Coca-Cola and Sudan

From Killer Coke:

On May 15, 1998, the African Studies Center at the University of Pennsylvania reported in a Sudan Update: " 'When the U.S. government announced sanctions against Sudan four months ago, officials here shrugged their shoulders,' reports IPS. `Trade between the countries was low,' they said, so the measure would hardly affect the economy. Now, however, the effect is being felt: Coca-Cola, for example, pulled out of the country this week and, as a result, at least 7,000 workers and technicians have lost their jobs, according to the Sudan Standard, an official weekly. Coca-Cola Ltd. was one of the leading employers in Sudan, economists here say.

"Sudan Standard said that Coca-Cola International had requested that Egyptian industries stop shipping concentrate and chemical mixtures needed to manufacture Coca-Cola drinks to its subsidiary in Sudan. The paper quoted company authorities as saying that they had not received permission from the U.S. government to ship the inputs to Sudan."

On October 24, 2006, Jeffrey Gettleman reported in The New York Times ("War in Sudan? Not Where the Oil Wealth Flows") that "In 2002, Sudanese investors opened a new Coca-Cola factory, with Coke syrup legally exported to Sudan under an exemption for food and medicine. The $140-million plant churns out 100,000 bottles of Coke, Sprite and Fanta per hour..."

In 1997, the American government imposed a trade embargo freezing Sudanese government assets in the U.S. and prohibiting exports to and imports from Sudan. The reason as reported in The New York Times: "human rights abuses connected to the north-south war and Sudan's links to terrorists."

In 2002, The Coca-Cola Co. exploited a loophole in the U.S. sanctions that gave the company an opportunity to ignore genocide in Darfur and to open a new plant in Sudan, thus propping up the Sudan economy and the government of Sudan's President Hassan al-Bashir. According to the Times article, President Bashir, an army general, seized power in 1989 through a military coup. Among the biggest beneficiaries of government revenues have been his troops - this in a country where the per capita income in 2005 was $640.

The New York Times story stated: "Sudan still marches to a martial tune. Army officers enjoy special status, foreign visitors must register with the police and schoolchildren are required to wear camouflage uniforms to class..."

An excerpt from a U.S. Treasury Dept. document entitled: "An overview of the Sudanese Sanctions Regulations..." states: "Except for information or informational materials and donated articles intended to relieve human suffering, such as food, clothing and medicine, and the licensed export of agricultural commodities, medicine and medical devices, no goods, technology, or services may be exported from the United States to Sudan, either directly or through third countries, without a license..."

Certainly, Coca-Cola soft drinks, Coke, Sprite and Fanta, hardly meet the standards of a food or medicine "intended to relieve human suffering." And the syrup for these products is certainly not being donated.

Nat Hentoff reported in the Village Voice: "We all know that the United States has placed certain trade restrictions on Sudan. Yet gum arabic is exempted, and it is the number one export of Sudan. Coca-Cola and the other major soft drink conglomerates need gum arabic. So what do we do? We proudly proclaim that we've got sanctions on Sudan, but we exempt gum arabic."

According to the Office of Foreign Assets Control (OFAC) of the Dept. of Treasury, Coca-Cola has paid fines "to settle allegations of violations of the Sudan sanctions...OFAC alleged that Coca-Cola exported to its bottler in Sudan services not authorized by its OFAC license and disregarded or evaded certain OFAC license restrictions. The services included financial and market support."

I believe The Coca-Cola Company should take the following action to help end genocide in Sudan's Darfur.

1. Allocate $15 million to run a three-month public relations and lobbying campaign to pressure the Sudanese government to stop the genocide in Darfur. This sum is $4 million less than the $19 million Coca-Cola spent in 2003 to advertise Sprite.

2. If this doesn't work, The Coca-Cola Co. should shut down its operations in Sudan and the company should compensate every worker affected by the shutdown the equivalent of at least four times Sudan's per capita income or one year's salary, whichever is greater, to help those Sudanese Coke workers' families adjust while seeking other means of making a living. Even if there were 7,000 employees, as reported in 1998, this would cost The Coca-Cola Co. less than $20 million, a drop in the bucket compared to the annual profits of $4 -5 billion or the compensation paid to its executive officers. E. Neville Isdell's compensation for 2006 as reported by the Atlanta Business Chronicle was $32.3 million.

This could serve as a model for other companies operating in the Sudan. Furthermore, the public everywhere should demand that gum arabic not be imported from the Sudan.

It should be noted that Warren Buffett who left Coca-Cola's board in 2006, but remains the company's largest shareholder with 8.3% of common shares outstanding worth about $10 billion, is also a major investor in the PetroChina Oil Company which gets oil from Sudan and is targeted by the Sudan divestment community. "Oil has turned it [Sudan] into one of the fastest-growing economies in Africa - if not the world - emboldening the nation's already belligerent government and giving it the wherewithal to resist the Western demands to end the conflict in Darfur."

Statement by Ray Rogers of Killer Coke.