Coca-Cola Factory in Mehdiganj. Photo: India Resource Center.
India: Coca Cola bottling plant shut down
19th June 2014
After eleven years of campaigning by local people suffering from water shortages, state authorities have closed Coca-Cola's bottling plant at Mehdiganj, Uttar Pradesh - inspiring campaigners at another three Coca Cola sites in India.
Coca-Cola's thirst for profits in India have placed its business interests over the well-being of communities and the environment and this is not acceptable.
Coca-Cola's Mehdiganj bottling plant - near Varanasi in Uttar Pradesh - has been shut down by state government authorities.
The Uttar Pradesh Pollution Control Board (UPPCB) ordered the plant to shut down because it found the company to be violating a number of conditions of its license, or 'No Objection Certificate' (NOC).
"This is a great victory and a welcome confirmation that local communities can successfully take on big, powerful business", said Nandlal Master of Lok Samiti, who has spearheaded the local campaign against the factory.
"We knew it was only a matter of time before the government acknowledged the demands of the community."
Success after a decade of protest
The local community has been protesting at Coca-Cola's bottling operations in Mehdiganj since 2003 as a result of water shortages - blamed on over-extraction by the company.
There is already intense competition for finite groundwater resources among farmers is this mainly agrarian area 25 km from Varanasi, as well as for growing urban use.
The campaign had also alerted the government to Coca-Cola's failure to meet a key condition of a temporary license given to it - obtaining the clearance from the Central Ground Water Authority (CGWA).
"Coca-Cola's thirst for profits in India have placed its business interests over the well-being of communities and the environment and this is not acceptable as the community of Mehdiganj has shown", said Amit Srivastava of the international campaigning group, India Resource Center.
No permit to extract groundwater
The Pollution Control Board, in its order dated 6th June 2014, noted that Coca-Cola had failed to obtain clearance to extract groundwater from the Central Ground Water Authority (CGWA), a government agency that monitors and regulates ground water use in water-stressed areas.
The groundwater in Mehdiganj has gone from 'safe' category in 1999 when Coca-Cola started operations to 'critical' in 2009, according to the CGWA. As a result, more ground water use restrictions are in place, including on ground water use by farmers and the community for drinking water.
UPPCB's closure order also noted that Coca-Cola had increased its production capacity from 20,000 cases per day to 36,000 without the Board's permission, and suggested that the company may have misled the Board about the actual amount of industrial waste discharge.
According to Coca-Cola waste discharges had remained constant, over a period in which production 80%. The Board also cast doubt on Coca-Cola's waste treatment plant, noting that the "Treatment System/Plant" was not operating smoothly/properly".
Expansion plans thwarted
Coca-Cola had been seeking to expand the capacity of its existing plant in Mehdiganj five-fold, part of its aggressive growth strategy of India which in 2012 announced an additional $5 billion investment by 2020 as sales in industrialized countries decline or stagnate due to health concerns.
The company's expanded facility in Mehdiganj has already been built but has not been able to begin commercial operations.
Coca-Cola has approached the National Green Tribunal (NGT), an environmental court in India, appealing against the decision of the UPPCB and has asked to be allowed to re-open its shut down facility. The NGT has not yet allowed the plant to reopen in the three hearings so far.
The closure of Coca-Cola's bottling plant comes at the peak of Coca-Cola's sales season in India, and the company has cited financial losses to the NGT as a reason for reopening the plant quickly.
Another problem - the land belongs to the community
The company also faces a major obstacle in its operations because some of the land acquired by Coca-Cola for its plant is community owned land. The use of such land - known as Gram Sabha or Gram Panchayat land - by private parties is prohibited by law.
As reported in The Ecologist, In December 2013, local authorities passed an order to evict Coca-Cola from the illegally occupied land. This followed a ruling by the The Supreme Court of India of 28th January 2011, which stated that any structures built on illegal land would have to be demolished:
"We are of the opinion that such kind of blatant illegalities must not be condoned ... possession of the land in question must be handed back to the Gram Panchayat. Regularizing such illegalities must not be permitted because it is Gram Sabha land which must be kept for the common use of villagers of the village."
However Coca-Cola appealed to the courts and obtained a stay order.
A surge of opposition across India
Coca-Cola was also forced to shut down another bottling plant in India in 2004 - in Plachimada in the state of Kerala, and faces legislation holding it liable for $47 million in damages as a result of its operations.
The company is also the target of a major community campaign in Kala Dera in Rajasthan where the community is seeking closure of the bottling plant due to rapidly depleting ground water.
Most recently, Coca-Cola's plans to build a new factory in Charba in Uttarakhand were defeated almost as soon as the proposal was made public in 2013, testament to how quickly and efficiently communities can organize and network in India against problematic companies such as Coca-Cola.
Amit Srivastava promised: "We will ensure that Coca-Cola will face heightened scrutiny anywhere it plans to operate in India because the track record of the company is dismal."
Also on The Ecologist: India: Coca-Cola eviction from 'land-grab' site imminent.
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