Inside Coke’s Labor Struggles

BusinessWeek travels to Colombia to speak with labor
leaders, politicians, workers and others who can shed
light on the controversy

To shed more light on the conflicting claims in the
Colombia Coca-Cola (KO ) controversy, BusinessWeek sent
Mexico City-based Latin America Correspondent Geri
Smith to Colombia for a week in late October. She
interviewed more than a dozen people, including labor
unionists, academics, diplomats, economists, current
and former Coke workers, and the country’s
vice-president in an effort to get to the bottom of the
dispute.

She didn’t expect to find a "smoking gun" — many of
the killings of Coke workers took place a decade or
more ago, and Colombia’s justice system is slow to
investigate and prosecute crimes. But as these excerpts
from her interviews indicate, Colombia’s political
violence makes it not only a dangerous place to be a
union organizer but a complicated place to do business.

The national headquarters for SINALTRAINAL, a union
representing Colombian food-industry workers, is in an
old two-story house in Bogot&aacute. Its worn, creaking
stairs reflect the ramshackle condition of the
country’s labor unions. Walls are plastered with photos
of Che Guevara and international Coke boycott posters
in several languages, including one showing the
wrinkled feet of a cadaver with a morgue toe tag
reading "Union Leader" and a headline saying "Killer
Coke can’t hide its crimes in Colombia."

"ENCOURAGING IMPUNITY." Edgar Paez, the union’s
international relations director, says the union tried
for years to get Coke to admit some responsibility for
the killings of at least eight workers employed by its
Colombian bottlers or to pay indemnization to their
families. Only when the union filed a U.S. lawsuit in
2001 and began an international boycott in 2003, he
says, did Coke pay more attention to the problem.

"If, when the first of our colleagues was killed,
Coca-Cola had issued a statement condemning the
paramilitaries or the criminals and demanding that they
stay out of worker-employer relations, we would
definitely say that the company had distanced itself
from what happened," says Paez. "But Coca-Cola doesn’t
say anything! We believe that if they don’t condemn
these killings, a multinational is encouraging
impunity." A Coke spokesman told BusinessWeek that its
bottlers had taken out advertisements in local
newspapers protesting the killings.

Although SINALTRAINAL is making waves with its boycott
in the U.S. and Europe, in Colombia it’s a mere shadow
of its former self. Today, it represents just 2,300
workers nationwide — 314 of them from Coke, with the
rest from other food companies, including Nestle.
That’s down from 5,400 workers a decade ago, because
many companies, like Coke, have restructured, replacing
full-time employees with short-term contractors.

POINTING FINGERS. One reason Coke’s problems in
Colombia seem so intractable is because the dialogue
with SINALTRAINAL is nearly nonexistent. Union leaders
are openly hostile: In an interview, Paez ticked off 27
demands including reparations to victims’ families and
promotion of fruit juices to replace consumption of
carbonated beverages such as Coke.

While Paez places the blame for the deaths squarely on
Coke, he acknowledges that lax law enforcement and a
weak justice system, along with government hostility
toward unions and the country’s four-decade-old civil
war, created the perfect environment for the killings
to occur.

"If the Colombian government had not allowed this
impunity from the beginning," he says, "all these
crimes wouldn’t have happened."

"POLITICAL FIGHT." Colombian Vice-President Francisco
Santos knows something about the country’s violence:
The former editor of El Tiempo newspaper, Santos was
kidnapped in 1990 by drug traffickers and held for
eight months, along with 10 other journalists.

Santos is in charge of improving the government’s
human-rights record, including investigating cases of
violence against unionists. In an interview with
BusinessWeek, Santos didn’t hide his disdain for
SINALTRAINAL’s boycott. "This [SINALTRAINAL vs. Coke]
is not a labor union fight, it’s a political fight. You
can’t justify the death of a union leader. [But] they
took a myth and built a campaign out of it. They found
a model that works, and they’ve been very successful at
[promoting] it. They’ve been able to build this
[martyrdom] image."

He says the government is making a good-faith effort to
investigate killings of labor leaders. "We know there
are problems, we’re trying to solve them," he said.
"It’s not as easy to get away with killing a labor
leader as it was five years ago. But we’re [still] not
satisfied at all with the results."

On Oct. 24-29, an International Labor Organization
mission visited Colombia to assess the current state of
labor rights. While the ILO applauded the government’s
efforts to improve investigation of labor-related
crimes, it noted that "impunity prevails." Fewer than
1% of cases are ever resolved.

