Corporate Water Mining and Water Privatization in India:

Threatening People’s Right to Water

Melissa Garside

Responses to Globalization: Global Studies 391

Professor Shittecatte

April 8, 2014 INDIAN WATER PRIVATIZATION 2

Corporate Water Mining and Water Privatization in India:

Threatening People’s Right to Water

Introduction

Water is essential to human life. Despite this fact of life, water scarcity is becoming an increasing problem in many areas of the world, and more and more people are facing barriers to accessing adequate quantities of potable water. People who have access to clean water often take it for granted, yet “[n]early 1 billion people lack access to clean, drinkable water” (Paul, 2013, p.

469). In India, even though it is one of the wettest countries on Earth (George, 2010, p. 100), the ability to access enough water is becoming an increasing problem for many peasants. George

(2010) notes that “In ancient Indian context water is considered as a sacred resource, an object that is divine and part of natural environment sustaining it and sustained by it” (p. 96). Water in

India today is no less precious, but it has become a very fought­over resource in recent years, and the supply is dwindling (George, 2010, p. 101). There are a number of reasons why water has become such a contentious issue in India, but in particular, groundwater mining and water privatization activities are having an incredibly negative impact on the lives of many Indian peasants. This paper analyses the negative impacts of water mining and water privatization on impoverished people in India, and, with a focus on the fight of Indian peasants against Coca­

Cola, analyses the effectiveness of their resultant activism against the multi­national corporations

(MNCs) responsible. Peasant activism in India against MNCs that have misappropriated their water has shown itself to be very inspiring and effective, and, while not always successful, it has served to spread international awareness on the importance of preventing corporate powers from superseding the health of a nation’s people and environment. INDIAN WATER PRIVATIZATION 3

Water Privatization and Economic Globalization in India

Water privatization, as well as water being used for corporate profits in other ways (such as groundwater mining for bottled water), is a hot topic of global debate. This debate is centered on whether or not water privatization is a positive thing, and whether water should be considered a common resource and basic human right, or a commodity (Bakker, 2007). Paul (2013) outlines some of the key arguments on both sides of the water privatization debate:

The first [argument] asserts that water should be treated as an economic

commodity ‘to be priced, marketed, and managed by the private sector.’

Proponents of this strategy contend that the private sector has more expertise and

economic capital than the public sector and will therefore be more efficient and

capable of expanding to underserved communities. But supporters of the second

strategy maintain that water is a human right under which all people must have

access to clean fresh water in sustainable and affordable quantities. Pointing to

privatization failures, these supporters reason that privatization creates

opportunities for corporate conglomerates to exploit debt­ridden developing

nations’ resources and markets. (p.470)

Additional arguments in favour of privatization are that by putting a price on water, people are more likely to conserve it—this concept is known as “market environmentalism”, among other terms for it, and its proponents believe that it “. . . simultaneously address[es] concerns over environmental degradation and inefficient use of resources” (Bakker, 2007, p. 432).

There are some reasonable arguments in favour of either side of this debate, but ultimately it is important to analyze the real­life successes and failures of public and private INDIAN WATER PRIVATIZATION 4 water management to truly understand the merits of both sides. That said, instances in which privatized water systems have been harmful to the people they are supposed to be serving are well­documented and numerous. India is no stranger to the ill­effects of water privatization and corporate groundwater mining. Although it is not explicitly stated by the Indian government that water is a human right, Paul (2013) argues that it can be inferred from their existing constitutional rights that it is considered as such. Given that, the Indian government has a lot of work to do in ensuring that their poor citizens have adequate access to safe water, as the examples to follow show.

The forces of globalization in opening up international markets have had a significant impact on India in many ways, including India’s management of water. Since the 1980’s, a series of liberalizations were made to the Indian economy, including to their banking industry, their electrical sector, and their water sector (Aiyer, 2008, p. 641). As a result of these economic reforms, large international corporations such as Coca­Cola, PepsiCo, Suez, Bechtel, and

Vivendi all made their way into India’s water market in various ways, such as through wastewater management contracts, privatization of urban water systems, consumer and industrial water deliveries, public­private partnerships with cities urban water systems, as well as water infrastructure management (Aiyer, 2008, p. 641). With a growing middle class in India throughout the 1990’s, privatization of India’s water systems as well as the soft drink industry promised large profits for these MNCs (Aiyer, 2008, p. 641). But Vandana Shiva notes that not everyone is benefitting from this water privatization, in fact for many people it is a harmful outcome of globalization: “Women in the hills are being denied water so that every drop of

Ganges water can flow down to be sold. So globalization commodifies the resources that are necessary for survival” (Navarro­Tejero, 2006, p. 12). INDIAN WATER PRIVATIZATION 5

