Professional Documents
Culture Documents
Introduction
From January 1, 2006, the University of Michigan in the US put on hold the sale of
the products of The Coca-Cola Company (Coca-Cola) in all its campuses, thus
becoming the tenth US University to do so. The ban was the outcome of a relentless
campaign by student activists and trade union groups, who accused Coca-Cola of
violent labor practices in Colombia and of creating environmental problems in India.
The University of Michigan issued the orders for the ban based on the
recommendation of its University Dispute Board. This was following the inability of
Coca-Cola to meet the deadline of December 31, 2005 that required agreeing on a
protocol on the findings of the commission formed by a set of universities in the US.
The commission had offered to investigate the companys labor practices and that of
its bottlers in Colombia. Coca-Cola did not want the findings of the commission to
have any legal consequences but the attorneys in an earlier lawsuit against Coca-Cola
and its bottlers in Colombia insisted that the findings should be legally admissible in
court of law in the US.
Other prominent US universities that had banned Coca-Cola on similar grounds were
the New York University, the largest private university in the US, Rutgers University
in New Jersey, and the Santa Clara University in California. The University of
Michigan and The New York University were Coca-Colas largest campus markets in
the US. Coca-Colas annual contracts with the University of Michigan, which had
over 50,000 students, were worth around US$ 1.4 million in sales in 2005.
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International Business
The campaign by student activists and trade union groups to ban Coca-Cola had been
going on for several years in different countries. Coca-Cola was accused, along with
its bottling partners, of hiring paramilitary death squads in Colombia to kidnap,
intimidate, or kill its union leaders and other workers at its bottling plants. Since 1989,
around eight union leaders of Coca-Colas plants in Colombia had been murdered and
many others abducted and tortured.
In India, Coca-Cola had to face opposition from the local people around its
factory in Plachimada, Kerala 2, who charged that the company was responsible for
the draining of the underground water table. In 2003, a BBC 3 report revealed that
Coca-Cola was distributing improperly treated sludge containing toxic
carcinogens and heavy metals like cadmium and lead, as fertilizer to farmers in
the region. Coca-Cola shut down this plant in March 2004 owing to mounting
pressure. The company then decided to shift its operations to a nearby industrial
zone, the Kanjikode Industrial Area.
There were also protests at Coca-Colas Mehdiganj plant in North India over similar
issues. In addition to these accusations, in 2003, the Center for Science and
Environment (CSE)4, made public the findings of its study wherein it reported that the
products of both Coca-Cola and PepsiCo Inc. (Pepsi) that were sold in India, had a
cocktail of harmful pesticide residues in them.
In an official statement, Coca-Cola denied that it had used death squads in Colombia.
The company said that two judicial investigations in the country had not found any
evidence in support of such allegations. Coca-Cola also claimed that there was no
evidence linking it or its bottlers with the groundwater problems at its factory
locations in India. Responding to the allegation that its products contained pesticide
residues, it said that the products that it sold in India were perfectly safe and were in
accordance with global quality standards.
Over the years, Coca-Cola, one of the largest non-alcoholic beverage companies, with
the worlds most widely recognized brand, had been facing a string of problems that
could seriously damage its brand image. The company had also faced allegations
related to anti-competitive business practices in Mexico and had to pay heavy fines
and penalties.
Background Note
The Coca-Cola drink, popularly referred to as Coke, is a kind of cola, a sweet
carbonated 5 drink containing caramel 6 and other flavoring agents. It was invented
by Dr. John Smith Pemberton (Pemberton) on May 8, 1886, at Atlanta, Georgia in
USA. The beverage was named Coca-Cola because at that time it contained
2
3
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The kola nut is a kind of a nut with a bitter flavor and high caffeine content, and is primarily
obtained from some West African or Indonesian trees.
Historically, a soda fountain referred to soda shops and the part of a drugstore (pharmacy)
where sodas, ice cream, sundaes, hot beverages, iced beverages, baked goods and light meals
were prepared and served. Now the term refers to the carbonated drink dispensers found in
fast food restaurants and convenience stores in the US and Canada.
Indiana, is a state in the US with Indianapolis as the capital.
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International Business
Exhibit I
Hobble-Skirt Design Bottle
Source: www.brandine.com/images.
