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Coke's Crimes in China

It's clear that Coca-Cola is bringing its destructive policies and products into the huge Chinese market as they relate to labor, human rights, health and environmental concerns.

During summer 2008, the Coke Concerned Student Group (CCSG) investigated five bottling plants of Coca-Cola in various cities, an investigative report was issued in December 2008, titled 'Coca Cola: The world's most valuable brand is evading its social and legal responsibility'. The Chinese press reported in December 2008 that Coke employees are "involved in the most dangerous, intense and tiresome labor, work the longest hours, but receive the lowest wages and face arrears and even cutbacks in their pay." One investigator claimed that Coke violated Chinese labor laws and reported that workers "often worked 12 hours per day for an entire month without a single day off."

Violence in Coca-Cola's Labor Subtracting System

SACOM [Students & Scholars Against Corporate Misbehavior] has been supporting the CCSG in their campaign to end the abusive use of dispatch labour or labour sub-contracting system. In December 2008 and May 2009, two investigative reports were published by the CCSG highlighted the labour violations in the Coca-Cola's bottling plants, including:

  • excessive use of dispatch labour: Coca-Cola reiterates that the beverages industry has a high seasonality; but in some of the plants, like Hangzhou bottling plant, most of the positions are filled by dispatch labour throughout the year;
  • inadequate protective equipment: No protective equipment, like gloves or earplugs, is provided to workers. At the same time, there is absence of pre-post training for new workers;
  • unequal treatment: CCSG points out that dispatch workers get a lower wage with longer working hours compared to the regular workers;
  • overtime: Dispatched labour always have overtime work up to 150 hours in Swire Guangdong Coca-Cola Limited (Huizhou) during summer;
  • deceptions in contract: Workers are asked to sign a blank contract. On the contract only the expiration date has already been filled in; and
  • denial of the right to unionize: Even though Coca-Cola claimed that dispatch labour can join the trade union in the factory, none of the dispatch workers displayed any knowledge about their rights to form or join labor unions.

    Disappointedly, Coca-Cola did not ever respond to the criticisms of the CCSG. Furthermore, a violent incident broke out in August 2009 when one of the student workers of Coca-Cola's bottling plant in Hangzhou, surnamed Liang or Xiao Liang, demanded wages owed by the labour dispatch company. SACOM called for a public response from Coca-Cola and issued a press release titled "Violence in Coca-Cola's Labor Subcontracting System in China." It was reported:

"On the 12th of August 2009, a labor dispatch company hired by Coca-Cola's designated Hangzhou-based bottling plant was discovered to have threatened two university student-workers who asked for their own and their two other fellow workers' backpay upon their resignation. Xiao Liang, 24, was beaten up by two managers at the labor dispatch company's office, resulting in serious wounds over his left eye, left hand, and right ear. Xiao Xu sent Xiao Liang to the Dongfang Hospital immediately after police arrived on the scene. Xiao Liang was later diagnosed with a ruptured eardrum, resulting in compromised hearing capacity...

Xiao Liang, 24, was beaten up by two managers at the labor dispatch company's office, resulting in serious wounds over his left eye, left hand, and right ear.

"Despite their declared commitment to corporate responsibility, Coca-Cola, the world's largest beverage company, has never approached the student-workers to explain wage arrears and use of violence.

"Regardless of whether it is the high or low production season, a significant body of subcontracted or dispatched workers — who face frequent wage arrears and even cutbacks on their pay — exists in Coca-Cola's Chinese factories."

"Dispatched workers are employed by agencies, which send them to fill 'temporary, supporting or replaceable positions,' according to Article 66 of China's Labor Contract Law.

