India: Coca-Cola ordered to stop extracting water in Kerala

A News item from Business Respect, Issue Number 68, dated 19 Dec 2003

The Kerala High Court has ordered Coca-Cola to stop extracting the ground water for its controversial bottling operations that have seen accusations that the company is draining the region's natural resources and despoiling the environment.

The ruling could end up forcing the plant to close, as alternative sources of the high quantities of water required will be difficult to envisage. It has been given one month to cease its extractions.

The move comes as a major victory for large numbers of local residents that have claimed the company's overconsumption of water was turning their agricultural land into a desert.

Justice K Balakrishnan Nair told the company that it owned the 40 acres of land upon which its plant stood, but not the ground water underneath it, which was a national resource belonging to the entire society.

He said: "Every landowner can draw a 'reasonable' amount of ground water which is necessary for its domestic and agricultural requirements. But here, 510,000 litres of water is extracted per day, converted to products and transported, thus breaking the natural water cycle."

Coca-Cola has continued to deny that it depleted the water reserves, and has said that it will appeal against the order.

The company also announced that it has set up an India advisory board under the chairmanship of former Cabinet secretary Naresh Chandra to guide the company on various issues including future strategies, corporate citizenship, social responsibility and corporate governance. This has led to the creation as well of a high profile India Environment Council, which will be headed by the former chief justice of India, BN Kirpal.

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