Coca­cola in India

With a growing middle class, India’s market for bottled water and soft drinks has been growing steadily since the 1990’s, with an annual market of about $2 billion as of 2008 (Aiyer,

2008, p. 641). As of 2006, India was also the world’s tenth­largest consumer of bottled water

(Aiyer, 2008, p. 641). When these figures are coupled with the fact that “The Coca­Cola

Company and PepsiCo control 80 percent of the soft drink market and account for 40 percent of the bottled water market” in India (Aiyer, 2008, p. 641), it is clear how profitable their operations are there. Coca­cola’s Indian subsidiary Hindustan Coca Cola Beverages Private Limited (Drew,

2008, p. 37) was absent from India for nearly two decades before being allowed to re­enter the market in India. As Raman (2007), explains: “After a 16­year exile, Coca­Cola made its re­entry into India in 1991 when the rule that no foreign corporation could have a majority holding in an

Indian company was rescinded” (p. 107).

In 1998, Coca­Cola purchased 34.64 acres of land in a rural Indian village called

Plachimada, and in 2000 it got permission from the state government and a license from the local rural government to begin producing up to half a million liters of soft drinks daily, which actually entails using up to 1.5 million liters of groundwater daily when production procedures are taken into account (Aiyer, 2008, p. 643). Within two years of Coca­Cola extracting groundwater in Plachimada “. . . the water table lowered considerably and there was evidence that groundwater in the surrounding areas was contaminated” (Aiyer, 2008, p. 643). To add insult to injury, toxic waste by­products from making the soft drinks was initially sold to local farmers under the guise that it was fertilizer, and when the farmers became wise to the scam,

Coca­Cola started disposing of the waste by dumping it in various locations near the plant, which caused groundwater and soil pollution (Raman, 2007, p. 108). The concept of “environmental INDIAN WATER PRIVATIZATION 6 racism”, whereby hazardous environmental projects are located in areas where people are the most marginalized applies to this case since some of the most marginalized people in India (the dalits and the adivasis) live in and around Plachimada (Raman, 2007, p. 107).

Kala Dera village in Rajasthan is another Coca­Cola bottling location with a similar story to tell. Groundwater mining at this location began in 1999, and it was observed that the

“groundwater resources were quickly depleted, leaving nearly four dozen villages deprived of their sources of irrigation” (Raman, 2007, p. 107). Further, these two examples are not isolated incidents in India, as water shortages have occurred around almost all of India’s Coca­Cola bottling plants (Raman, 2007, p. 108).

In the case of the Coca­Cola bottling plant that opened in Mehdiganj in 1999, local villagers were excited about the plant at first because of the potential employment and general improvement to the local economy it could offer them; but “after two years . . . it became clear that the company would not produce the hoped­for benefits” (Drew, 2008, p. 38). Further, Coca­

Cola mainly hired people from outside of the village, and only paid the workers about 66 rupees a day (which translates to approximately $1.65 US), and efforts to start a union were fought against harshly, including imprisoning five employees (Drew, 2008, p. 38). This example illustrates how even the perceived economic benefits to a village of having a Coca­Cola plant located there are unrealized, and the general experience that villages in India have with Coca­

Cola is negative.

As a result of having their livelihoods compromised by Coca­Cola’s decimation of their water source(s), many people affected by these activities began protests in the early­to­mid

2000’s. In her 2006 interview with with Navarro­Tejero, Vandana Shiva explains how people INDIAN WATER PRIVATIZATION 7 have fought against Coca­Cola’s activities in India which have had a detrimental impact on local water supplies:

There is . . . a group of tribal women who are fighting Coca­Cola, in the South of

India, which is sucking out 1.5 million liters a day of water for the bottling of

what is called India. And the Coca­Cola bottled water. Interestingly, two miles

radius, every tank, every well is dry. [People] have no drinking water. That's how

it plays out. (p. 12)

In light of the criticisms targeted towards Coca­Cola because of their actions in India, Coca­Cola is quick to point out that its “‘quality standards not only meet, but often exceed, applicable laws’” (Raman, 2007, 109), but this shallow defence merely confirms how greedy Coca­Cola is as an MNC and what little regard it has for the long­term environmental and social consequences of its operations.

Water Privatization Issues in India

Governments do not privatize their water because they are inherently evil. There are many reasons why water privatization happens, be it that local governments cannot afford to fix or replace aging water infrastructure, other economic pressures to privatize, governments wanting water provided to underserviced areas but being unable to afford it themselves, or the simple fact that private water companies are good at marketing themselves and offer infrastructure investments that governments have a difficult time turning down (Paul, 2013, p.

