The Coke Machine - Michael Blanding [104]
After years of getting nowhere with the countries, Collingsworth and his colleagues eventually gave up, and began to work on companies instead. With the second wave of corporate social responsibility rolling over corporate America in the mid-1990s, companies were eager to present themselves as responsible to the needs of the less fortunate around the world—as long as it didn’t cut into their profits by disadvantaging them against their competitors. Collingsworth and other labor and environmental activists reasoned that if everyone could agree to the same standards, then companies could “do the right thing” without worrying about losing ground to competitors. At the same time, they could earn that much-sought-after boost to their brands by showing sensitivity to the social concerns their consumers cared about.
The idea emerged as a voluntary “code of conduct” that companies would commit to following for their factories and suppliers overseas. The idea especially caught on after university students began criticizing apparel companies such as Nike for using sweatshop labor to create campus athletic gear. In a short time, the issue was national news, shaming everyone from Liz Claiborne to Kathy Lee Gifford. As he would several years later with the soda companies over obesity, Bill Clinton mediated a compromise in 1999. Then president, Clinton brought apparel companies and unions together to agree on a new voluntary set of standards similar to those of Pease’s law a decade before, along with a new nonprofit organization called the Fair Labor Association, to monitor them.
While Coke was not a signer to that agreement, it did participate more broadly in the “code of conduct” movement of which it was a part through other means, including the Sullivan Principles, a set of standards first established by a Pennsylvania minister in the 1970s in an effort to commit companies to racial equality in their doing business with apartheid-era South Africa. After the principles were ineffective in dealing with the issue (and, according to some critics, even counterproductive since they stalled the more powerful divestment campaign), their creator abandoned the principles. But in the midst of the Nike debate, they were reconstituted in 1999 through the United Nations as the brand-new Global Sullivan Principles, which committed companies to respecting freedom of association, paying workers enough to at least make basic needs, and providing a “safe and healthy workplace.”
Around the same time, Coke took the lead in working with the United Nation’s International Labour Organization (ILO) to create a set of principles against the use of child labor overseas and established its own “code of conduct” for bottlers that went further than either of the United Nations codes that it had signed. But these codes had problems. In addition to the fact that they were completely voluntary, Coke also interpreted them to apply only to companies in which it held a majority ownership. And thanks to Ivester’s “49 percent” solution, Coke intentionally held minority owner-ships in nearly all of its “anchor bottlers,” which made up most of the Coca-Cola system overseas, and certainly most of the employees in places like Colombia who might benefit from those worker protections. With the increasing use of contract workers, many of those employees weren’t even employed by companies in which Coke had a minority share.
Similarly, Collingsworth found the Fair Labor Association to be a bust. Whatever good intentions those signing the agreement might have had, the mechanism to enforce it was underfunded and weak. Nike reaped gobs of positive publicity, yet a 2005 report by the company found that workers in up to half of its factories were still forced to work sixty-hour weeks, made less than minimum wage, or were denied use of bathrooms and drinking water. “At the end of the day, it turned out to be a real whitewash,” sighs Collingsworth, who admits to being at a loose end in the late 1990s, no closer to holding corporations accountable for their sins overseas