The Coke Machine - Michael Blanding [135]
Meanwhile, activists at the 40,000-student University of Michigan demanded that the school reconsider Coke’s nine contracts—worth a collective $1.3 million a year—on the grounds that they violated the university’s new vendor “code of conduct.” In a petition to the school’s “dispute review board,” students demanded the company agree to an independent investigation not only in Colombia but in India as well. After a hearing in March 2005, the board ruled in the students’ favor, requiring investigations by the end of the year. “If they don’t step up and participate in corrective actions . . . in a big way,” said the board chair, “it would be cause to terminate the contract.”
New Coke CEO Neville Isdell watched the spread of the Killer Coke campaign on campus with mounting anxiety. Going into the annual shareholder meeting in April 2005, he was already several months into his eighteen-month plan to turn around the company. He’d reversed Coke’s slide in profits, begun to get a handle on the childhood obesity situation, and set in motion Coke’s new environmental thrust in India. And almost as soon as he took control, he hired Ed Potter to defuse the Colombia situation and protect the company from future problems with the overseas labor force.
Ed Potter had represented companies as an international labor lawyer in D.C. for more than two decades, even serving as the employer representative to the United Nations’ International Labour Organization (ILO). Recently, he’d helped Coke put into place a Workplace Rights Policy, which went even further in spelling out the protections for workers. Soon after, Isdell hired him on staff as the company’s new director of global relations. Quickly, he moved to get in front of the “Killer Coke” situation by declaring a new corporate code of conduct on labor and environmental issues. Like previous codes, however, it applied only to direct employees of the Coca-Cola Company and subsidiaries in which Coke owned at least a 50 percent interest. As for bottlers, Coke was “committed to working with and encouraging” them “to uphold the values and practices that our Policy encompasses.”
At the same time, Isdell attempted to take away one of the campaign’s main issues by commissioning an investigation into Colombian working conditions by a supposedly independent group, the Cal Safety Compliance Corporation. Standing up at the 2005 annual meeting, Isdell was able to report the study’s conclusions: that workers were allowed collective bargaining rights free of intimidation.
He continued with a page out of the obesity playbook, simultaneously denying responsibility for the violence in Colombia and positioning the company as part of the solution with the announcement of a new $10 million foundation to aid victims in the country. Likewise for India, he denied the company was responsible for water shortages, at the same time touting the company’s rainwater-harvesting initiative. All in all, it was an impressive presentation, countering the main allegations against the company head-on with a mix of defiance and compassion.
Opening the floor to questions, Isdell never knew what hit him. Immediately, activists jumped up to form two long lines. Rogers was first to speak, of course, dismissing Cal Safety as nothing but the “fox guarding the henhouse,” since the group