.vijayvaani.com]

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