The Coke Machine - Michael Blanding [142]
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,