Most businesses have to consider the impact of their activities on stakeholders. Coca-Cola is no exception but their operations in the southern Indian state of Kerala have caused widespread concern and a string of claims and counter-claims by residents of the local community and the company.
Coca Cola is the world’s leading soft drinks company. Coca cola invested over $1bn between 1993 and 2004 on their bottling in Kerala. It has contributed in around a fifth of the entire foreign direct investment to the country.
However the company faced severe criticism from activists and environmental experts who charged it with depleting groundwater resources in the areas in which its bottling plants were located, there by affecting the livelihood of poor farmers, dumping toxic and hazardous waste materials near its bottling facilities, and discharging waste water into the agricultural lands of farmers.
Despite all the criticism, the company continued its operations and decided to implement a wide range of initiative such as rainwater harvesting, restoring groundwater resources, sustainable packaging and recycling, and serving the communities where it operated.
The business in India is profitable to the company. The investment has enabled Coca Cola to make a higher return. Coca Cola reported a modest growth in the profit margin from their conducts in India.
The Indian government highly encourages the company to undertake its business operations in its country. As a result, Coca cola received £1.5m subsidy and help with its legal issues by the local government in India as an encouragement of their investment in India. It’s difficult to create a direct link of the overexploitation of ground water by Coca cola.
It is very complex to determine the fairness of this decision. This depends on who you are. The issue is that Coca cola makes money as an ambition.... [continues]
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