The Coke Machine (34 page)

The plant here dates back to 1995, built by Indian company Parle to produce local soft drinks Thums Up, Limca, and Gold Spot. In 1999, however, a division of Coca-Cola India purchased the plant and almost immediately workers began clashing with the company over working conditions. As in Colombia, only a fraction of the workers in the plant—some thirty-five or forty people—are permanent. The rest, up to two hundred workers, are employed only on short-term contracts, allowing the company to save on pay and benefits. Unhappy with the arrangement, workers appealed to company management for a more favorable deal—the company said no.

The real problems with the company, however, began when the farmers surrounding the plant began to experience problems with their crops and livestock they had never had before. The day after the graduation ceremony, Nandlal introduces a group of villagers who have gathered under a thatched awning to tell their tale. “The first major problem was that Coca-Cola used to discharge this wastewater. It was reaching the farmers’ land and destroying the land, making the land barren,” states Urmika Vishwakarma, a woman who has worked with Lok Samiti to administer micro-loans to women in the village. “All the animals who drank it died; anyone who touched it got blisters.”

Originally, Coke channeled its wastewater through a culvert under the Grand Trunk Highway into a canal that eventually made its way into the Ganges. In December 2002, however, the government blocked the culvert during highway reconstruction, spilling effluent into the fields. For months, the water pooled by the side of the highway, turning the fields into a rank, fly-drawing soup.

At that time, several villagers came to Lok Samiti to help. As they began to investigate, the farmers told Nandlal about a more insidious practice by which the bottling plant had been distributing the sludge from the plant’s wastewater treatment—a dry, white-colored ash—to farmers as fertilizer. After they used this ash, says Vishwakarma, “nothing would grow.” Then there was the drought. The entire state of Uttar Pradesh—of which Varanasi is a part—began experiencing water shortages in 2002, when the yearly monsoons began to fail. But the villagers around Mehdiganj say that their problems began several years earlier, when water levels began to drop precipitously around the Coca-Cola plant. The villagers now gather around an open well in the center of the village, sending a metal bucket down on a rope some sixty or seventy feet. Only in the last few inches does it hit water. Another well nearby is completely dry—one of ninety-seven wells that Lok Samiti says have dried out since the plant began operation in 2000, nearly half of the 223 wells they have surveyed in villages neighboring the plant.

The villagers name a number of factors in that decline—including lack of rainfall and drought. But as in Chiapas, they blame also Coke’s deep bore wells for literally sucking their land dry—exacerbating an existing problem if not causing the problem itself. Under the leadership of Lok Samiti, the villagers staged their first rally in front of the plant in May 2003, drawing only a few dozen people to protest. At the same time, they appealed to the local district magistrate, who ordered Coke to clean up its spilled wastewater and install a pipe under the highway to divert wastewater into a canal flowing into the Ganges. Not that the new drain fixed the problem; it just moved it to a less visible location. Across the highway from the plant in Mehdiganj, Nandlal leads the way through fields to a spot in one canal where a pipe protrudes. “There, that’s where the Coca-Cola plant discharges their water,” he says, pointing to an area where the water is scummy and green, with dried patches of white powder on the rocks.

A local farmer who lives a few yards away says the fields close to where the water comes out of the pipe are unproductive compared with those in other areas. If the water from the canal is used to grow sugarcane, it has an off taste. Once, when the plant restarted operations after shutting down a length of time, the canal overflowed into his fish pond, killing all of the fish he was raising for sale. Neighbors, he claims, have lost cows or buffalos. “I am not a doctor, I am not sure how they died,” he says. “But they drank that water.”

The plant
itself is sectioned off the highway by two gates topped with barbed wire. Unlike representatives of Coca-Cola FEMSA, who refuse to even talk about their operations, much less show off a bottling plant, the local bottler Hindustan Coca-Cola Beverages Pvt. Ltd. agrees to a tour of the interior. Leading the way is Kalyan Ranjan, Hindustan Coca-Cola’s external affairs manager for Northern India. Short and nattily dressed, he wears dark sunglasses and a permanent scowl. But he is also remarkably patient with a day and a half’s worth of questions about Coke’s operations—which is more than can be said about any of Coke’s public relations representatives in the United States or Mexico.

The first glimpses inside the plant there are underwhelming. In the stairwell just inside the entrance, a Sundblom Santa Claus smiles from an old poster, his red suit faded by the sun. Farther along, the cubicles lining the corridor upstairs are dilapidated, their walls sagging. In the conference room, the tables are covered with peeling contact paper and are surrounded by red plastic lawn furniture and, incongruously, a black leather couch.

Sitting down on the sofa, Ranjan sighs and says the allegations against the company have been blown out of proportion. Yes, water levels in the area have fallen, but the problem is the persistent drought, not the extraction from the plant. “If the question is groundwater depletion, the answer is yes. If the question is whether it’s the responsibility of Coke, the answer is no,” he says. “The simple reason is we are the smallest user, so in that sense, we are the smallest contributor to the problem.” Sticking to the corporate playbook of diffusing responsibility for the problem, he says Coke uses only 3 percent of the area’s groundwater, while agriculture accounts for more than 80 percent.

As for solid waste, he says the company disposes of it at a government-designated facility, and has never distributed it for fertilizer. “We have never dispensed biosolids to farmers,” he says. “Not an ounce, never ever, not here, not anywhere.” That vehemence is surprising, since Hindustan Coca-Cola’s own vice president said as recently as 2003 that the sludge was “supplied to farmers free of cost, as it was found to be a good soil conditioner.” Another statement on Coke’s website asserts that “since 2003, we no longer distribute biosolids to any area farmers for agricultural use,” implying that up until 2003 it did, in fact, distribute sludge.

