Coca-Cola, Water Use, and Pesticides in India

The India Resources Center recently reported that the state of Kerala banned Coca-Cola and Pepsi after the Centre for Science and the Environment's tests indicated the presence of pesticides in the soft drinks. Coca-Cola's use of ground water is a critical part of the controversy which began several years earlier through protests by women.

Dr. Vandana Shiva -- author of "Water Wars: Privitization, Pollution and Profit" (2002), and winner of the alternative Nobel Prize "Right Livelihood Award" 1993 -- reports that the movement in Kerala was started by women, who were having to travel greater distances becuase their wells were contaminated or dry due to the plant activities.

Coca-Cola must now provide water to the residents affected, which they are doing through tanker deliveries.

The water issues, and now the pesticide problems, have caused socially responsible investment groups to drop Coca-Cola from important investment indexes. KDL Research and Analytics, and Trillium Asset Management, actively working on socially responsible investment in the United States, removed Coca-Cola from their "Broad Market Social Index."

As a result, Coca-Cola Co. was dropped from the $8 billion TIAA-CREF Social Choice Account, a fund which invests according to social criteria. Steve Lippman of Trillium analyzes how powerful "socially responsible investment" indexes are.

Coca-Cola has responded to the problem in India with better watershed management strategies, independent testing of their product, and engagement of civil society groups locally.

"Because questions about our operations in India have persisted, with the most prominent concerns centered on our system’s water use, we have agreed to an independent assessment to augment our routine internal audits. The Energy and Resource Institute (TERI), a highly respected Delhi-based NGO with deep experience on sustainability issues, has agreed to conduct a transparent and impartial independent third party assessment of water resource management practices at Coca-Cola Company facilities in India, including potential contamination due to agricultural practices. The assessment is expected to begin this summer and conclude by the end of the calendar year. This assessment will involve respected environmental experts and TERI will provide periodic updates on their progress and findings on their Web site."

Yesterday, Coca-Cola held a conference call with Trillium, KDL, the UUA's Committee on Socially Responsible Investing, the InterFaith Center on Corporate Responsibility, and other concerned groups. Jim Gunning, a member of UUSC's board investment committee, invited UUSC staff to participate on the call.

The good news? Coca-Cola is listening and acting. The company is engaging with local actors in India to work out a compromise with the Indian authorities on standards for their products. When asked about the water issues -- specifically about whether Coca-Cola has a position on the right to water -- company spokesperson Harry Ott indicated that Coca-Cola would look into the question.

UUSC encouraged the company to consider the right to water not as a "charitable" gesture under a "good neighbor" policy, but rather an important part of a stable legal framework, and an entitlement for community members. The local community has made important democratic gains for the right to water, thanks in large part, to the women of India, and Coca-Cola is listening.