The University’s Dispute Review Board – created last year to hear complaints against University vendors and suppliers – held a public hearing last week on the Coca-Cola Company’s allegedly unethical labor and environmental practices in Colombia and India.
Representatives from the Coke Coalitionand Coca-Cola addressed the DRB and an audience of students mostly sympathetic to the coalition in the Anderson Room of the Michigan Union Monday afternoon.
If the board is convinced that Coca-Cola is in violation of the Code of Conduct for University Vendors, it could recommend that the University terminate its 12 contracts with Coca-Cola – which cost the University $1.3 million in fiscal year 2004, according to University spokeswoman Julie Peterson.
The DRB is investigating the company in response to a recommendation from University Purchasing Services calling for a formal review of Coca-Cola’s practices. Purchasing began its informal investigation after student groups voiced concerns and the Michigan Student Assembly passed a resolution calling for an inquiry about the allegations. The Coke Coalition – an umbrella group that includes Students Organizing for Labor and Economic Equality and the University chapter of Amnesty International – has pressured the University to sever its ties with Coca-Cola. The coalition was joined recently by the United Asian American Organizations – which is comprised of more than 30 Asian Pacific American campus groups – and the Graduate Employees’ Organization.
“We are primarily concerned with the human rights violations and the environmental violations Coke is perpetrating throughout the world,” said LSA sophomore Lindsey Rogers, a member of Amnesty.
Rogers said Coca-Cola’s actions in Colombia are in violation of two standards in the code of conduct – which require vendors to allow their workers freedom of association and collective bargaining and prohibit harassment and abuse of workers.
Rogers presented the most serious charge to the DRB – that management at Coca-Cola bottling plants in Colombia had collaborated with rightist paramilitaries to intimidate union members and their families with murder, kidnappings, torture and false charges.
Left-wing paramilitary groups, most notably FARC – the Revolutionary Armed Forces of Colombia – are engaged in an armed struggle against the Colombian army and right-wing irregulars. Both sides have committed atrocities against civilians, though the largely drug-financed right-wing groups – chiefly AUC, or United Self-Defense Forces of Colombia – are responsible for the worst abuses, according to BBC News, which reports that more than 35,000 Colombians have died as a result of the civil strife over the past decade. Union members, who are seen as sympathetic to the insurgency, are popular targets of rightist paramilitaries.
Pablo Largacha, corporate affairs manager for Coca-Cola Colombia, did not dispute that incidents took place in Coca-Cola facilities but said there was no evidence that factory management conspired with paramilitaries.
Coca-Cola representatives cited an assessment by the Cal Safety Compliance Corporation – a corporate responsibility consultant – that exonerated Coca-Cola of any responsibility in the intimidation tactics.
But members of the Coke Coalition were quick to question the reliability of Cal Safety’s report – which was based on 150 employee interviews conducted within the factories.
“Cal Safety has a history of not being a responsible independent investigator,” said RC junior and SOLE member Jory Hearst.
Representatives of the Coke Coalition accused Cal Safety of gross oversight in failing to discover severe labor rights abuses that were taking place in a factory in El Monte, California, one of the most infamous cases of sweatshop labor in recent history.
RC senior and SOLE member Ryan Bates was skeptical of Cal Safety’s independence from the companies it audits.
“Cal Safety is funded by corporations,” he said. “It has a vested interest in maintaining that business relationship.”
Bates also challenged Cal Safety’s methods. He said that interviews conducted in the factories are not valid because they allowed management to know who complained.
“Managers were aware of the individuals that were selected,” said Russ Childrey, vice president and director of marketing for Cal Safety, adding that they were not informed of the workers’ specific complaints.
Childrey said conducting interviews outside the facilities was impractical, citing safety concerns and saying it would have been disruptive to business to remove employees from the workplace.
Bates also said that by announcing its inspections in advance, Cal Safety gives companies time to clean up their operations. He mocked the few infractions Cal Safety did report in its investigation of the Colombia plants as trivial, saying, “You can find more dangerous things in my dorm room.”
Members of the Coke Coalition presented the findings of another investigation to refute Cal Safety’s assessment. The New York City Fact-Finding Delegation on Coca-Cola in Colombia, led by New York City councilman Hiram Monserrate, concluded in a 2004 report that there was sufficient evidence to support the allegations against Coca-Cola.