MAKING HEADLINES. Luis Alejandro Pedraza is the
representative in Bogota of the Geneva-based
International Union of Foodworkers (IUF). After
violence forced SINALTRAINAL to abandon Coke’s Carepa
plant a decade ago, Pedraza helped organize a new union
there. Some labor observers dismiss the IUF as
pro-company, but many unionists in Colombia believe
veteran unionist Pedraza is a straight shooter. Coke
workers are represented by around a half-dozen unions
nationwide.

At least 30 union leaders are killed in Colombia each
year, making it the most violent country for union
organizers. SINALTRAINAL is not the hardest-hit group.
Many more union leaders in the teaching, farming, and
health professions have fallen prey to violence. Yet,
SINALTRAINAL has been more successful drawing attention
to its plight. "The union sees multinationals as key
vehicles for airing their point of view to the world,"
says Pedraza. "They want to engage Coke in a permanent
debate because it gives them notoriety and
recognition."

Pedraza says the IUF refused to join the boycott
"because SINALTRAINAL did not present us with proof
that Coke had ordered the killing of unionists." Of
course, he acknowledges, "in this kind of thing there
is never any written evidence" pointing to who may have
ordered the killings.

He believes, however, that Coke could do more to lay
the conflict to rest. "We have always maintained that
Coke has a political responsibility...to seek peaceful
labor relations and that it should sign an
international agreement guaranteeing labor rights. Coke
hasn’t said yes yet, but it has been open to dialogue,"
he says. A model for that would be an agreement that
the IUF signed with Chiquita Brands in 2002 to
guarantee Colombian banana workers’ rights, he says.
After Chiquita signed that agreement, labor conflicts
diminished significantly.

LABOR WEAKENING. Hector Fajardo, a former top leader
of Colombia’s main labor confederation, the CUT, now is
an academic and adviser to a Spanish labor
confederation. Colombia, he says, "has always had a
profound anti-union culture." Massacres of striking
banana and cement workers in 1928 and 1965 set the tone
decades ago. Most killings take place during strikes or
when a union has just presented a list of demands in
the collective bargaining process.

In the 1990s, labor laws were reformed to allow
companies to replace full-time contract workers with
part-time laborers or subcontractors, which further
weakened the labor union movement. Today, only 4.8% of
Colombia’s 17 million workers belong to unions — down
from 9% in the 1960s.

Even though he thinks SINALTRAINAL should have pursued
constructive dialogue rather than a boycott, he
believes Coke hasn’t handled the issue well either.
"International campaigns are the Achilles’ heel of the
multinationals," he says. "I don’t think that Coca-Cola
has been able to prove that it was not responsible."

DANGEROUS CLIMATE. Carlos Rodriguez, CUT’s current
president, is one of eight CUT officials who has
government protection because of death threats. Yet he
isn’t satisfied. He says the government has failed to
carry out serious, thorough investigations and rarely
prosecutes anyone for the killings.

Unionists are caught in the middle of a country in
extreme conflict. "If you’re a union activist in an
area where the paramilitaries are in charge, they say
you’re a guerrilla. If you’re a union activist in an
area controlled by the guerrillas, they’ll say you’re a
paramilitary. And the army says you’re one of the two,
and goes after you," he says.

Still, CUT does not back the Coke boycott. "We respect
what our colleagues think, but we don’t share their
views," says Rodriguez. "In today’s globalized world we
can’t pretend that a boycott against multinationals is
the solution."

He does, however, think labor unions must join together
to ensure that multinationals follow worldwide codes of
behavior. "A multinational should behave the same in a
country where it invests as it does in its home
country."

LIVING IN FEAR. Luis Hernan Manco, 59, was president
of the local SINALTRAINAL union in Carepa when union
board member Isidro Segundo Gil was gunned down on the
premises of the Coke bottling facility there in 1996.
Manco was working just a few yards away when the
killing occurred. "When I heard the gunshot, I turned
and saw him fall," he recalls. "Two men standing over
him shot Gil several more times, and then they very
calmly got on their motorcycle and rode off."

After paramilitaries warned him that he would be killed
if he stayed in town, Manco fled to Bogota, where he
has lived in hiding for nearly a decade, leaving behind
his three children with his ex-wife. Working
sporadically as a night watchman, he had to borrow bus
fare to come to an interview at SINALTRAINAL’s
headquarters.

Although Coke says its bottlers have compensated
workers who were forced to flee their jobs, Manco says
he never received any severance pay. The company, he
says, paid for his bus ticket to Bogota but refused any
other compensation, arguing that he "abandoned" his
job, where he earned about $160 a month. "God willing,
I am still hoping the company will pay what they owe
me," he says. He’s still afraid to return to Carepa.
"The people who killed Gil are still there."

http://www.businessweek.com/magazin...