ECONOMICS OR ETHICS?

Coca-Cola Comes into Question at Mac Campus and Around the World

By Sarah Cairns
| View Magazine September 2005

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What started out as an idea for a class project on activism at McMaster University has morphed into a campus–wide campaign over the last year to protest McMaster's exclusivity contract with Coca–Cola.

"Nine of us worked on it... we planned a demonstration, and from there it's just grown," remembers Michelle Peek, a co–coordinator at McMaster's Campus Choice. Initially, the students were concerned with the fact that the exclusivity contract prevented freedom of choice on campus. "We looked at what they're teaching us and what universities are for," explains Adam Tracey, also from Campus Choice. "What I think (universities are for) is critical thinking, research and making educated decisions and, obviously, the democratic process. The contract fundamentally is against any of those principles. When you boil it down it's just a money grab.

"Through natural research, because we had to know who we were dealing with, we started uncovering all this information about Coca–Cola. When we were just focusing on the democratic process around an exclusivity contract, we couldn't really afford to not focus on the humanitarian and human rights side of things." The list of accusations against Coke that they came across is lengthy. In Columbia, for example, SinalTrainal union members have been terrorized for over a decade. "(Coke allegedly committed) 179 major human rights violations," relates Tracey. "That number comes from a fact–finding report that was commissioned by a member of the New York City Council. The report also outlines the murder of eight unionists."

The most gruesome of these attacks occurred in 1996, when union leader Isidro Segundo Gil was shot dead by paramilitaries in front of his colleagues inside the Carepa bottling plant. Only days later paramilitaries returned to the plant with prepared resignation letters for each employee. Of the six bottling plants in Columbia, only Carepa is without a union presence.

The Killer Coke Campaign, led by Ray Rogers, believes the murder was a direct order from the corporation and continues to call on them to agree to an independent investigation into Gil's and the other deaths [To clarify, the Campaign to Stop Killer Coke believes that Coke's bottling plant manager was behind the murder of Isidro Gil, as stipulated in the Alien Tort Claims lawsuit, which charges that Coca-Cola's bottlers in Colombia "contracted with or otherwise directed paramilitary security forces that utilized extreme violence and murdered, tortured, unlawfully detained or otherwise silenced trade union leaders." The Coca-Cola Co. has tried to treat these matters as a public-relations issue rather than serious labor and human rights abuses — Campaign Editor].

The Ethic NewsWatch reported that the International Labour Rights Fund and the United Steelworkers, both based in the U.S., has filed a lawsuit against the cola giant, accusing them of using paramilitaries in the above–mentioned crimes.

SinalTrainal has filed a human rights case against Coke under the Aliens Tort Claims Act, and in 2003 a U.S. district court ruled their case could proceed. And the alleged crimes don't stop in Columbia. Turkish and Indonesian workers faced mass firings for their union activity. For those workers who protested the arbitrary termination, police violence ensued. The United Students Against Sweatshops has requested the multinational to reinstate these individuals, provide compensation for lost wages and let "(individuals) be permitted to organize in accordance with international labour laws."

On top of all this, Multination Monitor, an American non–profit organization, included Coke in its list of the top ten worst corporations in 2004, for the "extensive documentation of rampant violence committed against Coke's unionized workforce." Former members of this exclusive list include ExonMobile, Halliburton and Phillip Morris.

"What's honestly really troubling is that they were voted one of the ten worst in 2001 as well, so that's twice in the last five years," Tracey notes.

While it may be difficult for some to identify with human rights abuses in the third world, Coca–Cola doesn't discriminate between first and third. Cases have also come forward in America. Just last month the company settled a discrimination lawsuit in Harahan Louisiana.

"The Labour Department found that Coke's hiring standards were not uniformly applied, resulting in 800 women and minorities being unfairly bypassed for merchandiser positions," BizNewOrleans.com writes. The article continues to say the Office of Federal Contract Compliance Programs proved that Coke is not an equal opportunity employer in three cases. Coke agreed to pay $340,000 in back wages and will hire 42 applicants who were originally passed over. In addition, Coke agreed in 2002 to pay $8.1 million to over 2,000 female employees who had been underpaid.

Then there's the corporation's dubious environmental record.

In India, Coke draws 500,000 litres of water a day from ground water resources in a country already known for its water shortages. The Corporate Accountability International organization states that "the company's bottling operations in Southern India are diverting potable (drinking) water from local residents to the production of Coca–Cola soft drinks."

The Indian Resource Centre believes the processing of soda pop in that country has contaminated soil and groundwater because of toxic cadmium levels found in sludge from Plachimada, one of Coke's largest processing plants in East Asia. That sludge was generously provided by Coca–Cola to Indian farmers in order to fertilize their crops. A BBC report into the matter revealed that "analysis conducted at the University of Exeter revealed that not only was it useless as a fertilizer but it contained a number of toxic metals, including lead. The water in nearby wells also had levels of lead well above those set by the World Health Organization." The company was also charged and found guilty in the bribery of a Kerala Pollution Control board member who had stated that pollution levels from the plant fell within proper standards.

Coke has also been implicated in wrongful termination suits, and been accused of inflating their profit margins, of knowingly selling contaminated beverages, violating contracts, bilking its workers, repackaging and selling nearly expired pop to minority neighbourhoods and, in India, lacing their product with large doses of caffeine without listing it on their labels.

Coca–Cola's 2004 profits amount to $21.96 billion from their various labels, including A&W, Barq's, Dasani, Five Alive, Fresca, Fruitopia, Hi–C, Minute Maid, Nestea, Power-ade, Sprite and Schweppes.

If all this seems horrifying to you, and you're a McMaster student, there is something you can do about it. Campus Choice has received approval for a student referendum in October with the date to be announced shortly.

What the referendum will do with a 'yes' vote is "at least stop our contract in two years as opposed to four," says Peek.

According to the terms of the contract, the exclusivity deal is set to be extended for a further two years — now without Coke having to pay royalties — because McMaster hasn't met sales quotas.

Economically speaking, the Coke revenue figures conflict depending on the source. "The Vice–President of Administration Roger Trull told us that the contract was well in excess of one million dollars yearly," says Tracey. "At the SRA meeting we were informed that McMaster's Student Union gets something like 4.63 per cent, which works out to roughly $50,000. So the total calculation is something like $750,000 a year, which is substantially less but it's still a large number."

Tracey also reveals the percentage becomes even smaller when you look at Mac's financial statements, which show tuition revenues of $107 million. With these numbers, Coke's contribution to Mac is only 0.7 per cent of tuition levels.

This is not an issue exclusive to Mac. The student movement is extremely active in the States, and globally 17 universities have ended their exclusivity contracts with Coke. The number breaks down to two in Canada, 11 in the U.S. and four in Europe.

So McMaster's upcoming student referendum, like those voted on in other institutions, comes down to a choice — economics or ethics? You decide.

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