INDIA: Cola Firms’ Entry Reflects Liberalisation Process

By Ranjit Devraj Reprint | | Print |

Ranjit Devraj

NEW DELHI, Aug 11 2003 (IPS) - Once banned from India by socialist governments, cola companies from the United States entered this country with a vengeance during the economic liberalisation of the 90s and have been at the forefront of the process since.

Only last month, the central government bent over backwards, at Coca Cola’s behest, to change long-held divestment rules so that Indians who buy shares in a foreign company’s Indian subsidiary are no longer assured voting rights.

Such a policy change is a far cry from the days in 1977 when Coca-Cola was forced to quit India by then industries minister George Fernandes – who is now defence minister in a right-wing, pro-U.S. government – for refusing to dilute equity stake in their Indian subsidiaries to 40 percent.

It was as if nothing could stop the onward march of Coca-Cola and its rival Pepsi until last week, when a top Indian environmental group called a press conference to announce that it could scientifically prove that the products of these transnational corporations were loaded with several banned pesticides.

Results of tests conducted at the laboratories of the environment group Centre for Science and the Environment (CSE) laboratories seemed to show that while the softdrink manufacturing companies were keen on promoting globalisation, they did not care too much when it came to maintaining global standards for their products sold in India.

On Monday, the Delhi High Court refused to entertain a petition filed by Pepsi asking for a gag order on CSE on the grounds that the organisation has ”no legal authority or recognition”.

In fact, Pepsi and its associates were forced to withdraw allegations of ”malafide intent” that it leveled against CSE, a non-government organisation with a formidable track record of environmental campaigning based on hard scientific evidence and research.

”We cannot close our eyes. We cannot ignore the CSE report. The agency is of high creditable performance,” admitted Additional Solicitor General, K K Sud.

He was referring to a similar expose by CSE six months ago that bottled water sold by reputable companies, including Coca-Cola and Pepsi, contained unacceptable levels of pesticides.

That campaign has resulted in stringent standards being applied to bottled drinking water.

Earlier, a hard-fought campaign by CSE against dangers to health from diesel engines elicited court orders that required all buses, taxis and public transport vehicles in the national capital to switch to environment-friendly compressed natural gas (CNG) as fuel.

Justice B D Ahmed ordered the government to intervene in the spat between the softdrink multinationals and the CSE and to carry out independent tests to ascertain the level of pesticides in the bottled soft drinks, and make the report available within three weeks.

The court endorsed the CSE’s concern over the lack of standards for permissible pesticide residues in softdrinks sold in India – and instructed the government to review the standards after comparing them with those existing in other parts of the world.

CSE’s feisty director Sunita Narain said what Pepsi attempted in court on Monday and failed to do was bring on the equivalent of what is known in the United States as a Strategic Lawsuit Against Public Participation or SLAPP.

” SLAPPs amount to silencing people into submission. They are not just intimidation lawsuits,” Narain explained.

”They question the rights of individuals and institutions to speak out on a public issue, and to communicate their views to government officials. They question the right of people to tell their elected representatives what they think, want, or believe in -in effect, for attempting to influence government action,” Narain said.

But Narain pointed out that New York, California and about a dozen other states in the United States have anti-SLAPP or citizen protection acts.

”The right of individuals and organisations like CSE to carry out action in public interest and in favour of public health cannot be questioned. It is a right to hold industries and governments accountable for their action, and should be strengthened – not suppressed,” she said.

The CSE and Narain have been accused of going public with their findings without first taking recourse to government agencies or the consumer courts and by ignoring ”due process of law”.

After the court hearing, Pepsi’s chief in India Rajiv Bakshi was seen on television channels raising his right hand and swearing that his company’s products were devoid of pesticides and met European Union standards.

”The public has been misled -we test the raw water we use as well as purified water and trust me, they meet EU standards and have no pesticides,” Bakshi said, confident the ”independent tests carried out by good accredited labs” will support his claim.

”We do not dispute the fact that the tests were properly done (by the CSE) but you cannot jump the gun like this,” said Wajahat Habibullah, secretary in the Department of Consumer Affairs.

But Narain said that sometimes, it was necessary in a country like India – with abysmal standards of public health and hygiene – to resort to ”shock tactics” every now and then.

”The incidence of cancer in this country is unbelievable.” Narain said, adding that Pepsi and Coca-Cola were only incidental in the CSE’s larger campaign. ”Our issues are water, pesticides and public health,” she said.