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Indian cola controversy gets
political
By Raju Bist
MUMBAI - Despite reports that two Indian
government laboratories have found Coca-Cola and Pepsi
soft drinks free of pesticide residues, the controversy
is far from over. For one thing, the exoneration appears
ambiguous. For another, this is India after all, where
both sides can claim victory and usually do. And since
it involves multinational corporations (MNCs),
everybody's favorite whipping boys at a time when
elections are not that far away, the announcement
doesn't mean that the matter is settled.
The
furor began on August 5 with a press conference by the
prestigious Center for Science and Environment in New
Delhi that 12 major bottled soft drinks manufactured by
the two MNCs contained a "deadly cocktail of pesticide
residues". It quickly turned into a nationwide
controversy that led to "bottle breaking" rallies across
the country and the banning of Coke and Pepsi in the
Indian parliament. Rival political parties have laid
into the MNCs with a vengeance.
The India-based
directors of Coke and Pepsi, bitter rivals for the
soft-drink rupee, took the unprecedented step of
appearing together to declare that the tests by CSE, a
non-government organization, were false. Nonetheless,
cola sales plummeted and within a week the two giants
had curtailed production by 30 percent at each of their
Indian operations.
Then India Health Minister
Sushma Swaraj last Thursday announced to the Indian
parliament that samples tested by the government labs
were "well within the safety limits" prescribed for
packaged drinking water. She was immediately attacked as
defending the two companies, with a couple of her
ministerial colleagues caught in the crossfire. But it
was hardly a ringing endorsement.
Both sides
claimed victory over the weekend. "I am delighted that
these baseless allegations have been proved incorrect,"
declared Sanjiv Gupta, president and CEO of Coca-Cola
India.
Not so fast, said Sunita Narain, the
director of CSE, "The test results announced by the
government have vindicated our findings that Coca-Cola
and Pepsi brands contained high levels of pesticide
residues."
But who was right? According to the
government's tests, only three of the 12 brands had been
given a clean chit. While the CSE's results had found
pesticide levels in soft drinks to be 11 to 70 times
European Union norms, the government findings placed the
level of such residues at 1.2 to 5.22 times in nine of
the 12 brands. So Gupta argued that the CSE was wrong in
initially smearing all the brands with the same brush.
And CSE director Sunita Narain told reporters, "Look,
the government statement falsifies the claims of soft
drink majors that their products had no pesticides and
that they were meeting global norms!"
A few days
later, external affairs minister Yashwant Sinha went to
Ranchi, capital of the eastern state of Jharkhand, to
attend an official function. He had expected journalists
to ask him about the tentative thaw in India's relations
with Pakistan and the recent visit of an Indian
parliamentary delegation to the country. Instead, all
that they wanted to know was: "Is the government giving
the green signal to the cola majors following foreign
pressure?" Annoyed, he shot back, "How can we accept
foreign pressure?" and asserted that there was no
pressure from any side.
In parliament,
opposition members grilled Swaraj along the same lines
and soon she was on the defensive. Later, talking to the
press, she pointed out that she had not given any "clean
chit" to the MNCs making cola drinks. "In my statement
in parliament, I did not say such a thing. I only said
that these drinks did not violate any domestic norms. In
fact, I also said that in some samples the pesticide
content exceeded the norms of the European Union."
Senior party leaders blame Swaraj for landing
the ruling Bharatiya Janata Party (BJP) party in a spot.
She should not have announced the laboratory reports in
parliament in the first place, they point out. A
laboratory spokesman could have done that. Party leaders
wonder why the minister didn't anticipate the
predictable opposition accusation: that Coca-Cola and
Pepsi gave bribes to clear their names. In fact,
Satyabrata Chaturvedi, a member of Congress, the main
opposition party, charged that the two companies had
"given a donation" to the BJP to be let off the hook.
Soon after Swaraj made her statement in the Lok
Sabha, the Lower House of the Indian parliament,
Samajwadi Party (SP) leader Mulayan Singh Yadav demanded
the establishment of a joint parliamentary committee to
probe the whole imbroglio. The demand was readily
accepted by Speaker Manohar Joshi.
The joint
committee is yet one more uniquely Indian phenomenon. It
is usually set up when the government in power is no
longer able to handle a hot potato. Committees are
elaborate affairs with the members meeting in five-star
hotels, calling in experts to advise them, and in some
cases, taking off on foreign junkets – all at the Indian
taxpayer's expense. The government previously has set up
such joint committees to probe the Bofors armaments
scandal and two securities scams (involving brokers
Harshad Mehta and Ketan Parekh) and to investigate the
financial failure of the government-run mutual fund Unit
Trust of India (UTI). Public memory is painfully short
and as with many other governmental probes, the findings
are usually quietly buried.
Instituting a joint
committee is a wonderful and convenient method for the
ruling party to win over friends from the opposition.
Thus, the 15-member joint committee announced to probe
pesticide residues in soft drinks and set safety
standards for soft drinks, fruit juices and other
beverages in which water is the main constituent is
going to be headed by former defense minister Sharad
Pawar and now the leader of the opposition Nationalist
Congress Party (NCP).
Only four of the joint
committee's 15 members belong to the ruling BJP party or
its political allies. Proof that the body's main
function is to scratch one party's back while it
contentedly scratches back? One of the members is
Akhilesh Yadav, a 20-something political greenhorn and
first-time member of parliament. He is the son of
Mulayam Singh Yadav, the MP who mooted the joint
committee charade in the first place.
Neither
Rajiv Bakshi, chairman of Pepsi India, nor anybody else
from his office reacted on the possible effect on his
company. But Coke's Gupta was more forthcoming: "Why
should we be afraid of a JPC [joint committee]. But
sometimes I wonder how many times a 117-year-old company
like ours should prove ourselves."
Even though
JPCs have been mostly ineffective in setting up
standards or systems in India, there is a danger that
the tenure of the latest one, if prolonged, could have
negative repercussions on foreign investment. A group of
foreign investors is reliably said to have already
communicated to minister Swaraj that "penalizing
companies which are fulfilling existing national norms,
even bettering them, can have serious implications later
on".
This stand is supported even by some
Indians. A business analyst working for a reputable
trade organization says, "All said and done, we have to
get our priorities right. This whole exercise should not
degenerate into a political football, a case of MNC
bashing. Let us first start by making efforts to improve
the quality of drinking water in the country. The amount
of water consumed from taps is much more than soft
drinks."
However, it is not as if the cola
controversy hasn't had its merits. The cola companies
may have been singed and are still nervously awaiting
the findings of the JPC. But there are three bits of
good news for the Indian consumer, one of them involving
Pepsi.
In a move to make cola drinks and other
beverages safer in the wake of the recent controversy,
the government will bring out a draft notification to
apply EU norms for pesticide limits on the water used in
drinks. Pepsico has decided to use bottled water for its
Fountain Pepsi outlets across the country against the
filtered tap water used at present. And the Indian food
ministry is planning to introduce mandatory quality
certification of carbonated soft drinks (like Pepsi and
Coca-Cola) by the Bureau of Indian Standards.
These changes, however, are still some time
away. Until then, there will be drinkers for the colas
but not all of them will gulp them down in single swigs.
(Copyright 2003 Asia Times Online Ltd. All
rights reserved. Please contact content@atimes.com for
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