The Crier

Whatever Happened to “Killer Coke?”

Last year, the University temporarily banned Coke products from campus. But stifling bureaucracy has since bogged the process down

Jeremy Davidson · Featured · Feb 05, 2007

On this date last year, you couldn’t purchase Coca-Cola products from any campus vending machines. Really. A little more than a year ago, the University suspended its contracts with Coca-Cola. Students had been accusing Coke of violating serious human and labor rights laws in India and Colombia.

But the list of allegations — which includes murdering, kidnapping, and torturing union leaders — were not what prompted the University to suspend its contracts with Coke. Instead, the decision came down to bureaucracy.

Coca-Cola was supposed to allow an independent investigation of its facilities by December 31, 2005. Then, on Dec. 16, the University received a letter from Coke, which said that the company would probably miss that deadline. As a result, the University suspended its contracts with Coca-Cola, until the company could agree to be investigated by an independent auditor.

The allegations of kidnap, murder and torture were not what prompted the University to suspend its contracts with Coke. Instead, the decision to suspend the contracts came down to bureaucracy.

In April 2006, the University resumed purchasing Coke products without considering the allegations. The University decided to resume its contract after the company agreed to an investigation of its facilities in India and Colombia, and named the groups that would conduct the audits.

Despite its good intentions, this bureaucratic investigation process has replaced the original Coke controversies. Both the University and Coke are pre-occupied with the logistics of the investigations, and the campus community is losing sight of what they’re actually supposed to be investigating. The state of the investigations confirms this sad reality.

Although Coke agreed to undergo these investigations more than eight months ago, the University still has no word about what’s happening. In fact, Peggy Norgren, the University’s associate vice president for finance, told me the investigation in Colombia hasn’t even begun.

This is especially problematic when you consider that the original deadline set by the University called for a report of findings from both independent audits by April 30, 2006.

The investigators

As troubling as the current pace of the investigations might be to anyone with a sense of justice, the worst aspect of the investigations is not their lack of speed, but the groups that are leading them. The International Labor Organization, an affiliate of the United Nations, is leading the Colombian investigation, and an NGO called The Energy and Resources Institute is conducting the investigation in India.

At the start of the Coke conflict, Coke flew an A-list of executives to Ann Arbor to speak to the Michigan Student Assembly. One of these executives was Ed Potter. Potter is the company’s director of global labor relations. Potter has also been the U.S. employer representative to the ILO for the last 15 years. I’m no lawyer, but I’m pretty sure even Mr. Potter would have to see this as a conflict of interest. The University is overlooking this fact because of the ILO’s connection with the United Nations. They have no such luxury with TERI.

The “independent investigations” that the University relies on to make their decisions suffer from a frightening lack of independence.

Coca-Cola India Limited is a corporate sponsor that TERI lists openly on their website. They have sponsored at least two of TERI’s investigations within the past two years. When asked about this, Norgren said “TERI has many many corporate sponsors.” Yet they list only 15 on their website, including Pepsi, Shell, and British Petrol.

As if this weren’t bad enough, Deepak S. Parekh is both a member of TERI’s governing council, and a member of the Advisory Board of Coca-Cola India. In order to compensate for these conflicts, the University started consulting with a group called Meridian, which is evaluating TERI’s evaluation of Coke.

The “independent investigations” that the University relies on to make their decisions suffer from a frightening lack of independence.

The University continues to do business with Coca-Cola while they are being investigated for human and labor rights violations. The University should live up to the spirit that forged the Vendor Code of Conduct, and stop hiding behind bureaucracy.

Further background

In early 2004, activists at the University scored a victory by creating the Vendor Code of Conduct, a document which stipulates that all companies doing business with the University must adhere to specific human and labor rights standards. In order to properly enforce the VCC, the University also created a committee called the Dispute Review Board. The DRB is a secondary committee, headed by one faculty member, and composed of two additional faculty members, two students, and two staff members. The DRB can be formed and called upon to investigate and debate any of the University’s contracts, after an initial investigation by the University Purchasing office deems it necessary and proper.

In June 2005, the DRB established a schedule for Coke to follow in order to continue doing business with the University while under investigation. University Executive Vice President and Chief Financial Officer Timothy Slottow said if Coke missed any of the following deadlines, it would be cause for termination or suspension of their contracts.

The guidelines:

September 30, 2005: Coke must agree to an independent third party review
December 31, 2006: Coke must name its independent investigators
March 31, 2006: Auditors must finish investigation
April 30, 2006: Investigation findings must be submitted to University
May 31, 2006: Coke must enact a corrective action plan, if the investigation reveals any findings of misconduct.