"SACOM's DEMANDS

"To Coca-Cola, the world's largest beverage company

"SACOM calls on Coca-Cola to take full responsibility for its abusive use of the 'flexible' labor system in its supply chains. We demand that:

  • "(1) Coca-Cola apologizes publicly to all four affected students, who have safeguarded their legitimate interests in accordance with the local law but were insulted and assaulted.
  • "(2) Coca-Cola pays for Xiao Liang the injured student-worker's medical fees.
  • "(3) Coca-Cola Hangzhou bottling plant signs contracts directly with all laborers dispatched from Zhi Qiang and many other agencies.
  • "(4) Coca-Cola converts all its subcontracted workers into full time employees within a reasonable time frame.
  • "(5) Coca-Cola invites the Coke Student Concerned Group, SACOM, and credible not-for-profit labor organizations to organize in-factory labor rights training program for all workers who produce goods for Coca-Cola in China."

On 17 December 2009, under pressure at home and abroad, Coca-Cola Greater China held the first formal meeting with CCSG and SACOM in Beijing. Both labour concerned groups seek to build sincere, constructive, and sustained dialogues with the businesses to improve labor standards.

In the meeting, CCSG and SACOM offered rights-compatible solutions to the identified labor problems. Regrettably, Coca-Cola denied the use of dispatch workers was incompatible with local laws and refused to rectify the problem. Both CCSG and SACOM decided not to enter into dialogue with Coca-Cola unless the Company reviews the employment policy of dispatch labour.SACOM Contact:

Debby Chan
Project Officer
Phone: +852-2392 5464
Email: debby@sacom.hk
Students & Scholars Against Corporate Misbehavior (SACOM)
Website: www.sacom.hk

Download and read SACOM"s press release: http://www.killercoke.org/downloads/china_coke_abuse_sacom_letter.pdf

Related Resources

Investigative Report

Press Release or Articles

Articles from other NGOs

News

Outsourcing: Turning Employees into Nonemployees

The China Labour Bulletin reported in an article entitled: "Chinese Workers in Coca-Cola Dispute":

" 'The new Labor Contract Law took effect on January 1, 2008,' she said. 'Our contracts expired on April 30. On April 3 at 6 p.m. they called us into a meeting all of a sudden with no notice, and told us that they were outsourcing our jobs and turning us over to a third party.'

" 'We would no longer be Coca-Cola employees,' she said...

"She said the workers had once received a basic salary of 2,500 yuan (U.S. $365) a month, but that their incomes had been cut in half after the transfer to the labor contractors Rongcheng. The workers had complained several times to Rongcheng."
http://www.china-labour.org.hk/en/node/100306

Other Coke abuses in China

BBC News (5/21/07) reported that Coca-Cola has been accused of benefiting from prison labor in China.

In August 2009 it was reported that Coca-Cola has been placed on a list of the top twelve factories causing water pollution in Beijing for excessive water use.

A major Coca Cola bottling plant in China stands accused of discrimination after a prospective employee was allegedly refused a clerical position after testing positive for Hepatitis B...

China Business Principles For Rights Of Workers In China

Following is B Wardlaw's proxy resolution on 'China Business Principles for Rights of Workers in China'presented at the April 21, 2004 Coca-Cola annual meeting:

B Wardlaw is a large Coca-Cola shareholder who has for years confronted the company on issues of human rights.

WHEREAS: our company's business practices in China respect human and labor rights of workers. The eleven principles below were designed to commit a company to a widely accepted and thorough set of human and labor rights standards for China. They were defined by the International Labor Organization and the United Nations Covenants on Economic, Social & Cultural Rights, and Civil & Political Rights. They have been signed by the Chinese government and China's national laws.

