Report: Legal Department of Coca Cola Içecek Pakistan

We have been assigned to:

Visit the Legal department of the Coca Cola Içecek Pakistan the subsidiary of
The Coca-Cola Company.

We had to gather basic information about their:

 Purpose of department
 Responsibilities
 Working procedures
 Hierarchy of department
 Circumstances; their company is facing

And after analyzing their overall performance of this department give suggestions and
recommendations to improve.

Acting on this we visited corporate office of Coca Cola Içecek Pakistan. It is located at
address: 5-E-II, Gulberg-III, Lahore. There we met their Manager Sales System and
Support, Mr. Muneeb Imran. He addressed us in details about his company and answered
our questions about the Legal department. He briefly described the working of their legal
department and Responsibilities of Legal Manager

We asked him questions about

 What is Purpose of the Legal department?

 What is the Responsibilities of Legal department?
 What is the working procedure of manger in Legal department?
 What is the Hierarchy of this department?
 Special circumstances their company is facing regarding to Legal
environment?
 Coca Cola Içecek

Introduction of Company
Coca Cola Içecek Pakistan is a multinational beverage company which operates in
Turkey, Pakistan, Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq, Syria
and Tajikistan. As one of the key bottlers of the Coca-Cola system, CCI produces,
distributes and sells sparkling and still beverages of The Coca-Cola Company.

CCI employs close to 8,500 people and has a total of 26 plants in 10 countries,
offering a wide range of beverages to a consumer base of 400 million people. In addition to
sparkling beverages, the product portfolio includes juices, waters, sports and energy drinks,
teas and iced teas.

CCI Operating Geography

CCI is the market leader in the majority of the countries it operates.

 KAZAKHSTAN

KYRGYZSTAN
AZERBAIJAN
TURKEY TURKMENISTAN TAJIKISTAN

SYRIA
IRAQ
JORDAN
PAKISTAN

Healthy growth

In 2018, CCI maintained its healthy growth by securing a higher rise in its EBITDA
than in its net sales revenues, and a higher rise in its net sales revenue than in its volume.

Surging profitability

CCI’s consolidated net profit for 2018 increased by 37.5% to TL 327 million.

Introduction of Legal Department

Every company is required to follow the Legal procedures in each of their activity and
maintain the mainstream rules and regulations laid down by the Government of the
Country. For this purpose the Coca Cola Içecek Pakistan has its own Legal department.
This department always keeps eye on each activity undergoing in the company to assure its
compliance with the legal procedures in Pakistan.

Their Responsibilities

 Coordinating with SECP

 Coordinating with Law authorities of Pakistan
 Handling up Legal communications with Courts
 Defining Legal Liabilities
 Assisting in Commercial agreements with suppliers
  Licensing documents
 Drafting Notices
 Drafting of board resolutions
 Giving on time advice on local laws and regulations
 Providing legal opinion on local laws and regulations such as;

o Labor Laws
o Telecommunication laws
o Food laws
o Manufacturing site regulations
o Commercial Laws

 Protecting and updating the Patents and Copyrights when needed

 Conducting Legal Audit
 Reporting in General Assembly
 Maintenance of minutes book
 Report to General Counsel of CCI
 Evaluate and decide on actions to be subjected to the
o Ethic Code.
o Health & Safety
o And violation of Company policies and Procedures under the Disciplinary
Procedure.
 Defense of human rights
 Resolving Legal dispute that may adversely affect the business
 Advising and preparing HR documentation including
o Policies related to Human Resource
o SOP's and agreements
o Ensuring it’s compliance with the company policy
 Resolving disputes among the stakeholders of the company
 Acting as a support function for various departments within the Company.

Working of their Manager

 CCI Organization runs based on the relationship with their customers and business
partners, which is based on mutually beneficial agreements and Manager in Legal
department ensures establishment of such relationships through drafting agreements that
are mutually beneficial as well as enable the Company to take maximum benefits under the
business laws while avoiding violation of any regulatory laws of Pakistan. He Protects the
Company’s reputation of being a responsible corporate citizen which in turn earns them the
good will that makes them favorite brand of the consumers.

Manager works with his team to protect the business interests by ensuring statutory
compliances, mitigating legal risks and exposure to business thus safeguarding reputation
of the Company.

