The Coke Machine - Michael Blanding [127]
In light of a crippling drought that year, however, the state’s chief minister declared in February 2004 the plant would be banned from extracting groundwater until the government’s study was completed. The pickets at the hut went on for another year as the two sides waited for the results, which eventually came as a victory for Coke in February 2005, ruling that the company could extract up to half a million liters a day without affecting groundwater.
Asked about the ruling, the former village council president Krishnan discounts the study, contending that the company must have bribed the government officials who conducted it. “The thing is very simple, because they tried to bribe me,” he says impatiently, contending that he was approached by Coke officials offering money for “community or personal development.” While Krishnan declines to say how much, another source says the offer was as high as $200,000—a small fortune in India.
Still defiant, the panchayat appeared to follow the court order to renew the license in June 2005—but only if the company would agree to certain conditions, among them that Coke “divulge all of its ingredients.” In other words, the panchayat of a tiny village in southern India was asking Coke to provide it with the vaunted secret formula that the company had guarded for decades in an Atlanta safe-deposit box—a formula that the company had refused to give up years earlier in favor of leaving the entire country. The village council must have known that Coke would never comply.
Meanwhile, whatever influence Gandhi’s spirit of nonviolence had on the village activists, they made it clear they would resist the reopening of the plant by any means necessary. Sure enough, in August the protest turned ugly, with police charging a line of protesters and injuring six while arresting seventy. Into the breach stepped the state pollution control board, which declared a few days later that the plant couldn’t reopen because its application was incomplete. The company had not mentioned cadmium in its raw materials, it charged, despite the heavy metal’s presence in the wastewater sludge—therefore it must provide a new application explaining how the chemical was used in the production process.
The announcement was essentially checkmate for the company, which declined to submit a new application. In fact, the plant hasn’t extracted a single liter of water since it closed in March 2004. Even as the activists celebrated the outcome, however, the result was in some small way a victory for the company as well. Faced with the real possibility of violence—even deaths—Coke had everything to lose in forcing a reopening, especially now that the eye of the world had been turned on the situation in India. Now, at least, the company saved face by arguing it was prevented from operating by a capricious state with a known communist past, with which it refused to do business.
As Coke’s former public relations head, Banerjee, says, Coke “would at least win public sympathy from other parts of India, and Kerala would once against be damned as an ‘investors’ graveyard’ by the media and the public.” That refrain was taken up not only by the company, but also by the U.S. government when a new study by CSE found even more pesticides in Coke and Pepsi in 2006 and the Kerala state government, now eager to align itself with the Plachimada movement, banned the sale of Coke and Pepsi in the entire state. (At least six other states pushed through more limited soft-drink bans, prohibiting sales in hospitals and educational institutions.)
“This kind of action is a setback for the Indian economy,” said U.S. undersecretary of international trade, Franklin Lavin, his comment reminiscent of the outcry fifty years earlier when France banned Coke. “In a time when India is working hard to attract and retain foreign investment, it would be unfortunate if the discussion were dominated by those who did not want to treat foreign companies fairly.” The bans were soon struck down by courts on