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Indian controversies

0 Comments 20 July 2010

Indian controversies

In one of our previous posts entitled The Coca-Cola Social Commitment we had covered this company’s corporate social initiative, RAIN (Replenish Africa Initiative), that aims at providing schools and infrastructures throughout Africa with safe drinking water.  The giant soft drink corporation is using the momentum of the 2010 FIFA World Cup in order to raise money for the RAIN initiative.  On its website the company declares that its goals are to return to the local communities the amount of water equivalent to what the firm uses in the production of their beverages. Corporate social responsibility can become an added value to the reputation and image of a company; yet this involvement needs to be long-term an authentic. A mere strategic cover-up for marketing purposes is sooner or later discovered by the media and public opinion. In parallel with Coca-Cola’s social initiatives, one can find a considerable amount of negative claims and controversial cases that denounce  the company’s unethical actions in countries like India.  For this reason, the India Resource Center website was created in order to publicly denounce all the injustices they declare to suffer locally and that are wisely and silently kept on the low-down by Coca –Cola. This article has a look at the two most recent controversial cases in order to help you have a more objective and complete view of the company so you can independently construct your own opinion on the matter.

Since 2004, Coca-Cola’s bottling plant in Plachimada, India, remains closed down as a consequence of a community protest campaign organized in order to denounce the company’s abuse of water resources.  A High Power Committee put in place by the state government of Kerala, India, has “recommended” on march 22, 2010, that Coca-Cola should be held responsible for the damages caused and liable for 48 million US$ “for damages caused as a result of the company’s bottling operations in Plachimada” (Source: ). Activist groups and environmentalists that have always tried to challenge and denounce Coca-Cola’s actions in that region were pleased about the recommendations. According to the Committee, the company is responsible for a series of damages and that they must pay compensations for “the agricultural losses, health problems, loss of wages, loss of education opportunities and the pollution caused to the water resources” (Source: ).  The official report explains that HCBPL (Hindustan Coca-Cola Beverages Private Limited), a subsidiary of the Atlanta based Coca-Cola firm has created serious depletion of the local water resources contaminating the water and soil of the region.  The report declares that Coke should be hold criminally responsible for its “reckless actions” in the region. It is yet too early to be able to tell if an actual legal initiative against the soft drink giant. Paradoxically, while Coca-Cola is indirectly responsible for polluting water in India; according to the firm’s website, Coca-Cola declares its commitment to give back to the community the amount of potable water equivalent to what they spent on their production plants. While they are trying to apply principles of corporate social responsibility on one side, the company seems to neglected ethical values drastically in other conditions. Perhaps, the situation in Plachimada was a mere incident, or perhaps the company’s corporate social responsibility is a witty marketing strategy. While it is hard to judge a firm based on a single case, the accident in India is not a one-time isolated event, and it is plausible to think that the previous episodes were not simple “accidents”.  Another controversy around the Coca-Cola brand and its bottling plant in India occurred on June the 27th, 2010 where three workers were killed after the explosion of a boiler.

The Indian controversy surrounding Coca-Cola continues with the death of three workers and five other injured that were working at a Coca-Cola bottling plant in Khurda. The individuals were doing regular cleaning activities when the boiler exploded. Once again, just as in the previous case, the bottling plan is operated by HCBPL a substitute of the Atlanta based Coca-Cola Company. According to local media and groups, “the boiler was “old” and a new boiler was undergoing tests before it was to replace the boiler” (Source: ).  The three people that died were not permanent employees of the soft drink giant industry; they were working under temporary contract, working for the summer period. It appears that this explosion could have been avoided and indeed, the police arrested three individuals from the bottling plant who were responsible of the maintenance operations. The contract workers that tragically lost their lives in the incident were paid minimum wage, a salary that ranks between $ 1.90 and $ 2.75. The police arrested the supervisors of the plant and the state has initiated a process of investigations.

While the company promises its commitment towards clean water sources and the respect of the local environment, communities in India are organizing fervent campaigns in order to denounce the fact that Coca-Cola has “destroyed their water resources through over extraction of water and pollution” (Source: Consumers need to keep their eyes open and try to behave in a responsible manner, by trying to be objectively informed on the positive and negative aspects of a company. One cannot be blissfully blinded by a green and social-friendly campaign done by giant corporations without truly looking more deeply into the matter. Assuming that any long-term sustainable initiative, if truely serious, over time should be celebrated and supported. The critical attitude toward a firm should take into account the overall level of impact from all possible points of view.



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