Suit charges Coca-Cola complicity in Guatemala rights abuses

Guatemalan union leaders and their families filed a lawsuit in New York State Supreme Court in Manhattan against Coca-Cola Co., accusing the world’s biggest beverage company of complicity in violence against labor leaders. Lead plaintiff JosĂ© Armando Palacios says he was repeatedly targeted in attempts on his life after he joined the union at a Coca-Cola processing plaint in Guatemala City, owned by Industria de Cafe or Incasa, in 2004. Thugs he charges were hired by Coke invaded his home, held his wife and family at gunpoint, and threatened to shoot them. Palacios fled to the United States in 2006, where he was later joined by his family.

The plaintiffs say they filed the complaint in New York due to lack of access “to an independent and functioning legal system in Guatemala,” citing “a corrupt judiciary which has been undermined by the intimidation and murder of witnesses, prosecutors, lawyers and judges.” They seek punitive damages for wrongful death, assault, battery, trespass, false imprisonment, unjust enrichment, negligence and other charges. The lead attorney is Terry Collingsworth, who has pursed lawsuits against Coca-Cola for a decade, in cooperation with the Campaign to Stop Killer Coke. (Atlanta Journal-Constitution, Courthouse News Service, March 2)

See our last post on Guatemala.

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  1. More on new lawsuit against Coca-Cola
    Dear Labor and Human Rights Activists:

    On Thursday, February 25, 2010, International Rights Advocates, a non-profit human rights organization, and the Conrad and Scherer law firm filed a new civil lawsuit against The Coca-Cola Company. The case involves a campaign of violence against two Guatemalan trade unionists and their families — including rape, murder, and attempted murder —at the behest of the management of INCASA, the owner of two Coca-Cola bottling plants and an instant-coffee plant (which also produces Coca-Cola syrup for fast-food restaurants) in Guatemala. The complaint against Coca-Cola can be viewed at The two trade unionists are José Armando Palacios, who was forced to flee to the U.S. in early 2006, and José Alberto Vicente Chávez, whose son and nephew were murdered and whose daughter was gang raped on March 1, 2008.

    As a paralegal field investigator for International Rights Advocates, I have worked on preparations for the lawsuit. But I also have a personal stake in it, because in my former job as Latin America liaison for U.S. Labor Education in the Americas Project (USLEAP), a U.S.-based nonprofit labor rights organization, I advocated for one of the plaintiffs, José Armando Palacios, after he was fired from INCASA in retaliation for his union organizing work. Mr. Palacios was a member of the INCASA Workers’ Union, SITINCA, which is affiliated to FESTRAS, a Guatemalan food and beverage workers’ federation, and to the International Union of Food Workers (IUF). The IUF is a global union federation that signed a joint statement with Coca-Cola in March 2005, as a step towards a global framework agreement with the company.

    In June 2005, USLEAP included the case of Mr. Palacios and the SITINCA union in a petition it filed before the Office of the U.S. Trade Representative. The petition demanded that Guatemala be excluded from receiving trade benefits under the U.S. Generalized System of Preferences because of its horrendous labor rights record, and it included what had happened to Mr. Palacios as one of several examples of the failure of the Guatemalan government to enforce minimum labor rights standards.

    Mr. Palacios worked for 27 years at the INCASA-owned coffee and Coca-Cola syrup plant in Guatemala City, and he joined the union, SITINCA, right from the start, rising to a leadership position in the 1980s. In 1991, management offered him a job as an in-house security guard, but on the condition that he resign from the union. Though INCASA’s condition was illegal, Mr. Palacios and his union colleagues agreed that he could still offer the union assistance as a security guard even if he wasn’t formally a union member. In early 2004, after 13 years as a union-friendly security guard, Mr. Palacios rejoined SITINCA, along with two other in-house security guards whom he had organized, in defiance of INCASA management. He immediately received a death threat from INCASA’s Personnel Manager, Eduardo García, and from then on was subjected to an escalating campaign of intimidation, harassment and violence, including an attempt on his life on June 18, 2004. On April 16, 2005, two men forced their way into Mr. Palacios’ house when he was not at home. They tied up Mr. Palacios’ son, Rony Vladimir, pointed guns at him and at Mr. Palacios’ wife, Sara Ramos, and threatened to kill them and Mr. Palacios if he continued causing problems through his union activities. Mr. Palacios’ nine-year-old daughter, Roslyn Yamilet, was also present during the home invasion and was similarly threatened. Less than a month later, on May 6, 2005, INCASA fired Mr. Palacios without cause after it became clear that violence and intimidation wouldn’t deter him from his union work.

