Table of ContentsSummaryIntroductionBackgroundRepercussionsThe Anti-Coke StruggleStakeholder TheoryConclusionBibliographySummaryIn March 2000, Coca Cola, under its Indian subsidiary Hindustan Coca Cola Beverages Private Limited (HCCBPL), began operations in its bottling plant in Plachimada, in the southern state of Kerala. Over the next few years, the area surrounding the plant began to feel the dangerous effects of the plant, as groundwater was contaminated and toxic waste was released. What followed was a long struggle by Plachimada residents, interest groups and NGOs, which ultimately led to the plant's operations being shut down. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”?Get the original essayThis report is a reflective piece of writing and will attempt to describe the events that occurred during the struggle in Plachimada, which took place at two levels: the base and the judiciary. It will then attempt to answer questions relating to the ethical responsibilities of the company towards the community around it and towards society as a whole. IntroductionMilton Friedman said: “There is one and only one social responsibility of business: to use its resources and engage in activities intended to increase its profits as long as it remains within the rules of the game, that is say that it engages in open and free competition, without deception or fraud. » The aforementioned statement has long been the unwavering belief of societies across the world. The notion of businesses as economic entities with the sole objective of profit maximization has been prevalent for as long as anyone can remember. Seen from this perspective, the company has no “responsibility” other than that of producing economic value for its shareholders. This must therefore lead us to believe that a company certainly does not have ethical responsibilities but only legal obligations. His argument is based on the fundamental idea that, as mere agents of shareholders, managers have the sole duty to increase their wealth. This argument has been attacked by many researchers on different points. First, it seeks to completely ignore any ethical obligation. In other words, as long as they follow the law, they don't have to worry about any other impact their actions might have on their stakeholders other than shareholders. Second, it is not certain that the shareholders actually gave such a mandate to management. . They could have invested for purely speculative purposes. In fact, some shareholder surveys in the United States have found that the majority do not want simple profit maximization by companies, to the exclusion of all other considerations. Third, if it is accepted that maximizing shareholder value is the mandate, then this has to be a long-term initiative. This objective is only achieved by adopting a sustainable proactive approach and developing a long-term relationship with stakeholders and the community. The Plachimada vs Coca Cola case illustrates this conviction. It then examines the repercussions of failing to consider the well-being of the community in which it thrives. Background Plachimada is a small hamlet in Palakkad district of Kerala. The majority of the population is made up of Adivasis (indigenous people) whose main activity is agriculture. About 80% of villagers are engaged in agricultural work, and 20% are engaged in other professional activities. In 1998, HCCBPL acquired 34.4 acres of land (mainly rice fields) in order to set up a bottling plant inPlachimada. On January 25, 2000, the Perumatty Panchayat (whose constituency includes Plachimada) granted permission to construct the factory and operations began in March. The Kerala State Pollution Control Board has granted a permit to produce 561,000 liters of beverage per day, with an average requirement of 3.8 liters of water for every liter of beverage. The water source was mainly groundwater from 6 borewells and two open ponds, and around 2 million liters of water per day were extracted. Six months after the plant began operations, villagers complained that the water was unfit for drinking or cooking. Over the next few months, several villagers complained of unusual stomach aches. Farmers complained that wells were draining unusually quickly and crop yields were falling. A public interest group called Corpwatch India found that there were high levels of calcium and magnesium in the water, caused by excessive water extraction. Bottle washing carried out at the factory used chemicals and the resulting sludge was discharged from the factory. Initially, the sludge was sold as fertilizer to unsuspecting farmers, after which it was distributed free of charge and, in the face of growing resentment among villagers, it was simply dumped by the roadside. In the few months since the launch, more than 1,000 families from surrounding villages have been affected.RepercussionsAccording to the company's agreement with the Kerala State Pollution Control Board (KSPCB), up to 1.5 million liters of water were withdrawn commercially from 6 boreholes located within the factory compound. The permit granted Coca-Cola the right to extract groundwater to meet its