March 23, 2010 / 12:08 PM / 7 years ago

Coca-Cola India unit asked to pay $47 million damages

File photo of the Coca-Cola logo in Niles, Illinois February 12, 2009. The Indian unit of Coca-Cola Co has been asked to pay $47 million compensation for causing environmental damage at its bottling plant in Kerala, state officials said on Tuesday.John Gress/Files

NEW DELHI (Reuters) - The Indian unit of Coca-Cola Co has been asked to pay $47 million compensation for causing environmental damage at its bottling plant in Kerala, state officials said on Tuesday.

A state government panel, in a report late on Monday, said Coca-Cola's subsidiary, Hindustan Coca-Cola Beverages Pvt Ltd (HCBPL), was responsible for depleting groundwater and dumping toxic waste around its Palakkad plant between 1999 and 2004.

Protests by farmers, complaining against pollution, forced HCBPL to close down the unit in 2005. The company operates 52 bottling plants in India.

The conflict between industry and farmers reflects a wider battle in India, where efforts to modernise the densely populated country have often met with protests from villagers who make up more than half of the country's 1.1 billion plus population.

Coca-Cola said in a statement late on Monday that HCBPL was not responsible for causing pollution in Palakkad.

"It is unfortunate that the committee in Kerala was appointed on the unproven assumption that damage was caused, and that it was caused by Hindustan Coca-Cola Beverages," the statement said.

A final decision on the compensation will be taken by the state government.

But news of the committee's findings in Kerala spread to at least two states where local villagers are protesting against Coca-Cola, alleging similar depletion of water and contamination.

"The water level in and around the bottling plant has gone down by at least 40-50 feet," said Nandalal Master, a local leader, spearheading a movement against Coca-Cola outside Varanasi in the northern state of Uttar Pradesh.

"We are organising huge protests and planning to move court and seeking more support of people," Master said by telephone.

Environmentalists say similar protests against another Coca-Cola bottling plant were being planned in Rajasthan.

"This decision will strengthen the resolve of people against similar plants in other states and we foresee more protests," said Amit Srivastava of the India Resource Center, a pro-farmer campaign organisation.

Farmers' protests in India have forced cancellation of special economic zones and other projects in four other states. A total of 230 tax-free export zones have already been put on hold.

Reporting by Bappa Majumdar; Editing by Alistair Scrutton and Alex Richardson

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