The Coke Machine (40 page)

Before the lawyers could file, Collingsworth received a call from Ed Potter, whom he knew through D.C. labor law circles. Now just a year into his position, Potter asked if perhaps there was a way they could work out a settlement. At his insistence, the two sides engaged a retired judge in San Francisco, Daniel Weinstein, to act as a formal mediator in their talks. The two sides drew up a “term sheet” on August 17, 2006, agreeing they would use their “best efforts” to finalize a settlement within six weeks. In broad terms, the settlement would include cash compensation for the victims in Colombia along with a new workers’ rights policy by the company to prevent future violations. In exchange, the lawyers would call off the dogs, including Ray Rogers’s campaign maligning Coke.

Collingsworth told Potter that while he wouldn’t be able to curtail campaigning by Rogers while negotiations ensued—or USAS or Srivastava for that matter—he could promise that as an act of good faith SINALTRAINAL would suspend its campaign and refrain from publicly criticizing Coke as they talked out a settlement. That promise was a hasty one—and in the end, a fatal one for the union’s case.

Instead of the promised six weeks, the negotiations dragged on for the next eighteen months. And once the union’s biggest weapon—its voice in the campaign—was taken away, it lost the leverage to make strong demands of the company. The negotiations unfolded under a strict cloak of confidentiality, and both sides’ lawyers are still prohibited from revealing what was discussed. Documents from the settlement talks, however, reveal the extent of the gap between the union’s and Coke’s goals—and how aggressively Coke was willing to protect its image.

Whether through misunderstanding or willful disregard for the agreement, SINALTRAINAL resumed criticizing Coke on its website. After all, Coke was destroying the union with its increasing use of contract workers, union leaders reasoned, and the death threats continued to appear at their union halls. If Coke wasn’t going to stop the paramilitaries from threatening them, why should they keep their mouths shut? Immediately, Coke’s lawyers protested to Judge Weinstein, who blasted back from his BlackBerry that both sides refrain from public statements until he had a draft of the settlement on his desk by the first week of October 2006. Despite a flurry of conference calls and e-mails among Collingsworth, Kovalik, and Coke’s lawyers, SINALTRAINAL continued to distribute flyers and post messages to its site about its ongoing campaign, and Coke trolled Web and newspaper reports for even the slightest notice of disparagement that it could use to hold over the union’s head with the judge.

As the two sides pushed closer to agreement in October, Coke made clear its goal was to stop the bad publicity against the company, refusing any admission of liability in the torture or murder cases. Furthermore, it insisted SINALTRAINAL agree to never campaign internationally against Coke again. In fact, in a draft of the settlement, it required that the union scrub Internet search engines and archives to get rid of any mention of Killer Coke—as if the campaign never existed. For its part, Coke would pay just over $12 million to the union, including $1 million for Isidro Gil’s heirs, and $4 million to be divided among Correa, Galvis, Flores, Garcia, and González. The bulk of the rest would go into a $6 million fund for victims of trade union violence, jointly administered by Coke’s foundation and the union representatives; Collingsworth and Kovalik would receive $2 million in escrow to cover “administrative fees” for their part in managing the fund. Finally, the company would agree to a new workers’ rights policy—but only for full-time workers, not contract workers—and a confidential “global forum” four times a year in which Coke would meet to discuss ongoing labor issues.

And then there was one more thing, added by Coke’s lawyers: In order for the employees to get their money, they would have to resign from the union.

 

 

 

When the agreement
arrived in Colombia, it was met with disbelief by Javier Correa and the rest of SINALTRAINAL’s leadership. If Coke wanted them to stop talking about past cases such as Gil’s murder, that was fine, but how could they refrain from criticizing the company for abuses that hadn’t occurred yet? And resigning from the union? In their minds, the court case, the campaign, the negotiations—all of it—was an attempt to
save
the union. That requirement would defeat the entire purpose of the agreement.

