India’s southern state of Kerala has passed a law allowing people to seek compensation from U.S. soft drink company Coca Cola for alleged damages caused by a bottling plant. The company’s Indian subsidiary has expressed disappointment at the legislation and denied that its plant caused any damage.
Indian state legislators passed the bill after a high level panel established by the Kerala state government concluded that production at Coca Cola’s bottling plant had resulted in environmental and soil degradation, and water contamination.
The state government says that the plant at Plachimada village in Palakkad district extracted excessive amounts of ground water, leading to water shortages in the area. It says sludge disposed from the plant contained cadmium, lead and other substances that affected crops and the health of local people.
The factory was shut down in 2005 following protests by activists and local citizens.
A three-member tribunal will now be empowered to process claims from people who claim to have been adversely affected by the plant.
In a statement, Coca Cola’s Indian subsidiary, Hindustan Coca Cola Beverages, says the panel's study is devoid of facts, scientific data or any inputs from company representatives. It says Coca Cola was not given an opportunity to share independent data before the bill was introduced.
Amit Srivastav, is director of the non-government group, India Resource Center, which campaigned against the Coca Cola plant in Kerala. He says the damage caused by the plant has been well documented.
"There have been number after number of government studies, independent observer organization studies, that have actually confirmed that Coca Cola company is responsible for the water depletion and pollution in the area," Srivastav said.
Hindustan Coca Cola Beverages strongly denies the allegations, and says its operations did not cause any damage. It says it is reviewing its options, but is willing to talk to all stakeholders on the issue.
A committee established by the state government had estimated the cost of the damage allegedly caused by the plant at around $48 million.
This is not the first time Coca Cola has been mired in controversy in the state. In 2006, the Kerala state government had banned the production and sale of Coke and Pepsi beverages in the state, but the order was overturned by the High Court.