Univ. of Michigan Drops Coca-Cola Contract

Students at the University of Michigan looking for a quick caffeine-fix may no longer count on always having a Coca-Cola after the university suspended its purchases of Coke products on Jan. 1, 2006.

Allegations that Coca-Cola has been complicit in human rights and environmental abuses in Colombia and India, respectively, prompted the decision, which will soon leave students without Coca-Cola in campus vending machines and cafeterias. An investigation by an arm of the university had earlier determined that the soft drink company may have violated various standards that Michigan expects vendors to uphold.

Michigan joins at least nine other universities, including New York University, that have also ended their contracts with Coca-Cola over the accusations, according to the Associated Press.

A campus group called the Students Organizing for Labor and Economic Equality (SOLE) first brought a complaint on Nov. 30, 2004, alleging that Coca-Cola had violated the university’s “Vendor Code of Conduct,” according to a statement posted on the Michigan website.

The code of conduct, adopted in the spring of 2004, outlines the “primary standards,” including nondiscrimination and freedom of collective bargaining, as well as “preferential standards”—such as a living wage and environmental protection—that the university demands its contracted vendors to uphold.

The student coalition accused the soft drink company of polluting groundwater in India with pesticides and promoting unsafe working conditions and interfering with labor unions in Colombia, the statement said. Coca-Cola has repeatedly denied the allegations.

The complaints were forwarded to the university’s Dispute Review Board (DRB), which investigates possible breaches of the code of conduct. In June 2005, the DRB determined that Coca-Cola may have violated the code’s standards with regard to pesticides in India and labor issues in Colombia, according to the statement.

An assistant for Michigan spokeswoman Julie Peterson told The Crimson that Peterson would have no further comment beyond the statements on the university website.

The DRB established a series of deadlines for Coca-Cola to accept an independent, third-party audit of the conditions in Colombia, according to the university’s statement.

The soft drink giant agreed to the assessment in principle, but in a letter dated Dec. 16, 2005, Coca-Cola said that a legal impasse regarding a pending lawsuit against its Colombian bottling partners would prevent the company from selecting an auditor by the board’s Dec. 31 deadline.

Coca-Cola spokeswoman Kari Bjorhus said the “sticking point” came when the plaintiffs in the lawsuit refused to grant an “inadmissibility agreement,” which would have prevented them from using any materials that surfaced in an audit that could not be obtained through other channels.

Based on the company’s inability to meet the board’s deadline, the university decided not to renew or extend contracts with Coca-Cola that expired on Jan. 1, 2006. In the 2005 fiscal year, Michigan spent about $1.4 million on Coke products, according to the university’s statement.

However, both the company and the university remain upbeat about the prospects of initiating the investigation, and working together in the future.

“We believe Coca-Cola is sincere in its desire to ensure fair labor practices and a safe working environment in Colombia and sustainable environmental practices in India,” Timothy P. Slottow, Michigan’s executive vice-president and chief financial officer, and Peggy Norgren, the associate vice president for finance, wrote in a letter to Coca-Cola dated Dec. 29, 2005.

“We plan to resume University procurement of Coca-Cola products if the details of conducting an independent, third-party investigation in Colombia can be resolved to our mutual satisfaction, and if we can agree on the process for a third-party review of environmental concerns in India,” they wrote.

Bjorhus said, “We are certainly very hopeful that we will reach an agreement” with the university.

The contract suspensions drew praise from Ryan Bates, a Michigan senior and member of SOLE, but he added that the student coalition wants the suspensions to be permanent. Bates also said that the university should not resume business with Coca-Cola even if the company does agree to an audit.

He said the SOLE coalition represents about 20 student groups and approximately 5,000 students on campus.

“The university should not renew its contracts with Coca-Cola until the [Colombian] unions’ and the [Indian] farmers’ demands are satisfied,” he said. “Our demands are not for an investigation.”

According to Bates, the unions demand restitution from Coca-Cola for the families of union leaders allegedly murdered as a result of engaging in labor activism. They have also called for a public commitment from Coca-Cola not to work with paramilitary forces in Colombia, while the Indian farmers want the company’s plant closed down and restitution for any long-term health effects.

Among other students, reaction to the contract suspensions was more subdued. Several students reached by telephone on Wednesday said that they were not yet aware of the university’s decision. Classes did not officially begin until yesterday, and the website of the student newspaper, the Michigan Daily, did not carry a report on the contract suspensions until early yesterday morning.

“Generally, I, along with many other students, am apathetic about this kind of situation,” said Charles Q. Ngo, a Michigan junior and a member of the United Asian American Organization, which is part of the SOLE coalition. “I’ve been following it and I support [it], but I haven’t been actively supporting.”

Ngo said that the large number of similar causes on campus makes it difficult for students to commit their energies to the SOLE campaign.

“I feel like my time is more useful in another way,” he said.

—Staff writer David Zhou can be reached at dzhou@fas.harvard.edu.