  • (1) No goods or products produced within our company's facilities or those of suppliers shall be manufactured by bonded labor, forced labor, within prison camps or as part of reform-through-labor or reeducation-through-labor programs.
  • (2) Our facilities and suppliers shall adhere to wages that meet workers' basic needs, fair and decent working hours, and at a minimum, to the wage and hour guidelines provided by China's national labor laws.
  • (3) Our facilities and suppliers shall prohibit the use of corporal punishment, any physical, sexual or verbal abuse or harassment of workers.
  • (4) Our facilities and suppliers shall use production methods that do not negatively affect the worker's occupational safety and health.
  • (5) Our facilities and suppliers shall not call on police or military to enter their premises to prevent workers from exercising their rights.
  • (6) We shall undertake to promote the following freedoms among our employees and the employees of our suppliers: freedom of association and assembly, including the rights to form unions and bargain collectively; freedom of expression, and freedom from arbitrary arrest or detention.
  • (7) Company employees and those of our suppliers shall not face discrimination in hiring, remuneration or promotion based on age, gender, marital status, pregnancy, ethnicity, region of origin, labor, political or religious activity, or on involvement in demonstrations, past records of arrests or internal exile for peaceful protest, or membership in organizations committed to non-violent social or political change.
  • (8) Our facilities and suppliers shall use environmentally responsible methods of production that have minimum adverse impact on land, air and water quality.
  • (9) Our facilities and suppliers shall prohibit child labor, at a minimum comply with guidelines on minimum age for employment within China's national labor laws.
  • (10) We will not sell or provide products or technology in China that can be used to commit human rights violations or labor rights abuse.
  • (11) We will issue annual statements to the China Working Group detailing our efforts to uphold these principles and to promote these basic freedoms.

RESOLVED: Stockholders request the Board of Directors to make all possible lawful efforts to implement and/or increase activity on each of the principles named above in the People's Republic of China.

SUPPORTING STATEMENT: As U.S. companies import more goods, consumer and shareholder concern is growing about working conditions in China that fall below basic standards of fair and humane treatment. We hope that our company can prove to be a leader in its industry and embrace these principles.

B Wardlaw's statement on the floor of the meeting:

"As far as my proposal on China business principles which I am bringing to you for the third time, I introduced this proposal because I, along with many other socially conscious shareholders, are concerned about Coke, its reputation and its share price. As I've said here the last two years, we seem to be heading toward possible public relations calamity in China. So just looking at it from the viewpoint of the company, it makes sense for us to spend more time thinking about, before we go in, we're spending over a $1 billion, what over the last 20 years in China, developing products there.

"The Olympics are coming to China in 2008 in Beijing. This is a moment where Coca-Cola is going to be highlighted because of our close involvement with the Olympics and the, as someone has said, as a recognized product in the world. I think what is happening, is that we are still not, as a company, paying enough attention to what could happen in China. Every human rights abuse possible has been committed in China. We are doing business there. There are companies that are getting together to talk about this with human rights leaders. Reebok, Target, these companies are gathering to talk on a regular basis about how corporations can do business in a place like China. I am simply suggesting that we join those people in their discussions, which for some reason we have not yet been willing to do.

"I would like to just conclude by saying that when the history of the 21st century is written, Coca-Cola can either be a footnote to that history as a company that made a lot of money and was very successful, or it can be a major story. And I think we can become that major story simply by turning more of our attention to the kind of things that we have the opportunity to do. It's what I continue to ask this company to do and other corporations to do, but Coke is uniquely placed to do the kinds of things that everyone in the world would appreciate. Thank you."

Mr. Wardlaw's resolution was opposed, as usual, by the company's board of directors and was voted down.

Coke's Crimes in China Addressed at Annual Meetings

Campaign to Stop Killer Coke Director Ray Rogers addressing the Board at the 2010 Coca-Cola Annual Shareholders Meeting

At the 2010 annual meeting, Campaign to Stop Killer Coke Director Ray Rogers addressed Coke's human rights abuses in China:

"The Coca-Cola System, including The Coca-Cola Co., many of its bottlers and subsidiaries like The Coca-Cola Export Corp., shamelessly operate like a criminal syndicate with impunity. Human rights abuses uncovered in China, Colombia, El Salvador, Guatemala, India, Mexico and elsewhere can not be dealt with simply as public relations problems. They are real and must be addressed adequately."

And at the Coca-Cola annual meeting in April 2009, Rogers addressed Coke's human rights abuses in China with the following statement:

"My name is Ray Rogers and I and thousands of Coca-Cola workers are not happy. Before I cast my vote for election of directors, I need to inquire what role members of the board and especially Donald McHenry, chair of the Public Issues Committee, and others on the committee, including Cathleen Black, Alexis Herman, Donald Keough, Sam Nunn and Jacob Wallenberg plan to do to thoroughly investigate and monitor, through credible independent groups, allegations of dreadful labor and human rights abuses related to Coca-Cola's operations in China, Colombia and elsewhere.

