The Coke Machine (41 page)

While Coca-Cola was seemingly losing ground, it was planning to outflank activists with the TERI report—the investigation done at the behest of the University of Michigan—which it finally released in January 2008. Surprisingly, given TERI’s ties to Coke, the environmental group appeared to support the campaign’s demand to close the plant at Kala Dera, saying that “it is obvious that the area is overexploited and it is highly unlikely that the water situation would improve.” Unless the company could transport water from another location or store it during the rainy season, TERI wrote, the company should shut it down. The report went on to contradict Coke’s claims of water neutrality by finding that “water tables have been depleting in Mehdiganj,” even while it stopped short of recommending that the plant there close.

By contrast, on the issue of pollution, the report supported Coke, saying it “generally meets the government regulatory standards,” even while it occasionally fell short of the company’s own, more stringent, standards. TERI declined to offer an opinion, however, on whether Coke was responsible for groundwater contamination around the plants, saying it was beyond the scope of the report. Finally, on the issue of pesticides, the report concluded they were totally absent in the water used for production, even as it declined to test the actual beverages Coke produced.

Both sides rushed to spin it in a favorable light. “Enough is enough. Now even Coca-Cola’s ally in India has found the company to not be up to the mark,” said Srivastava. Coke soft-pedaled, promising in a letter to the University of Michigan to use the findings to create a new “community engagement framework” to “engage with stakeholders” and institute new “global guidelines for operating plants” by early 2008. As for Kala Dera, the company announced it wouldn’t be shutting the plant—but would instead step up its rainwater harvesting to help the surrounding community. “The easiest thing would be to shut down, but the solution is not to run away,” said Atul Singh, CEO of Coca-Cola India. “If we shut down, Rajasthan is still going to have a water problem.” Even TERI, however, expressed skepticism about the efficacy of rainwater harvesting, upholding the activists’ claims that many of the rainwater-harvesting structures were in “dilapidated condition.”

When the report landed on the desk of administrators in Michigan, however, virtually none of that mattered. It took university vice president Tim Slottow only three days to declare that the university would retain its contract with Coke, for the surprising reason that TERI found no pesticides in the water Coke used for production. Incredibly, that’s what the fine print of the Michigan’s dispute resolution board had declared would be the standard for decision-making. Groundwater depletion and pollution would be too difficult to accurately measure, the board concluded, despite being the main points of contention in the student activist campaign. And yet TERI didn’t even measure whether pesticides were present in Coke beverages.

Even as Coke was able to use the TERI report to blunt the attack from India, the full brilliance of its strategy wasn’t revealed until another report landed on a desk at another university.

 

 

 

After the breakdown
in negotiations on Colombia, Collingsworth and Kovalik filed their appeal of the ATCA case on March 31, 2008. As they waited for their day in court, everyone else was waiting, too—for the release of Coke’s much-vaunted ILO report into the Colombian bottling plants. In fact, the UN agency had slowly made good on its promise to investigate, with six “senior officials” from Geneva setting up shop in Bogotá over the summer of 2008 and meeting with company managers, touring plants, and interviewing workers. In all, they were there twelve days.

The ILO finally released its report on October 3, 2008, and like the TERI report it was a mixed bag for Coke. The agency criticized the bottler for hostility toward unionization, with managers threatening workers against joining unions, and punishing them with withheld pay, repeated dismissals, and even assaults if they did. The ILO reserved its highest criticism for the practice of subcontracting, noting that at some plants up to 75 or 80 percent of workers now worked on a temporary or contract basis. Those workers, it found, received lower wages and worked far longer hours than the full-time workers—in some cases even required to work twenty-four-hour shifts.

Despite the harsh assessment, at no point did the ILO investigate the company’s alleged past contact with paramilitaries, or their history of murder, threats, and intimidation. The Killer Coke campaign pounced, throwing back Neville Isdell’s comments from the shareholder meetings in which he promised to investigate “past practices.” But sure enough, that was never what the IUF had asked Coke to do, says Ron Oswald, the general secretary of the international union that formally requested the assessment. He confirms all along that the assessment was intended to look only into current working conditions, despite Coke’s clearly positioning the report as a response to the student protests at NYU and Michigan. “We told them very clearly they should not do that,” he says. “It was never intended to be the response that a number of people continue to ask for and what I think is a legitimate request.”

