Chiquita case puts big firms on notice
The company's admission that it paid Colombian paramilitaries $1.7 million has sparked outrage in Colombia.
Rows of stout trees hang heavy with bright green bananas on plantations near Colombia's border with Panama. Workers slice off each bunch and package the fruit in boxes with a label recognized worldwide for its fresh bananas: Chiquita.Skip to next paragraph
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In Colombia, however, the Chiquita name has recently come to symbolize the confirmation of a long-suspected relationship between multinational firms and illegal armies fighting in the nation's four-decade-old war.
Chiquita Brands International admitted in US court last month that it paid $1.7 million to Colombia's brutal right-wing militias over the course of eight years. The company said it did so to protect its employees and agreed to pay a $25 million fine. The case is sparking outrage in the capital, Bogotá, where officials want to see company executives on trial.
Many in Urabá, Colombia's banana growing region, shrug off the payments as normal. Chiquita pulled out of Colombia in 2004 by selling its Banadex subsidiary to a local company for $43.5 million. But the case could have implications for other companies doing business here or in other conflict areas around the world, analysts say.
"It's one of the first – if not the first – times that a [US-based] company is indicted and pleads guilty to providing material support to an organization known to commit widespread human rights abuses," says Arvind Ganesan, director of the Business and Human Rights program at the New York-based Human Rights Watch.
"But it's actually not a case about human rights," he says. "It's a unique case where terrorism is the crux of the whole thing." The single-count indictment against Chiquita was for "engaging in transactions with a specially designated global terrorist."
The right-wing United Self Defense Forces of Colombia (AUC) joined the ranks of Al Qaeda and Hamas on the State Department's list of terrorist organizations in September 2001. Colombia's two main leftist rebel groups, known as FARC and ELN are also on the list.
Companies across the globe should be looking at the Chiquita case as a cautionary tale, says Mr. Ganesan. "Even if [the security providers] are not on a terrorist list, [the Chiquita case] should provoke a real rethinking of security arrangements," he says. The AUC was not on the US terrorist list when Chiquita began making its payments.
At least three multinationals operating in Colombia – coal mining giant Drummond, Nestle, and Coca-Cola – have been targeted in civil lawsuits in the US that claimed these companies paid paramilitaries to kill or intimidate union workers. The Chiquita case could pave the way for investigations into other companies, as well. "Corporations are on notice that they cannot make protection payments to terrorists," said Assistant Attorney General Kenneth Wainstein on announcing the plea agreement. A Justice Department spokesman declined to say whether probes into those firms are under way.
Chiquita case could be a precursor
"If Chiquita can be prosecuted, then Drummond can," says Terry Collingsworth, an attorney with the International Labor Rights Fund which supports civil lawsuits against Drummond, Nestle, and Coca-Cola.
Chiquita is "now a sitting duck" for legal action by families who believe the company may be liable for their loved ones' deaths, Mr. Collingsworth says.
Colombia's chief prosecutor Mario Iguarán said Colombia may ask for the extradition of the eight Chiquita executives who according to court papers authorized or knew of the payments. "This was not payment of extortion money. It was support for an illegal armed group whose methods included murder," Mr. Iguarán said.
In 2001, more than 3,000 Central American rifles and millions of rounds of ammunition were unloaded at a Colombian port by Banadex and eventually ended up in the hands of paramilitary forces, according to an investigation by the Organization of American States. As part of an ongoing investigation into the shipment, Iguarán's office recently sent a formal request to the US Justice Department asking for all court documents relating to the plea agreement and all information the department may have that may pertain to the Colombian investigation. Chiquita spokesman Michael Mitchell told the Associated Press in an e-mail regarding the shipment that 'there is no information that would lead us to believe that Banadex did anything improper.' "
Iguarán also said his office has opened a criminal investigation against Drummond.