A multi-billion-dollar transnational corporation has had to blink first in an eyeball-to-eyeball dispute with an obscure panchayat of Kerala. On November 17, Hindustan Coca-Cola Beverages Private …

imageA board proclaimed it to be their 575th day of struggle. As if to counter the villagers’ move, Coca-Cola employees were camping outside the panchayat office, about 3 kilometres away, demanding that the plant’s licence be renewed. The board there declared that the stir had reached its 188th day.

It was against this backdrop that the hearing began.

Thirteen members of the panchayat as well as its secretary attended the meeting. HCBPL was represented by N Janardhan, plant manager; A M Shafeeq, advocate; Durai Murugan, assistant manager, quality; and Muthiah Kannan, regional legal manager.

Rather than answering the questionnaire prepared by the panchayat, HCBPL ended up presenting its own wish list.

Sources present at the meeting say that the Coke representatives handed over a letter to the panchayat, requesting it to constitute a panel of experts as suggested earlier by the state’s local self-government department (LSGD) — the bureaucratic arm of the local government. In addition to this, the company asked the panchayat for details of complaints and reports mentioned in the latter’s recent show-cause notice.

Though talks proved inconclusive and failed to end the eight-month-long standoff on the issue, yet the exercise succeeded in drawing attention to the rights of local people over their natural resources. “It is a positive development,” said panchayat president A Krishnan.

Unfortunately, the Kerala government’s stance on the matter flies in the face of its professed commitment to empowerment. This was evident from the comments of Cherkkalam Abdulla, the state’s minister for local self-government. “The views of Palakkad’s inhabitants do not reflect those of the entire state. We need industries and employment for the prosperity of the whole society,” he said. Despite repeated attempts, Down To Earth could not elicit a response from Coke.

The company had earlier moved the Kerala High Court (HC), questioning the authority of the panchayat. The court, however, dismissed Coke’s plea on November 14, and Justice K Balakrishnan Nair observed that the company could explain its stand at the panchayat meeting scheduled for November 17.

It was on April 7 this year that the Perumatty panchayat took the decision to cancel HCBPL’s licence. The village body contended that the company’s plant had led to depletion and contamination of the area’s groundwater, and issued a show-cause notice on April 9.

How trouble took root

The Perumatty panchayat itself had given a licence to HCBPL in January 2000 to run the bottling plant at Plachimada. The permit was renewed regularly, with the last extension being valid till March 31, 2003. The products to be manufactured included Coke’s premium brands — Coca-Cola, Thums Up, Limca, Fanta, Sprite, Maaza and Kinley soda.

As the soft drink company set up shop, the panchayat’s income got a boost. Annually, it received Rs 4.65 lakh as building tax, a licence fee amounting to Rs 30,000 and Rs 1.5 lakh in the form of professional tax. The fact that the unit hired about 150 permanent staff and more than 250 contract labourers, meant that employment opportunities, too, were generated. Despite the Coke plant being a source of regular revenue, the panchayat decided to crack down on it when local people’s complaints poured in regarding deterioration in the quality of water around the unit.

The factory is sited in Plachimada village, and lies adjacent to predominantly tribal areas. In early 2002, the local inhabitants first realised that something was amiss. “Rice cooked in the well water, which used to be crystal clear and potable, was now going bad within a couple of hours,” recounts Rajamma, a resident of the area. The taste of the water also became different. Apart from expressing concern about the quality of water, villagers detected a sharp dip in the water level.

If water was the main cause for concern and aroused the people’s suspicions, a sudden drop in crop yields of local farmers left them in no doubt that the plant’s operations were the source of all the trouble.

Significantly, HCBPL supplied sludge, which it called “soluble and good”, as manure to farmers.

These developments sparked anti-Coke protests in the area. Matters came to a head on April 22, 2002, when villagers picketed the Plachimada plant.

Getting tough

A year later, the 15-member board of the panchayat decided not to renew the Coca-Cola factory’s licence on the ground of “protecting public interest”. It charged the company with “causing shortage of drinking water in the area through overexploitation of groundwater sources”. According to a Kerala State Pollution Control Board (KSPCB) estimate, Coke required 1.5 million litres of water per day during peak production.

“The panchayat’s move was based on section 232 of the Kerala Panchayati Raj (KPR) Act, 1994, which gave the local body sufficient authority to notify that no place within its jurisdiction shall be used for purposes dangerous to human life or health,” explains K N Unnikrishnan, special grade secretary of the panchayat. Under the KPR Act, production of aerated water is one among 159 types of dangerous and offensive trades requiring a licence from the local bodies.

Legal wrangle

The panchayat’s refusal to grant permission triggered a chain of events (see: Plachimada’s protracted battle ) that began with Coca-Cola taking the legal recourse. On May 16 this year, the HC ordered the status quo and directed the company to move the appropriate authority for redress. The court also told the latter to take a decision within a month from the date of the appeal.

