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In a major development Indian High Court has ordered that water from the river Tamirabarani in the south Indian state of Tamil Nadu must not be diverted to Coca-Cola and Pepsi producing plants in Gangaikondan due to the severe water shortages in the area.
The court order came as the result of a public interest litigation filed by FEDCOT, a statewide consumer organization, which had sought to stop the use of river water for production of Coca-Cola and Pepsi product because water scarcity has diminished both drinking water as well as water for irrigation in the area.
Acknowledging the ongoing water crisis and taking note of a decision made by the Indian Supreme Court, the Madras High Court in its November 21, 2016 order noted that, "It is the duty of the State as well as this Court to ensure the livelihood and the welfare of the general public, by making these natural resources available to them, instead of diverting the same for commercial purpose."
The High Court order is a major setback for Coca-Cola and PepsiCo in India and signals the emergence of new challenges the companies will face even when using surface water. So far, both Coca-Cola and PepsiCo have faced significant setbacks for using groundwater, including plant closures, denial of licenses for operating new plants, restrictions on the amount of groundwater used, and more stringent regulations on groundwater usage.
As a result of the widespread campaigns against Coca-Cola and PepsiCo for their mismanagement of groundwater resources, both companies planned to increase reliance on surface water for their bottling plants.
In April 2015, Coca-Cola's plans to set up a new bottling plant in Erode using water from river Cauvery was also rejected by the state government due to immense community opposition.
The Coca-Cola and PepsiCo producing bottling plants that have been denied river water in Gangaikondan are operated by co-packers for Coca-Cola and PepsiCo, and the co-packers have entered into contracts to manufacture the respective companies' products exclusively.
Dr. D.A. Prabakar, Chairman of FEDCOT who has led the legal efforts, was pleased with the interim injunction although he also expected a legal challenge by the soft drink producers in the Supreme Court. FEDCOT has also plans to crate public awareness among the banks of river Tamirabarani.
The India Resource Center has worked with communities across India to stop bottling operations in water stressed areas, and the campaigns have succeeded in forcing the beverage industry to become more water efficient in its operations in India and internationally.
However, the beverage companies continue to operate in water stressed areas, prioritizing proximity to markets over availability of water and hardships caused to the community as a result of operating water intensive industries in water stressed areas. The campaign has called for an end to all bottling operations in water stressed areas - regardless of whether groundwater or surface water is used.
"As long as Coca-Cola and Pepsi continue to operate in water stressed areas in India, they will continue to face opposition from the community and farmers. We need to ensure adequate water for drinking, which is a fundamental human right, as well as for farming which is the source of livelihood for most Indians, before water can be diverted for unnecessary and unhealthy products such as Coca-Cola and Pepsi," said Amit Srivastava of the India Resource Center, an international campaigning organization.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)