Saturday, April 19, 2008

Coke's Liabilities Increase in India


Wilmington, USA (April16, 2008): Coca-Cola shareholders should be extremely concerned thatthe Coca-Cola company continues to increase its liabilities in India by engaging in unethical practices, shareholders were told at the Coca-Cola annual general meeting in Wilmington today.

A recent study funded by Coca-Cola confirmed that the company's bottling plants contribute to severe water shortages around some of its bottling plants in India. The report also recommended the closure of a bottling plant in Kala Dera in Rajasthan and cautioned Coca-Cola on the declining water tables in Mehdiganj in Uttar Pradesh.

"The Coca-Cola company management is doing a great disservice to its shareholders by hiding the real extent of the liabilities the company has incurred in India and it will come back to haunt them. The longer the shareholders wait to seriously address the concerns in India, the greater the liability," said Amit Srivastava of the India Resource Center who attended the meeting and spoke on behalf of the campaigns from India.

One of Coca-Cola's largest bottling plants in India - in Plachimada in Kerala - has been shut down since March 2004 because Coca-Cola is unable to obtain the necessary environmental clearances.

Communities campaigning against Coca-Cola in India have vowed to hold the company financially and criminally liable for the damages. The state of Kerala is also mulling criminal charges against the company for destroying water resources and pollution.

"Coca-Cola's own report as well as government studies have confirmed what we have been saying all along - that the company has worsened the water crisis for thousands of people," said Nandlal Master of Lok Samiti which coordinates the community campaign against Coca-Cola in Mehdiganj.

"Coca-Cola must cease its bottling operations in Mehdiganj and compensate the thousands of farmers who have lost their livelihoods as a result of declining water tables courtesy Coca-Cola," he continued.

"What other confirmation does Coca-Cola need to shut down the plant in Kala Dera?" asked Rameshwar Kudi of the Kala Dera Sangharsh Samiti, the local group that has led the campaign for the plant's closure. "Continuing to operate the plant even after its own study has found the company guilty of worsening water shortages is criminal, and we will make sure that Coca-Cola pays heavily for the damages it has caused."

The report released in January 2008 was conducted by the Energy and Resources Institute (TERI) and was a scathing indictment of Coca-Cola's operations in India, particularly on water management.

The Coca-Cola company was forced to agree to an assessment of its operations as a result of campaign efforts at the University of Michigan which demanded the assessment for continuing business with Coca-Cola. It should be noted that at last year's AGM, Coca-Cola company management had recommended a vote against a resolution which called for a "report on the potential environmental and public health damage from its plants in India." The resolution did not pass.

The Coca-Cola company has responded to the growing opposition against it in India through a variety of "corporate social responsibility" initiatives, although the vast majority do not deal directly with the plants being opposed themselves. One of Coca-Cola's often touted initiatives in India is rainwater harvesting, which the company has announced with much fanfare as a result of the growing opposition to its water management practices. The communities' assertion that such initiatives were just for show and not genuine were confirmed by the report by TERI, which noted that "all the recharge shafts that were randomly visited were found to be in dilapidated conditions."

"Coca-Cola's own assessment has shown that the company has acted irresponsibly by locating many of its bottling plants in India in areas with water scarcity, and as a result, exacerbating the already existing water crises in India," said Amit Srivastava of the India Resource Center. "Even from a dollars and cents perspective, Coca-Cola's practices in India are plain wrong. It is time for the shareholders to demand accountability from the Coca-Cola company management."

For more information, visit www.IndiaResource.org

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