IUF | Coca-Cola Workers Network | Monthly : December 2006

Call for International Solidarity Against Vicious Assault on Employment & Trade Union Rights at Coca-Cola Pakistan


The IUF has launched an international solidarity campaign against the vicious assault on employment and trade union rights by the management of The Coca-Cola Company's subsidiary in Pakistan, Coca-Cola Beverages Pakistan Limited (CCBPL).

Read the story on the IUF website by clicking here.

Please also send a protest letter to TCCC to "Stop Union Busting at Coca-Cola Pakistan!" by clicking here .

Action points and country issues from last IUF/Coca-Cola conultations, 20-10-2006

On 20 October 2006, an IUF team composed of representatives of IUF unions with the largest memberships in Coca-Cola or facing issues of major trade union violations within the Coca-Cola system met with senior management in Atlanta.

Download the Agenda IUF/CC 20-10-06, action points and the executive summary of the meeting

Pakistan: Management forces through jobs-destroying outsourcing plan, union membership cut by half

On Saturday 9 December the management at the Coca-Cola Beverages Pakistan Limited (CCBPL) bottling plant in Karachi launched an aggressive attack on trade union rights and employment security by terminating 153 out of 291 union members and outsourcing their jobs. Termination letters were sent by courier to the homes of 153 union members, bypassing any collective bargaining process and completely disregarding the union.

On the morning of 9 December the management increased security at the bottling plant and arranged routine police visits. When questioned about these measures the management lied - claiming that VIP guests were expected. In reality the increased security was in preparation for the union’s reaction once workers received their termination letters that were sent directly to their homes. Among those terminated were seven union officers (out of nine on the union committee) including President, Vice President, Joint Secretary, Finance Secretary and three members of the managing committee.

The majority of the retrenched workers were employed sales/distribution, warehousing, shipping logistics and transport maintenance, all of which will be outsourced. This is despite the serious problems (including breakage and losses) already caused by third-party contracting and the hiring of casual workers at the plant and distribution/logistics centre. Regardless of the impact on business performance or employment security, the management appears more concerned with attacking the union and attempting to break its collective bargaining power.

On Sunday 10 December the union held a membership meeting and voted to reject the terminations and the compensation package offered by management. On the following day a mass protest was held outside the factory gates, blocking all vehicle access to the plant and the distribution/logistics centre. Despite the strong police presence the protests continued for two days, with the management repeatedly refusing to negotiate with the union. Finally, on the third day of protests the management increased its compensation offer - mixed with threats and intimidation directed at individual union members (including those who have outstanding debts to the company, face disciplinary measures for previous work-related incidents, or with legal cases in court). As a result half of the dismissed workers were finally coerced into accepting the increased redundancy package, making the union’s opposition untenable, and compelling the union to sign an agreement with the management.

Despite the settlement, the union has made it clear that it will continue to fight against further jobs destruction and will launch a renewed organizing drive to rebuild its membership and defend trade union rights.

ACCUP-IUF affiliate CCSUM rallies against outsourcing & casualization

On 30 November, the Coca-Cola Sales Force Union-Meycauyan (CCSUM), a member of the IUF-affiliated Alliance of Coca-Cola Unions Philippines (ACCUP), joined thousands of workers in protest rallies to mark Andres Bonifacio Day. The Union used the day to draw attention to the ongoing fight against outsourcing and casualization, as part of a nation-wide campaign launched by ACCUP on May First.

rally_against_outsourcing_s.jpg CCSUM rallies against outsourcing & casualization. Bottom right corner: pamphleting workers at other Coca-Cola bottling plants to raise awareness of the impact of outsourcing & casualization on employment security and trade union rights.

View image Click here to view a larger image.

The ACCUP-IUF campaign t-shirts read: "Regular employees are now an endangered species" next to a picture of a Coke botlte, and on the back reads: "Save Jobs, Save the Future - STOP! Outsourcing & contractualization!"

30 November 2006 marked the 143th anniversary of the birth of Andrés Bonifacio y de Castro (30 November 1863 – 10 May 1897) who was one of the chief leaders of the revolution of the Philippines against Spanish colonial rule, the first revolution in Asia against European colonial rule. Bonifacio played a critical role in "a new movement that radicalized the Philippine political landscape at the time in a bid for genuine freedom and democracy. He symbolized a people awakened and ready to fight against tyranny, repression and exploitation." (APL 29 November)

In a press statement issued by the APL on 30 November, workers were reminded that: "...[t]today as we celebrate Andres Bonifacio Day we are reminded that the sweetest victories are often borne of the harshest of struggles. We realize that the obstacles have been laid out before us but workers everywhere possess the resolve necessary to combat these repressive measures and the rotten system imposed by a few on us. We resolve to forge ahead, guided by the fiery ideals of Andres Bonifacio, against the hardships that we face day after day. Together we will fight for our rights towards the attainment of a society that is just and humane with the interests of the majority of the toiling masses at the forefront and the oppression [by] the few eliminated"

Click here to visit the APL website.

Investigated Coca-Cola man earmarked for No.2 position

This provides an important insight into the background of Muhtar Kent who has just been appointed President and Chief Operating Office (COO) of The Coca-Cola Company. He was investigated by the Australian Securities Commission for selling off 100,000 shares and making AUD$400,000 when he was managing director of Coca-Cola Amatil's European division.