Frustrated with the stalled talks, SINALTRAINAL went on the offensive, sending representatives to participate in a tour in Germany called, without subtlety, “Coke Kills.” Coke’s lawyers hit the roof. “Every request we made for . . . the immediate cessation of anti-Coke hostilities—was met with an attitude that borders on ‘who cares,’” Coke’s outside lawyer Faith Gay wrote to Collingsworth in November. “Obviously this is the primary issue that
we do
care about. Non-disparagement is why we are paying money to your clients.” As far as the company was concerned, she accused the union of not negotiating in good faith. “To be frank, we believe that plaintiffs are unwilling to disarm for internal political reasons and because they know no other means of interacting with their employer(s).”

To prove they meant business, Coke’s lawyers filed a motion with Weinstein demanding he fine SINALTRAINAL $150,000 for breach of the term sheet. Furthermore, it demanded he force Rogers to end his campaign as well. Weinstein didn’t go for it, but he did order the union to pay $120,000 in penalties. As frustrated as Coke was getting with the union, Collingsworth was getting just as frustrated. “Look, don’t waste my time,” he told his clients. “If there is an internal political reason why there’s not ever going to be a deal, tell me now.” Correa responded that the union was willing to negotiate—if Coke would give it some assurances that it could stop eroding the union both through use of contract workers and through threats by paramilitaries.

In April 2007, the negotiating team headed to Atlanta to try one last time to strike an agreement. Serving as a translator for the group, Camilo Romero admits to feeling intimidated as he headed down with Collingsworth and Kovalik into the “lions’ den”: the penthouse suite of Atlanta’s King & Spalding Building. Accompanying them was the union’s team of negotiators: president Javier Correa, international relations head Edgar Paez, and secretary/treasurer Duban Velez. And also along for the ride was Ray Rogers.

Even as the union had begun its protracted talks with Coke, Rogers had not been idle. He was hot on the trail of a contract at the 35,000-student University of Alberta when Collingsworth called to tell him he’d eventually have to end his campaign if negotiations went according to plan. Rogers was fine with that, he said. “But first, tell me, what did we win?” As he caught wind of the details, he, too, was incredulous. No admission of guilt, no assurances the union would continue, no promise of dealing with subcontracting, and a comparatively minuscule dollar amount by corporate standards. (By comparison, Exxon agreed to pay $5 billion for the
Valdez
spill.) Rogers told the lawyer he’d go along with whatever the union leaders decided—but he wanted a chance to talk with them first.

The night before negotiations started in Atlanta, Romero was put in the awkward position of translating for Rogers as he addressed the Colombians in their hotel room. Coke spent $20 million for a few minutes of advertising during the Super Bowl, he told them. Surely they could afford more than that to compensate victims of torture and murder. “We don’t intend to give up our fight against the company,” answered Correa. “Nor will we accept that people make money on us as victims”—implying that Rogers was looking for his own cut. Privately, Romero also interpreted Rogers’s plea as a personal money grab.

Despite their past clashes over Rogers’s campaign tactics, Romero was on the same page in thinking Coke was offering a bum deal that didn’t ultimately address any of SINALTRAINAL’s key demands. Sitting around the heavy wood conference table overlooking downtown Atlanta, the two groups went over the main points of contention without progress—Coke holding fast to the basic agreement—that SINALTRAINAL and Killer Coke be muzzled in exchange for money, with no other enforceable obligations. Finally Kovalik walked out, followed soon by the Colombian team.

But Collingsworth proposed that he try one last time to personally negotiate with Ed Potter. Early the next morning, Collingsworth called to say he’d had a breakthrough—the company would pay settlement money to end the lawsuit and Rogers’s campaign, but SINALTRAINAL would be free to say whatever it wanted in the future.

The Colombians delayed their flight home to meet with Coke’s representatives for a handshake, even taking pictures with the Atlanta skyline in the background. They flew back to Bogotá thrilled about bringing the arrogant multinational to its knees, even as the union lived to fight another day. When the translation of the agreement finally arrived, their elation turned to dismay as they saw that all of the old language forbidding the union from denouncing the company had remained.