Hearst suggested the Workers’ Rights Consortium – a nonprofit organization that monitors compliance with university codes of conduct for manufacturers of college apparel – as an alternative to Cal Safety. In March, New York University asked Coca-Cola to agree to an inquiry by WRC, an offer the company declined.
Carol Martel from Coca-Cola’s Ethics and Compliance Office said WRC was not an impartial auditor because some of its employees participated in the campaign against Coca-Cola.
But SOLE member and LSA sophomore Nafisah Ula said the only WRC employee involved in the Coca-Cola campaign – Terry Collingsworth, executive director of the International Labor Rights Fund – resigned.
DRB member and Business Prof. Andy Hoffman challenged the Coca-Cola representatives to use an auditor both sides viewed as legitimate.
Martel replied that the action her company has taken to investigate the allegations has been adequate.
A Colombian court and the Prosecutor General of Colombia have both concluded that Coca-Cola did not collude with paramilitaries to intimidate union members. But the reliability of these findings is undermined by ties between the Colombian government and right-wing death squads. According to BBC News, “There is an undeniable body of evidence that shows cooperation between army units and paramilitaries.”
According to Coca-Cola, SINALTRAINBEC – a union representing Coca-Cola workers – has denied the company collaborated with paramilitaries. But the Campaign to Stop Killer Coke claims that SINALTRAINBEC has only 25 members and is hardly representative of unionized Coca-Cola workers in Colombia, the majority of whom belong to SINALTRAINAL.
Coca-Cola was dismissed from a 2001 lawsuit filed by ILRF and the United Steelworkers of America claiming that its Latin American bottler – Panamco – collaborated with paramilitaries to murder unionists, BBC News reported. District Judge Jose Martinez said Coca-Cola did not have control over Panamco’s labor practices.
But Collingsworth argues that Coca-Cola should be reinstated as a defendant in light of Coca-Cola FEMSA’s 2003 acquisition of Panamco, Reuters reported. Coca-Cola owns about 40 percent of Coca-Cola FEMSA.
Largacha defended his company’s labor practices by saying that more than 31 percent of employees of Coca-Cola’s bottlers in Colombia belong to unions, compared with only 4 percent of all Colombian workers.
LSAjunior Jessica Fricke was the only student who spoke in defense of Coca-Cola at the hearing. Agreeing with Largacha that factory managers are not complicit in violence against unionists, Fricke added that Coca-Cola does not have the military resources to protect its workers from violent attacks. But despite these limitations, she said Coca-Cola “has taken many steps to protect its employees” – including handing out cell phones for emergencies and providing armored transport through dangerous regions.
Bates responded by saying that many of Coca-Cola’s protections for its labor force exist on the books but are not enforced. He flatly denied that employees had access to cell phones or armored cars, based on communications between SOLE and Colombian employees of Coca-Cola.
Last month, Coca-Cola contributed $10 million toward establishing the Colombia Foundation for Education and Opportunity to aid the victims of the Colombian civil conflict, Reuters reported.
Hoffman asked Coca-Cola why it operated in violent regions of the world if it claimed to be a leader in ethical labor practices.
Largacha said the company provides a legitimate source of employment and revenue in a country where drug money fuels the activities of right- and left-wing paramilitaries.
The Coke Coalition also challenged Coca-Cola on its environmental record in India.
Ula said the amount of pesticides – including DDT – in Coca-Cola soft drinks sold in India is 30 to 34 times higher than the amount in European and American Coca-Cola products.
“What makes a person in India more able to withstand these chemicals?” she asked.
Rackham student and Coke Coalition member Sayan Bhattacharyyalashed out at what he saw as a double standard, saying, “I hold it to be self-evident that my life as an Indian is as valuable as your lives as Americans.” Coca-cola has shown “a cynical disregard for human life,” he added.)
The Coca-Cola representatives denied Ula’s accusation.
“We follow one (standard) across the world,” said Harry Ott, Coca-Cola’s director of Global Water Resources, via conference call. “The products meet all Indian as well as international standards,” he added.
But Coke Coalition member and LSA juniorKristin Purdy said Coca-Cola sodas were not bound by Indian standards for packaged drinking water because these do not govern carbonated water.
Tests conducted by India’s Health Ministry in 2003 found that the pesticide levels in Coca-Cola soft drinks, though somewhat higher than European Union standards in some samples, were still within safe limits, The New York Times reported.
But a 2004 study by an Indian joint parliamentary committee confirmed an earlier report that found unacceptably high levels of pesticides in Coca-Cola sodas, The Hindu reported. One of the chief concerns cited by the committee was India’s lack of regulation for carbonated beverages.
