Plachimada's claims

Swayed by strong public opinion, the State government decides to set up a tribunal to judge the compensation claims of victims.

IT may seem surprising that the decision of the Kerala government to establish a tribunal to judge the compensation claims of people affected by the activities of the Coca-Cola factory at Plachimada village in Palakkad district has received only a muted response.

The Plachimada bottling plant of Hindustan Coca-Cola Beverages (HCCB) Pvt. Ltd., Coca-Cola's largest unit in India, has remained closed since March 2004, caught as it was in a web of high-profile people's agitations, court cases and controversies over groundwater depletion and pollution, including heavy metal toxicity, caused by it in the predominantly agricultural village.

On June 30, Chief Minister V.S. Achuthanandan announced the Cabinet's decision to set up a dedicated legal agency to assess the actual compensation due to every applicant and issue orders to the company for compliance, after much dithering and criticism against the proposal from within the Cabinet and the State Industries Department. It was the first time in the State that such a tribunal was being proposed to offer compensation to victims of industrial pollution.

As articulated by T. Balakrishnan, Principal Secretary (Industries), at an official function in Kozhikode, the Industries Department was obviously worried about the impact of such an unprecedented move on the industrial climate in the State, especially on future industrial investments, employment opportunities and similar, pollution-related issues surrounding public sector industrial units.

But despite the objections, the Cabinet could not have decided otherwise, given the strong public opinion to act on the advice of a high-power committee (HPC) appointed by the government in May 2009 (on the recommendation of the State Ground Water Board), to assess the extent of damages caused by the Coca-Cola plant at Plachimada and [for] claiming compensation.

The 13-member HPC, headed by Additional Chief Secretary K. Jayakumar, had consulted experts in various fields, held public hearings and drawn on several earlier studies before submitting its detailed report in March.

Compelling evidence

In brief, the 91-page report said that the committee had compelling evidence (from several studies by legislative committees, the Supreme Court Monitoring Committee, scientific bodies as well as civil rights groups and concerned individuals) to conclude that Hindustan Coca-Cola Beverages Private Ltd. has caused serious depletion of the water resources of Plachimada, and has severely contaminated the water and soil. Water resources were severely polluted by lethal heavy metals contained in the toxic sludge generated by the company. A substantial part of Plachimada's soil has also been polluted by the hazardous sludge illegally distributed by the company to unsuspecting farmers. The company is obviously liable to pay compensation, for the heavy damages they have caused to the natural resources of the area.... It is evident that the damages caused by the Coca-Cola factory at Plachimada have created a host of social, economic, health and ecological problems, cutting across different sectors.

The report, which recommends that the company, located as it is in a drought-prone area, should not resume its operation, gives a detailed account of how the water crisis in Plachimada was caused and compounded by the excessive pumping of groundwater by the Coca-Cola plant. It said the company had been taking away the scarce groundwater resources (over which the domestic and agricultural needs have first and second priority respectively) without a licence from the Perumatty village panchayat, which has administrative authority over Plachimada. The committee found that the operation of the factory had also caused pollution of groundwater and that it would take years to mitigate.

Besides, the report said, the solid waste [ETP sludge] from the factory exacerbated the crisis. Part of this material was dumped in landfill sites within the factory compound. Large quantities of it were trucked out and disposed of in the farmlands all around and far off places. The factory had impressed upon the peasants that it was good manure. The sludge had no nitrogen content but dangerous levels of cadmium and high levels of lead make it a hazardous waste. Too much of cadmium in the soil had led to its leaching into the wells. The presence of excessive cadmium in the farmland has led to nutrient imbalance in the soil. The farmlands, which had apparently very good soil structure, got deteriorated in due course.

