India water crisis laid bare by clash with cola giants

24 April 2010
A pollution fine for Coca-Cola and an order for PepsiCo to cut water use at factories in India have highlighted a conflict between big business and farmers over natural resources.

Last month, a report commissioned by the southern state of Kerala ordered Coca-Cola to pay 47 million dollars in compensation for polluting agricultural land and extracting too much groundwater at a bottling plant.

A similar report submitted at the same time instructed PepsiCo to cut groundwater use by two-thirds at its plant also in Kerala’s Palakkad district.

The twin investigations were ordered by the Kerala government after years of protests by farmers who say industrial projects like those run by the soft drinks giants leave just a small fraction of water for irrigating fields.

“Operating water-guzzling bottling plants in drought-hit areas where farmers do not have access to water is highly unethical and criminal,” said R. Ajayan, who is spearheading the campaign in Kerala.

A report by the World Bank released in March said about 60 percent of aquifers in India would be in a critical condition within 15 years if the trend of indiscriminate exploitation of ground water continued.

Farmers in Kerala close to the Coca-Cola plant, which was only open between 1999 and 2004, say the water table dropped drastically and a sludge containing toxic chemicals dumped by the unit seeped into their soil making it infertile.

Similar accusations have been levelled against Coca-Cola by farmers near bottling plants in the town of Varanasi and on the outskirts of the desert city Jaipur.

“They have ruined our fields completely. We wait and wait for water and what we extract is not even worth feeding the cattle,” said Raghav Govind, a farmer living near the Varanasi plant.

Coca-Cola closed its plant in Kerala after months of angry protests — led by the state’s powerful Communist and anti-American politicians.

Environmentalists say future clashes between farmers and industry will become increasingly fraught due to government failure to regulate the use of water, with the country’s annual consumption expected to almost double by 2050.

Water shortages are one of the biggest issues restricting new towns planned outside fast-growing cities such as the capital New Delhi.

“Fights over water will worsen if India does not define a clear policy on sharing,” said Ashima Roychoudhari, an environmentalist working for the government in New Delhi.

“There has to be a point where we have to start prioritising and rationing water to stop wastage and prevent conflicts.”

Farmers who are against industries such as the bottling plants say their opposition will not end until their demands are met.

“We will not allow factories to take water when communities do not have enough water to sustain their lives. Agriculture is more important than making a fizzy drink,” said Nandlal Master, a community organiser in Varanasi.

Both companies deny all the allegations, which many observers see as politically motivated.

“Based on scientific evaluation, our Palakkad plant operations have not been shown to be the cause of local watershed issues,” Coca-Cola said in a statement about its closed unit.

PepsiCo said its plant was a model factory and one of the most water efficient examples of its type.

“Through innovative recycling and recharging techniques, the plant has been able to save about 200 million litres of water in the last four years and has also brought down the water usage by 60 percent,” it said.

Kerala’s minister for water, N.K Premchandran, who heads the panel that issued the damning reports, vowed to pressure the companies to act — though the fines are not legally binding as they have not been imposed by the courts.

“In the case of Coca-Cola, they will have to allocate compensation to the farmers, and PepsiCo should install water meters at their bottling plant to check their daily consumption,” he said.

“Granting agricultural land for the Coca-Cola plant was a mistake. At that point we did not want to miss the industrialisation bus, but now we have to protect the environment,” he told AFP.

Premchandran said the government would not order the PepsiCo plant to shut down as it employed more than 3,500 people.

Experts focusing on industrial policy and foreign investment said Indian states often create the problem by hosting lavish trade fairs to attract big companies and offering them concessions to set up businesses.

“It is not the multinational company that decides to open a unit near a farm. The government allocates them land,” said a senior official at the Federation of Indian Chambers of Commerce and Industry who declined to be named.

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