production needs of 3.8 liters of water for every liter of Cola. As a result, the water table has retreated, as has the quality of groundwater. Detailed sampling of water collected from the area revealed a high concentration of calcium and magnesium ions. Additionally, the colloidal slurry generated as a byproduct was initially sold to villagers as fertilizer. In 2003, the BBC, on its Face the Facts programme, said samples of slurry used as fertilizer contained dangerous substances. “The region's agricultural industry has been devastated and jobs, as well as the health of local people, have been put at risk,” said John Waite, the show's presenter, reading This Is the Verdict scientists from the University of Exeter, where samples taken from Plachimada were sent for analysis. The above-mentioned events are of great concern as they prove how businesses would neglect the well-being of the community in favor of maximizing profits. It is evident that Coca-Cola did not consider it important to engage in meaningful dialogue with the community in which it operated. True to Friedman's notion that a company has no ethical responsibility but only a legal obligation, Coca-Cola may have thought about what fell within its legal rights and did not bother to consider possible reprisals from the community. The events that followed show us why it is essential for a business to interact positively with its community. Samithy) began its protest against the factory, with over 1,500 people, mostly adivasis, demanding the immediate closure of the factory due to the grave danger it posed to their daily lives. The committee was responsible for a series of protests, anti-coke rallies and other disruptions of Coca-Cola plant operations.Several street corner meetings and intense campaigns followed. On June 9, 2002, a rally and public meeting was organized by the People's Union for Civil Liberties and the National Alliance for People's Movements in solidarity with the Samithy. In the meantime, from April 2003, the fight against the cola giant took a decisive legal turn. On April 7, the Perumatty Panchayat decided not to renew the license of the HCCBPL. The Panchayat Secretary canceled the license, citing the following reasons: excessive exploitation of groundwater by the company, environmental problems due to the presence of hazardous and toxic substances in the waste emitted by the company and shortage of drinking water . This was challenged by the company's Kerala High Court, which directed the company to approach the Local Self-Government Department (LSD) which stayed the cancellation issued by the Panchayat, stating that it had exceeded his powers. The BBC Radio 4 program "Face the Facts" reported the presence of carcinogens in waste dumped by the factory. This waste had been dumped in neighboring areas under the pretext of providing fertilizer to farmers. On August 5, 2003, the Delhi-based Center for Science and Environment released a report showing that 12 soft drinks contained a significant amount of pesticides. On 7 August 2003, the KSPCB confirmed the BBC report and ordered Coke to stop supplying waste to adjacent areas and to immediately collect all waste and store it in safe containment on the factory premises. On March 8, 2004, the Kerala government ordered the plant's operations to be halted until June 15, 2004. A number of newspapers such as The Guardian, The Times and the United Kingdom's Financial Times, the New York Times of the United States, Le Monde of France and Asahi Shimbun of Japan covered the events and happenings in Plachimada. Overall, Coca-Cola seemed to appear in a bad light during the episode. Not only the factory but also the company suffered a heavy blow. The Plachimada factory has not yet reopened. Stakeholder Theory Today, business is no longer simply an agency for shareholders. They are replaced by a stakeholder model that includes many other groups, including the community in which the business is located and the broader society that may be affected by how the business operates. No business, even the most successful, can exist in a vacuum. They require investors to give them money, customers to buy their goods/services, employees to serve customers, suppliers to sell them the goods they will sell, and to have a community within from which they can prosper. The business cannot succeed in the absence of one of these groups. Of course, these groups can interact in hostile ways. However, the interests of all parties involved would be better represented if everyone's preferences could be accommodated. This approach to business is known as the stakeholder model. It can easily be argued that, to a large extent, stakeholder theory is a better representation of the web of relationships that exists in the interactions of any business. After all, it certainly involves more responsibility than the shareholder theory. Therefore, it encompasses more groups than just shareholders. Any company that follows stakeholder theory must take into account the needs and wishes of a large number of people. Conclusion The struggle in Plachimada continues today as villagers seek to recoup the loss of their.”