Coca-Cola denies accusations of propping up Swaziland’s dictator

Coca-Cola has strongly dismissed accusations that it has been propping up one of Africa’s most notorious dictators, Swaziland’s Mswati III, via its concentrate operations in the country that are said to contribute as much as 40 percent of the country’s GDP.

The Guardian reports that the king has travelled to Coca-Cola’s headquarters in Atlanta in the US, much to the disgust of Swazi political activists who blame him for human rights abuses and looting the nation’s wealth.

Mary Pais Da Silva, co-ordinator of the Swaziland Democracy Campaign, has called for Coca-Cola to pull out of the country immediately.

“Coca-Cola must know they’re doing business with the wrong people,” she said. “At the end of the day it doesn’t benefit the economy in any way. Their profits don’t help the average Swazi, while the king is getting richer by the day.” She added: “The king is milking the country. This is entrenching him more and more, giving him economic strength to crush opposition. Nobody should do business with the regime in Swaziland. They should cut ties and take their business elsewhere.”

Mswati III has 13 wives and a fortune of about $100m (£64m), he presides over one of the worst-off countries in the world, with most people living in absolute poverty. Political parties are banned and activists are regularly arrested, imprisoned and tortured, writes The Guardian.

Coca-Cola says that Mswati III does not receive any profits or dividends from its Swaziland operation, its biggest in Africa. But some activists estimate that Coca-Cola, the world’s biggest beverage company, contributes as much as 40% of the country’s GDP. The company admits it cannot account for how the money it pays in taxes is used by the Swazi government.

Coca-Cola says it adheres to the “highest ethical standards” and aims to be “an outstanding corporate citizen in every community we serve”. It set up in Swaziland in 1987 after leaving apartheid South Africa.

It denies claims from some activists that it was motivated by Swaziland’s sugarcane fields – its concentrates do not contain sugar – or that the king personally owns shares in the Swazi factory.

Sherree Shereni, spokeswoman for the Coca-Cola central Africa franchise, said: “King Mswati III does not receive any profits or dividends from Conco Swaziland [Coca-Cola’s concentrate production plant].”

Conco, like all the Coca-Cola Company (TCCC) concentrate plants, is 100% owned by TCCC.

Shereni added: “Through the Coca-Cola Africa Foundation, which was set up in Swaziland in 2001, the population of Swaziland has, however, benefited from Coca-Cola’s contributions to their social welfare in the areas of water stewardship, health, education and entrepreneurship.”

Asked if the king uses tax revenue from Coca-Cola for his personal benefit, Shereni said: “TCCC, like any other taxpayer, does not determine what the taxes paid to the governments of countries in which it does business are used for. This is the statutory prerogative of the governments themselves.”

She added: “Coca-Cola is not involved with political agenda of any country in which it does business. Coca-Cola’s reputation is built on the quality of its brands, the highest standards of manufacturing practices, the welfare and safety of its employees and adherence to local and international laws as applicable in any country where Coca-Cola does business.”

Source: The Guardian

Comment from the Daily Maverick

“Poor old Coca-Cola. The world’s favourite drink can’t do much right these days. If it’s not responsible for America’s obesity epidemic, then it’s causing children’s teeth to rot. Or using up all of India’s water while stealing Nigerian jobs. But this latest accusation goes even further, claiming Coke is responsible for propping up the authoritarian regime of an entire country – and it refuses to do anything about it.

That country is Swaziland, where Coca-Cola has its concentrate manufacturing plant that exports all over southern and eastern Africa. Critics, led by the Swaziland Solidarity Network, claim Coca-Cola alone accounts for up to 40% of Swaziland’s GDP. This number is probably a generous overestimate, but even if it’s just 20%-30%, it’s still a hefty slug, without which the nearly bankrupt government of King Mswati III would be completely bankrupt.

And that is the critics’ issue. By virtue of its economic position, Coca-Cola is in a powerful position to influence Swaziland’s wayward king, Africa’s last absolute monarch and often criticised (with some justification) for using his power for the good of himself rather than his people. But so far, the corporation has remained determinedly apolitical, confirming in a statement it has no intention of meddling in a country’s internal affairs.

A sensible position from a company looking to protect its balance sheet, but one that doesn’t correspond to recent history. The only reason Coca-Cola is in Swaziland at all is because it moved out of apartheid South Africa. Although this only came after huge international pressure, and only in 1987, it shows the company can be motivated by political factors if the circumstances are compelling enough. And with Swaziland’s economy getting worse by the day, and Mswati’s inaction becomes more inexcusable, those circumstances might be closer than we think.” Simon Allison