Investigated Coca-Cola man earmarked for No.2 position
Leon Gettler, Management Reporter December 4, 2006

NINE years ago, the then Australian Securities Commission completed an insider trading investigation into an international Coke executive, Muhtar Kent, who had made a small fortune after he shorted Coca-Coca Amatil shares just before a profit downgrade.

Now the same executive has been earmarked as the Coca-Cola Company's next chief operating officer.

Following the unexpected announcement by the company that its 1996 results would fall well short of expectations, a whopping $2.5 billion was wiped off Coca-Cola Amatil's market capitalisation in a fall approaching 30 per cent.

CCA shareholders might have suffered enormous losses.

But Mr Kent, who was managing director of Coca-Cola Amatil's European division, made $400,000 when he offloaded 100,000 shares just before the announcement.

As a result of the official investigation, Mr Kent and the regulator came to an agreement in December 1997 that he would pay the profit he made to purchasers of the shares. They also agreed that he would kick in an extra $50,000 to pay for the investigation.

According to overseas reports and speculation, Mr Kent is now expected to be appointed the Coca-Cola Company's No. 2 man within the month.

Mr Kent left the company in 1999 but rejoined last year.

He is now president, Coca-Cola International, and president, North Asia, Eurasia and Middle East Group. He also sits on the company's executive committee.

In an emailed response through company spokesman Ben Deutsch, Coca Cola chairman and chief executive Neville Isdell told The Age: "This matter was thoroughly investigated and conclusively resolved by the ASC a decade ago and widely reported on in many publications at that time, and since.

"The board and I, guided by outside counsel, carefully reviewed the matter and we are satisfied that it was the result of an honest mistake. Throughout Muhtar's successful career, he has always demonstrated the highest level of personal and professional integrity and we are fortunate that he is part of our senior leadership team."

Mr Deutsch said Mr Kent was not aware of the implications of the share transaction.

"Mr Kent was advised by his financial adviser to diversify his financial portfolio, which at the time consisted solely of KO stock and CCA stock options," he said.

"He accepted the proposal and left it to the financial adviser to execute. In doing so, he did not fully understand that it would involve a short sale or the elements of a short sale. As a result, he also did not know the specific timing of the transaction."

He said the company had strict rules regarding share trades and a large group of employees were on its restricted trading list.

Fraud exposed in San Miguel Corp's Coca-Cola earnings

Over the past five years members of the IUF-affiliated Alliance of Coca-Cola Unions Philippines (ACCUP) have reported widespread corruption, mismanagement and dubious business practices in the operations of Coca-Cola Bottlers Philippines Inc. - including contracts for third-party distribution allocated on the basis of political connections and bribes, and the deliberate holding back of Coca-Cola products in favour of San Miguel Corp's own local colas. Together with excessive outsourcing and casualization this has led to a massive loss of market share, poor business performance and low morale. More important the work environment has deteriorated, together with declining union membership.

ACCUP's criticisms of mismanagement are vidicated by a new report that San Miguel Corp fabricated its earnings: "... revenue of the entire Coca-Cola beverage group may have been artificially inflated by a much as 20 billion pesos worth of accounts receivables caused by a scheme meant to window-dress the company’s financial records.”

Philippine exchange halts trading in San Miguel over fraud report
Nov 29, 2006 MANILA

— Trading in Southeast Asia’s biggest food and beverage company San Miguel Corp, was briefly suspended on the Philippine Stock Exchange Thursday after a report that it allegedly “bloated” revenue figures.

Trading was halted for half an hour with the exchange citing a Philippine Daily Inquirer report that San Miguel “fraudulently bloating its sales revenue by as much as 20 billion pesos (400 million dollars) over a three-year period.”

The report did not specify which three-year period it was referring to.

However San Miguel told the stock exchange its sales practices and financial reporting are above board, and trading in the scrip was allowed to resume.

San Miguel’s A-shares closed up 50 centavos at 65 pesos and its B-shares added 50 centavos to 73.50 pesos.

It also told the exchange it “stands by the integrity of its sales practices and financial reporting.”

The cited report also said: “More importantly, revenue of the entire Coca-Cola beverage group may have been artificially inflated by a much as 20 billion pesos worth of accounts receivables caused by a scheme meant to window-dress the company’s financial records.”

The report was sourced to a former San Miguel employee.

The San Miguel statement said the allegations of the former employee, Fortunato Penaredondo, were circulated in an unsigned white paper in April and led the company to undertake “both internal and external probes.”

The audit committee of a beverage unit, Cosmos Bottling Corp, engaging external auditors and external legal counsel, concluded practices were “a matter of business judgment and was a transitional and sales distribution strategy” and “there was no abuse, impropriety or irregularity.”

San Miguel’s own audit committee also investigated the allegations of another unsigned white paper of impropriety at unit Philippine Beverage Partners Inc, while another investigative committee was formed to look into the practices of its Coca Cola Beverage Group, it said.

“The external auditors continue to conduct their audit,” it added.

San Miguel recently reported an 18-percent rise in net profit to 6.17 billion pesos (120.3 million dollars) in the nine months to September on the back of robust sales.

The 115-year-old San Miguel has breweries in China, Vietnam, Indonesia, Australia and Thailand and packaging plants in China, Vietnam and Malaysia. — AFP