He represents company in all legal matters, managing all legal aspects of

transactions, acquisitions and regulatory matters having implications on the organization
and overseeing the work of outside counsels; He provides comprehensive legal and
compliance services to support to the country operations for achieving and securing
business objectives at optimal legal costs.

Corporate & Commercial

Legal Manager identifies, evaluate and mitigate legal risks. He safeguards the
company’s assets, handle the legal aspects of commercial and corporate transactions in
coordination with other departments of the company and coordinate with CCI where
applicable. Drafting, vetting and standardization of various agreements (including
commercial, services, supply chain, consultancy, toll filling, marketing, distribution, leases,
financial facilities, human resource, administration etc.), Addenda, Amendments, MOUs,
Notices, Letters, Replies, Opinions etc

He defends the company against third party claims and overall manages disputes as
well as he manages and keeps valid arrangements with the Parent company “The Coca-
Cola Company”.

Regulatory Affairs
 Legal manager Corresponds and interact with PSQCA, CCoP, SECP, SBP, BOI,
Local Bodies etc. He foresee and evaluate risk associated with the commercial and other
transactions and secure approvals from regulatory body concerned to safeguard and
enhance the company’s reputation.

Acquisitions

Legal Manager also works for Legal, corporate and commercial due diligence for
acquisitions and development projects and handle the legal aspects of development
projects Acquisition of lands, warehouses and/or sales centers and coordinate with internal
and external stakeholders Preparation of project documents including EPC, consultancy,
project management, turnkey and capacity enhancement.

Policies, Procedures, SOPs & Compliances

Legal Manager Provides legal assistance to all internal stakeholders in regards to

development / revision of internal policies, procedures and SOPS which ensure overall
transparency, efficiency and risk mitigation. He ensures that company is compliant to all
applicable laws & regulations, and provide legal advice and guidelines across territories.
Draft / vet internal and external information, publications, management of domestic and
international auditors’ observations and devise action plans to enhance level of
compliances He along with his qualified team leads the nationwide disciplinary proceedings
pertaining to misconduct of employees.

Training & Development

Spearhead nationwide trainings and refresher sessions on code of ethics, workplace

rights and provide guidelines across territories.

Litigation

Manager has to supervise junior counsel(s) in respect of pending and threatened

litigation at various forums relating to labor affairs, employment matters, taxation,
consumer, tribunals etc. Candidly weigh and assess risks of various course of action to
ensure compliance with legal mandates.

Taxation & Miscellaneous

Legal head Guides junior counsel(s) in providing support to tax department,

managing publicity and other tax matters. Appearance before various forums to represent
company.

Additionally

Manager has to Provide nationwide legal and commercial support and assist in
responding to queries from various departments of CCI and TCCC.

Company Secretariat:

Legal department has a Company Secretariat where these kinds of activities are
held as: requisite statutory filings; assist in arranging BOD meetings, AGM, EGM, Minutes,
Notices, Shareholder affairs, statutory records, right issue, allotment of shares and scripts
etc. Maintenance and management of corporate registers.

Outsourcing

Sometimes company needs to outsource the Legal services from the Local law
practitioners or Legal service providers. In case of any Legal affair, charge or lawsuit which
is to be handled by the law practitioners specialized in that type of case; The Legal
department hires the legal services from outside their department.

Most common Legal Issues

Water management

Coca Cola Içecek Pakistan has faced flak in the past due to its water management
issues. Several groups have raised lawsuits in the name of Coca Cola because of their vast
consumption of water even in water scarce regions. At the same time, people have also
blamed Coca Cola for mixing pesticides in the water to clear contaminants. Thus, Water
sourcing is an axe which can fall anytime on the head of Coca cola. If water is limited or
rationed, Coca Cola can experience a major downfall in their revenue and capacity of
distribution.

Actions taken

CCI Focusing on “using less while producing more” in their sustainability

understanding. So they aim to complete “Zero Waste” transformation in all CCI plants. CCI
started production under the status of “Zero Waste” in Hazar Damla Water Plant Turkey.
Hazar Plant is CCI’s fourth plant producing under the status “Zero Waste”.

Additionally, CCI has the best water and energy use ratios across the global Coca-
Cola system. That’s how they can legally defend themselves on the Water Management
issue.

