The State also plans to move against PepsiCo for alleged environmental violations—including polluting of groundwater and over-consumption of water—in one of its factories in Kerala

India finally seems to be becoming more aware of environmental issues being caused by major multinational corporations operating in India. This is a welcome change from the way the country bungled on the Bhopal gas tragedy, with polluter Union Carbide getting away without even so much as a slap on the wrist, for the world's worst industrial disaster.

The Kerala government plans to set up a tribunal that will hear and award compensation claims against Coke for causing pollution and water depletion. However, Hindustan Coca-Cola Beverages Pvt Ltd (HCCB) is questioning the State government's action and is calling it 'biased'.

"We disagree with the recommendations of the High Powered Committee (HPC) and the proposed follow-up action. The said Committee, in our view, was set up with the pre-determined and unproven conclusion that the operations of HCCB have caused (a) loss to the residents of Plachimada (in Kerala's Palakkad district)," said Kamlesh Sharma, senior manager-public affairs & communications, HCCB, in a statement.

The statement further adds that the government committee or panel reviewing claims must determine through "scientific study and through established process of law" whether any damage was caused to the residents of Plachimada, and who was responsible for such damages.

The State Cabinet's decision is based on the report and recommendations of the HPC which was released on 22 March 2010, holding HCCB responsible for causing pollution and water depletion in Plachimada. The committee was headed by K Jayakumar, additional chief secretary, Kerala government. 

The tribunal will consider claims of compensation from HCCB relating to water and air pollution, loss of agricultural crops and animals, diseases affecting human beings in the surrounding area due to the excess withdrawal and pollution of groundwater & surface water by the company, according to the report which has been accepted by the State government. The tribunal will also consider claims related to loss of wages and loss of educational opportunities.

As per the 'polluter pays principle', the HPC had suggested that HCCB be made liable for Rs216 crore (around $48 million) for damages caused by the company's bottling operations in Plachimada. According to officials from Kerala's water ministry, the tribunal will be set up within three to six months.
 
But Coke remains adamant. "This (action by the State) is in spite of the fact that numerous scientific studies by independent experts and investigations by the government of Kerala itself have shown that HCCB is not the cause of local watershed issues," Mr Sharma said in his statement.

Since March 2004, the HCCB bottling plant in Plachimada has remained shut due to the community-led campaign challenging HCCB's alleged abuse of water resources.

Local activists who have been involved in the campaign to shut down HCCB's bottling plant and hold the company accountable for the damage it has caused, welcomed the move by the State government. "Coca-Cola has been forced to shut down its operations in Plachimada since 2004, and no amount of legal manoeuvring will help it change the final outcome. The best thing Coca-Cola can do is to accept the will of the people and the State-pack up, pay up and leave," said Amit Srivastava of the India Resource Center, an international campaigning organisation.

Coke's biggest competitor, PepsiCo, is also facing the heat in Kerala. The State is planning to take on PepsiCo's alleged environmental offences. NK Premachandran, Kerala's minister for water resources, told the State Assembly on Thursday (1st July) that the PepsiCo factory at Kanjikode (also situated in Kerala's Palakkad district) has been consuming water beyond the permitted norms and chemical effluents and solid waste from the factory have been polluting the groundwater.