Exhibit II
Bell Shaped Fountain Glass
Source: http://wingers.info/menu/Coke.
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11
PET (Polyethylene terephthalate) is a thermoplastic resin of the polyester family that is used
to make beverage, food, and other liquid containers, synthetic fibers, as well as for some
other thermoforming applications.
Roberto C. Goizueta, a Cuban immigrant, had worked up the ranks at Coca-Cola and was its
Chairman and CEO from 1980 to 1997. Under his leadership, Coca-Colas stock value
increased by more than 7200 percent.
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International Business
In 1986, Coca-Cola merged the company owned distribution network with two large
ownership groups that were for sale -- the John T. Lupton franchises and BCI Holding
Corporations bottling holdings -- to form an independent entity, Coca-Cola
Enterprises Inc. (CCE). CCE, which mainly operated in America and Europe,
distributed 2 billion physical cases of products, representing 21 percent of CocaColas volume worldwide, in 2004. The total revenues of CCE for the same year were
US$ 18 billion.
In 2005, Coca-Cola had operations in over 200 countries selling more than 400 brands
in categories like packaged drinking water, coffees, juices, sports drinks, and teas,
apart from its main soft drink products. The company owned four of the top five soft
drink brands in the world, Coca-Cola, Diet Coke, Fanta, and Sprite. It also had other
popular brands like Barqs, Fruitopia, Minute Maid, POWERade, and Dasani water.
Coca-Cola had became one of the biggest beverage companies in the world by 2005,
selling around 1.3 billion beverage servings per day. The main reasons for CocaColas enormous success were its advertising campaigns (Refer to Exhibit III for a list
of popular advertising slogans of Coca-Cola) and its massive production and
distribution operations spread across the world (Refer to Exhibit IV for brief financial
information).
Exhibit III
Popular Advertising Slogans of Coca-Cola
Year
Slogan
1886
Drink Coca-Cola
1929
1936
1942
1944
1950s
1950s
Be Really Refreshed
1950s
Go Better Refreshed
1963
1969
1971
1979
1985
1985
1993
Always Coca-Cola
1999
Enjoy Coca-Cola
2001
2005
Make it real
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Exhibit IV
Comparison of Key Financials for the Years 2003, 2004, & 2005
(In US$ million)
December 31, 2005
December 31,
2004
December 31,
2003
Total Revenues
23,104
21,962
21,044
Gross Profit
14,909
14,324
13,282
Operating Profit
6,085
5,698
5,221
Net Profit
4,972
4,847
4,347
Year
Exhibit V
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International Business
The quality system was constantly revised to meet the latest and most stringent
food and safety regulations including Global Food Safety Initiative 12 (GFSI)
Guidance Document. Coca-Cola believed in the promise of refreshing and
benefiting the customers and strove to keep up this promise through the Quality
System.
Adapted from www2.coca-cola.com.
Coca-Cola prepared a code of business conduct for all its employees that incorporated
the companys core values such as honesty, integrity, diversity, quality, respect,
responsibility, and accountability. The code of business conduct was uniform for all
the companys operations across the world and it clearly defined policies and
procedures to help employees handle various contingencies. Coca-Cola believed that
the companys most valuable asset was its trademark brand and that the value of this
brand had been built over a century by the commitment and integrity of its employees
(Refer to Exhibit VI for Coca-Colas code of business conduct).
Exhibit VI
Coca-Colas Code of Business Conduct
Coca-Cola considered its employees to be the representatives of the company and
expected them to act with honesty and integrity in all the matters pertaining to the
company. The code of conduct covered various aspects such as:
Employee responsibilities
Conflicts of interest
Financial records
Use of company assets
Working with customers and suppliers
Working with governments
Protecting information
Administration of code
Employees were encouraged to ask for guidance when in doubt on issues relating
to the code of business conduct, ethics, and compliance matters and to report
possible violations. The company created an exclusive Internet website,
www.KOethics.com and had an international toll-free telephone number, for
guidance and reporting of such issues. The company arranged for translators for
employees who could not speak English over the provided telephone line. The
employees also had the choice of remaining anonymous and were required to
cooperate with any investigations of code of business conduct.
Managers had the primary responsibility to maintain the code of conduct in the
company. Managers had to understand the code of conduct and report suspected
violations. If any employee violated the code of conduct with the knowledge of the
manager, then both would be held equally responsible for the offence.