471). That said, water privatization can have some seriously negative impacts on the people who live in the areas where water which has long been a common resource becomes privatized, and the changes in price and accessibility to water that can come along with it. INDIAN WATER PRIVATIZATION 8

The Sheonath River runs through the Chhattisgarh state, and is a very important water source in the region, as well as having religious significance (George, 2010, p. 101). In 1998 the river was privatized by a company called Radius Water Limited (RWL) on a “Build, Own,

Operate, and Transfer” agreement to supply water to a new industrial area at Borai since the local government claimed it was unable to do so itself (George, 2010, p. 102) The contract was scheduled from October 2000­October 2020, and through this contract “RWL secured exclusive access to a 23.6 kilometer stretch of the river” to supply water to industrial areas in the region, and eventually construction of a dam was deemed necessary to supply enough water (George,

2010, p. 103). After a few years of the project being in place, it became evident that RWL’s operations were inefficient, but due to contractual agreements, the local government would have to pay a large amount of money to terminate the contract (George, 2010, p. 105). Overall, the privatization of the Sheonath river was a very negative experience for people living nearby in

Durg, as well as other villages downstream and upstream from the dam: the owner of RWL told people that they could only take water from the river for six months of the year, impacting farmers who rely on the river to water their crops, as well as fishermen who were newly restricted from fishing near RWL’s exclusive access areas, and parts of the river downstream from the dam dried up, causing the water table to fall in those areas (George, 2010, p. 106­107).

Further, mainly due to RWL’s activities, Durg’s economy nearly collapsed, with farmers unable to water their plants and fishermen with no fish to catch (George, 2010, p. 106).

Vandana Shiva explains the social and ethical issues surrounding water privatization in

India, and how other rivers and water services in India have been affected by MNCs through privatization: “Many women are starting to commit suicide because they can't walk the water and the government of India has canceled every local water scheme in favor of Suez, the world's INDIAN WATER PRIVATIZATION 9 biggest water company which wants to privatize the Ganges” (Navarro­Tejero, 2006, p. 12). Not surprisingly, the people affected by the Sheonath river privatization took action against RWL by protesting, and “Following the struggle the government took various measures to appease the people” (George, 2010, p. 108). In a triumph of people against MNCs, by February 2002 the government it had lifted the ban on river­water extraction so that villagers could access the river again (George, 2010, p. 108).

Activism in India

Citizen activism can be a very effective way of bringing public awareness to environmental degradation and mitigating or stopping the degradation from continuing. Pargal and Mani (2000) note that in developing countries, community action/activism is sometimes the only form of environmental protection that exists. They argue that firms operating in India which pollute or damage the environment must directly consider local citizen responses to their negative impact on the environment, and should not ignore the potential costs of citizen activism.

In their analysis of where firms decided to locate their operations in India, they found that

“plants in India appear to take account of the potential for collective action on the part of the residents of the state as well as the likely penalties . . . for violations of environmental or other regulations” (p. 844). In light of Pargal and Mani’s observations of citizen activism in India,

Coca­Cola’s continuously harmful manufacturing behaviors in Plachimada, and elsewhere in

India are somewhat surprising.

The people of Plachimada wanted Coca­Cola to leave for a simple reason: Coca­Cola was draining and polluting their groundwater which they needed for subsistence. Their protests and activism, which took the form of “an indefinite sit­in” by the local tribal women was INDIAN WATER PRIVATIZATION 10 supported by the Perumatty Panchayat (local government) (Drew, 2008, p. 39). Eventually, following legal action, “the Kerala Chief Minister ordered the closure of the plant on 17

February 2004. The Perumatty Panchayat continues to withhold permission of the company to resume operations” (Drew, 2008, p. 39).

In the case of Mehdiganj, however, protests against Coca­Cola have not yielded the same results. Peaceful protests and hunger strikes have been carried out in opposition to Coca­Cola’s harmful activities there, and “residents of Mehdiganj are asserting that they and their resources are being exploited in the pursuit of capital­centric, western models of development that are not necessarily in their best interest” (Drew, 2008, p. 39). Rather than peacefully negotiating with protesters congregated outside the gates of the Coca­Cola bottling plant in Mehdiganj, the “most common response was the assault and imprisonment of numerous peaceful protesters, including elderly women, at the hands of the police force” (Drew, 2008, p. 40). After more than five years of local opposition in Mehdiganj, Coca­Cola had still not lessened its water extraction rates,

“despite a persistent draught and the continuing drop in groundwater” (Drew, 2008, p. 40).