    Mr. Palacios spent the next eight months fighting for reinstatement to his job and rallying support for nine other SITINCA members who had been fired from the INCASA-owned Coca-Cola bottler in Retalhuleu, Guatemala, for their union activities several years earlier. During those eight months, the threats and intimidation escalated, finally forcing Mr. Palacios and his family to go into hiding in a rural area of Guatemala in late 2005. When an assassin came to kill him in late January 2006, Mr. Palacios narrowly escaped death. He fled to the U.S. in February 2006, and was granted political asylum in 2007.

    I owe Mr. Palacios and his family an enormous personal debt because as the USLEAP Latin America liaison, a job I held for 9 ½ years, I naively represented to him that USLEAP could help him in his fight for justice, something which turned out to be far worse than untrue. While USLEAP initially supported Mr. Palacios, its Executive Director, Stephen Coats, later succumbed to pressure from Coca-Cola and the IUF, and threw Mr. Palacios and his family to the wolves.

    Coca-Cola infiltrated USLEAP and compromised its mission when it hired Stan Gacek, a member of the USLEAP Board of Directors, as a consultant. Mr. Gacek had just resigned as an official of the AFL-CIO International Department when he went to work for Coca-Cola in January 2006 – without removing himself from the USLEAP Board of Directors. In his dual capacity as USLEAP board member and Coca-Cola consultant, Mr. Gacek intervened directly in Mr. Palacios’s case, purportedly to help him, though events would demonstrate that his real interest was to get Mr. Palacios to drop his fight for reinstatement and to protect Coca-Cola from the fallout resulting from the violence committed against Mr. Palacios and his family. Mr. Gacek eventually returned to become the Associate Director of the AFL-CIO’s International Department, and is still a member of the USLEAP Board of Directors.

    A fundamental problem for Mr. Palacios was the fact that the federation his union belongs to, FESTRAS, and its global federation, IUF, did not support his struggle for reinstatement. Less than two months before he was fired in May 2005, the IUF and Coca-Cola signed a joint statement committing them to work together towards a framework agreement. This left Mr. Palacios, as well as the nine illegally fired workers from INCASA’s Coca-Cola bottler in Retalhuleu, Guatemala, out in the cold. When Mr. Palacios worked to rally support for their reinstatement, he found himself increasingly at odds with FESTRAS’s leadership and, implicitly, with the IUF.

    Though IUF General Secretary Ron Oswald assured me in January 2006 that he was in discussions with Coca-Cola’s Director of Global Labor Relations, Ed Potter, in order to win reinstatement at least for Mr. Palacios and two of the nine fired workers from the Retalhuleu bottler, Mr. Palacios reported that FESTRAS had proposed that all of the fired INCASA workers accept buyouts (payment of back wages and severance) in lieu of reinstatement. At least two of the nine fired bottling workers were subjected to violence and intimidation in the weeks before they were finally coerced into accepting buyouts at the end of January 2006. These acts of violence and intimidation were not made known to a wide audience at the time. It’s worth noting that in their legal case, the courts had found repeatedly in favor of reinstating the nine fired bottling workers; even so, INCASA had refused to reinstate them, and Coca-Cola did not use its leverage to force INCASA to do so.

