Coca-Cola's battle

Published : Jul 15, 2005 00:00 IST

THE legal battle between Coca-Cola and the Perumatty grama panchayat in Kerala reached a piquant stage by June-end, with the village body continuing to fudge the street-smart efforts of the multinational soft drink maker to gets its licence renewed and restart extraction of the "scarce groundwater resources of the village", as the growing body of anti-Coke protesters often describe it.

On June 2, Coca-Cola armed itself with a favourable `interim' order from the Division Bench of the Kerala High Court directing the panchayat to renew the MNC's licence by June 9, failing which the company would be free to restart its operations from June 10.

The court gave such a direction because, it said, the panchayat had failed to comply with its earlier order (Frontline, May 6, 2005) to "consider" the application of the company based on its directives and it felt that "the panchayat was relying on extraneous factors so as to deny the company the licence". If the panchayat had doubts about the claim of the company that it had complied with all legal formalities and pollution control norms, it should have prudently sought further clarifications from the company, the Division Bench said. Instead, the Bench said, the panchayat sat over the company's application for a considerable period and "with a closed mind" rejected the application on the grounds that the functioning of the company would be illegal in the absence of a clearance from the State Pollution Control Board and licence under the Factories Act.

As the court's order came in for sharp criticism for its reliance on "technicalities" rather than on "the larger issues that affected the people", the Perumatty panchayat issued Coca-Cola a licence valid for three months, but hooking it to the compliance of 13 conditions by the company, including production of a fresh certificate under the Hazardous Wastes (Management and Handling) Rules, a licence under the panchayat laws for drawing, using and supplying water (to the affected people) as per an earlier directive of the Supreme Court Monitoring Committee on Hazardous Wastes, and the submission of a detailed plan for the social security measures it was required to implement for the benefit of the affected villagers.

In a letter to the panchayat on June 8, Coca-Cola rejected the three-month conditional licence describing it as "arbitrary and in violation of High Court orders" and claiming that the 13 conditions put forth by the panchayat were well outside its legal powers. Instead, the company wanted the panchayat to renew its licence for two years and submitted a fresh application. This was rejected by the panchayat on June 13. The panchayat said in a statement that it had granted the three-month licence based on the orders of the High Court subject to certain conditions "and without prejudice to the rights of the panchayat to go on appeal before the Supreme Court". As the licence has already been granted, there was no provision for a second application under the Panchayati Raj Act, it said. Coca-Cola maintains otherwise.

Meanwhile, the Kerala State Pollution Control Board (KSPCB) too has decided to issue a show-cause notice to the soft drink maker asking why the company had failed to comply with the directions of the Supreme Court Monitoring Committee on Hazardous Wastes to install a reverse osmosis system or an equivalent process for water purification "to ensure that water used for effluent treatment is returned to its original condition for re-use".

A senior PCB official told Frontline that though the company has complied with the directions of the Supreme Court committee on building a secure landfill system for the disposal of hazardous sludge from the factory, it was yet to explain to the Board how hazardous substances such as cadmium are present in the sludge, even though the raw water used for the manufacturing process does not contain such hazardous elements. Moreover, he said, there were also several defects in the consent application submitted by the company.

The case is set to reach the Supreme Court soon and the panchayat said in its June 7 order that "it has received legal advice to comply with the order of the High Court first and then to move the Supreme Court to protect and safeguard the rights and obligations of the panchayat under the Constitution of India and provisions of the Kerala Panchayati Raj Act."

R. Krishnakumar
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