Monday, June 7, 2010


It is still fresh in the memory of many about the violence marred closure of Coco Cola's bottling plant at Plachimada in Kerala, the "God's Own" country where "God" seems to be looking the other way when irrational and unjust decisions are taken that defy logic. This multi national beverage company, though not much liked by many, was invited to Kerala and welcomed there with a red carpet to establish its plant providing many incentives and allurement. It made sense that a state like Kerala, notorious for its aggressive labor force, needed respectability by attracting reputed industry like Coca Cola, providing some economic benefits for the local population. But the 2004 closure of the plant, within 4 years of its inauguration in 2000, under some pretext smacked of ideological consideration rather than any substantiative issue. It is another matter that the industry minister of the same state lamented recently that "Kerala is the only state that could not prevent closing of an industry", obviously for wrong reasons.

The controversy surrounding the establishment and closure of the Plachimada bottling plant refuses to die down and in March this year a so called "high power panel" consisting mostly of government bureaucrats put out a "damage" report against the company, recommending recovery of Rs 2162.8 million as compensation to the local population. Strangely some of the panels members were the same bureaucrats who were involved earlier in giving license for setting up the plant! While it may be difficult to come to any impartial conclusion regarding various charges leveled against the company, one thing seems to be certain that none of the charges can stand legal scrutiny and on the other hand any international legal assault by the company against Kerala government may even result in awarding compensation to it from the government! On the social front Coca Cola company could be faulted for not being sensitive to the unforeseen consequences of their drawing half a million liters of water every day from the under ground sources, though more than 65% of it was returned to the ground and for distributing the sludge as fertilizer material.

Kerala government must have been aware that beverage manufacturing is a water intensive operation and this should have been factored into the decision to grant license. The State Pollution Control Board with the necessary mandate should have fore seen the damage that could be caused by the plant waste for insisting on remedial measures before starting the operation. Even after identifying the water and waste disposal problems with the plant a compromise rather than a confrontation would have prevented the closure. Coca Cola company is an international giant with enormous resources and it could have been persuaded to develop the villages around the plant site by deployment of modern technologies for water harvesting and conservation and expanding agricultural activities. Incidentally Palghat district in Kerala had the most rain fall in the state and this might have been one of the considerations for locating the plant here. The accusation that the sludge contained heavy metal contaminants like Chromium, Cadmium, Lead etc is disturbing because beverage making does not involve use of any inputs even remotely connected to these metals. Taking a cue from this, government should have become alert to monitor the presence of these poisonous metals in the ground water which was being consumed by the villagers for ages. This does not seem to have bothered the authorities at all, with their focus only on 'closing" the plant at any cost.

Not wanting to learn a lesson from the past, the CM of the state in an aggressive posture categorically declared recently that another bottling plant belonging to PepsiCo in Pudussery, again in Palghat district, must also be closed because "locals" are against it! What type of a state is this which, after encouraging industry to come, turns against them on some pretext or the other? Is it really due to genuine reason or based on ideological considerations? It is doubtful if the state government would have taken such a stand if the plant was established with Russian or Chinese collaboration, reflecting its animosity to any thing associated with the US. The pretext that the local village council has filed a case against the bottling plant does not carry much weight because the present ruling regime in that Panchayat is controlled by the same political party that rules the state.

Contrast this with the interest generated by the just concluded "Global Investors Meet" (GIM), organized in Karnataka which attracted over 350 entrepreneurs with an investment potential of Rs 4000 billion and opportunity for employment for over 600.000 people. Though Karnataka cannot stand any where near Kerala in terms of literacy, skills and productivity, investors seem to be satisfied that they would get all the support from the government. Even God may not help "God's Own Country", if it cannot help itself by learning from other better performers.


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