    In early December 2005, IUF General Secretary Ron Oswald told the IUF Latin America regional office that Coca-Cola was willing to “make resources available to improve security” for Mr. Palacios; in other words, Coca-Cola said it was willing to pay for a security scheme for him (e.g., bodyguards) to protect his physical security. But the company, according to Mr. Oswald, was waiting for a proposal. Mr. Palacios never learned of this offer directly from the IUF or its affiliate FESTRAS. He found out about it only when I alerted him (Mr. Oswald told USLEAP about the offer as well). Anxious to protect his family, Mr. Palacios put together a written proposal for a security scheme, and emailed it to the IUF, FESTRAS and USLEAP on December 17, 2005.

    A few days later, David Morales, the General Secretary of FESTRAS, angrily rebuked Mr. Palacios for sending his security proposal. Mr. Palacios reported that Mr. Morales also had unkind words for me for having told Mr. Palacios about Coca-Cola’s security offer. When I reported the incident to USLEAP Executive Director Stephen Coats, his only reaction was to express concern about the possible damage done to USLEAP’s relationship with FESTRAS.

    Needless to say, no security scheme for Mr. Palacios or his family was ever forthcoming. The proposal was henceforth dropped by Mr. Oswald and Mr. Coats until, on January 26, 2006 Mr. Gacek, the USLEAP board member and Coca-Cola consultant, informed Mr. Coats that Mr. Palacios was willing to forego reinstatement and that Coca-Cola would fund his security scheme. How Mr. Gacek had come to understand that Mr. Palacios would give up his fight for reinstatement is a mystery. Mr. Palacios had never once even hinted that he would renounce reinstatement. Mr. Palacios and I called Mr. Gacek on January 27, 2006 to rebut the information and to ask him where he had gotten it from. Mr. Gacek would not say. Before the conversation ended, Mr. Palacios reiterated his intention to continue to demand reinstatement.

    The following day, January 28, 2006, an assassin arrived at Mr. Palacios’s home in Guatemala City and murdered a man matching Mr. Palacios’s description who had just parked his car in front of Mr. Palacios’s home, as he was getting out of his car. Mr. Palacios, who had gone to his home briefly to retrieve some clothing (he was living in hiding elsewhere), was three feet away when the other man was shot to death. The assassin calmly walked away from the scene after pumping three gunshots into his victim. Mr. Palacios is convinced that he was the intended target, and that the assassin killed the other man in a case of mistaken identity.

    After this brush with death, Mr. Palacios decided that he must give up his fight for reinstatement and leave Guatemala (the nine fired bottling workers also renounced reinstatement and accepted buyouts on January 31, 2006). He fled to the U.S. a week later. Unfortunately, his family was unable to accompany him, because his wife and daughter did not have U.S. visas. Before leaving for the U.S., Mr. Palacios hid out in a series of hotels in Guatemala City, protected by a group of international accompaniers.

    While in hiding, he was approached by Rodrigo Romero, a Coca-Cola lawyer from Costa Rica. Mr. Palacios asked Mr. Romero for assistance to protect his family. But Mr. Romero said he had a better idea: that Mr. Palacios should name a price, so that Coca-Cola could “arrange a meeting between you and a check” — in exchange for dropping all legal claims against Coca-Cola and agreeing to maintain permanent silence about what the company and its bottler had done to him. Mr. Palacios refused the offer.

    Around the time of this meeting, IUF General Secretary Ron Oswald sent an email to Stephen Coats and to me in which he expressed deep concern – not for the safety of Mr. Palacios and his family, but about the possibility that should Mr. Palacios flee to the U.S., he might contact Terry Collingsworth of the International Labor Rights Fund and sue Coca-Cola (Mr. Collingsworth is now the Executive Director of International Rights Advocates, is part of the Conrad and Scherer law firm, and is lead counsel in the lawsuit against Coca-Cola). Mr. Oswald strongly implied that the IUF would not help Mr. Palacios if he fled Guatemala.

