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Shutdown order slammed on Coca-Cola plant, licence cancelled

     

Picture source: indiaresource.org

Posted on 18 Jun 2014

Last updated 28 Jun 2014 00:00:00 +0530

  Coca-Cola, Mehdiganj, India, Ground Water, Waste discharge

Coca-Cola had been seeking to expand the capacity of its existing plant in Uttar Pradesh's Mehdiganj five-fold, as part of its aggressive growth strategy in India. In 2012, the company announced an additional $5 billion investment by 2020 as sales in industrialized countries decline or stagnate due to growing health concerns. 

HNF Correspondent

 

In a recent move, authorities of Uttar Pradesh (UP) government have slammed a shutdown order on Coca-Cola's India bottling plant in Mehdiganj.

The Uttar Pradesh Pollution Control Board (UPPCB) ordered for shutdown of the plant as it found that the company operated in violation of a number of conditions marked in its license or the “No Objection Certificate (NOC)."

In its order dated June 6, 2014, the Pollution Control Board noted that Coca-Cola failed to obtain clearance from the Central Ground Water Authority (CGWA), a government agency that monitors and regulates ground water use in water-stressed areas,  to extract groundwater.

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 while on ground water is used by farmers and the community for drinking water.

The closure is a major victory for the community in Mehdiganj which has actively engaged itself with the UPPCB, CGWA and other government agencies to shut down Coca-Cola’s plant. The campaign had also alerted the government about Coca-Cola’s failure to obtain the clearance from the CGWA, a key condition of the temporary license given to the company. The campaign, which enjoys widespread local support, had also sent letters from 15 village councils (panchayat) in April 2013 seeking closure of Coca-Cola’s plant.

UPPCB’s closure order also noted that Coca-Cola had increased its production from the permissible 20,000 cases per day to 36,000 without the Board’s approval. The company might have misled the Board about the actual amount of industrial waste discharge too as the data submitted by the company remained constant in spite of increase in production by 80%. The Board also cast doubt on Coca-Cola’s waste treatment plant noting that the “Treatment System/Plant” was not operating “smoothly/ properly.”

“We knew it was a matter of time before the government acknowledged the demands of the community.  This is a great victory and a welcome confirmation that local communities can successfully take on big, powerful businesses,” said Nandlal Master of Lok Samiti who spearheaded the local campaign.

Coca-Cola had been seeking to expand the capacity of its existing plant in Mehdiganj five-fold, as part of its aggressive growth strategy in India. In 2012, the company announced an additional US$5 billion investment by 2020 as sales in industrialized countries decline or stagnate due to growing health concerns.

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 shutdown facility.  The NGT has not yet allowed the plant to reopen in the three hearings so far.

As the closure of Coca-Cola’s bottling plant comes at the peak of Coca-Cola’s sales season in India, the company has cited financial losses to the NGT as a reason for re-opening the plant quickly.

Coca-Cola’s expanded facility in Mehdiganj is already built but has not been able to start commercial operations. The company also faces trouble in its operation because part of the land acquired by Coca-Cola for its plant is community owned and, thus, cannot be used for private purposes.  In December 2013, local authorities passed an order to evict Coca-Cola from the illegally occupied land but Coca-Cola managed to obtain a stay order by approaching the courts.

Coca-Cola was also forced to shutdown another bottling plant in India, in 2004. The plant based in Plachimada in the state of Kerala faced legislation and the company was held liable for damages worth US$47 million resulted by its operations.

The company is also facing strong opposition from the local community in Kala Dera [Read Study debunks Coca Cola's CSR claims in India] of Rajasthan. Here also the community demands closure of the bottling plant in view of rapidly depleting ground water.

Most recently, Coca-Cola’s plans to build a new factory in Charba in Uttarakhand were defeated soon after the proposal was made public in 2013. This is another testimony to how quickly and efficiently Indian communities can organise and network against problematic forces such as Coca-Cola.

“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.  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,” said Amit Srivastava of the India Resource Centre’s international campaigning group.

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