Use of Plastic

The Policies and Regulations relates Environmental protections mostly forbids

company for making wastes and use of Plastic etc that increases Costs of Production

Coca Cola Içecek is acting on their principle of

“More quality, less waste”

With their effective projects carried out in packaging and recycling, in the last 8
years, CCI has used 15 thousand tons less plastic with its lightening works in PET
packaging and recycled 54% of the packages put on the market in 2017.

Health Concerns

In general society it prevails that carbonated sugary drinks is the major cause of
obesity and obesity-related diseases like diabetes and cardiovascular diseases. Coca-cola
is blamed to advertise and promote its products dramatically without acknowledging the
concern of bad impacts on health of its consumers.
Coca-Cola’s side

“Coca-Cola made a narrative on this issue that: “Consumption of Coke is part of a

healthy diet. It has been working with scientists to reframe the debate on the link between
sugar-sweetened beverages and obesity and concluded that with an adequate amount of
exercise or physical activity and keeping account of the sugar levels in diet consumer will
never be harmed by the soft drinks as the case for Coca-Cola.”

Coca-Cola’s Channel stuffing

A lawsuit was filed against Coca-Cola accusing the firm of coercing bottlers in
outside regions of the USA into the purchase of hundreds of million dollars’ worth of surplus
beverage concentrates in a bid to seemingly make sales seem higher than was true.
Channel stuffing as this case is called presents artificially inflated sales deemed at
deceiving investors to affirm that the company was doing better than it actually was. It gave
investors a false understanding of the firm’s success.

Coca-Cola had earlier gotten off with a warning pertaining to a similar lawsuit. United
States Security and Exchange Commission was quoted to have said the firm misled
investors into putting funds into the firm using falsified figures to lure investors as the firm
failed to disclose end of period practices that truly depicted operational results of the firm.

Coca-Cola immediately initiated its Ethics and Compliance committee to discuss

concerns focusing on compliance with the organization’s Code of Business Conduct.
Investor trust was significantly diminished and in 2008 Coca-Cola settled a channel stuffing
lawsuit for close to 135.5 million dollars (Reuters). The firm however issued a statement
emphasizing that the settlement was not a confession of wrong doing or an act of guilt
rather the firm said the settlement was a strategic move to avoid a full drawn out legal battle
that would further put the firm in the more bad light.

In Nutshell

As part of the mission of Coca Cola Içecek Pakistan “ To achieve the Position of best
FMCG company across the market.” It is utmost responsibility of Legal Department to
maintain the goodwill of company among the consumers as well as the government and
investors. Legal department always keep eye on internal and external activities of company
and environment especially political environment, so to quickly and effectively respond any
claim from third parties or country’s regulatory authorities. Legal Department works
professionally to minimize the legal cost of their company.

Some Legal Information of Company

Paid-in capital TL 254,370,782

Registration date 30.05.1990

Registration number 265859

Trade registry office Istanbul Chamber of Commerce

Central registration number 0611000816000014

News: CCI and TCCC have renewed the existing Bottling Agreement for further 10
years effective 1 January 2018.

Our Comments:

We have found their legal department as best suited to their company and it is the
need of their organization. Legal department is working side by side with the other
departments in the organization to support each of the legal activity.

The working of legal department is very efficient and effective as they handled many
critical situations very professionally and they managed intelligently to reduce the legal cost
to company very effectively.

Recommendations

 To turn the legal environment into favors of the company Legal department must
establish understandings with the political government of Pakistan which is
lacking in them.
 Government of Pakistan is ready to implement the environmental rules and
regulations strictly. So CCI must build their relationships fairly with the political
government bodies to build positive narrative about their company.
 On Health concerns Legal department must advice their company to launch the
awareness campaign in Pakistan to make people build the habits of healthy diet and
build a thought that “Not a soft drink but the habits of consuming soft drink is
harmful.”
 If Coca-Cola wants to continue to maintain its strong leadership status in the soft
drink industry, then it is recommended that the firm begin to initiate and engage in
discussions that are centered on scientific studies on brand product nutrition.

This initiative will be utterly essential in ensuring that consumers begin to see the
firm as a transparent and genuinely concerned brand with the wellbeing of its
consumer on the top of its priorities.

For any Information about Coca Cola Içecek Pakistan visit:

www.cci.com.tr.