    USLEAP Executive Director Stephen Coats then found a near-perfect solution to the problem of how to protect Coca-Cola from legal action while feigning assistance to the victims: he recommended that Mr. Palacios accept as his legal counsel a Michigan attorney who admitted that she lacked the capacity to actually sue a large corporation like Coca-Cola. Reluctantly, Mr. Palacios accepted the suggestion.

    Mr. Coats also arranged a meeting between Mr. Palacios and Mr. Gacek, the USLEAP board member and Coca-Cola consultant. At this meeting, which took place in New York on February 9, 2006, Mr. Gacek asked Mr. Palacios for copies of all the documentation he had on his case, and promised to get Coca-Cola to “do the right thing.” Mr. Palacios reluctantly sent Mr. Gacek a copy of his case file. That was the last he heard from Mr. Gacek, who returned later in 2006 to the International Department of the AFL-CIO.

    Mr. Palacios later told me that he turned over copies of his documentation to Mr. Gacek and agreed to let the Michigan lawyer represent him because he was afraid for his family’s safety in Guatemala. He had concluded, not unreasonably, that he could not afford to get on the wrong side of Coca-Cola or of USLEAP while his family was still vulnerable. For many months after Mr. Palacios fled Guatemala, strange men continued to show up and ask for him and his family at their former home in Guatemala City.

    Coca-Cola’s security offer was obviously always conditional: Mr. Palacios could hope for protection from INCASA if, and only if, he agreed to give up his fight for reinstatement. It’s also clear that Stan Gacek’s communication to Mr. Coats on January 26, 2006, in which he falsely claimed that Mr. Palacios had already agreed to forego reinstatement, was nothing more than a thinly veiled ultimatum. The meeting with Mr. Gacek and the arrangement with the Michigan lawyer were just an elaborate charade to protect Coca-Cola from a lawsuit — and, in the case of the documentation Mr. Gacek asked for and received, to help Coca-Cola prepare for the sham negotiations the company would shortly engage in with Mr. Palacios through his Michigan lawyer. Mr. Palacios felt compelled to go along with these negotiations, without signing the settlement offer proposed by Coca-Cola, until his family finally won approval to join him in the U.S. on August 31, 2008. Once his family was safely out of Guatemala, Mr. Palacios fired the Michigan lawyer and suspended the negotiations with Coca-Cola.

    The impunity enjoyed by INCASA and Coca-Cola in the Palacios case set the stage for the next round of violence against the SITINCA union. After difficult negotiations that lasted more than a year, SITINCA signed a renewed collective bargaining agreement with INCASA on February 21, 2008. José Alberto Vicente Chávez, a prominent member of the SITINCA Executive Committee at the Retalhuleu Coca-Cola bottler since the 1990s, was actively involved in the negotiations. Mr. Vicente also led the union’s efforts to secure compliance with the newly signed collective bargaining agreement in the week following February 21, after INCASA started to violate its terms even before the ink was dry.

    In the days following the signing, Mr. Vicente had several confrontations with INCASA managers. Frustrated with INCASA’s violation of the agreement, Mr. Vicente and a colleague sent an email on February 26, 2008 to the IUF regional office, asking for the IUF’s intervention. The next day, Mr. Vicente was summoned by FESTRAS General Secretary David Morales to a meeting to be held two days later in Guatemala City; at the meeting, Mr. Morales expressed his displeasure because Mr. Vicente had contacted the IUF to complain about INCASA’s violation of the collective bargaining agreement.

    While his family waited at a bus stop in Retalhuleu for Mr. Vicente’s return from this meeting, in the early morning hours of March 1, 2008, they were attacked by a group of armed thugs who killed Mr. Vicente’s son and nephew, and then gang-raped his sixteen-year-old daughter. The thugs told Mr. Vicente’s daughter that they had been sent to kill his family; Mr. Vicente’s daughter managed to escape from her assailants after they raped her. Mr. Vicente, who continues to be a leader of SITINCA and to work at the Coca-Cola bottler, was forced to go into hiding with his surviving family members. They have remained in hiding for the last two years.

