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.

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.

Revelations of details about Chiquita's payments to the AUC has coincided with a widening political scandal in Colombia as ties between the paramilitaries and some of the country's top politicians and government officials come to light. Eight lawmakers and a governor are currently in jail on charges they colluded with the militias. Last week, arrest warrants were issued for six mayors.

Today, workers on what used to be one of Chiquita's farms lower their voices to talk about the case and are curious about why the company felt compelled to admit to making the payments. "Don't they all do it?" asked one supervisor at the packing plant that still supplies Chiquita.

'No secret' that firms paid militias

"It was no secret that the multinationals, especially in Urabá, paid that money," said Freddy Rendón, alias "the German," the head of a paramilitary bloc that operated in the banana region. Mr. Rendón is one of 57 paramilitary leaders who demobilized along with some 30,000 fighters as part of a deal with the government.

Chiquita did not just pay the AUC. It also admitted to – but was not prosecuted by the Justice Department for – paying the FARC and ELN rebel armies before the paramilitaries took control of the region.

Despite the nature of the AUC – blamed by human rights groups for some of Colombia's most gruesome crimes – Chiquita is only accused of breaking US law beginning in October 2001 when the AUC was officially named a "foreign terrorist organization" by the US State Department.Mr.

Mitchell said in a telephone interview from the company's US headquarters in Cincinnati that the motive behind the payments was to protect its employees. "We believe they saved people's lives," he said.

However, during the time Chiquita was paying the paramilitaries, thousands of people across Colombia died at the hands of the right-wing militias, which expanded from Urabá. In the banana belt alone between 1997 and 2004, paramilitary forces are blamed for 22 massacres in which 137 people were killed, according to government figures.

On one particularly bloody day in January 1999, 14 people were murdered in a killing spree that spread throughout the banana belt's four municipalities, after then AUC chief Carlos Castaño called off a Christmas-time truce. Hundreds more died in individual killings.

Alberto is a tall, self-assured man in his early 40s. But his voice drops to a whisper when he says he personally witnessed at least 10 murders on one of Chiquita's 26 plantations where he worked for 11 years.

He vividly remembers the last murder he saw on the Banafinca farm in 1999. When Alberto and his coworkers arrived on the plantation they saw two men known to be paramilitary henchmen standing menacingly near the packing plant. The thugs waited until everyone took up their workstations and then went into the field where one of Alberto's coworkers was climbing a ladder to bag a banana stem. "No one knew who they had come for that day," Alberto says.

The thugs waited until everyone took up their workstations then went into the field where one of Alberto's coworkers was climbing a ladder to bag a banana stem. "They cut off his head with a machete, dumped the weapon, then calmly walked to their motorcycle and drove off, without saying a word," says Alberto, who asked that his real name not be used.

Alberto cannot say whether the murder had anything to do with Chiquita's payments. But he says that the company's contributions to the paramilitary groups helped strengthen them and allowed them to expand throughout the country. "The money Chiquita paid helped finance the paramilitaries. Their coffers grew, and they were able to buy more weapons.

José Benítez, a leader of the banana workers' trade union, said Chiquita and the other firms that have paid paramilitaries must be held accountable.

"It's like they are trying to erase all those deaths with money that the victims here will never see. If there is justice, the Chiquita executives will see the inside of a Colombian prison," says Mr. Benítez.

Yolanda Rúa, a member of a women's peace organization in Urabá, says however that it serves little purpose to lock up company executives. Instead, she says, the $25 million that Chiquita will pay to settle the Justice Department's investigation should go to the victims of the paramilitaries that Chiquita supported. "We don't need a long prison sentence for them. We need to see some sort of reparation."

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