"I want to know if the board will continue to turn a blind eye to the kinds of recurring, unethical conduct that has earned executives of this company and many of its bottlers, the reputation of being among the world's worst liars, scam artists and white collar criminals.

"In December, Coca-Cola came under fire in China based on undercover investigations by a group of university students working at several Coke plants. The press reported findings that workers at these plants are "involved in the most dangerous, intense and tiresome labor, work the longest hours, but receive the lowest wages and face arrears and even cutbacks in their pay." One investigator claimed that Coke violated Chinese labor laws and reported that workers "often worked 12 hours per day for an entire month without a single day off."

"In 2007 the British Broadcasting Corporations reported that Coca-Cola has been accused of benefiting from prison labor in China..."


Campaign group 'disappointed' with Coca Cola

By John Sexton
China.org.cn, December 30, 2010
http://www.china.org.cn/china/2010-12/30/content_21648456.htm

"A report by a student group campaigning to improve working conditions at Coca Cola bottling plants in China says there has been "disappointing" progress in fulfilling a pledge to convert temporary staff to full-time employee status.

"The report from the Coke Concerned Student Group (CCSG) follows earlier highly critical reports that claimed Coca Cola's systematic use of contract staff was a legal device to avoid providing benefits full-time employees are entitled to. The reports also said that long-term use of contract staff is illegal under China's labor law...

"CCSG's latest report, published on Christmas Day [12/25/10], presents the results of a recent investigation of conditions at Swire bottling plants in Guangzhou, Huizhou and Hangzhou. It concludes that, while some contract workers have been given full-time status, a much larger number were simply dismissed without adequate compensation. In March, the report says, 100 contract workers, two-thirds of the total, were dismissed from Swire's Guangzhou plant. And at their Hangzhou plant only a small number of skilled workers were given full-time status..."

Coca-Cola Emphatically Denies Human Rights Violations in Its China Businesses

By Thomas Wilkins
ChinaStakes, April 25, 2009
http://www.chinastakes.com/2009/4/coca-cola-emphatically-denies-human-rights-violations-in-its-china-businesses.html
&
http://www.organicconsumers.org/articles/article_17654.cfm

... A shareholder proposal from a California investment firm cited publications and reports claiming Coca-Cola used prison labor in China and the company, its bottlers and suppliers "have been associated with human rights controversies."

... The heated exchange between Ray Rogers, director of Corporate Campaign Inc was a fire storm as shareholders considered whether to vote yes or no on a proposal by a shareholder connected with Harrington Investments of Napa, California.

... The California advocacy firm has campaigned since the early 2000's to ensure that the rights of Chinese workers and citizens be protected by asking companies to sign the China Business Principles. This is a code of conduct written by Amnesty International, the International Labor Rights Fund and Global exchange.

... "Coke's has policies which are meaningless. We want to make it a fiduciary responsibility that they consider human rights. The fiduciary issue is important to protect human rights."

He cited one very large socially conscious institutional investor which divested itself from its Coca-Cola stock.

Chinese student workers in Coca-cola dispute

From China Labour Net, August 26, 2009
http://www.worldlabour.org/eng/node/239

"A university student who got a temporary job at Coca-Cola this summer through an employment agency is taking the soft-drink bottler to court, after he was beaten by staff members at the agency.

"He is alleging that Coca-Cola showed poor management by hiring agencies that exploit workers.

"He said he was beaten by staffers at the agency after he demanded pay for his work at Coca-Cola...

"The students claimed that Coca-Cola turns a blind eye to illegal actions by their employment agencies and bottlers...