The union went back on the attack, with renewed calls for a boycott, and Coke again protested the breach in the cease-fire. A frustrated Potter wrote Collingsworth to say, “It may be time to move on and conclude no agreement is possible and that we were just wasting our time for the last fourteen months.” Twisting the knife, he added: “We are in a much better position to deal with this dissipating campaign than we were in 2005.” As reluctant as the lawyers were to admit it, Potter was right. Despite continued campaigning by Rogers and Srivastava, the student campaign had peaked with the victories at NYU and Michigan. Since then, the lack of active campaigning by the Colombian workers had thrown the campaign into disarray. For all of Coke’s complaints about SINALTRAINAL breaking their agreement, in fact, the union had substantially reduced its public comments and appearances, especially at the schools that formed the backbone of the campaign. When Srivastava went up against the largest Coca-Cola contract in the country—a ten-year, $38 million contract at the University of Minnesota—he learned too late that SINALTRAINAL wouldn’t appear to make its case to the administration. Coke, of course, did show up, and the contract was renewed.

 

 

 

The more
he saw the campaign slip away, the more livid Rogers became about the botch that the lawyers had made of the negotiations. In the same way the anti-obesity lawyers had given Coke the upper hand when it agreed to hold off bringing a lawsuit, SINALTRAINAL’s agreement to suspend campaigning had taken all the fire out of Killer Coke. “When you do something like that, you’re playing into their hands and undermining your own power,” says Rogers. “When they are feeling the heat, that’s when you need to pick up a bigger club.”

It’s that attitude that made Rogers the biggest threat to Coke—and the company knew it. In the last draft of the settlement agreement from October 2007, “Killer Coke” is mentioned repeatedly throughout the text, which spells out in heartless detail exactly what issues can be raised by whom and when. In return for the leniency granted the union in the face of their breach of negotiation terms, SINALTRAINAL was offered even less money—$8 million. And of that, $3 million would go to the lawyers for a “discretionary fund” to cover their fees and “ensur[e] that the Killer Coke Campaign is dismantled.” In other words, Coke would get rid of its biggest adversary, all for less money than the $10 million it had paid a year before to establish its Colombian foundation.

Even before the final draft was inked, Correa and his colleagues in Bogotá had made up their minds not to go along with it. “Ladies and Gentlemen of The Coca-Cola Company,” Correa began in a letter sent in September. “It is not right that . . . SINALTRAINAL remains unprotected and silent, while the company has no restrictions, deactivates the campaign and does not adopt policies which respect the rights of its workers. . . . Given this situation, we have decided to tie ourselves again to the campaign.”

The union demonstrated that in a big way with its next move: filing a complaint with the International Labour Organization alleging paramilitaries were carrying out violent attacks against workers at the same time the company was implementing policies to suppress union representation. Coke demanded the complaint be withdrawn, saying it would “cause irreparable damage both to [the Coca-Cola Company] itself and to the chances of successfully negotiating an end to the KillerCoke [
sic
] campaign.” It was a strange attitude to take from a company that had already committed itself to an independent investigation of the very same claims by the very same agency. When the union refused to withdraw it, Coke again appealed to Weinstein for another fine. Collingsworth gave up—faced with a client who had already pulled out of negotiations, in action if not in word, and an adversary ready to pounce on any infraction, he made it official and told Weinstein that the union was pulling out of negotiations and canceling its obligations under the term sheet.

A year and a half after entering negotiations, he and Kovalik had to admit they had little to show for the effort. All the union stood to gain was money—and without promises of protection, even that was a double-edged sword in Colombia, opening them up to the possibility of heightened violence. Meanwhile, whether or not Coke was bargaining in good faith, the delay only helped the company.

Even as the negotiations foundered, Rogers was ready to go back on the attack at the many universities ripe for the picking. At most of them, however, the key student activists who had started the campaigns had graduated. And now, Coke was about to unveil a one-two punch to ensure that no new activists would take their places.

 

 

 

While Colombia
and the negotiations with SINALTRAINAL occupied the forefront of Coke’s attention, the villagers in India had pressed on with their battle against the company. In Uttar Pradesh, Nandlal and Srivastava released a devastating report about pollution at a second bottling plant one hundred miles from Mehdiganj, complete with pictures of bags of sludge strewn around the property. Three months later, the franchisee Brindavan Brothers announced it was shuttering its doors because of “unbearable financial losses.”