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Coca-Cola Plant Shut Down in India, Authorities Cancel License

Written By Unknown on Wednesday, June 18, 2014 | 12:45 AM

Varanasi, India: Coca-Cola’s bottling plant has been shut down by state government authorities in Mehdiganj in the state of Uttar Pradesh in India.

The Uttar Pradesh Pollution Control Board (UPPCB) ordered the plant to shut down because it found the company to be violating a number of conditions of its license, or “No Objection Certificate” (NOC).

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

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, including on ground water use by farmers and the community for drinking water.

The closure is a major victory for the community in Mehdiganj which has actively engaged the UPPCB, CGWA and other government agencies to shut down Coca-Cola’s plant.  The campaign had also alerted the government to Coca-Cola’s failure to meet a key condition of a temporary license given to it – obtaining the clearance from the CGWA. 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 capacity from 20,000 cases per day to 36,000 without the Board’s permission, and suggested that the company may have misled the Board about the actual amount of industrial waste discharge (which has remained constant, according to Coca-Cola, in spite of increasing 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”.

Coca-Cola had been seeking to expand the capacity of its existing plant in Mehdiganj five-fold, part of its aggressive growth strategy of India which in 2012 announced an additional $5 billion investment by 2020 as sales in industrialized countries decline or stagnate due to 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 shut down facility.  The NGT has not yet allowed the plant to reopen in the three hearings so far. 

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

Welcoming the closure of Coca-Cola’s plant, Nandlal Master of Lok Samiti who has spearheaded the local campaign said, “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 business.”

Coca-Cola’s expanded facility in Mehdiganj has already been built but has not been able to begin commercial operations.  The company also faces a major obstacle in its operations because some of the land acquired by Coca-Cola for its plant is community owned land and 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 approached the courts and obtained a stay order.

Coca-Cola has also been forced to shut down another bottling plant in India in 2004 – in Plachimada in the state of Kerala, and faces legislation holding it liable for $47 million in damages as a result of its operations.  The company is also the target of a major community campaign in Kala Dera in Rajasthan where the community is seeking closure of the bottling plant due to rapidly depleting ground water.  Most recently, Coca-Cola’s plants to build a new factory in Charba in Uttarakhand were defeated almost as soon as the proposal was made public in 2013, testament to how quickly and efficiently communities can organize and network in India against problematic companies 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 international campaigning group, India Resource Center.

For background on Mehdiganj and for more information visit www.IndiaResource.org

Nandlal Master, Lok Samiti (Hindi) +91 94153 00520
Amit Srivastava, India Resource Center +91 98103 46161

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