I’ve just finished reading the report Coca-Cola submitted last week to the State Department on its business practices in Myanmar (Burma), and I have to say I’m impressed with how seriously this company seems to have taken the Responsible Business Reporting Requirements. Those who have read prior ERI commentary on the Myanmar responsible business reports, which are mandatory for U.S. companies making large investments in Myanmar, will know that the Coke report is a welcome change of pace from the reports submitted by other investors.
What makes the Coke report unique is the level of transparency it provides – both into the company’s successes and its failure in responsible business conduct – meaning that communities, investors, and the U.S. Government alike have a reasonable basis to engage with Coke and trouble-shoot human rights issues that may arise in the course of its operations. Now, I can’t vouch for the truth of anything that’s disclosed here – though I have no specific reason to doubt the report, I have no idea if Coke and its local partner are actually being as careful and thorough about their human rights, environmental, and labor performance as they say here. But the level of detail about the due diligence processes they’ve gone through, the concerns they’ve identified, and the steps they’ve taken to ensure that they and their partners are mitigating serious risks is exactly the kind of transparency needed to build trust between a company like Coca-Cola and the communities its operations will affect.
Of course, there are a couple of places in the report where Coke may be hiding the ball. For example, the report explains that there’s a wastewater treatment issue that is in the process of being resolved. But it never explains exactly what is happening to that wastewater and who is affected. Similarly, Coke explains that it does not have a system to investigate land acquisition issues and vaguely suggests that it will develop something in the future as it expands its operations on the ground. But it’s not clear whether the “Grant Land” on which its existing facilities are operating is also subject to land concerns.
Overall, though, the report should be commended for stating up-front both the successes and the challenges of doing business responsibly in Myanmar, and for giving stakeholders a basis for understanding and questioning the company’s practices. For example, the report explains in detail the types of on-site grievance mechanisms it intends to establish, which will focus on workplace concerns and will be available to all employees. Reading this description, an external stakeholder learns that Coke may not be planning to provide a site-level grievance mechanism for affected community members in case of human rights or environmental concerns – a potential oversight that can be raised with company management in order to head off possible problems beforehand. Similarly, Coke’s explanation of the investigations it intends to make of its security guards’ background provides a basis for engaging if employees or community members have any concerns about a particular guard’s history or conduct.
Crucially, the Coke report avoids many of the pitfalls that make the reports submitted by other companies under the Reporting Requirements inadequate and, in some cases, non-compliant with the terms of the General License that allows U.S. companies to do business in Myanmar. Coke discloses the name of its principal local partner, unlike Hercules Offshore. It willingly acknowledges the responsibility to conduct due diligence and discloses its policies and procedures in full detail, unlike Crowley Marine Services, Capital Bank & Trust Company, and Capital Investment. And it declines to keep any of its findings confidential, despite the fact that the Reporting Requirements allow companies to submit confidential reports to the government on some of the issues that Coke has chosen to include in its fully public report.
All this is presumably made possible by the fact that Coca-Cola already has worldwide human rights and environmental policies, and that it has already handled a significant number of human rights challenges in the past (which have led to lawsuits relating to its practices in Colombia and India, among other places). Other companies – particularly investment funds like Capital – may not be so familiar with concepts such as human rights due diligence, and may therefore reflexively reject the idea that society’s expectations of responsible business conduct apply to them as well.
For civil society and community advocates, we now need to hold Coke to its high standard of transparency and push it to continuously improve in future reports. We should take advantage of the information Coke has disclosed to engage with the company to further elevate its social performance. And perhaps most importantly, we must use this report to show companies like Capital and Hercules that transparency is not something to be afraid of, but rather that it’s the only way for multinational corporations to operate responsibly in Myanmar and other high-risk environments.
This post was written by Jonathan Kaufman, former staff.