Questions

1. Which do you think is the most significant controversy associated with Coca Cola opening a contaminated bottled plant in Plachimada, Kerala, India? Rank the below from most to least significant and explain your decisions.

a) The role and responsibilities of businesses in society b) Scientific evidence versus local knowledge related to water availability and pollution

c) Ideologies of governance (capitalism versus communism, national versus local)

2. By applying Stubbs and Cocklins framework (see materials on Organisational responsibility) and the three different perspectives (neoclassical, ecological modernisation and ecocentric) explain if Coca-Cola acted ethically.

3. What do see as the weaknesses and strengths of the three different perspectives for understanding organizational responsibility?

Please answer the questions accordingly.

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Good business or ecological catastrophe?

The arrival of Coca-Cola in Kerala, India

Coca-Cola opened a plant in Plachimada, Kerala, South India in 2000. They were attracted to India as it gave access to a new market and cheaper labour. They brought jobs, investment, technology and skills. The Coca-Cola Company exists to benefit and refresh everyone it touches. They say they strengthen communities and are committed to preserving the environment. They emphasize how they are using natural resources responsibly.

At the heart of our business is the trust consumers place in us. They rightly expect that we are managing our business according to sound ethical principles, that we are enhancing the health of our communities, and that we are using natural resources responsibly (Douglas Daft, Coca-Cola Chairman and Chief Executive).

Coca-Cola says it has invested more than US$1bn in India, making it one of the top investors in the country. They draw local water to process into cola and other fizzy drinks, like carbonated water. The bottles of drinks are then transported to Indian towns and cities where those who can afford it buy it. The company boast that several of the bottling plants provide safe drinking water to local villagers though the organization of water tankers, bore well and hand pumps. The company also distributed fertiliser, the slurry, a by-product of the process, to local farmers.

The state and national government

National and state government were keen to attract multinationals to India to create new jobs and increase tax revenues. They were loathed to impose environmental, social and labour standards accepted in the West. They offered generous tax breaks, subsidies and sometimes free electricity or water as a lure. Coca Cola was given cash back of 15% of its investment in the Plachimada factory by the state government. All the major political parties (except the smaller Communist Party of India) were in favour of the decision for Coca- Cola to build the plant in Plachimada, Kerala.

The local residents

After less than two years of the bottling plant beginning to operate the communities living nearby started to complain about both the quality and the quantity of water in the village wells. Their shallow water pumps became dry, their rice paddies turned into deserts and their coconut palms died. They were forced to walk five miles a day to reach a usable well. What was left in their wells was giving them severe stomach pains and headaches. The district medical officer confirmed that the water was unfit for drinking. Farmers yields dropped so much that some were forced to abandon their fields and seek labouring work elsewhere.

In the autumn of 2001 the first collective protests were organized outside of the plant, demanding its closure and full compensation to the villagers. Mylama, a 55-year-old woman led the protest. She said that rainfall had been scarce for the past two years. But the availability of water in the well has no relation to rain she insists. Even when we had less rain before the company came, we still had no shortage of water.

Gaining support and gathering evidence

By October 2008, over 90 different organizations had registered as members of the Solidarity Committee, which had been set up by people in Plachimada to generate outside support for their struggle with Coca- Cola. This outside support included NGOs, journalists and academics trying to prove links between the plant and the problems experienced by the villagers. Contamination was detected from the leaking of contaminated waste water into the ground water reserves and wells, as well as high toxic levels in the solid waste produced that was dumped in fields around the factory, and used as a fertilizer by many farmers. For example, the solid waste or slurry was later found by the University of Exeter to contain carcinogens and lead. Additionally, the Director of the Centre for Science and the Environment announced that 12 large cold drink brands manufactured by Coca-Cola and Pepsi sold in and around Delhi contained a cocktail of pesticide residues, including chemicals which can cause cancer, damage nervous and reproductive systems and reduce bone mineral density.

An ongoing dispute

In May 2003 the court ruled in favour of the local residents of Plachimada who brought a legal action against Coca-Cola. Coca-Cola was ordered to close its boreholes and stop drawing ground water because it was ruining the environment. The company appealed but was forced to stop its production in March 2004, however in 2005 a Division Bench of the Kerala High Court overturned the previous court ruling and ruled that Coca-Cola had the right to exploit the local water resources as long as it did not do so at the inconvenience of others (Mathiason, 2006). The company was given one month to find an alternative source of water. Coca-Cola appealed against the decision. The company now brings water in from other sources and says, We took a conscious decision not to put stress on water sources at a single location and decided to source water from surplus areas. They accused the local campaigners of being self-declared Marxists and communists. They have stopped distributing the slurry as fertiliser and treat it now as hazardous waste.

Berglunds (2017) analysis of the case suggests:

That the Plachimada campaign was really up against all odds, facing opponent with huge opposition capacity, by challenging not only a powerful multinational corporation, but also both the local and the state government, including the judicial system. The relative success in of the campaign must be seen as an exception produced by a number of factors in the social, cultural and political context working together, such as the internal strength of the movement; the double vulnerability of the poor tribal villagers which was turned into political capital; the competent leadership and its ability to strike alliances with other NGOs and with media; the access it had to the decision making process due to a relatively open political climate and a favourable legislation on local governance. (p340)

In February 2011 the Kerala state government unanimously passed the Plachimada Compensation Tribunal Bill, with the purpose of awarding the victims financial compensation (Singh, 2011). In a statement, Coca- Cola said it was disappointed with the new legislation suggested that this bill is devoid of facts, scientific data or any input from or consideration given to Coca-Cola. However, by 2017, the Bill has failed to gain the Presidential approval necessary, and no compensation has yet been made. It has been suggested that the Bill may be reintroduced with certain changes (Raghunandan, 2017).

Disputes continue across India with Coca-Cola. For example, in 2017 more than a million traders in India boycotted fizzy drinks including Coca-Cola and Pepsi after claims from two Indian trade associations that foreign firms are exploiting the countrys water resources (Doshi, 2017). Additionally, recent suggestions by Coca-Cola that it can become water neutral, are argued to be impossible and deceptive, because as the India Resource Center has pointed out it is not possible for a company whose primary raw material is water, to have neutral impact on water resources (Srivastava, 2015). Coca-Cola have suggested that India is its fifth largest business hub and that they will continue to invest and expand their activities in the country (Sharma, 2020).