Following the release of the committee’s findings, Coca-Cola said it would comply with any standards set by the Indian government.
Ula also alleged that Coca-Cola distributed sludge with high levels of cadmium – a carcinogen – and lead – which can lead to mental retardation in children – for farmers in the Indian state of Kerala to use on their crops. She said the sludge had no value as fertilizer.
“Did the Coca-Cola Company test this sludge before they gave it away to farmers?” she asked. “If they didn’t test it, why not?”
But Ott countered that the cadmium and lead in the sludge were not above allowed levels and that these substances do not seep into groundwater, where they can contaminate drinking water.
Yet a 2003 study conducted by BBC News concluded that the sludge was “useless as a fertilizer” and contained harmful levels of toxins. According to the study, the toxins had in fact contaminated the local water supply.
Coca-Cola claims that a study by the Kerala State Pollution Control Board found that the sludge contained acceptable levels of heavy metals. But the conclusions of the study have been challenged both by board members and Kerala Opposition Leader V.S. Achuthanandan, The Hindu reported. The opposition leader said the board misinformed the public and that the study actually found unacceptable levels of cadmium in drinking water in areas where the sludge had been distributed.
The board ordered Coca-Cola to stop distributing its waste as fertilizer and India’s Supreme Court instructed the company to install a purification system for its wastewater and to provide drinking water to affected communities.
Ula also charged that Coca-Cola built plants in drought-prone areas, leading to water shortages in the communities where the factories were located.
The corporate representatives again disputed Ula’s claim.
“There is no evidence linking a depletion of groundwater in India to Coke,” said former Coca-Cola spokeswoman Lori Billingsley, now the senior vice president of Porter Novelli, a public relations firm.
Billingsley’s presence angered LSAjuniorand Coke Coalition member Ben Grimshaw, who said, “It’s really unacceptable that they bring PR people here.”
Ott said the water shortages were the result of drought, not his company’s actions.
“We have decreased our water usage 27 percent,” he said. “Studies have shown we were not responsible for dropping the aquifer,” he added.
A 2004 inquiry by India’s Central Ground Water Board concluded that while Coca-Cola was not to blame for the drop in the water table in Kaladera, located in the state of Rajasthan, it was exploiting deeper aquifers, The Hindu reported.
A study by members of KSSP – the Science Writers’ Forum of Kerala, a state in India – found that Coca-Cola’s exploitation of local water resources would lead to water shortages and a decline in the quality of groundwater, according to The Hindu. A 2003 study conducted by the Kerala State Groundwater Department concluded that drought, not Coca-Cola, was responsible for the drop in the water table and the lower quality of water.
In 2003, the Perumatty village council revoked Coca-Cola’s license to operate in Plachimada, located in Kerala. Last month, a court overturned the council’s decision and allowed the company to continue drawing water from the area. The council has appealed this decision to the Supreme Court.
Coca-Cola has argued that its implementation of rainwater harvesting programs in its plants in India has helped replenish local sources of water.
But Ula said the system is a long-term, not an immediate solution, because it takes a long time for water to seep down through the soil.
“If Coca-Cola truly does value local demands, they will leave their plant closed until rainwater harvesting has impacted water levels,” she said, adding that her opinion was not the official stance of the Coke Coalition.
Bates accused Coca-Cola of trying to postpone the hearing to minimize the number of students who would be able to attend.
“Coke has systematically acted in bad faith with this university,” he said.
Billingsley denied this charge, citing longstanding scheduling conflicts. Ott had to teleconference from a business-related commitment in Shanghai.
Though it took place on the third day of final exams, the hearing was standing room only. Many students held up signs in protest of Coca-Cola’s alleged violations. One sign showed three corpses of murdered Colombian workers floating face-down in a glass of Coke.
All of the students who spoke out against Coca-Cola were met with enthusiastic cheers and applause.
The DRB is composed of two students, two faculty members, two staff members and the Assistant Director of Purchasing Dennis Poszywak. Some DRB members expressed concern that the participation of the student board members in the Coke Campaign may compromise their objectivity, but Stafford said they will be allowed to vote. The DRB will be accepting comments on the Coca-Cola issue until May 9 at firstname.lastname@example.org.
New York University, Rutgers University, the University of Iowa and DePaul University are only a few of the universities considering cutting their contracts with Coca-Cola.