Adapted from www2.coca-cola.com.
12
In April 2000, a group of international retailer CEOs identified the need to enhance food
safety, ensure consumer protection, and strengthen consumer confidence, to set requirements
for food safety schemes and to improve cost efficiency throughout the food supply chain.
Following their lead, the Global Food Safety Initiative (GFSI) was launched in May 2000.
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15
Leftist guerrillas were armed groups with socialistic ideologies waging a war against the
Colombian government.
Right-wing paramilitary groups were armed groups supporting capitalistic ideologies
opposing leftist guerillas.
Sindicato Nacional de Trabajadores de Industrias Alimenticias (SINALTRAINAL) is the
National Food Workers Union, which represents Coca-Cola employees in Columbia.
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International Business
It was further alleged that the following day the paramilitary squads returned to the
plant and made the workers sign a statement on the Coca-Cola letterhead that they
were resigning from their membership of the union. The workers were given a
deadline and threatened with dire consequences, if they refused to sign. The union
members alleged that since they had no choice, most of them resigned on the spot. It
was further said that some members quit their jobs and fled to other cities fearing for
their lives. Another allegation was that the then president of the union had been
summoned by the plant manager and, in the presence of paramilitary men, asked to
leave the city along with other union leaders.
SINALTRAINAL charged that apart from these eight killings, 48 members had been
forced into hiding and 65 members had received death threats. In 1995, five union
members working in a Coca-Cola plant at the city of Bucaramanga were jailed for six
months on charges of terrorism. They were accused of planting an explosive device in
the factory. However, these charges could not be proved and were later dropped for
lack of evidence. The trade union also alleged that the bottlers were systematically
targeting permanent workers so that they could be replaced by contract workers, who
would do more work for lower wages.
In January 2004, a New York City Fact-Finding Delegation16 went to Colombia to
verify these allegations. The delegation concluded that Coca-Colas involvement in
the violation of human rights and labor rights could not be excluded. The report
estimated that there had been 179 major human rights violations of Coca-Colas
workers including the murders. Union members and their family members had been
kidnapped and tortured; workers had been fired for attending union meetings; many
had been asked to denounce their legal rights.
According to the report, the violence and intimidation had occurred with the
knowledge or under the directions of the companys managers at the bottling plants.
The paramilitary groups had had free access to the plants and had cordial relations
with the plant managers. The report said that Coca-Colas Colombian managers had
admitted that they had never investigated the relationship between the plant managers
of their local bottlers and paramilitary groups in spite of so many complaints and
allegations. The report concluded that this lack of action on Coca-Colas part clearly
showed the companys utter disregard for human rights and the well-being of its labor
personnel in Colombia.
17
In January 2004, New York City Council Member Hiram Monserrate and a delegation of
union workers, student and community activists traveled to Colombia to investigate
allegations against Coca-Cola.
Ajegroup, a privately held company based in Peru, is involved in the beverage business.
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18
19
20
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International Business
Many local residents in the villages surrounding the factory site alleged that over the
years, they had been faced with depleted underground water levels, leading to water
scarcity. In addition, the bottle washing operation involved the use of chemicals and
generation of effluents. These effluents were allegedly released without adequate
treatment, leading to the contamination of groundwater. As a result, it was reported
that the groundwater turned turbid or milky on boiling and was unfit for consumption.
Another by-product of bottle washing was a foul smelling dry sediment sludge waste.
It was said that the waste was initially sold to unsuspecting farmers as a fertilizer.
When there were no takers, Coca-Cola allegedly offered it free of charge.
In 2003, BBC Radio 4s Face the Facts program revealed that a separate study
conducted by it has shown that the sludge contained high levels of carcinogenic heavy
metals like cadmium and lead. It was alleged that when the farmers came to know that
it was toxic and raised protests, the waste was dumped on the wayside and on the
lands at night. In the same year, the Center for Science and Environment (CSE)
published a report which revealed that 12 soft drink brands sold by Coca-Cola and
Pepsi in India had pesticide levels far higher (almost 36 times more) than what was
permitted by the European Economic Commission (EEC) 21.
