In October 2020 Ethical Consumer viewed The Coca-Cola Company website for information on how the company managed workers' rights in its supply chain. The company's Supplier Guiding Principles (SGP) were viewed.
A Business Toolkit produced by Partner Africa was featured on the website, which contained supply chain guidance that demonstrated many aspects of best practice. However, it was stated in the toolkit: "The information provided is intended for general guidance and information purposes only." Therefore, the document was not Coca-Cola policy.
Supply chain policy (poor)
The company had adequate policies on forced labour, discrimination, and freedom of association. A strong policy would also include the following commitments: payment of a living wage, the restriction of working hours to 48 hours plus 12 overtime (without exception), and no use of child labour (under 15 or 14 if ILO exempt).
The company's 'Pass It Back Supplier Toolkit' stated "Practically speaking, SGP require compliance with local law as well as core ILO conventions prohibiting Child Labor, Forced Labor, and Discrimination, and protection of Freedom of Association." While it stated that suppliers should comply with ILO conventions, it did not explicitly state that child labour signified anyone under 15 years old, or 14 if the country had ILO exemption. Overall, the company was considered to have a poor supply chain policy.
Stakeholder engagement (poor)
Ethical Consumer deemed it necessary for companies to demonstrate stakeholder engagement, such as through membership of the Ethical Trade Initiative, Fair Labour Association or Social Accountability International. Companies were also expected to engage with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's supply chain audits, and for workers to have access to an anonymous complaints system, free of charge and in their own language.
The company stated "We believe that dialogue with a wide range of external stakeholders is critical to respecting human and workplace rights." It also stated "We regularly consult stakeholders and benchmark against industry standards and with peers in organizations like AIM-PROGRESS and the Consumer Goods Forum to improve our program." It stated that it had ongoing engagement with the International Union of Foodworkers (IUF), and stated that it met twice annually with the organisation. A link titled "Read our updated joint statement" led to a document dated 2010. A visit to the IUF website did not provide any updates on engagement between the company and the union. It however featured several articles stating that The Coca-Cola Company was violating the rights of workers in various countries. The AIM-PROGRESS website stated that it used mutual recognition of audits "where possible", which was not considered sufficiently rigorous. While the company webite listed several partners, overall it did not appear that the company had clear engagement with organisations that would result in the verification of labour standards in a way that encompassed the range of countries it worked in.
The company offered EthicsLine as an anonymous whistleblowing service run by a third party. This service appeared to be available in a broad range of languages listed across the top of the complaints website. Ethical Consumer trialled the Spanish version of this complaints service to see how well it operated. While the webpages were successfully translated to Spanish, the dropdown menus that needed to be used in order to select which category a complaint fell under were in English. It was therefore assumed that the complaints process was not fully accessible to workers speaking languages other than English. Overall, the company was considered to have a poor approach to stakeholder engagement.
Auditing and Reporting (poor)
Ethical Consumer deemed it necessary for companies to have an auditing and reporting system. Results of audits should also be publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to their whole supply chain, including some second tier suppliers. The costs of the audit should be borne by the company.
The results of audits did not appear to be reported or quantitatively analysed for The Coca-Cola Company.
Some information was provided about its approach to auditing. The following information was identified:
- "all the bottling operations and authorized suppliers selling more than $60,000 annually to the Coca-Cola system are required to complete a third-party audit and share the audit results with The Coca-Cola Company."
- The company state that it used third-party audits, which were generally announced but could also be unannounced.
- "Each year, The Coca-Cola Company facilitates more than 2,000 third-party audits of Company office locations, franchise bottlers, and suppliers [...] "The Company’s publicly stated goal is that, by 2020, 98 percent of bottling plants and 95 percent of in-scope suppliers will achieve compliance with the Supplier Guiding Principles."
- "we partner with a select number of accredited audit firms and conduct training on a regular basis to ensure they understand and align to our program requirements. The Company supports the efforts of the Association of Professional Social Compliance Auditors (APSCA) to ensure a common accreditation for auditors and audit firms. Currently, all of our preferred audit firms are involved in APSCA."
Ethical Consumer considered it necessary to have a clearly scheduled audit plan, but no further information other than the above was identified.
It was unclear whether the company's auditing and reporting applied across the whole supply chain, including some second tier. It stated "direct and authorized suppliers agree to comply with the Supplier Guiding Principles." This was considered insufficient supply chain coverage.
The company stated that termination of a supplier should be a last resort, as walking away did not solve the problem, so was considered to have a positive approach to non-compliance.
It was unclear whether audit costs were covered by the company.
Overall, the company was considered to have a poor approach to auditing and reporting.
Difficult issues (poor)
Ethical Consumer also deemed it necessary for companies to address other difficult issues in their supply chains. This would include ongoing training for agents, or rewards for suppliers, or preference for long term suppliers. It would also include acknowledgement of audit fraud and unannounced audits, and measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association. Overall, the company was considered to have a poor approach to difficult issues.
The company received Ethical Consumer's worst rating for Supply Chain Management and lost a whole mark in this category.
coca-colacompany.com (19 October 2020)