    Following the attack, the Guatemalan authorities located some of the perpetrators, killed at least one of them, and arrested three others. The three were tried and eventually convicted of the attack and received long jail sentences after Mr. Vicente’s daughter valiantly testified against them in open court. But the court refused to look for the intellectual authors, despite the fact that one of the assailants is related to several prominent members of Solidarismo, the anti-union workers’ organization controlled by INCASA management at the Retalhuleu bottler.

    The AFL-CIO included a report of the attack on Mr. Vicente’s family as an annex to its 2008 petition to the U.S. Office of Trade and Labor Affairs (OTLA) against Guatemala’s participation in the Central America Free Trade Agreement (CAFTA). In its petition, however, the AFL-CIO misreported the incident, falsely stating that the attack occurred when Mr. Vicente was returning from Guatemala City after having filed a complaint (presumably with the authorities), when in fact he was returning from the meeting with FESTRAS described above. USLEAP repeated the misinformation on its web site. The IUF apparently used the attack on Mr. Vicente’s family to press Coca-Cola to buy out the INCASA bottler.

    The IUF and Coca-Cola have reportedly been discussing the buyout in periodic meetings held in Atlanta over the last two years, meetings from which Mr. Vicente’s union, SITINCA, has been excluded. Nevertheless, a member of another Coca-Cola workers’ union who has participated in the meetings reported to Mr. Vicente that Coca-Cola has adduced its own hypothesis to explain the crime: that his family was attacked because Mr. Vicente’s son was romantically involved with a gang leader’s girlfriend. Judging from the IUF’s silence, it appears to have accepted Coca-Cola’s hypothesis. But this information never emerged at the trials of the arrested perpetrators, all of whom simply denied their involvement in the crime. Mr. Vicente insists that the information is untrue, and wonders where Coca-Cola got it from.

    The AFL-CIO could easily have verified the facts of the case, but it did not even bother to interview Mr. Vicente or his family, or ask for their permission before writing the annex to the petition. By including their case in its CAFTA petition, the AFL-CIO may have placed Mr. Vicente and his family in greater danger, and indeed Mr. Vicente has received death threats as armed men have continued to look for him and his family at their former residence in Retalhuleu.

    In May 2009, Mr. Vicente contacted the AFL-CIO Solidarity Center to point out the error in the CAFTA petition and to ask for assistance to cover the high costs associated with maintaining his family in hiding. The AFL-CIO gave him a small amount of monetary assistance, but then washed its hands of the matter and removed his case from the next phase of the CAFTA petition process. Like Mr. Palacios before him, Mr. Vicente and his family have been hung out to dry by organizations that claim to support labor rights in Guatemala.

    With remarkable cynicism, USLEAP Executive Director Stephen Coats has used the INCASA case as fodder for his own self promotion. In the summer 2008 USLEAP Newsletter, after misreporting the attack on Mr. Vicente’s family, Mr. Coats asserted that “in January 2006, USLEAP helped expedite the departure to the U.S. of Jose Armando Palacios, who was nearly killed following months of threats against him and his family.” If USLEAP helped “expedite” anything in Mr. Palacios’s case, though, it was the defeat of his courageous battle for reinstatement. And by working to protect Coca-Cola from legal action – instead of demanding that the company protect Mr. Palacios and his family — and by maintaining public silence about Coca-Cola’s responsibility in the case, including the company’s infiltration of the supposedly independent USLEAP, Mr. Coats helped lay the foundation for the subsequent violence against Mr. Vicente’s family.

    For my part, as the former USLEAP Latin America liaison (I quit in early 2007), I want to apologize for not exposing USLEAP’s conflict of interest from the start. In retrospect, I recognize that doing so at the earliest possible moment might have prevented further harm. Above all, I ask Mr. Palacios and his family for their forgiveness.

    One can only hope that Mr. Palacios, Mr. Vicente and their families will finally be able to win justice in their case against Coca-Cola. And I hope that all genuine labor and human rights activists will support their struggle.


    Bob Perillo