Some of the main pesticides found were Lindane, 22 DDT,23 Malathion,24 and
Chlorpyriphos25. It was believed that the use of groundwater which had high pesticide
residues and which had not been properly treated by the companies was the main
reason for such high pesticide levels. These residues could cause cancer, damage to
the nervous and reproductive systems, birth defects, and severe disruption of the
immune system in the long run. The same study concluded that no such residues were
found in the same brands that were sold in the US (Refer to Exhibit VII for other
allegations against Coca-Cola).
22
23
24
25
26
27
28
The European Economic Commission is a branch of the governing body of the European
Union (EU) possessing executive and some legislative powers. It is located in Brussels,
Belgium.
Lindane is an insecticide, which has been banned in 52 countries across the world as it is
believed to cause cancer.
DDT (Dichloro-Diphenyl-Trichloroethane) was the first modern pesticide and is the most
well known. It is also believed to cause cancer.
Malathion is an insecticide with relatively low human toxicity. However, malathion breaks
down, especially in indoor environments, into malaoxon, which is 60 times more toxic than
malathion.
Chlorpyriphos is a toxic insecticide that is widely used in pest control.
The United Steel Workers of America (USWA), established in May 22, 1942, has over 1.2
million active and retired workers as members. The union is headquartered at Pittsburgh,
Pennsylvania.
International Labor Rights Fund (ILRF), established in 1986, is an advocacy organization
dedicated to achieving just and humane treatment for workers worldwide.
The Alien Tort Claims Act (ATCA) of 1789 grants jurisdiction to US Federal Courts over
any civil action by an alien for a tort (breach of civil contract) only, committed in violation
of the law of nations or a treaty of the United States.
682
Exhibit VII
Other Allegations against Coca-Cola
In 1998, Coca-Cola was accused of discriminating against its African-American
employees in pay and promotions and a class action race discrimination lawsuit
was filed against it by its African-American employees. In 2000, after an 18month-long litigation, Coca-Cola was ordered by the court to settle the lawsuit for
US$ 192.5 million. Of the total amount, US$ 36 million was allocated to
monitoring the companys employment practices and stopping discrimination. Of
the remaining amount, US$ 113 million would be paid as cash payment and US$
43.5 million would be adjusted in salaries. Also, Coca-Cola had to agree to form an
outside task force that would ensure that the company maintained fair practices in
pay, promotions, and performance evaluation.
In 2002, there were fresh allegations that the companys African-American
employees continued to remain under-represented in top management of the
company. They were also paid less and dismissed more often than white
employees. In its operations in African countries, Coca-Cola was accused of
having only white employees at the managerial levels while Africans were
employed at lower levels as factory workers and in distribution operations. White
employees were predominantly granted medical coverage for HIV/AIDS while the
local workers were ignored. Coca-Cola workers in the Cincinnati plant in the US
also accused the company of creating a hostile, intimidating, offensive, and abusive
workplace environment and they filed a lawsuit against the company.
In June 1999, Coca-Cola products were banned for a brief period in Belgium after
about 100 students in Belgium fell ill after drinking its products. The illness was
attributed to the use of wrong carbon dioxide gas in the products manufactured in
a plant at Antwerp, Belgium. The ban was lifted after Coca-Cola withdrew all its
products from Belgium, Luxembourg, The Netherlands, and other countries where
the products manufactured in Belgium were being sold. During the same period, in
France, the sale of canned Coca-Cola drinks was suspended briefly following fears
that they had been contaminated with a fungicide used to treat a small number of
transportation pallets.
In June 2005, an investigation authorized by the European Union found that CocaCola had entered into deals with shops and bars to exclusively stock Coca-Cola
products and it concluded that these agreements were anti-competitive in nature.
Coca-Cola in Europe had to agree to end the deals. In 1998, Pepsi made a similar
complaint in the US that Coca-Cola was illegally entering into agreements under
which only Coca-Cola brands would be sold at the fountain sales in restaurants and
other businesses. However the complaint was dismissed in US
Matthew Whitley (Whitley), a former employee of Coca-Cola filed lawsuits against
Coca-Cola for improper dismissal from the service. He claimed that he had been
dismissed after he had brought to the notice of Coca-Colas top management certain
improper accounting practices. During the course of the lawsuit, it was revealed that
Tom Moore (Moore), a former head of Coca-Colas Burger King29 account, had been
aware of a fraudulent test used by one of his direct subordinates, John Fisher, to
boost sales of Frozen Coke at Burger Kings outlets. Coca-Cola later apologized to
Burger King and Moore was forced to resign. Among the other allegations in the
29
The Burger King Corporation, a large international chain of fast food restaurants,
predominantly sells hamburgers, french fries, and soft drinks.
