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.”
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 sh
utting 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 Colom
bia 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.
The Coke Machine: The Dirty Truth Behind the World's Favorite Soft Drink Page 31