By Margaret Webb Pressler | Washington Post | April 22, 2004
Last year, Coca-Cola Co. seemed to have put to rest allegations of complicity in human rights violations in Colombia when a federal judge threw out a lawsuit filed by an international labor group. But at yesterday's shareholders meeting, it became evident that the issue remains a problem for the soft-drink giant.
As Coca-Cola announced a quarter of record earnings, protesters marched outside the Hotel du Pont in Wilmington, Del., and disrupted the proceedings inside with charges about Colombia aimed at Coca-Cola chief executive Douglas N. Daft. One protester was forcibly removed.
Last month, the company sent two executives to Carleton College in Minnesota in an unsuccessful effort to head off a student vote to terminate its contracts on campus. That vote was part of the same campaign by activists who argue that the company does not do enough to protect its bottling-plant workers in Colombia.
The issue has also been a point of frustration for Coca-Cola's recently resigned general counsel, Deval L. Patrick, according to sources close to the situation, since he promised publicly last fall to mount an independent investigation of the charges. After early encouragement about the idea internally, one of the sources said, Daft recently changed his mind and turned down Patrick's idea. That frustration played a role in Patrick's decision this month to resign, that source said.
Asked whether the canceled investigation was a factor in the resignation, Coca-Cola spokeswoman Sonya Soutus said in a written statement: "Many factors, predominantly personal, played a role in Deval's decision. . . . Based on our own internal investigation — as well as those by the Colombian courts and the Colombian attorney general — we are convinced the charges are unfounded. The Coca-Cola Company has been exonerated by the Colombian courts and dismissed from the federal case in Miami. We concluded this delegation would be duplicative and unnecessary."
She attributed the statement to both Patrick and the company.
The charges about the company's Colombia operations were raised in 2001 when the International Labor Rights Fund sued in U.S. District Court in Miami on behalf of a murdered worker at Coca-Cola's Panamco bottling plant. The suit claimed the Coca-Cola did nothing to stop paramilitary groups' sometimes violent intimidation, and even murder, of Coca-Cola's bottling workers who were interested in unionizing.
The judge in the case ruled that Coca-Cola did not have sufficient control over its bottling plants to be liable in the case, and dismissed the company as a defendant. The labor rights group filed an amended complaint on Monday, again naming Coca-Cola, since it bought the Colombia bottling plant last May.
But it was yesterday that the issue really came into public view.
The annual meeting started with the typical introductory remarks from Daft, including the news that Coca-Cola made $1.13 billion, or 46 cents a share, in first quarter — the first time the company has ever reported a quarterly profit of more than $1 billion.
When he opened the floor to shareholders, anti-Coca-Cola activist Ray Rogers was first to the microphone and he raised the situation in Colombia.
"All the evidence shows the Coca-Cola system is rife with immorality, corruption and complicity in gross human rights violations," he said, according to the company's webcast of the meeting. He accused Daft of lying and continued for several minutes, even after being asked to step aside.
Then, his microphone was shut off and hotel security personnel removed him from the room, although Coca-Cola executives were heard asking security to "stand down."
After Rogers was hauled off, Daft turned to another executive on the dais and muttered, "We shouldn't have done that." But it wasn't over. Other activists later took the floor on the same issue. Students from New York University and Rutgers University made claims similar to Rogers's, if more quietly.
The activists and students called for an independent investigation of the bottling plants' alleged involvement in encouraging violence against its unionized workers. Daft repeatedly told them that "objective" investigations of the issue have already taken place and that the "facts" the activists were citing "are not true."
The debate over sending an independent delegation to Colombia has been swirling at Coca-Cola's Atlanta headquarters since Patrick made his pledge last October after being challenged at an awards dinner in Washington.
Patrick, who was head of the Justice Department's civil rights division in the Clinton administration, was being honored by Equal Justice Works, a nonprofit group that encourages law students to pursue public service legal work. Andrew Hansen, a speaker at the dinner, made a reference to Coca-Cola's alleged conduct in Colombia just before Patrick spoke.
In his speech, Patrick responded by offering to send a contingent of independent observers to inspect plants in Colombia "so we could see that those workers were in fact organized and were able to be organized," Hansen recalled in a recent interview. For several months, Hansen said, he negotiated with Patrick, as did David Stern, president of Equal Justice Works. As recently as February, the trip was being planned for a broad-based group of activists and investigators, both said.
But in early March, despite having first supported Patrick's efforts, Daft told Patrick that the trip could not happen, according to a person familiar with the situation.
That decision left Patrick "disappointed," according to the source, since he saw the trip as a chance to clear Coca-Cola's name once and for all. He viewed the reversal as the kind of "internal politics" that he had grown tired of, the source said. Those experiences, along with the long commute between his job in Atlanta and his family in Boston, led to Patrick's decision to leave the company. Deval is one of several executives to leave the company, or announce plans to leave, in recent months — including Daft, who said in February that he will retire at the end of this year.
Coca-Cola still faces student campaigns against the company. Last year, two small liberal arts colleges, Bard College in New York and Lake Forest College near Chicago, voted to end their contracts with Coca-Cola when they expire, under pressure from students. Last month, the student government at Carleton voted 12 to 8 to oust Coca-Cola after a four-hour debate between activists and Coca-Cola executives.
"They started off by talking about how Coke is a responsible company . . . then they downplayed some of the violence against Coca-Cola workers," recalled Mike Schorsch, a senior at Carleton who organized against Coca-Cola.
Now, the anti-Coca-Cola movement is spreading to larger schools, such as Rutgers, the University of Massachusetts and NYU, where students are agitating to get Coke out of cafeterias and vending machines.
Coca-Cola spokeswoman Soutus said the company will continue to try to convince students that they have the facts wrong.
"These allegations are outrageous and obviously it's disturbing to us that anyone would believe them," she said.
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