In fact, such an investigation was beyond the scope of the ILO committee that led the inquiry, says Kari Tapiola, the head of the ILO’s Committee on Standards and Fundamental Principles and Rights at Work. “We said right from the beginning that we can only look into what the situation is currently,” he says, “we would not start going into an area that is covered by the complaint section of the freedom of association.” The what? “A separate committee to which trade unions or employers can complain.” As it happens, that’s the very ILO committee to which SINALTRAINAL filed its complaint after ending negotiations with Coke, sending the company immediately running to Judge Weinstein for sanctions.

Virtually the only interview granted by the Coca-Cola Company for this book was a forty-minute phone interview with Ed Potter. Asked when the company first discovered that the ILO wouldn’t be looking into past practices, Potter equivocates. “I think there is a little dancing on the head of a pin here,” he says, “because when you are looking into the present presumptively you are also looking into the past.” But clearly the company “would never have agreed” to looking into acts of violence that were already subject to court proceedings, he says. “It was never going to happen.” As with the TERI report, the scope of the report had been seemingly predetermined to support Coke; in no case would it answer the question that NYU had presumably asked it to—whether the company had colluded with paramilitaries to perpetrate violence against its workers.

The question now was whether the university would accept the ILO assessment as fulfillment of its call for an independent investigation. The university senate held off the vote until February 5, 2009—by coincidence the day after SINALTRAINAL was finally scheduled to get its hearing in Miami on the appeal of the ATCA case. That morning, Collingsworth headed to the twentieth floor of Miami’s federal building. Waiting there for him was a panel of three judges, each with a scowl deeper than the last. Collingsworth launched into an argument he’d been rehearsing for the better part of three years—that the case had been wrongly decided when Judge Martínez allowed the sample bottling agreement as the sole item of discovery.

“Who at Coca-Cola wanted Gil murdered—who?” interrupted Judge Bernard Tjoflat. Collingsworth began to answer, “On an aiding-and-abetting theory . . .”

“Who?” barked Tjoflat.

“We don’t know that information yet,” Collingsworth admitted. But the names of plant managers listed in the complaint, he continues, should at least be enough to get them a copy of the actual bottler agreement and a list of those responsible for implementing it.

“Here is the fishing in this area of the law,” said Tjoflat, referring to Judge Martínez’s earlier warning against “international fishing expeditions.”

If there was any doubt the hearing was turning into a disaster, the relatively easy reception given to Coke’s lawyer Faith Gay clinched it. After the hearing, Collingsworth walked down to the courthouse cafeteria with Bill Scherer, a well-known Republican lawyer in Florida whom he’d brought with him to help make his case. Scherer reassured him, “I thought you did great.” After all, he said, isn’t Coke dealing in contradiction? In its public announcements, the company touts its workplace policies for bottlers, and yet in court it argues it has no control over them. “So which is it?” he asks. “How is Coca-Cola going to enforce their rights policy if they don’t have control. Ask Ed Potter about that.”

Posed exactly that question, Potter responds in great detail about the series of audits and worker complaint mechanisms that have been put in place to enforce Coke’s new workplace policies, including its “guiding principles” for bottlers since 2006. For the big bottlers, he says, the Coca-Cola Company gets directly involved when violations of labor or environmental policies occur. “We really do not let go of these conversations until there is a resolution,” he says. “Believe me, in my whole time here, I have never had a bottler that said we are not going to play here. It’s never happened.”

In other words, Potter is saying the company does have control over its bottlers—if nothing else, through the power of influence. So does that mean the bottling agreements have changed since the days of Gil’s murder? “My sense is the language of the franchise agreements hasn’t changed for a long, long time,” he says. “But the understanding of what people need to be responsible for, accountable for, has evolved over time.” If the Gil case had happened today, he says, “It’s not something that would linger and fester. There would be people on the ground, and it would be a different degree of attention to the issues that were raised.” It’s hard to believe Potter is actually saying this, basically admitting that Coke had everything it needed to deal with the violence at bottlers in Colombia from the moment it happened, as early as the first murder in Carepa in 1994. And yet Coke failed in its responsibility to stop or investigate the crimes.

