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Case Study Coke in IndiaAdapted by Lesley Fleischman from:

Hills, Jonathan and Welford, Richard. Corporate Social Responsibility and Environmental Management. 12, 168177 (2005)

August

2003 Coke has 44 wholly owned and franchise owned bottling plants in India Indian NGO finds that Coke and Pepsi products bottled in India contain pesticides. Immediate impact on Coke stock price.

Coke threatened legal action over allegations. Indian government tests confirm findings.October

2003 Coke hires PR firm, develops strategy to deflect media attention away Escalating community protests at bottling plants, demonstrations, hunger strikes,

etc.December

2003 Ordered by Indian court to stop drawing groundwater for its bottling plant in

Plachimada, Kerala

Judge ruled that no power to allow a private party to extract such a huge quantity of groundwater Protesters claim that Coke water use was reducing agricultural yields Coke cited lack of rainfall, not their operations, as cause of crop declines

February2004

Parliamentary committee finds high amounts of pesticide residue in Coke and Pepsiproducts bottled in India

Not illegal, Indian safety standards weakMarch

2004 Coke application for new bottling plant in Plachimada denied by local authorities

because of groundwater use and wastewater

Pepsi had operations in same region, no similar denialJune 2004 Coke works with local and national authorities to reassess its waste treatment

Denied that its operations in Plachimada using too much groundwater, but committedto using advanced rainfall harvesting technology to help replenish the groundwater

after a 60% decrease in rainfall over the previous 2 yearsSeptember

2004

Indian environmental groups launch campaign against Coke and Pepsi

Increasing local opposition at bottling plants

October

2004 Protests against Coke in U.S.

Protests end in violence at Coke plant in Mehdiganj

a hedge fund had been launched with an investment strategy of shorting shares ofcompanies with which it took issue. The London-based funds first target was Coke.

February

2005 Campaigns to cancel contracts with Coke at U.S. universities

UK trade union, Unison, joins protest against Coke

April 2005 High Court of Kerala ruled that Coke can extract up to 500000 litres of water per day

from common groundwater resources at its Plachimada facility in southern India

Coke cited rainwater, and claimed that a nearby Indian brewery, which they said usedmore water than Cokes Plachimada plant, had been left alone by activists

Protests at Coke annual meetingMay 2005

Opposition by NGOs, local communities, and environmentalists to Coke franchiseebottling plant proposal to set up a soft-drinks unit in the Gangaikondan village of

Tirunelveli district in southern Tamil, claimed plant would deplete and contaminate

groundwater, and draw from the Tamiraparani River

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June 2005 Local council reluctantly renewed the license for Cokes bottling facility at

Plachimada for three months with 13 conditions. Coke rejected the three-month

conditional license, describing it as a violation of a High Court order.

On 9 June around 700 community members and supporters marched to the Cokefactory in Plachimada, Kerala, to demand plant be permanently shut down. Protesters

were met by a large cordon of police officers, and close to 500 people were arrested. NGOs reiterated that the community in Plachimada had experienced severe water

shortages since Coke started operations in the area, and the remaining groundwater as

well as soil had been polluted as a result of Cokes bottling operations.

The Wall Street Journal (7 June) ran a front page article on Coke in India and notedthat while NGOs have flagged some serious issues, such as Cokes onetime practice

of giving away waste material to local farmers that some studies later showed

contained toxic materials, they had made some dubious claims as well, with AmitSrivastava of the IRC recently comparing Cokes environmental practices to the

industrial accident at Bhopal, which killed thousands. Significantly, the Wall StreetJournal report claimed water allegations remained unproven. It said Keralas highest

court had rejected water abuse claims in April of that year, noting that wells therecontinued to dry up the previous summer, months after the local Coke plant stopped

operating. Moreover, a scientific study previously requested by the court found that

while the plant had aggravated the water scarcity situation, the most significantfactor was a lack of rainfall. The NGOs responded that Coke should not be locating

bottling plants in drought-stricken areas.

Cokes Asia Director of Communications told the Wall Street Journal that activistssuch as IRC are making false environmental allegations against us to further an anti-globalization agenda. Cox accused Sunita Narain, who heads the CSE, whose report

on pesticide content in 2003 first put Coke India in the spotlight, of brandjacking

and using Cokes brand name to draw attention to campaign against pesticides.

To further publicize the pesticide issue, some NGOs last year began publishingstories online and to the news media relating to Indian farmers spraying Coke ontheir crops as a pesticide. However, the IRC now admits the stories were merely a

publicity stunt by local activists and farmers. The Wall Street Journal article also

claimed a Boston-based NGO called Corporate Accountability International postedon its website a Coke fact sheet suggesting that as a result of Cokes extraction of

water in Kerala water riots and water-related murders are now an everydayoccurrence as water becomes scarcer. Asked to back up the claim, the group

admitted it could not and later removed the statement. Interestingly, NGOs such as

the IRC refuse to even sit down with Coke officials, despite repeated invitations.Theres no space for dialogue right now, says Srivastava.