Nearly 15 years after Coca Cola plant shut down, Plachimada’s fight for Rs 216 crore in compensation continues

16 March, 2019

In January 2000, the Perumatty panchayat in Kerala’s Palakkad district gave the Hindustan Coca-Cola Beverages Private Limited, or HCCB, a license to set up a bottling plant in Plachimada, a tribal settlement under the panchayat’s jurisdiction. The HCCB is an Indian bottling entity of The Coca-Cola Company, a United States-based manufacturer of aerated drinks. Spread over a land measuring 34 acres, residents of the area claimed that the bottling plant soon caused severe water shortage and contamination. A massive movement ensued against the HCCB, calling upon the company to shut the plant and compensate those affected. Though compensation remains an issue, after extensive media coverage of the matter and widespread protests, the residents of Plachimada found a silver lining when the plant stopped all operations in 2005. But in January this year they noticed some activity on the plant, which seemed like it was being renovated.

The HCCB’s activities allegedly affected nearly a thousand families in Plachimada, who were predominantly from Scheduled Caste and Scheduled Tribe communities. According to an October 2006 report in the Economic and Political Weekly, six borewells and two open wells in the factory compound used some 0.8 to 1.5 million litres of water daily. In 2010, a high-power committee set up by state government submitted an extensive report on the impact of the HCCB’s plant. K Jayakumar, who led the committee and was the additional chief secretary of the Kerala government at the time, told me that among other things, they found that the HCCB gave the sludge that they produced in the plant to the farmers by misrepresenting it as high-value organic manure. “The poor people planted it and the entire farmland became arid and uncultivable,” he said. The report concluded Rs 216.26 crore “could be claimed as reasonable compensation” from the HCCB.

The HCCB’s alleged transgressions and the pending compensation again came into sharp focus after the residents of Plachimada noticed some activity on the plant this year. In addition to the Jayakumar committee’s report, the Perumatty panchayat also made several attempts over the past two decades to hold the HCCB accountable, but the company repeatedly questioned their authority to do so, and evaded liability. According to the activists associated with the movement against the HCCB, political parties in the state only support them according to their own convenience. KV Biju, an environmental activist, told me, “The interesting thing is that be it BJP, Congress or CPI(M), they are always with corporates.”

Since the plant was established, tribal communities have been at the forefront of the resistance against the plant. Mayilamma, a woman who lived near the factory, was the first to raise her voice against the HCCB, in 2001. She was a prominent leader of the Adivasi Samrakshana Sangham, or ASS—a group formed to address the concerns of tribals in the locality, which also took on the HCCB’s plant in Plachimada. In April 2002, CK Janu, the president of the Adivasi Gotra Maha Sabha—a group seeking land rights for tribals—inaugurated the first official protest by the ASS. Apart from insisting the plant be shut, it also demanded a criminal investigation against the HCCB. In order to solicit support from non-tribal civil-society organisations as well, the ASS was renamed the Coca Cola Virudha Janakeeya Samara Samithi, or the Anti-Coca Cola People’s Struggle Committee, but it is now commonly known as the Plachimada Action Committee. The committee is fighting for compensation from the HCCB even now.

In 2003, the movement received global attention when the British Broadcasting Corporation released a documentary titled Face the Facts, which reported that water in Plachimada contained high levels of carcinogens such as lead and cadmium. In April that year, the Perumatty panchayat gave into pressure from the protesting groups, and refused to renew HCCB’s license citing “excessive exploitation of groundwater” and a resulting water shortage in the area. The company then took the panchayat to court, challenging the local body’s jurisdiction to stop the plant’s operations. The panchayat and the company were embroiled in a tussle over the renewal of the license for years after that.

In January 2004, Vandana Shiva, an environmental activist, organised the World Water Conference in Plachimada. At the event, the residents of Plachimada adopted a declaration stating that Coca Cola’s operations endangered “the very existence of local communities.” The declaration also said, “We should resist all criminal attempts to marketise, privatise and corporatise water.” In the following month, AK Antony, the chief minister of the state at that time, banned the use of ground water by the plant till June 2004 because a drought had hit Kerala. In April 2005, the Kerala High Court instructed the panchayat to renew the HCCB’s license and allowed the plant to extract 5 lakh litres of water per day.

Due to vociferous protests and a constant tussle with the panchayat for renewing the license, the HCCB has not operated the plant since 2005. This was testimony to the power of the people in Palakkad, who had successfully led a similar movement in the district decades earlier. In 1973, the Planning Commission had approved the construction of a hydroelectric dam in the district, which would have harmed its reserve forest, the Silent Valley. This gave way to the Save Silent Valley campaign, which eventually led to the project being called off in 1983.

After the HCCB shut down its operations at the plant in Plachimada, the protestors pivoted all their efforts for compensation for their losses. In the report that Jayakumar’s committee submitted to the state government in March 2010, it wrote that the total loss because of the plant could be pegged at Rs 216.26 crore. He told me that there was bureaucratic pressure to be “moderate” in the report. “There were fairly large number of attempted interventions saying that you should not write a report against the company because it will affect the industrial climate of the state,” Jayakumar said. He described the situation in Plachimada as “a multi-pronged calamity.” When the committee asked the HCCB to provide their side of the story, Jayakumar added, they responded that they do not recognise the committee as an authority on the dispute.

