Report Examines Coke Water Use in India

Some Coca-Cola bottling plants in India are contributing to water scarcity but generally meet government regulatory standards on the level of pollutants in wastewater, according to a report commissioned by the Atlanta beverage giant and released Monday.

The report by The Energy and Resources Institute, an independent research organization based in New Delhi, was meant to address concerns about Coke's business practices in India and is likely to fuel a long-simmering debate about how the company uses water in the world's second most populous nation.

Activists, community members and government officials in India have blamed Coca-Cola for pollution and for causing wells to run dry around some of the 60 bottling plants the company operates in India.

Two of the six bottling plants examined in the study were located in areas where groundwater tables were "overexploited," according to the report.

But the report concludes that there was no significant pollution and that the plants "generally meet the government regulatory standards" for water quality, though sometimes did not meet the company's tougher standards.

Coca-Cola executives say that the company — the world's top producer of nonalcoholic beverages — has followed environmental standards that are among the highest in the world.

"We look at this report very, very positively and very seriously," said Atul Singh, president of Coke's India division.

"The report, the whole exercise — that took almost 18 months — clearly is a commitment for me and my team to take on board the recommendations that have come out of the report," Singh said in a telephone interview.

In India, the facts of the dispute have been tangled in a web of often-contradictory scientific reports, anecdotal claims and legal action.

Company officials commissioned the report after the University of Michigan requested the evaluation in 2005 when students called on the administration to cancel its beverage contract with Coke, partly because of concerns about pesticide pollution in India.

In a letter Monday to Coca-Cola, University of Michigan officials said the report resolved the issue and that the university would continue to do business with Coke. The university noted that the report found no pesticides in water used in the bottling process or in wastewater discharge.

Two major conclusions of the report were that Coca-Cola should improve its treatment of factory wastewater and should avoid situating bottling plants in areas where water resources are stressed, said Leena Srivastava, one of two coordinating directors of the study.

A $16 million bottling plant in Kaladera, in India's northeastern Rajasthan state, has had "significant impacts" on local water supplies, particularly in summer months when water tables are "in acute water-stress period." But the report also noted that the majority of water drawn from local aquifers in the area was used in agriculture.

Because Coke did not provide researchers with environmental impact assessments carried out before the Kaladera plant was built, researchers could not determine if executives were aware that the area was considered "overexploited" when they decided on the location, Srivastava said.

But she added that "purely from a water point of view, I think it is a highly questionable decision to have located the plant in Kaladera."

Coca-Cola disputes that assertion.

A letter from Coke to the University of Michigan last week said that "in recent years" the company has added five times more water to local water tables in Kaladera through the harvesting of rainwater than it removed for the production of beverages. Rainwater harvesting involves trapping rainwater and allowing it to seep back into the ground to replenish underground aquifers rather than run into rivers and lakes.

The letter — dated Jan. 11 and based on Coke's review of the report — also said that "Coca-Cola is a relatively small user of water in Kaladera; the plant taps far less than one percent of the area's available water."

The company has pledged to replace more water to Indian aquifers than its bottling plants use by 2009 as part of a larger plan to improve its water stewardship globally. The worldwide effort will include reducing the amount of water needed to make beverages and expanding water treatment so all water used in the manufacturing process is returned to the environment.

The report by the Indian research group also said that wastewater produced by some of the Coca-Cola bottling plants studied contained some pollutants — including cadmium, a highly toxic chemical element, and nitrogen — at levels above company regulations, although only a few samples taken at the factories showed pollutants in excess of less stringent Indian government standards.

Harry Ott, Coke's director of strategic global water initiatives, said that "there is no (wastewater treatment plant) in the world that is 100 percent compliant all the time" with regulations on pollution levels and most governments monitor average compliance over time.

"Overall, we are in generally in compliance on an ongoing basis," he said. "We've got a major effort underway to avoid (pollutants including cadmium) entering the plant, but from time to time they slip in there and go through the system."

Srivastava urged Coke to "take a longer-term perspective" and look at water "from an overall sustainability point of view for the region as a whole."

In India and other countries where water scarcity is growing, Coca-Cola and other beverage makers are under increasing pressure to conserve water, analysts said.

Because Coca-Cola is one of the world's best-known brands and water is the main ingredient in their beverages, "consumers and activists will look at them to see if they're doing the right things when using water," said Lauren Torres, a beverage industry analyst at investment bank HSBC.

Activists in the United States have highlighted conflicts over water use in India to call for boycotts of Coke products in the United States and Europe.

Last May, Smith College notified Coke that it would be barred from bidding to supply beverages to the school partly because of "Coca-Cola's business practices" in India, according to a letter the college sent to the company.

In its letter to the University of Michigan, Coke said that based on the India report it will "issue global guidelines for operating plants in areas facing serious and chronic water shortages" and will "place greater emphasis on community water needs when siting and operating plants."