Government Moves to Claim $48 Million Compensation from Coca-Cola

For Immediate Release

India Resource Center
Contact: 

Amit Srivastava,
+1 415 336 7584 (US)

Government Moves to Claim $48 Million Compensation from Coca-Cola

Will Set Up Claims Tribunal to Process Claims from Affected Parties

WASHINGTON - In a major step towards holding Coca-Cola
accountable for damages it has caused in India, the state government of
Kerala decided on Wednesday to move forward with the formation of a
tribunal that will hear and award compensation claims against the
Coca-Cola company.
 
The Kerala state cabinet’s decision is based on the report and
recommendations of a High Power Committee which
released a
report
on March 22, 2010 holding Coca-Cola responsible for causing
pollution and water depletion in Plachimada in the state of Kerala in
south India.
 
Using the “polluter pays principle”, the High Power Committee had
recommended that Coca-Cola be held liable for Indian Rupees 216 crore
(US$ 48 million) for damages caused as a result of the company’s bottling
operations in Plachimada.
 
The Coca-Cola bottling plant in Plachimada has remained shut down since
March 2004 as a result of the community-led campaign in Plachimada
challenging Coca-Cola’s abuse of water resources.
 
The tribunal will consider claims of compensation from the Coca-Cola
company relating to “water and air pollution, loss of agricultural crops
and animals, diseases affecting human beings in the surrounding area due
to the excess drawal and pollution of groundwater and surface water by
the Company,” according to the report accepted by the state
government.  The tribunal will also consider claims related to “loss
of wages and loss of educational opportunities.”
 
The report noted that the suggested figure of $48 million was “indicative
in nature” and “should not be treated as the outer limit of
compensation.”  The report also stated that the “actual compensation
will have to be calculated by an Authority duly set up for this
purpose.”
 
Local activists engaged in the campaign to shut down Coca-Cola’s bottling
plant and hold the company accountable for the damages it has caused
welcomed the move by the state government.  They also called for
pursuing criminal charges against Coca-Cola for the various laws it had
violated, a course of action also supported by the High Power
Committee.
 
“The Kerala government’s integrity and decisiveness can be demonstrated
only when it follows up on the other recommendations of the High Power
Committee which unequivocally stated the compensation is not to be viewed
as a quid pro quo for not initiating criminal charges,” said R. Ajayan of
the Plachimada Solidarity Committee, a statewide organization that has
been instrumental in moving the compensation process forward.
 
In spite of the overwhelming evidence implicating Coca-Cola in
Plachimada, the company denies any wrongdoing in Kerala.  Coca-Cola
has also questioned the legitimacy of the High Power Committee, a body
set up by the state government of Kerala that is one of the highest
possible empowered committees to be set up in the state. 
 
Recent reports also suggest that the company will use legal maneuvers to
tie up the compensation process in courts. 
 
“Coca-Cola has been forced to shut down its operations in Plachimada
since 2004, and no amount of legal maneuvering will help it recover its
disrepute or change the final outcome.  The best thing Coca-Cola can
do is to accept the will of the people and the state – pack up, pay up
and leave,” said Amit Srivastava of the India Resource Center, an
international campaigning organization.
 
The recommendations of the High Power Committee are

here
.
 
A list of the members of the High Power Committee is

here
.
 
For more information, visit
www.IndiaResource.org

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