Based on the report, the state government passed the Plachimada Coca-Cola Victims Relief and Compensation Claims Special Tribunal Bill, in February 2011. The bill called for the establishment of a tribunal to realise the due compensation amount. Instead of assenting to the bill, RS Gavai, the state’s governor at the time, reserved it for the consideration of the president of India. In March that year, the bill was forwarded to the central government, which was led by the Congress-led United Progressive Alliance, and it remained with the ministry of home affairs for four months. When Jayakumar heard the bill was going to the centre, “I knew it was killed,” he said. “I know the power of this company.”

The MHA referred the bill to other ministries for suggestions—the ministries of rural development, agriculture and social justice expressed no objections to the bill. But based on a 59-page submission from Fali S Nariman, the HCCB’s legal counsel, the ministry asked the state government for an explanation. Nariman’s submission stated that the state legislative assembly does not have the “legislative competence” to set up a tribunal and that this power is conferred only on the parliament of India. He also wrote that the National Green Tribunal is “solely and exclusively conferred with jurisdiction to decide all matters relating to environment including damages for loss sustained on account of pollution etc.” In November 2015, after the Bharatiya Janata Party came to power at the centre, the governor of Kerala was informed that Pranab Mukherjee, the president of India, “has been pleased to withhold his assent” from the bill.

In spite of the protracted movement against the plant, the matter of compensation was not addressed even during appeal proceedings before the Supreme Court, according to S Sarath, the editor of the monthly Malayalam magazine Keraleeyam, which covers environmental issues extensively. In 2017, the Supreme Court dismissed all appeals after the HCCB submitted that it did not intend to resume activity on the plant. Sarath, who has closely followed the case over the years, told me, “There were attempts to draw the attention of the court to issues including compensation. But Coca-Cola winded up the case to prevent that from happening.”

After returning to power in 2016, the Left Democratic Front government in Kerala has given many assurances to the people of Plachimada that they will be provided compensation. PT John, the coordinator of the farmers’ group Rashtriya Kisan Mahasangh in south India, who has participated in the movement since 2002, told me, “In its election manifesto, the LDF government had promised to implement the bill and to award the compensation.” After a protest raised the issue again in 2017, Sarath recounted, Pinarayi Vijayan, the chief minister, “had then said that he would consider the matters regarding the compensation tribunal.” Sarath added that the government should reintroduce the bill only after making the necessary changes to avoid facing the legal hurdles as in 2011.

Speaking about the response of political parties to the compensation bill, John told me, “Our criticism is that those who have the right and the duty to implement are not doing so and are thereby supporting Coca-Cola.” The HCCB set up the plant when the LDF was in power in Kerala. Since then, either the LDF or the Congress-led United Democratic Front have formed the government in the state. “When LDF is in power, UDF supports us. When UDF is in power, LDF supports us,” Biju, the environmental activist, who is also the convenor of the Plachimada Struggle Solidarity Committee, another group demanding compensation from the HCCB, told me. John echoed these thoughts. “Both are the same,” he said, referring to the LDF and the UDF. “There is no difference.”

PK Biju, a member of parliament from the Alathur constituency, which includes Plachimada, told me that the LDF made attempts to meet the demand. He claimed that it was the parties constituting the central government that did not make efforts to approve the bill. “Both BJP and Congress government took an irresponsible stance and stood opposed to giving compensation to the poor people.” He said both the parties think that “once one corporate company pays, people who have been victims of exploitation by other corporate companies can also benefit.”

About the activity residents of Plachimada noticed recently, John said, “Some renovation work has been happening on the land.” I sent questionnaires to the offices of the chief minister, finance minister and chief secretary of the state about the compensation. I also inquired whether a new project by the HCCB is being planned in Plachimada. The chief minister’s office forwarded the email to the district collector of Palakkad, D Balamurali. When I called Balamurali, he said, “I am not aware that such compensation has to be paid. I need to study it before I can comment on that.” I also spoke to Krishnankutty K, the minister for water resources and a member of legislative assembly representing the constituency comprising the Perumatty panchayat. When I asked him about the possibility of introducing a new bill related to compensation, he told me, “I don’t know about it. I haven’t studied it.” Both denied giving permission to HCCB establish a new plant.

A spokesperson of the Coca-Cola India Private Limited, a wholly-owned subsidiary of The Coca-Cola Company, too, dismissed claims about a new industrial process coming up on the company’s land in Plachimada. “The company was only undertaking maintenance of the facility and has no plans to initiate any industrial activity,” the spokesperson, who requested not to be named, wrote in an email. The spokesperson stated that commenting on the compensation would be “premature,” while stressing that the company was always compliant with all rules and regulations during the bottling plant’s production years in Plachimada.

The email also said that the plant distributed over 60,000 litres of purified drinking water free of cost within the Perumatty panchayat. I asked Biju, the environmental activist, about whether the HCCB had distributed water. “The company was ordered to supply water in accordance with the court’s directions,” he said. “But everyone said that they don’t want water from the company.”