The committee also said there was a steady decline in agricultural production in the area; 91 per cent of the farming households reported a drastic fall in agricultural income and employment because of reduction in crop productivity; metals such as cadmium, lead and chromium were detected in the sludge; the general health of the people had been affected; and skin ailments, breathing problems and other debilities had been reported; fodder and water at Plachimada and the surrounding areas were contaminated with copper, cadmium, lead and chromium at levels higher than what was considered safe by the World Health Organisation; there was a significant fall in the birth weight of babies born in the area after 2000 (which one of the studies attributes to the impact of cadmium on the health of the mothers); drinking water had become scarce as a result of pollution; and women had to walk long distances to collect water, and that this deprived them of their wages.

The deterioration in the quality and quantity of groundwater and the consequent public health problems, displacement and migration of labour and the destruction of the agricultural economy are the main problems identified in Plachimada, which have been caused and contributed by the Coca-Cola factory, the report said.

The fact that Coca-Cola factory at Plachimada has caused immense damage to the environment and people and their livelihood is supported by impeccable evidence. In fact any other finding can only be a figment of imagination, it said. The committee did not examine fresh evidence to prove the role of the company in creating the damages which stand proven through earlier studies, which had conclusively established the damage caused by the Coca-Cola plant.

The report indicated that the company was liable for all the damage and that the committee, therefore, had concentrated more on the extent and valuation of the damage and on creating an institutional mechanism with legal backing as a necessary prerequisite to claim damages from the company.

The report was highly critical of the authorities concerned for not using existing legal provisions properly and with environmental sensitivity earlier, especially in the legal war between Coca-Cola and the Perumatty panchayat which began with the ruling of the Single Bench of the Kerala High Court in December 2003 that the company would have to stop using groundwater and seek alternative sources of water.

Polluter pays

Significantly, on the legal implications of its findings, the committee said that the polluter pays' principle was implied in the environmental laws in India and that the provisions of the Water (Prevention and Control of Pollution) Act, 1974, the Environment Protection Act, 1986, and the Hazardous Waste (Management and Handling) Rules, 1989, as amended in 2003, gave the State Pollution Control Board sufficient powers to deal with the issues arising out of the operation of the Coca-Cola plant.

It is also well established, the committee argued, that (a) where an activity in a private property affects the life and well-being of another person, the law needs to be interpreted in favour of the victim, ensuring the maintenance of human rights and basic amenities to citizens; (b) that the state has got a duty to protect groundwater from excessive exploitation, which arises from the Right to Life guaranteed under Article 21 of the Constitution; and (c) that the absolute liability for harm to the environment extends not only to compensation to the victims of pollution but also to the cost of restoring the environmental degradation'.

The body of irrefutable evidence available makes the company liable for ecological degradation, groundwater pollution, drinking water contamination, soil despoliation, consequential health damages, decline in agricultural income and loss of livelihood.

The committee said that in view of the clearly established principles, the Government of Kerala had the legal right and responsibility to initiate steps to make HCBPL pay compensation on the polluter pays' principle for the following categories of damage: rendering the water in the wells and borewells useless and harmful for drinking, washing and cooking in a radius of two km from the factory; rapid depletion of groundwater; rendering the land toxic by dumping the waste sludge and slurry extensively on the land; causing health problems to the people in the area as a result of the presence of heavy metals; destruction of agriculture; rendering vast numbers of agricultural labourers unemployed, especially those belonging to S.C. [Scheduled Caste] and S.T. [Scheduled Tribe] and other poor labourers; rendering drinking water unsafe for cooking purposes (and for compensating for this loss until such time the surface and groundwater is reversed to the safe limit); incurring additional expenditure to the state exchequer for provision of clean drinking water as a coping up mechanism in lieu of pollution.

The report also seeks to make it clear that payment of compensation for the damage suffered does not in any way affect the criminal liability of the company under various laws and should not be viewed as a quid pro quo for not initiating criminal charges. Therefore, apart from fixing the liability to pay compensation, the company has to be made answerable for violations of the provisions of many laws, including the Water (Prevention and Control) Act, 1974, the Environment Protection Act, 1986, the Factories Act, 1948, the Hazardous Waste (Management and Handling) Rules, 1989, the S.C.-S.T. (Prevention of Atrocities) Act, 1989, the Indian Penal Code, the Indian Easement Act, 1882, the Kerala Ground Water (Control and Regulation) Act, 2002, and the Kerala Land Utilisation Order, 1967.