Now, more than twelve years later, the company was still shirking that responsibility. The night of the Miami hearing, Adolfo “El Diablo” Cardona stood in front of a blackboard in a small room in NYU’s Vanderbilt Hall. With Romero translating, he retold for perhaps the hundredth time the story of Gil’s murder, his attempted abduction, the destruction of the union. The next day, Romero sat in the hearing room of the NYU senate as its members deliberated their ban on Coke. The chair, Arthur Tannenbaum, began the meeting arguing that the ILO assessment, while not perfect, is the best the university could hope to achieve. At this point, an investigation into the murders would be impossible. Hearing those words, Romero felt his heart sink. When the vote came down, it was a close defeat, twenty-eight to twenty-two, in favor of lifting the ban. The last bright spot of the Campaign to Stop Killer Coke had dimmed.

 

 

 

Even as
the campaign watched its two biggest victories snatched away, one would think they could take solace in the new framework the company had put in place to control its bottlers. After all, Ed Potter himself promised that if a situation similar to the violence in Colombia occurred today it would be handled much differently. That hasn’t necessarily been borne out, however. In fact, a similar case
did
occur. It happened in Guatemala, and it happened on Potter’s watch.

José Armando Palacios was spared the violence that infected Coke’s bottling plants in Guatemala in the late 1970s and early 1980s. Though he began to work for Coke in 1979, it was at a separate plant not owned by anti-union John Trotter, but by another company named INCASA. He joined the union early, soon becoming a leader. In 1991, he took a job as an in-house security guard, a position that had been forbidden by management to unionize. Palacios had a secret plan to organize the security guards anyway—arguing that they would be a valuable asset to the union, able to tip off union leaders to visits by authorities when they engaged in work stoppages or slowdowns.

He quickly succeeded in persuading the other five guards to join. But at the time, union leaders thought the idea too risky, so Palacios bided his time for more than a decade until 2004 when new leaders were willing to risk it. As soon as they made their intentions clear, though, Palacios says he started receiving threats from the plant’s personnel manager, Eduardo García, who allegedly told him he’d have to abandon the effort, or else he’d use his connections in the army to have him disappeared. (Palacios reported the incident to the Public Prosecutor’s Office, which set up a meeting with García, in which he denied making any threats but did sign a statement with Palacios promising to continue woking with “mutual respect” in the future.) A few months later, in June 2004, Palacios was working the graveyard shift when he heard shouts at one-thirty in the morning saying, “You are going to die, you son-of-a-bitch unionist!” Palacios threw himself to the ground just as shots rang out. He crawled under a truck, heart pounding and breathing heavily as he waited to be killed.

He survived, as several private security guards arrived to rescue him and his assailants fled. Those same guards later showed him a copy of a memo they had received from García to the head of their company, a retired army colonel, saying Palacios was “totally damaging” to the company, and listing the hours he worked at night. If anything, the shooting strengthened Palacios’s resolve to unionize, with memories of the bravery of the bottling plant leaders in the 1980s still in his mind. “If our movement didn’t have martyrs, capitalism would have swallowed us long ago,” he says.

After the shooting, the bottler offered to pay him severance and fly him to the United States if he resigned. Soon after he refused, men burst into his house while he was out shopping, threatening his wife and son at gunpoint before leaving—an incident Palacios sees as a direct reprisal for his intransigence. Finally, in May 2005, the bottler fired him, just two months after Ed Potter had arrived at Coke, and even as he was promoting Coke’s new zero-tolerance policy for anti-union violence. The union protested the firing as illegal, and fought to reinstate him at the company. After several more attempts on his life, however, Palacios went into hiding, eventually reaching out through a nonprofit to the Coca-Cola Company in Atlanta.