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International Business
lawsuit was one which said that Coca-Cola had conspired with its suppliers and
artificially boosted sales. Whitley demanded US$ 44 million to drop the lawsuits
against the company. Finally, Coca-Cola settled these lawsuits by agreeing to pay
US$ 540,000 to Whitley.
Compiled from various sources.
This prompted SINALTRAINAL to issue an international appeal for the boycott of
Coca-Colas products until it got justice in Colombia. On July 22, 2003, a boycott
campaign was started by major trade unions in Colombia and it was supported by the
World Social Forum30, student activists, and other various social activist organizations
around the world. The call for the boycott attracted instant attention from student
groups, trade unions, and other organizations all over the world.
In October 2003, in response to the boycott, the student union of the University of
Dublin, the largest university in Ireland, decided to ban Coca-Colas products from
outlets that were controlled by it. An attempt by Coca-Cola to reverse the ban failed
and the boycott spread to other colleges like Trinity College and the National College
of Art and Design. The Union of Students in Ireland, which represented 250,000
students, passed a resolution to support the ban on Coca-Cola. After this, the
Teachers Union of Ireland, the Irish National Teachers Organization, and a number
of other trade unions and political organizations supported the boycott of Coca-Cola.
The call for the boycott of Coca-Colas products also had a significant impact in
England. In 2004, UNISON,31 the largest trade union in UK, passed a resolution
during its National Delegate Conference to support the boycott. In March 2005,
ECOSY,32 an organization for young European socialists and a member of the
federation of youth wings of all mainstream socialist and social democratic parties in
the European Union, voted to support the boycott following a motion tabled by the
Irish Labor Youth delegation. In addition, a number of other trade unions and
organizations joined the Coca-Cola boycott campaign (Refer to Exhibit VIII for a list
of organizations that boycotted Coca-Cola).
England also witnessed an active student campaign to boycott Coca-Cola. The
National Union of Students which represented 750 unions passed a resolution to
verify the allegations against Coca-Cola in Colombia and India. The National Union
of Students held a 25% stake in the procurement agency that had contracts with CocaCola; therefore the decision was significant in monetary terms for the company. If
these allegations were proved to be true, then Coca-Cola could be possibly banned
from almost every college and university in England.
In May 2005, following agitations from student unions and other organizations, 12
universities in America, including large universities such as the University of
Michigan, New York State University, Rutgers University, and Santa Carla
University, formed a Commission and discussed the issue with Coca-Cola. The
Commission offered to investigate the allegations against Coca-Cola in Colombia.
However, Coca-Cola and the Commission failed to reach an agreement on whether the
30
31
32
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Exhibit VIII
List of Organizations that Boycotted Coca-Cola
Name of the Organization
Membership
1.3 million
1.7 million
0.7 million
0.27 million
1.7 million
1.3 million
0.06 million
Not Available
34
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US$ 10 million to the Torino (Turin) Olympic Committee and was the sponsor of
these Games. In another setback to Coca-Cola, the organizers of the Live 8 concerts 35
pulled out of negotiations with the company over sponsorship deals because of public
opposition. Coca-Cola was also banned from the Make Poverty History March 36 held
at Edinburgh, Scotland, on July 2, 2005, attended approximately by 300,000 people.
The impact of these bans and boycotts on Coca-Cola in terms of sales and profits was
very little when compared to its overall business revenues and profits. However the
impact was far greater in terms of the companys brand image and public relations.
Coca-Cola was one of the most widely recognized brands in the world and had been
consistently ranked by Interbrand37 as the number one brand in the world from 2001 to
2005 (Refer to Exhibit IX for the Interbrand top ten brand rankings from 2001 to
2005).
Exhibit IX
Interbrand Top Ten Brand Rankings from 2001 to 2005
Brand Name
2005
2004
2003
2002
2001
Coca-Cola
Microsoft
IBM
GE
Intel
Nokia
Disney
McDonalds
Toyota
11
12
14
Marlboro
10
10
11
Source: http://bwnt.businessweek.com/brand/2005.