Reasonable compensation

The committee took the view that when the enjoyment of property of one person causes harm to the life and property rights of the adjoining owner, the liability under tort is invoked and the victim is entitled to compensation. It calculated the overall money value of the damage caused by the Coca-Cola unit at Rs.216.26 crore, an amount that could be claimed as reasonable compensation, it said, under the following heads: agricultural loss Rs.84.16 crore; health damages Rs.30 crore; cost of providing water Rs.20 crore; wage loss and opportunity cost Rs.20 crore; cost of pollution of water resources Rs.62.10 crore.

According to the committee, this amount of compensation is only indicative in nature and is in no way final or absolute and the actual compensation will have to be calculated by a legally constituted dedicated authority.

It proposed two options of institutional mechanisms to assess and claim the compensation for the suffering and damage caused by the company. One was the constitution by legislation or an ordinance of a Plachimada Claims Tribunal for the adjudication of disputes relating to compensation due to water and air pollution, loss of agricultural crops, loss of income from animal husbandry, loss of health by pollutants and contaminated water and ecological and other damages due to the excess drawal and pollution of ground water and surface water by the company.

The other was for the State government to approach the Centre for the constitution of an authority under Section 3(3) of the Environment Protection Act, 1986, to be headed by a retired High Court judge, and with powers to deal with the situation as was done in the case of damage caused by the tanneries and other polluting industries in Tamil Nadu.

Amidst differences of opinion within the ruling Left Democratic Front (LDF) and the government over the issue, Achuthanandan said the Cabinet had decided to constitute a tribunal, as proposed by the committee. The representatives of the company had all along refused to participate in the meetings and public hearings convened by the government committee and had been questioning its validity and the justification for its constitution.

They have opposed the committee's recommendations and the government's decision to constitute a tribunal.

The company's claim was that the committee was constituted under the pre-determined and unproven conclusion that the operation of the Coca-Cola plant had caused loss to the residents of Plachimada and that scientific studies by independent experts and investigations by the Government of Kerala itself have shown that Hindustan Coca-Cola Beverages Pvt. Ltd. is not the cause of local watershed issues.

It is also known to have taken the position that any government committee or panel reviewing claims should determine through scientific study and through established process of law whether any damage was caused to the residents of Plachimada and if indeed such damage was caused, it should also determine who was responsible for it.

It is to be seen how long it will take for the State government to pass a law or issue an ordinance to constitute a tribunal and for the tribunal itself to assess the damage and the compensation required to be paid. A senior official told Frontline that given its past actions, the company was unlikely to cooperate with the tribunal's proceedings and was more likely to challenge the government's decision before a court of law.

Therefore, for now at least, there is more hope for the affected people in the special leave petition filed in the Supreme Court by the State Pollution Control Board challenging the decision of the Division Bench of the High Court in Perumatty Panchayat vs the State of Kerala, than in the tribunal that is to be constituted.

The Division Bench had in an order on April 7, 2005, overturned the earlier decision against the company made by a single judge and had asked the Perumatty village panchayat to renew the operational licence given to the Coca-Cola company (Plachimada's loss, Frontline, May 6, 2005). Though the panchayat soon went on appeal to the Supreme Court against this decision, the apex court had refused to entertain the case on technical grounds.

Subsequently, the panchayat had impleaded itself as a party in the appeal filed in the Supreme Court by the Pollution Control Board in December 2005. It is in this case that for the first time, perhaps, the serious issues of pollution at Plachimada were brought clearly before a court's notice, a board official told Frontline. The apex court is yet to start hearing on the case.