" 'A manager at the agency asked us to sign a contract stating that we will be paid the minimum wage of Hangzhou, which is 5.7 yuan (83 US cents) an hour,' Liang told China Daily yesterday. 'But at the same time, he told us that we will only be paid 55 yuan for a day and we have to work 12 hours a day. We wonder how much Coca-Cola pays for the agency... ' "

" 'Unlike the factory's full-time staff, we were given no protective gear such as gloves and ear plugs. We are also paid far less than them,' Liang said. 'Coca-Cola was seriously infringing the rights of agency workers by its poor management over the employment agencies and their factories.' "

Beijing Slams Pepsi and Coke As "Dirty" For Using Too Much Water

By Alex Pasternack, August, 24, 2009
http://www.treehugger.com/files/2009/08/china-targets-coca-cola-pepsi-for-excessive-water-use.php

"This week Coca Cola and Pepsi — two of the biggest multinational companies in China, and self-professed leaders in corporate social responsibility — found themselves teamed up: on a list of the top 12 factories causing water pollution in Beijing. But it turns out their inclusion on the list is not the result of pollution...Rather, it has to do with their high consumption of water...

"But Beijing's list points up the gulf between image and reality for both companies — and the dire environmental situation of some of the places which they operate."

Coca-Cola, Darfur, Tibet & the China Olympics

http://www.killercoke.org/downloads/coke.darfur.tibet.olympics.pdf

In New York, legislators have introduced bills requiring the state comptroller "to pull pension money out of companies like Coca-Cola..." (New York Post 7/24/07), which do business in Sudan. And Texas Republican Governor Rick Perry "signed a bill... directing the Teachers Retirement System and Employees Retirement System to get rid of holdings in companies doing business in Sudan because of atrocities in Darfur" (New York Times, 7/19/07).

Press Release
"Violence in Coca-Cola's Labor Subcontracting System in China,"
Students & Scholars Against Corporate Misbehavior

31 August 2009
www.killercoke.org/downloads/china_coke_abuse_sacom_letter.pdf

On the 12th of August 2009, a labor dispatch company hired by Coca-Cola's designated Hangzhoubased bottling plant was discovered to have threatened two university student-workers who asked for their own and their two other fellow workers' backpay upon their resignation. Xiao Liang, 24, was beaten up by two managers at the labor dispatch company's office, resulting in serious wounds over his left eye, left hand, and right ear. Xiao Xu sent Xiao Liang to the Dongfang Hospital immediately after police arrived on the scene. Xiao Liang was later diagnosed with a ruptured eardrum, resulting in compromised hearing capacity.

China Daily, "Coca-Cola exploits workers, students say,"

By Cui Jia, August 20, 2009
http://www.chinadaily.com.cn/bizchina/2009-08/20/content_8591793.htm

A university student who got a temporary job at Coca-Cola this summer through an employment agency is taking the soft-drink bottler to court, after he was beaten by staff members at the agency.

BBC News, "Coke says no China jail labour,"

By Paul Danahar, May 21, 2007
http://news.bbc.co.uk/2/hi/asia-pacific/6675343.stm

Coca Cola says it found "no evidence" to support a claim by a UK businessman who alleged the use of prison labour by a Chinese supplier of its merchandise.

China Labour Bulletin

Coca Cola plant accused of Hepatitis B discrimination
http://www.china-labour.org.hk/en/node/47677

A major Coca Cola bottling plant in China stands accused of discrimination after a prospective employee was allegedly refused a clerical position after testing positive for Hepatitis B...

In February 2007, the 27 year old woman applied for a job as a "sales operations clerk" (xiaoshou yunzuo wenyuan) at Hangzhou Zhongcui Foodstuffs. She took three written examinations on three separate days and passed all three. A manager in the Hangzhou Zhongcui personnel department informed her that if she passed a routine medical check at the Hangzhou No.3 People's Hospital, they could go ahead and sign an employment contract. The results of the medical revealed that she was a Hepatitis B carrier but that her liver function was normal. On 26 February, she took the results of her medical check to the personnel department at Hangzhou Zhongcui and was told point blank that it was "company policy" not to hire Hepatitis B carriers. She stressed that her job had nothing whatsoever to do with food production and as such she posed no risk but the company still refused to employ her.