35
36
37
Live 8 was a series of concerts that took place in July 2005, in the G8 nations and South
Africa. They were timed to precede the G8 Conference and Summit that was held in
Perthshire, Scotland from July 6-8, 2005. The objective of these concerts was to pressure
world leaders to write off the debt of the worlds poorest nations, increase and improve aid,
and negotiate for fairer trade rules in the interest of poorer countries.
Make Poverty History March was a program organized by The Make Poverty History
campaign. The campaign is a British and Irish coalition of charities, religious groups, trade
unions, campaigning groups and celebrities committed to increasing awareness and
pressuring governments into taking action to alleviate poverty.
Interbrand is company dedicated to identifying, building, and expressing the right idea for a
brand. The company was established in 1974 at London and is now headquartered in New
York.
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Coca-Colas Response
Coca-Cola opened an exclusive website, www.cokefacts.org, to address these
allegations, especially those related to Colombia and India. In an official statement
featured on the website, Coca-Cola claimed that the allegations against the business
practices in Colombia were false. Two different judicial enquiries in Colombia, one
by a Colombian court and the other by the Colombia Attorney General, had found no
evidence against Coca-Cola or its bottlers linking them to the murders of the union
members. Coca-Cola also quoted a judgment in the lawsuit at Miami, Florida 38,
wherein the judge had dismissed the charges against Coca-Cola, Columbia. A
workplace assessment conducted in Colombia by Cal Safety Compliance
Corporation,39 a respected, independent third party assessor too had found no
instances of anti-union violence or intimidation at the bottling plants.
Coca-Cola and its bottlers conducted an internal investigation and said that they found
no evidence regarding the allegations. The company claimed that on the contrary, the
bottlers enjoyed normal relations with 12 separate unions in Colombia and had
collective bargaining agreements in place with all the unions which covered wages,
benefits, and working conditions. The local bottlers were working along with local
unions and the Colombian government for the workers safety and uplift. They
provided transportation to and from work to any worker who felt unsafe. The bottlers
were providing loans for secure housing of the workers and increasing the security of
union offices. Employees were also given paid cellular phones for emergency use and
were protected from shift and job changes with legal aid.
The Colombian Vice-President, Francisco Santos, who was in charge of improving the
governments human rights record, including investigating cases of violence against
trade union activists, said, This (SINALTRAINAL vs. Coca-Cola) is not a labor
union fight, its a political fight. You cant justify the death of a union leader. (But)
they took a myth and built a campaign out of it. They found a model that works, and
theyve been very successful at (promoting) it. Theyve been able to build this
(martyrdom) image.40 He declared that the government was committed to
investigating and stopping the killings of the labor union leaders. We know there are
problems, were trying to solve them. Its not as easy to get away with killing a labor
leader as it was five years ago. But were (still) not satisfied at all with the results.41
Coca-Cola also rejected the allegations made against it of monopolistic business
practices and anti-competitive trade practices in Mexico. The company said that it
would appeal to a higher authority against the fines imposed by the FCC. Company
spokesman Charlie Sutlive said, As we stated before, we respect the decisions.
However, we have used the appeal processes open to us to present arguments that our
business practices comply with Mexican competition laws, and to demonstrate that
our commercial practices are fair.42
In another official statement, Coca-Cola rebutted the charges against its bottling plant
at Plachimada, Kerala. The company said the plant was not responsible for the
depletion of the underground water table. The company quoted a study conducted in
38
39
40
41
42
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International Business
October 2002 by Dr. R.N. Athvale, emeritus scientist at the National Geophysical
Research Institute (NGRI),43 which concluded that there was no field evidence of
overexploitation of the groundwater reserves in the area surrounding the plant. The
report added that any underground depletion could not be attributed to the water
extraction in the plant area.
Coca-Cola also quoted another report prepared by the Palakkad District
Environmental Protection Council and Guidance Society in June 2002. The report had
concluded that the factory did not cause any environmental damage at any level. A
report prepared by the Kerala State Groundwater Department too had rejected these
allegations and attributed the depletion to a decrease in rainfall over the years. CocaCola claimed that the plant had established an advanced system for rain water
harvesting to replenish the under groundwater table at the plant.