Drew (2008) explains that the water laws in India are outdated, which is a large part of why these excessive groundwater mining activities have been allowed to continue (p. 38). The

Indian water laws do indicate that landowners also own the water underneath their land, but

Drew (2008) points out that “these laws were fashioned in a time when limited technology and capital helped to cap the possible extraction of water resources”, and the current realities of the

“liberalized market economy” allow for MNCs, who do not have an interest in India’s long­term prosperity to take advantage of these archaic laws and take as much water as they want for very little cost (p. 38). In this way, water privatization issues in India relate to the broader critique of corporate, economic globalization. INDIAN WATER PRIVATIZATION 11

Indian Activism and the Global Justice Movement

Although much of the protesting and activism surrounding water privatization and corporate water mining in India occurs within India’s borders, it sets an example for other countries struggling with the same issues. Further, Indian water activism has become

“successfully linked . . . to a larger network of movements asserting water rights and opposing water privatization. . . . these networks have gained regional, national, and international attention for their cause” (Drew, p. 40). The Indian protesters against Coca­Cola and other water privatization projects are part of the Global Justice Movement (GJM) in that they are fighting against the forces of corporate globalization which have allowed MNCs to harvest their precious water, nearly for free (Aiyer, 2008, p. 642).

There are many organizations now involved with water activism in India which spread awareness internationally. One such organization is run by Amit Srivastava, who singlehandedly runs a non­governmental organization (NGO) in the United States concerned with spreading the word about Coca­Cola’s bad deeds with water in India, and has even done country­wide speaking tours at U.S. colleges to increase awareness on this issue (Stecklow, 2005). Vandana

Shiva, a famous Indian activist, along with Navdanya, the NGO that she founded, are both important actors in the GJM. As indicated previously in this essay, she is a staunch critic of water privatization in India, as well as elsewhere in the world, and has done a lot of work in this area (Navdanya, n.d.). Furthermore, Drew (2008) describes the linkages between many different activist groups who support the fight against water privatization in India, at varying levels:

From Plachimada to Mehdiganj, networks of anti­water­privatization activists

continue to grow. The Lok Samiti, for instance, receives regional support from INDIAN WATER PRIVATIZATION 12

groups such as the Gaon Bachao Sangarsh (Save the Village Committee) and the

Sanjha Sanskruti Manch Varanasi. Nationally, they receive support from the

Research Foundation for Science Technology and Ecology . . ., the National

Alliance of People’s Movements . . ., and the water harvesting organization,

Tarun Bharat Sangh. Internationally, they are supported by organizations such as

the India Resource Center, the Campaign to Stop Killer Coke, Corporate

Accountability and the Polaris Insitute. (40)

This long list exemplifies how important water security and universal access to water is to people, and how many people are fighting against water privatization globally.

Overall, it is difficult to discern whether the majority of the Indian water activists are part of the ‘reformist’/ ‘tame it’ category of thinking, whereby they feel that the water issues they fight against can be remedied by policy changes (such as updated water laws restricting commercial extraction of water in arid regions), or whether they are part of the ‘roll­back’/ ‘scrap it’ category of thinking, whereby they think the whole system is terribly flawed and that a new system altogether is needed in order for any real improvements to occur. However, many of the successful outcomes of citizen protests and activism have resulted in a more ‘reformist’/ ‘tame it’ category of changes being made at a local level, such as regional or municipal governments stepping in to rescind the water restrictions put in place by private water companies (as in the case of the Sheonath river discussed earlier in this essay). In order for it the outcomes of Indian water activism to be of the ‘roll back’/ ‘scrap it’ category, the Indian government would need to update its water laws and ultimately restrict water privatization entirely. While complete restriction seems quite unlikely, updating the Indian water laws will likely occur as it seems to be in the best interest of the Indian government. INDIAN WATER PRIVATIZATION 13

Conclusion

Protests and activism in India against MNCs involved in water privatization, such as

Coca­Cola, have proved both effective and inspiring. Although anti­water­privatization activism has not always been successful in India, it has spread important international awareness on issues of irresponsible corporate activity resulting in declines in the health of India’s people and environment. Water is such a basic human need that the corporate control of this resource crosses a line which should not be crossed. This is especially true when people are priced out of having proper access to water that they used to be able to afford when it was managed publicly, or otherwise prior to privatization. Although there are some arguments that putting a price on water will encourage people to conserve it, and while water conservation is good and necessary, there are other ways to conserve water which do not involve making it less accessible to the general public. The criticisms of the people of Plachimada and other Indian people who have endured disputes related to water privatization are completely reasonable. Unless Coca­Cola is willing to pay significant money for the water that it uses to the settlements in which they locate their bottling plants, in addition to lowering production to sustainable extraction levels, they should not be allowed to operate in Plachimada and other parts of India. The GJM is contributing enormously to seeing that Indian people’s right to water is maintained, even if they do not win every single battle. INDIAN WATER PRIVATIZATION 14

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