Coca Cola Compensation Bill: Centre subverts constitutional process
by S Faizi on 28 May 2015 1 Comment
When a piece of legislation unanimously passed by a State legislature in deference to massive public demand is sent to the Centre for Presidential assent and is held up by the Union Home Ministry for long four years, without even passing it on to the President, it represents a subversion of the Constitutional process and raises worrying questions about the Centre’s utter disregard for the Constitutionally endowed legislative powers of the State Assemblies and the whole Constitutional process itself. All on behalf of a recalcitrant multinational corporation once totally expelled from the country.


The environmental and social devastation of the Plachimada area in Palakkad district of Kerala had forced the government in 2009 to set up a High Power Committee (HPC) of fourteen experts, chaired by the Additional Chief Secretary. Nine months of work resulted in an exhaustive report scientifically establishing, with robust evidence, that the devastation was caused by the operation of the plant established by the Coca Cola company in the area, and valuing the ecological and social losses thereby caused.


The Plachimada Coca Cola Victims Compensation Claims Tribunal Bill (henceforth, the Bill), unanimously passed by the Kerala Assembly on 24 February 2011, following the submission of the report of the HPC, established a tribunal to adjudicate claims of compensation from the multinational company by the victims of Plachimada. On a conservative estimate the HPC put the cost of damages at Plachimada at a minimum of Rs 2162.6 million.


What happened to the Bill thereafter is a text book case of how powerful multinationals, with the aid of their home governments, subvert statutory procedures in the global South. The Manmohan Singh government did its best to wither this critical piece of legislation, and it is the same story under the Modi regime.


The Kerala Governor sent the Bill for Presidential assent via the Ministry of Home Affairs a month later (March 2011). Although there was no issue of repugnance with any central laws, it was sent for Presidential assent to obviate any future argument of repugnance in a court of law. The Home Ministry forwarded the Bill to various related ministries for comments, and five ministries (Agriculture, Rural Development, Water Resources, Food Processing Industries and the Department of Justice under the Ministry of Law) duly submitted their categorical approval of the Bill.


Beyond categorical approval, some ministries in fact recommended stronger measures than the contents of the Bill. Yet, it is shocking that the Bill was not sent to the President by the UPA government as they were yielding to US pressure, and the then Home Minister P Chidambaram was particularly keen on subverting the legislation. His successor, SK Shinde, worked under his guidance; once he even said he was not even aware of such a pending Bill even though the Kerala Chief Minister met him to convince him to expedite the assent process.


The Modi regime is also keen to subvert the Bill. The Union Home Ministry has recently sent a letter to the Kerala government ‘requesting’ it to withdraw the Bill, something even the UPA had not dared. The reasons raised by the Home Ministry are an outlandish repeat of the multinational company’s ‘legal opinion’ that it had submitted to the UPA government.


The Home Ministry provides gratuitous advice to the State government - in line with the multinational’s ‘legal opinion’- to approach the National Green Tribunal (NGT). This betrays the sad fact that the Home Ministry officials have not even read the National Green Tribunal Act, 2010. Section 15.3 of the Act requires the petitions for compensation to be filed within a period of 5 years, with a grace period of 6 months.


The most critical damages to groundwater and toxic contamination caused by Coca Cola at Plachimada occurred during 2000-2004, way before the five years and six months time bar set by the Act. Hence this Act cannot be used to redress the tragedy at Plachimada. This is the reason why the Bill was passed by the Assembly in the first place. And it may be recalled that the NGT became operational only in May 2011. The Home Ministry officials and their legal advisors should be held accountable for deliberately misinforming a State government.


The Cola company’s initial response to the HPC was one of intimidation as contained in its letter to the HPC chairman; later, it launched a ludicrous misinformation campaign. The Cola CEO Muhtar Kent had falsely informed the annual shareholders meeting in Atlanta that the Plachimada plant could be reopened any time, when in actual fact it was closed by an order of the State Pollution Control Board in February 2004 for failure to install the required facility for treating the toxic sludge in line with the order issued by the Supreme Court in October 2003. The company refused to install this facility and also declined to comply with the direction of the Supreme Court Monitoring Committee to provide piped drinking water to the residents of Plachimada. Now, the Modi regime is giving unfounded advice to the Kerala government!


There is absolutely no conflict between the NGT Act and the Bill, primarily due to the difference in temporal coverage. In fact, by filling the time gap in regard to the Plachimada locale, the Bill provides an excellent complement to the NGT Act. The Home Ministry repeating the challenge of the Cola company that the State Assembly has no legislative competence to enact legislation to redress the damages in the areas of health, agriculture, labour (loss), animal husbandry, groundwater etc, all listed in the State List (II under the Seventh Schedule) is posing a serious question on Centre-State relations. The Home Ministry has no powers to decide on the legislative competence of a State Assembly; that power is vested with the judiciary alone.


The Plachimada Bill does not in any way conflict with the Centre’s powers in regard to implementation of international treaties as provided by Articles 253 and 246 as the Cola lawyers had vainly sought to argue in their ‘legal opinion’; it flows from the State’s Constitutional responsibility to act upon the violation of Article 21 and has nothing to do with any international declaration.


Besides fulfilment of the State's obligation in terms of Article 21 as interpreted by the Supreme Court, it is also based on the polluter pays principle that has become an integral part of our jurisprudence. The enactment of this law will remain a critical contribution in enforcing a legal regime for the sustainable management of the scarce natural resources of the country, as a public resource as underlined by the Supreme Court judgment in the G2 scam, and to remedy the deprivations suffered by the victims, and in pursuance of Article 39b of the Constitution. It also fills an important legislative gap in terms of time bar for the Plachimada locale and complements the NGT Act.


It is surprising that while the Home Ministry’s new letter refers to the responses of the Department of Legal Affairs and the Solicitor General that favour the Cola company, it tactically ignores the categorical support to the Bill expressed by the relevant ministries long time ago. The Plachimada Bill represents a new low in Indian polity, exposing its pathologically illegitimate ways of manoeuvring to protect the interest of multinationals as opposed to India’s poor.


The author is an ecologist specializing in international environmental policy, and was a negotiator in the Intergovernmental Negotiation Committee on CBD that formulated the CBD text. He is a Member of CBD Expert Group on Poverty and Biodiversity and Board member of CBD Alliance, global network of NGOs on CBD issues. He was the Environment Expert Member of the Plachimada High Power Committee 

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