Blood Bananas – Chiquita in Colombia
Introduction:
Banana is a serious and a complicated business when it comes to producing and delivering it to the consumers all around the world. As most of the banana production takes a place in the tropics, the largest consumers are the U.S., the European Union and Japan. Chiquita, Dole and Del Monte who are also known as “the big three” control 60 percent of the global banana trade. Dole was founded in Hawai in 1851 and had reported revenues of US $6.9 billion in 2007, being the largest producer and marketer of high-quality fresh fruits and vegetables. Del Monte is one of the largest and well known producers, distributors and marketers of premium quality, branded food and pert products for U.S. generating US $3.4 billion in net sales in 2007. Chiquita which has been the largest employer in Latin America for many years, was founded 1899 and is known for revolutionizing the banana trade by using refrigerated ships for the first time. In 2007, Chiquita was the leading distributor of bananas In the United States with annual revenues of US $4.7 billion.
Chiquita and terrorist ties
Chiquita has been known as a rapacious multinational corporation for a long time. Company has been blamed for having farmers work for long hours in dangerous conditions, contaminating water with agrochemicals and harming tropical forests for expansion. Its operations in Colombia have been the most controversial topic for a long time due to the instability of the region and the country. However in 1996, Better Banana Project led by Dave McLughin, persuaded Chiquita to allocate US $20 million to overhaul the environmental and employment standards at all of its farms, which employed 30,000 workers in Latin American countries.
Colombia, with a population over 45 million people, was known for the inequality in income of its citizens and the terrorist organizations which was claimed to be formed to protect poor against Colombia’s wealthier classes. Revolutionary Armed Forces of Colombia (FARC) and National Liberation Army (ELN) were the two initial terrorist groups formed to campaign against Colombian administration which is known for using harsh methods to stabilize the countries problems. These groups fund themselves by mainly through ransom kidnappings and “taxation” of the illegal drug trade. From 1999 to 2008, FARC and ELN were estimated to control up to 40 percent of the territory in Colombia. In 1997, Autodefensas Unidas de Colombia (AUC), with over 20,000 members, was created to counter the FARC and ELN. This armed group started to protect different local economic, social and political interests by fighting the insurgents in the areas they operate. The AUC was considered a terrorist organization by many countries, including USA and the countries of European Union. It fund its operations by cocaine related earnings and “donations” made by its sponsors. Chiquita made over 100 payments totaling over US $1.7 million to AUC to make sure its operations were safe and protected from other terrorist groups.
Chiquita was in a tough place to continue its business in Colombia since local government and its army was no help to protect its employees. Company CEO Fernando Aguirre said that company was forced to pay “taxes” to the guerillas (FARC) and (ELN) in the late 80s and early 90s and when AUC took over the control over the jungle they demanded the same thing. He made it clear that if the company did not make the payments, it would jeopardize its employee’s lives since AUC had already killed at least 50 employees.
Corporate Responsibility:
Everything started with an article that was published on Cincinnati Enquirer in 1998 regarding Chiquita’s operations in Colombia. Company was accused of mistreating workers on its Central American plantations, polluting the environment, allowing cocaine to be brought to USA on its ships, bribing foreign officials, evading foreign nation’s laws on land ownership, and forcibly preventing its workers from unionizing as well as other allegations. This article and the articles afterwards started to attract public and government interest in Chiquita’s operations. In 2004, Chiquita voluntarily disclosed that one of its Colombian banana subsidiaries had made payments to different terrorist groups between 1997 and 2004, in order to protect its employees. Back in 2001, when AUC was declared to be a specially designated foreign terrorist organization by the US government, Chiquita started to feel the pressure to investigate its own ways to sustain its business in Colombia by making payments to AUC. Even though company was warned by many internal and external sources to stop payments to terrorist groups between 2001 and 2004, Chiquita continued to make payments. Its rationale was, in order to protect lives of its employees; company had to continue to make payments. When the justice department started the investigation which lasted more than regular investigations, company still continued to deal with the terrorist organizations and tried to convince Justice to drop the case or at least agree to a non-prosecution agreement. While it worked for a while, the federal investigation lasted long because of the shifting Justice department personnel. The Justice Department said that Chiquita's senior executives reviewed and approved the payments, even though they had the knowledge that the AUC was "a violent paramilitary organization. In 2007, Chiquita became the first major US Company ever convicted of financial dealings with terrorists.
Suggestion and Situation Review:
The question is whether one can construct an argument that Chiquita has obligation not to cooperate with paramilitary groups, which have in the past committed serious human rights abuses as it has been reported concerning paramilitary groups in parts of Colombia? Many advocate that obligation not to cooperate may require a corporation either to withdraw its business from dangerous areas or to take measures to ensure that its corporate operations do not amount to complicity in the human rights abuses. The best solution in my view would be for Chiquita to withdraw its operations from Colombia. Having said that Chiquita’s solution to sell its subsidiary but continue to buying bananas from it still does not solve the moral and ethical problem and Chiquita still bears the responsibility for continued violence funded by its payments to the new owner.