Web | August 31, 2006
Cola Wars, Water Wars
If oil defines the present, water might define the future. But at present, it take four litres of fresh water to create one litre of cola, and the rest is rendered waste. Toxic waste. And what do the MNCs pay? A pittance. So much for the fizz and the celebrity-laden ads.
Last week, water experts from 140 countries gathered in Stockholm for an international conference and predicted water wars. More than two billion people already live with water shortages primarily in India, China and the Middle East. Rivers, lakes and aquifers could become strategic assets and economies could crash as the supply of fresh water becomes as important as foreign investment. Water is already considered strategic in the Middle East -- Israel not only destroyed Lebanon’s roads and bridges, it also bombed its irrigation canals in the recent war. If oil defines the present, water might define the future.
And believe it or not, the corporate world agrees. Including Coca-Cola. Analysts paid by Coca-Cola, Shell, Cargill and others predicted scenarios in Stockholm that lunged from civil unrest to economic chaos to mass movement of people to Europe because of water scarcity. Conflicts over water may become common as governments struggle to feed domestic, agricultural and industrial demand, their report said. Over exploitation could result on a massive scale. Of course, the main question for businesses was how to overcome the water problem and "still make a profit," as Lloyd Timberlake, a spokesman for the World Business Council on Sustainable Development, which brought the corporations together for the study, so honestly admitted.
So what is Coca-Cola’s own relationship with water? Let’s take India for starters. While Coca-Cola paid lip service in Stockholm and attempted to show its corporate conscience, it pays next to nothing for the millions of litres of water it extracts daily in India, including from drought-prone areas. Ditto for Pepsi. The government’s own Central Ground Water Board reported water tables dropping 10 metres in five years since Coca-Cola started its bottling plant in Kala Dera. The soft drink industry is shockingly wasteful with the precious resource of water. It take four litres of fresh water to create one litre of Coke and the rest is rendered waste. Toxic waste. So much for the fizz and the celebrity-laden ads.
In the ultimate corporate subsidy granted to assuage "market forces", Coke and Pepsi pay a miniscule cess on their raw material -- water. In Mehdiganj plant, Coke used 13 million litres of water in 2003 and paid a water cess of between 3 paise and 30 paise for every 1,000 litres. That too depending on the usage, according to a report in Frontline this May. Is it any surprise that communities around most of the bottling plants are angry? With water tables receding and price for domestic use of water rising, why this freebie for a humongous multinational for the most precious resource? Coke’s profits were around $15 billion last year.
Protests have erupted in Kala Dera in Rajasthan too because the story is sadly the same. According to research by the India Resource Centre, a San Francisco-based watchdog group run by Amit Srivastava, Coca-Cola gets free water except for the tiniest of cess. Hold on to your seats, but the multi-billion dollar empire paid the grand sum of Rs. 5,000 a year from 2000 to 2002 and then a slightly higher amount of Rs. 24,246 in 2003 for the water it pulled out. Wait, it gets worse. The cess is calculated based on the discharge of effluents -- meaning the wastewater -- and not on the fresh water it extracts. So Coke improves even on the deal of its lifetime -- 30 paise per thousand litres. This might be the freest ride Shining India is providing a company soaked in profits to prove it is market-friendly. Turly, life ho to aisi.
Given the dire warnings at the water conference last week, the magnitude of Coca-Cola’s global war on water is frightening. The true dimensions of the attack may parch the future.
In 2004, Coca-Cola extracted 283 billion litres of water worldwide and given the ratio of raw material to the end product it canned, it turned two-thirds of it into wastewater -- unusable and laden with chemicals. In India, unscrupulous executives reportedly even offered the waste to local farmers as "fertiliser". The Central Pollution Control Board (CPCB) did a study of 16 soft-drink plants across India after complaints from Kerala and West Bengal and found that in eight plants, the waste contained unacceptably high levels of cadmium, lead and chromium. The sludge carried 220-538mg/kg of lead while the limit in India is 100mg/kg. The report was tabled in the Parliament recently. Even though this hazardous waste must be stored and treated properly in concrete landfills, neither the government nor Coca-Cola is building any.
The company claims in advertisements that it is returning the water to aquifers in India but in reality and by its own admission, rainwater harvesting in the Mehdiganj plant was only eight percent of the total annual use. This is neither substantial nor sufficient despite what the full-page ads claim as Amit Srivastava rightly asserts.
If exploitation of water is one dark side of the ubiquitous Coca-Cola, the report by the Centre for Science and Environment in Delhi on pesticide levels in soft drinks is another. CSE tested more than 50 samples and found unacceptable levels of pesticides in the drinks, sending the corporate PR machine huffing and puffing along with its Indian extension. Whitewashing by Health Minister Anbumani Ramadoss in Parliament, calling the CSE evidence "inconclusive" was a blatant attempt to calm official American tempers. Washington had hollered across the oceans in the voice of Franklin Lavin, US undersecretary for international trade, who called the ban on Cola sales "a setback for the Indian economy". Kerala and five other states have imposed full or partial restrictions. Indian industry gods issued reflexive statements through CII and FICCI, bowing to Lavin. All these speak politics not concern for the health of the people Mr. Ramadoss was elected to referee.
Sadly, most of the media coverage has been content to leave the whole issue to a simplistic "charges- and-counter-charges" narrative. Some have focussed on such inanities as how Coke’s PR machine lost the ball instead of getting a head start (New York Times). Editorials in respected Indian papers have pontificated on how opposing multinationals is an act of faith for knee-jerk populists. Others pointed out that India’s drinking water supplies and milk are contaminated, so why focus on Colas? For them, one wrong justifies the other. The sanguine edit page writers had nothing to say about the evidence CSE report provided. There are notable exceptions but India‘s largest selling mainstream and financial papers are not among them. There have been more investigative reports in the British (The Observer, The Independent, BBC) media than in the Indian press.
Here are some disturbing evidence collected by activists to ponder:
The US Food and Drug Administration rejected shipments of Coca-Cola products from India on at least 10 occasions since January 2005 on grounds they were unsafe for Americans. India Resource Centre has tracked the US directives.
The government of Latvia banned the sale of Coke and Pepsi in schools this August on health grounds. The ban will reportedly take effect Nov. 1.
The University of Sussex, the University of Michigan, University of Rutgers and more than 15 others have boycotted or banned the sale of Coca-Cola in the student union buildings on grounds of health and Coke’s anti-labour policies.
Since 1989, eight union leaders from Coca-Cola plants in Colombia have been murdered allegedly by paramilitary goons.The plant managers have taken no action and instead colluded with union busters against the workers, according to UK Students Against Coke.
In Turkey, Coca-Cola officials fired 105 workers in May 2005 because they were attempting to form a union. A month later, Turkish riot police beat up more than 150 workers inside the factory compound apparently with the connivance of Coke officials.
After reading up on Coke over the past week, I know I am going to try to wean myself off this drink even though I am only an occasional sinner. I much prefer cold water with my pizza.