The company filed a representation before LSGD secretary P Kamalkutty on May 22. Coke’s main contention was that it had not violated any of the conditions laid down by the panchayat. It further claimed that the village body had not based its decision on any independent scientific investigation conducted by competent authorities.

In the meantime, the panchayat made representations to LSGD listing out HCBPL’s violations. It noted that the company had not been granted clearance by the revenue divisional officer under clause 6 of the Kerala Land Utilisation Order of 1967, which would enable it to convert paddy fields into an industrial area. The panchayat also submitted that it had conducted a detailed site inspection, and was prima facie convinced that the indiscriminate extraction of water by the appellant was resulting in the shortage of drinking water in the locality. “A certificate issued by the Water Analyst Section of the medical laboratory, Kozhikode, reveals that the water is not drinkable,” said the local body.

On September 18, the panchayat issued another show-cause notice to HCBPL. The company challenged the move in the HC on October 6. It argued that the panchayat had no jurisdiction to slap a second notice when the appeal filed by the company with the state government was pending. Coke also maintained that the decision was violative of the state’s industrial policy.

After hearing the panchayat as well as HCBPL, LSGD passed an order on October 13 that favoured Coke: “It is a fact that the panchayat has not conducted any scientific enquiry or obtained any report from competent agencies before taking the drastic step of cancelling the licence already issued by it. (Further) there is no clinching evidence to prove that the well water has deteriorated due to the company’s activities.”

The self-government department also asked the gram panchayat to constitute a team of experts from the departments of groundwater and public health, along with the state pollution control board, to conduct a detailed investigation into the allegations against the company. “Till the panchayat takes a final decision, the stay will continue,” the LSGD secretary stated.

Even as the state government was busy giving a clean chit to Coke, a reporter of the British Broadcasting Corporation (BBC) got the company’s sludge tested. It was found to have a high concentration of cadmium and lead (see box: Ambivalent authorities).

LSGD’s adverse order evoked a strong response from the panchayat. The local body filed a writ petition in the HC on October 29, in which it raised “substantial questions of law” relating to the power of the Kerala government to intervene with the functions enjoined on a panchayat.

“The LSGD secretary is only a government official and cannot overrule the constitutional authority of the elected gram panchayat. More importantly, the burden of proof should be on the company,” avers K Krishnanakutty, a former legislator of the Janata Dal, whose members are in the panchayat.

“Conclusive proof cannot be got unless the results pertain to a long-term study,” feels M K Prasad of activist body Kerala Sastra Sahitya Parishad. Disregarding such legitimate objections, Abdulla justifies LSGD’s action: “The panchayat has only been asked to follow legal procedures and seek expert advice before it takes a final decision.”

On November 3, the panchayat despatched a letter to HCBPL asking it to appear for a personal hearing in front of the board on November 17. In what was a shot in the arm for the local body, the HC shot down Coca-Cola’s second writ petition on November 14. The court reserved orders on the panchayat’s writ petition for November 28.

P A Vasudevan, a prominent activist, is apprehensive: “The issue has snowballed into a legal and laboratory-oriented controversy. It is really a social problem. The world over, water is an asset of the community.”It may be noted that since this is the only Janata Dal-dominated panchayat in the state, the row has also assumed political undertones. The division along party lines was in evidence on November 17, too, when the two members of the Congress party did not participate in the meet.

State complicity

As the dispute spilled into the court, a host of state agencies were required to present their opinions. Sadly, most of them have either maintained a studied silence or obfuscated the issue.

For instance, KSPCB chairperson Paul Thachil passes the buck: “The matter (pertaining to the area’s water) comes under the purview of the groundwater department and not the PCB.” The underground water department (UGW) has, in turn, remained non-committal. This despite the department’s internal data reportedly showing that three wells in the area had depleted and the water level in 11 out of 19 wells in Plachimada declined considerably between April 2002 and May 2003.

Studies since November 2002 also showed the increased presence of total dissolved solids (TDS) in wells in the area. A UGW official says: “The quality of this water is suspect. The TDS is high, especially chloride and fluoride.” He further points that while the TDS is less than 500 parts per million (ppm) in the observation wells located away from the plant, it is as high as 1,700 ppm in wells that are in the plant’s vicinity.

The UGW department’s report is said to have mentioned that “caution is needed in the use of groundwater”. The document adds: “The decline in groundwater level in several open wells in the area indicates the need for…implementing artificial recharge measures…. Therefore, it is recommended that the factory control its intake of groundwater.”

State law secretary Ramkumar says: “So far no government department has sought legal opinion on the row.” The KPR Act specifies that an independent tribunal should have been constituted as the appellate authority to hear petitions against a panchayat.