Ranjan does admit that the company had a problem with wastewater flowing from the plant, but it lasted only three or four days, despite contemporary media accounts that say the problem persisted for months. Even so, he says, the water that flowed from the plant was treated wastewater, which should have been completely harmless—a fact that Ranjan says he will demonstrate after the plant manager, Sanjay Bansal, arrives to lead a tour.

Bansal shows the way to the pump house, where the plant has two bore wells—one with a capacity of 50,000 liters per hour, and a backup of 30,000 liters—for a total extraction of some 15 million liters during June, its busiest month. From there, a pipeline leads to the water treatment facility, where Bansal explains a seven-step process of purification, starting with the application of lime and bleach, continuing through a carbon filter to remove chemicals, then ultraviolet light to kill bacteria, and then successively smaller filters that remove any particles left in the water. From there, the water passes into the bottling facility. “German,” Bansal nods approvingly at the Krones automatic electronic bottling machine on the way past a blur of glass bottles—the one part of the plant that looks identical to the Coca-Cola Enterprises plant in Massachusetts.

Finally, to complete the cycle, the water passes to the wastewater treatment plant, which looks surprisingly rudimentary compared with the shiny and complex intake treatment room. A catwalk leads over several open tanks where water is sprayed with ammonia to reduce the pH level and aerated in a froth to reduce the oxygen bacteria need to survive. The water is then filtered through tanks where chemicals and bacteria dry as sludge, while the rest of the water is pumped into holding tanks to be flushed out as waste.

A small laboratory full of test tubes and beakers checks the wastewater for pH as well as dissolved solids and biological oxygen demand (BOD)—a measure of dissolved organic matter that can lead to bacterial growth. A whiteboard on the wall shows that on the day of the tour all of these measures are below the standards set by the Central Pollution Control Board of India. To prove that the water can support life, Bansal shows off a small tank containing two ground fish, which he says are swimming in the same treated wastewater that will be flushed from the plant. “That is the ultimate test,” he says.

Leading the way into the manager’s office, he introduces a local farmer from the nearby village of Karipur named Dudh Nath Yadav. The bottling company has done a lot of good for his village, he says, giving young people employment at the plant. While he says the groundwater has receded in the past four or five years, the farmers protesting Coke have exaggerated the amount, which he puts at only fifteen feet. “They don’t have too much support,” he says of the protesters. Ranjan chimes in, insisting that he has never seen more than 150 people protesting in front of the plant, half of them from the Lok Samiti school.

Of all of the claims that Ranjan makes, the idea that protesters have very little support is the most easily contradicted. Photos, eyewitness accounts, and independent news reports have documented thousands of people at a time protesting in front of the plant in Mehdiganj. And that is neither the first nor the only place that Coke has met opposition in the country. In fact, not since France after World War II has any country shown such vehement opposition to Coke on so many fronts, part of a rocky history that has beset the company for decades.

 

 

 

Coke first entered India
in 1958—back when the recently independent country was openly welcoming the investment of foreign corporations. In short order, Coke became the dominant soft drink in the market. The mood of the country changed in the 1970s, however, when a lingering mistrust of foreign powers led to a backlash against multinationals. Then Parliament passed a law requiring companies to divest at least 60 percent of their shares to local investors. Despite the fact that some twenty-two bottling plants were already majority-owned by Indians, the Coca-Cola Export Company that supplied them with syrup was not. Not only did the government demand divestment from the syrup plant, it also required Coke to divulge the recipe for the secret formula, an obvious deal-breaker for the company. Coke’s executives from John Pemberton to Robert Woodruff hadn’t spent so much time imbuing the secret formula with such totemlike secrecy only to throw all of that away for the sake of one country. Reluctantly, Coke packed up and left in 1977.

Into the breach came Thums Up, a drier and fruitier cola made by the Indian company Parle that quickly snatched up the market Coke had left behind. The tide turned back in the 1990s, however; with the new globalization fostered by the WTO and IMF, countries were told that the key to prosperity was privatizing industry and reducing barriers to foreign investment. India relaxed its ownership guidelines, and Coke began exploring a return to the country—which it did in a big way in 1993. Facing opposition from Parle, however, Coke simply bought up the company, along with its brands.

Initially, Coke set out to create an anchor bottler similar to other parts of the world—but it ran into resistance from the bottlers already existing in the country, which refused to sell out or merge. By 1997, Coke shifted tack to build its own bottling system under a new entity called Hindustan Coca-Cola Beverages Pvt. Ltd., which now directly runs approximately half of the bottling plants in the country. The Indian government allowed the company under the stipulation that at least 49 percent of shares would be sold to Indian shareholders by July 2002.

Almost from the beginning, Coke’s return to India was a disaster. Soft drinks had never caught on much in India outside an urban middle class that made up only 10 percent of the population. In the rural areas, people still drank traditional beverages such as coconut water, tea, and yogurt-based lassi. By 2002, per-caps in India were dismal, at just 6 bottles per person per year, compared with 17 in Pakistan, 73 in Thailand, and 173 in the Philippines. Making matters worse, Coke made the poor decision to kill the popular Thums Up brand and substitute Coke instead. The push failed, opening up more room for the ascension of Pepsi. Now Thums Up and Pepsi both command 20 percent of the market, while Coke languishes in third place with 11 percent, despite lavish ad campaigns featuring Bollywood film stars.

Pleading poverty, Coca-Cola India asked the government for a stay of execution in divesting its shares in Hindustan Beverages, arguing it would lead to a fire sale in shares that would hurt the company’s all-important brand image. The government granted it, even as the national and foreign press slammed Coke for reneging on its promise. Now, seven years after the deadline, only 10 percent of the company is Indian-owned.