The company also rejected the allegation that its factory had released un-treated
industrial effluents. Coca-Cola stated that the technology used for waste water
treatment at the plant was among the most advanced in the world, equivalent to the
technology used at its bottling plants in America and Europe. Moreover, the
procedures for treatment and discharge of effluents complied with the standards and
norms set by the Kerala State Pollution Control Board (KSPCB).
In response to the allegations that it supplied toxic sludge to farmers as fertilizer,
Coca-Cola said that the dry sediment slurry waste or sludge, a by-product of its
operations, was not harmful. The sludge was made up of organic and inorganic
material that would not contaminate the land. The sludge was used around the world,
including by Coca-Cola, as a soil enhancer. The generation of sludge in all the
companys plants was monitored for composition and was disposed of properly.
Further, the KSPCB had concluded in a detailed study that the concentration of
cadmium and other heavy metals in the sludge were below prescribed limits and
therefore could not be considered hazardous.
Coca-Cola also rejected the charge that its products in India contained high level of
pesticides and insecticides. The company said that testing for pesticides in finished
soft drinks was a complex process and often produced unreliable and unrepeatable
results. The accurate way of carrying out the test was to test each of the separate
ingredients for its soft drinks before they were combined to make a finished soft drink.
Coca-Cola routinely tested its ingredients in this way to ensure that the final soft drink
product remained safe.
Furthermore, the company quoted a study conducted by the Department of Family and
Child Welfare, Central Government of India, after the allegations were made in
August 2003, which had found that the products sold by the company were perfectly
safe. Coca-Cola said that it was a responsible corporate citizen in India and mentioned
that it had won many awards with regard to environment management and community
development in India (Refer to Exhibit X for awards won by Coca-Cola in India).
Atul Singh, Coca-Cola India President and CEO, felt that the environmental and
pesticide allegations against the company in India were still being debated upon
because of Coca-Cola Indias failure to communicate with its consumers, nongovernment organizations (NGOs), and even its own local employees. He said, Its
(communication failure) not just with consumers and NGOs on the pesticide
controversy, even staffers were not getting the message. 44
43
44
NGRI, based in Hyderabad, India, is an institute dedicated to basic and applied research in
the field of geophysics, groundwater exploration, environmental information, etc.
Interview with Atul Singh, We just failed to communicate, Business Standard, February 7,
2006.
688
Exhibit X
Awards Won by Coca-Cola in India
Category
Award
Community
Development
Environment
Health
45
46
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World: Europe Belgium considers lifting Coke ban, http://news.bbc.co.uk, January 16, 1999.
2.
3.
4.
5.
6.
7.
John F. Borowski, For Christmas, will Coca-Cola stop acting like Big Tobacco?
www.educationnews.org, December 22, 2004.
8.
9.
10.
US: Coke to examine overseas labor practices, www.corpwatch.org, June 20, 2005.
11.
12.
13.
Chad Terhune, Isdell could lose Cokes cola crown, www.laborrights.org, December 7, 2005.
14.
Thomas Gary, Coke ban heats up across country, www.nyunews.com, December 08, 2005.
15.
Colin Perkel, Coca Cola hits back as boycott over alleged human-rights abuses gathers
steam, www.cbc.ca, December 27, 2005.
16.
Marla Dickerson, Upstart firm in Peru taking fizz out of cola giants
Coke, Pepsi face unlikely challenger, www.sfgate.com, December 30, 2005.
17.
18.
19.
20.
21.
Colleges boycott Coke over labor concerns, www.taipeitimes.com, January 01, 2006.
22.
23.
24.
Coke should make U-M pay for cola ban, www.detnews.com, January 11, 2006.
25.
Geri Smith, Inside Coca-Colas labor struggles, www.businessweek.com, January 23, 2006.
26.
27.
We just failed to communicate- Interview with Atul Singh, Business Standard, February 7,
2006.
28.
www.brandine.com/images/
690
universities
ban
on
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30.
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31.
www2.coca-cola.com/ourcompany/pdf/business_conduct_guidelines.pdf
32.
www2.coca-cola.com/ourcompany/commitment_quality.html
33.
www2.coca-cola.com/presscenter/viewpointsmichigan_bor.html
34.
www.cokefacts.org
35.
www.educationnews.org
36.
www.killercoke.org
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