[sustran] fwd: CSE India - The coke and diesel men

[SUSTRAN Resource Centre]

(See news on CSE's diesel campaign near the bottom of this essay, which
discusses lessons and analogies from Belgium's Coke scare.)
----------------------

From: "webadmin" <webadmin at cseindia.org>
Organization: Center For Science and Environment
Date: Mon, 16 Aug 1999 15:18:11 +0530
Subject: What's new at CSE

.......
A message from our Director, Anil Agarwal

The coke and diesel men

Indian companies have a lot to learn from the recent Coke scare in Europe.
In two  separate incidents, more than 100 Belgians fell ill last month
after drinking Coke.  This scare came after a series of similar incidents
had already taken place in  Europe  from the ‘mad cow disease’ to the more
recent debate over genetically  modified foods and the latest scare over
poultry products in Belgium being tainted  with cancer-causing dioxin. 


In France, Belgium and the Netherlands, most of the Coke products were
banned and in  Switzerland, Italy and Spain, health ministers put out
public warnings against Coke  products coming from the two suspect bottling
plants, even though the company does  not ship its products to these
countries from those plants. The stock market also  turned bearish on Coca
Cola shares. 


The company itself was partly to blame. On June 21, in its first
advertisement  appearing in France, it claimed that the quality of its
products was beyond  reproach, which many people found to be ‘more pompous
than apologetic’, as the  Financial Times put it. Paul Holmes, editor of
Reputation Management, pointed out,  “People like to see companies admit
‘we’re human, we can make mistakes and we’re  doing the best we can. That’s
a much more consumer-friendly message than ‘Our  products are perfect and
we can do no wrong’.” 


Fortunately, the company recognised its mistake fast and soon came out with
a new  strategy to undertake damage control. It admitted that the problem
had occurred at  one plant because of defective carbon dioxide and at
another, a foul-smelling  fungicide had leaked on to Coke cans. And Coca
Cola’s chairperson, Douglas Ivester,  himself apologised for any discomfort
or inconvenience brought on by its products  and that the company will
guarantee the quality and safety of its products at every  instant that is,
at every point of the retail chain. In full-page newspaper  advertisements
across Belgium, Ivester said, “To all the Belgian people, I want to  say
that I’m personally very sorry for any discomfort or inconvenience. My
colleagues and I will be working very hard to earn your trust again.”
Coke’s  products are slowly getting back into the shops. 


The entire episode was too small to affect Coke’s finances. Belgium, France
and the  Netherlands make up less than 4 per cent of Coke’s global volume
but it could have  caused irreparable damage to the company’s reputation. 


This episode has left Coke management a lot more sobre and mature about how
it  should handle public concerns. As a US consultant told USA Today, “The
public  fundamentally does not trust big companies, and it tends to believe
negative health  information. Companies should address two questions from
their customers: ‘Am I  going to be okay?’ and ‘What are you doing about it?’


This is an important lesson for Indian companies, too. India’s economic
development  is still very low and so are its levels of urbanisation,
industrialisation,  motorisation and agricultural modernisation. All this
will pump enormous amounts of  poisons into India’s environment, create
incredible levels of pollution and  seriously affect public health unless
serious steps are taken to prevent it. India  is already reaching
unbearable levels of pollution even though its economy is still  one of the
poorest in the world. 


In such a situation, it would help Indian CEOs to understand that public
concern  over such issues should be dealt with care and caution. Being
dismissive of these  concerns does not help the image of the companies,
especially big companies. But  this lesson is yet to be learnt. If it is
pointed out that diesel vehicles pose a  serious threat, diesel vehicle
manufacturers are quick to ask ‘but what about petrol  cars?’ and ‘aren’t
you being paid by petrol vehicle manufacturers?’ Similarly, oil  companies
claim that they are meeting all fuel quality standards set by the
government at their refinery gate. They are not therefore prepared to take
responsibility for the huge adulteration that takes place during the
transport and  retail stage. Oil companies are expected to keep a watch on
fuel quality but never  find a single case of adulteration even after
checks, simply because they don’t see  the quality supplied to the consumer
as their responsibility. 


Recently, Down to Earth carried a major story featuring major foreign car
manufacturers who had been asked a few simple questions (Down To Earth, Vol
8, No 4,  July 15) : Why are you promoting diesel vehicles in a city like
Delhi which already  has extremely high levels of particulates in its
ambient air which kill nearly  10,000 people every year? Are you not aware
of these health effects of particulates,  especially as most of this
research is being done in your own countries? Even if the  Indian
government does not stop you from making diesel cars, should you not desist
 from doing so yourself? 


Not one company gave us a straight answer about the particulate problem
from diesel  cars. In the so-called ‘market’, the rumour is that Down to
Earth is being paid off  by Korean car companies because they are more
hesitant to produce diesel cars. In  other words, public concerns grow only
when some vested interest is behind it. These  companies simply forget that
public health and environmental concerns will slowly  catch public
attention and it is they who will suffer damage to their reputation in  the
market. It’s best to face the challenge rather than to deny it. 


— Anil Agarwal


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