Meanwhile, the Perumatty panchayat has told HCBPL to furnish the documents before November 28, and appear before it on December 2. “As a licensing authority, we have every right to ask for supporting documents. But they wanted to wait for the November 28 HC order. The company has sought another opportunity for a hearing,” reveals Krishnan.

It seems that there is still some time before the last chapter is scripted in the controversy.

On a strong wicket

Perumatty panchayat’s case is statutorily sound

CONTITUTIONAL issues underlie the deadlock that persists in Plachimada. More specifically, the entire debate is centred on the rights of panchayats. Not only is the Perumatty Grama Panchayat pitted against the Hindustan Coca-Cola Beverages Private Limited (HCBPL) and the Kerala government, it is ironically having to take on the local self-government department also.

In fact, it was the latter’s directive to have the matter investigated afresh by officials of other departments that prompted the panchayat to file a writ petition in the HC. In doing so, it asserted its rights under article 243 G of the Constitution of India.

The article vests powers in the state governments to endow panchayati raj institutions with the authorityto handle 29 subjects listed under the the Eleventh Schedule of the Constitution.

Several key functions like drinking water requirements, minor irrigation works, overall water management, and health and sanitation figure in this schedule.

The Kerala government has devolved all the 29 functions to panchayats through the Kerala Panchayati Raj (KPR) Act, 1994. The act clearly empowers village bodies to regulate the use of a place within its area for specified industrial purposes by issuing or refusing to issue a licence. Chapter 20 of the act deals with public safety, convenience and health, including waste disposal. It was this provision that the Perumatty panchayat invoked to cancel Coke’s licence. The Kerala Panchayats (Licensing of Dangerous and Offensive Trade and Factories) Rules, 1996, issued under sections 232, 233 and 234 of the KPR Act, provide further details and procedures in the matter of issuance of licence. Further, section 218 of the act stipulates that all waterworks are to be handled by panchayats. In addition to these, section 234 (c) gives the panchayat the right to implement water supply schemes and sewerage works.

In view of the above, one of the most important functions of a panchayat is to ensure that community members get an adequate supply of pure drinking water. The Perumatty panchayat stressed that it was not being able to meet this constitutional obligation because of the contamination of drinking water by the Coke plant. It further emphasised: “In exercising (such authority), the government has no power to dictate to a panchayat.”

While there may be conflicting views about constitutional provisions in respect of the power of panchayats, the Perumatty village body has cited two recent cases where the judiciary upheld the autonomy of panchayats.

One was delivered by the Kerala HC in 1996 in the ‘Manjapra Grama Panchayat versus State of Kerala’ case. The Supreme Court passed the other order in 2002 in the ‘Action Council, Poovathode versus Benny Abraham’ case (see box: SC’s endorsement). In both the instances, the respective panchayats — Manjapra Grama Panchayat in Ernakulam district and Poovathode Grama Panchayat in Kottayam district — had refused to grant licences to metal crusher units since they could affect the health of the local people.

Justice K S Radhakrishnan of the Kerala HC had stated in the Manjapra case: “The mere fact that the district medical officer and pollution control board have issued no-objection certificates does not mean that the panchayat should give licence to an applicant.” The HC said that the panchayat itself could “independently consider” whether a metal crusher unit would affect the people of the locality. The judge added: “The panchayat has got such powers and duties as to enable (it) to function as (an) institution of self-government.”

Even in the Plachimada case, the HC’s decision to refer the company back to the panchayat shows that the court respected the jurisdiction of a local government elected under a constitutional provision. Coke moved the court insisting that the panchayat is “subordinate to the state government and is expected to follow the...guidelines issued by it”. But Krishnanakutty reacts sternly: “How can a multinational company question the authority of a local body empowered by parliament?”

(With inputs from Surendranath C in Thiruvananthapuram)

SC’s endorsement

Apex court recognises panchayat’s right to self-govern

When the Poovathode Grama Panchayat refused to issue a licence to Maniyakkupura Metal Industries owner Benny Abraham for a metal crusher unit in Kerala’s Kottayam district, the latter approached the Kerala High Court (HC). On January 2, 2001, a single-judge bench of the HC directed the panchayat to “consider the application of the petitioner...and grant the licence”. The judge observed: “When the PCB (pollution control board) has cleared the project and the Green Channel Committee has cleared the scheme, it is too much to...deny the installation of the unit altogether.”

The village body’s decision was based on an assessment by a panchayat sub-committee. The panchayat feared that as there was scarcity of water in the area, adequate dust pollution control measures would not be adopted. It was contended that the unit would adversely affect agricultural lands as well as the livelihoods of tribal populations in the vicinity. Later, a division bench of the same court dismissed the panchayat’s appeal. However, the panchayat appealed again against the verdict — this time in the Supreme Court. The apex court overturned the HC order on April 29, 2002, stating: “We have no hesitation to come to the conclusion that the high court seriously erred in law.”



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