Abstract:
Chiquita Brands International and its leaders learned a very hard lesson about paying off terrorist groups to protect their employees. Over the past 25 years, no place has been more perilous for companies than Colombia, a country that is finally beginning to emerge from the effects its Colombian banana subsidiaries had made protection payments to terrorist groups from 1997 through 2004. The Justice Department began an investigation, focusing on the role and conduct of Chiquita and some of its officers in this criminal activity. Subsequently, Chiquita entered into a plea agreement that gave them the dubious distinction of being the first major U.S. company ever convicted of dealing with terrorists, and resulted in a fine of US$25
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company ever convicted of dealing with terrorists, and resulted in a fine of US$25 million and other penalties. To make matters worse, the industry was facing pressure from increasing retailer purchasing power, major changes in consumer tastes and preferences, and Europe 's imposition of an "onerous tariff" on companies that sourced bananas from Latin America. With this in mind, Fernando Aguirre, Chiquita 's CEO since 2004, reflected on how the company had arrived at this point, and what had been done to correct the course so far. He faced major challenges to the company 's competitive position in this dynamic industry. What would it take to position the company on a more positive competitive trajectory? Would this even be possible in this industry and in the business climate Chiquita faced?
Learning Objective
The case provides a vehicle for analyzing strategic, contextual, and ethical challenges underlying Chiquita 's presence in Colombia, a primary global source for bananas. The case highlights the trade-offs that Chiquita made while paying protection money to ensure business continuity and employee protection. Historic information tracks the evolution of the company from its early focus on owning plantations; growing, importing, and distributing bananas; sourcing, marketing, and distribution, to "downstream" value-chain activities that were more
We eat bananas almost every day; however, most of us do not really know where these fruits come from. In Banana Cultures, John Soluri focuses on the relationship between banana production in Honduras, especially in the North Coast between roughly 1870 and 1975, and banana consumption in the U. S.. He focuses on growing, protecting, transporting, and mass marketing of bananas. John Soluri integrates Agroecology, anthropology, political economy, and history in order to trace the symbolic growth of the banana industry. The author admits that his work is highly interdisciplinary, as a desirable trait in the academic world. The study incorporates a wide range of sources, including manuscript census data from Honduras, fruit company records, published scientific records, Honduran and U.S government correspondence, oral testimonies, and ephemera from U.S mass culture. Throughout his work, he combines elements of geography, biology, social history, foreign affairs, and environmental history. Soluri also looks at labor practices and worker’s lives, changing gender roles on the banana plantations, and the effects of pesticides in the Honduran environment and people. His central argument is that United States consumption of bananas causes major social, political, and environmental change in Honduras. In addition, he looks at the banana pathogens, the ways the United States treated these fungal diseases, and the terribly detrimental effects these new treatments had on the farmers on
The Michoacan state in Mexico has become the world’s largest producer of avocadoes. Although this vegetable is grown on farms throughout this state, it is also tied to an integral network of trade and export to countries across the globe. In this essay, I will argue that like any commodity chain study, the production of the organic Hass avocado has an intricate production process, which for my commodity chain study begins in Uruapan, Mexico a town in the state of Michoacan. This analysis has indicated the crucial underlying links to trade, labour, and demand that the export of this vegetable has created throughout North America
After the U.S. Justice Department determined that Chiquita’s payments were illegal and must be stopped, Chiquita pleaded guilty to one criminal charge of engaging with a terrorist organization and received a $25 million fine. Public admission and a guilty plea make the evidence clear that Chiquita knew they were acting irresponsibly and unethically. After the lawsuits were filed, Chiquita maintained it was a victim of extortion and simply trying to protect its employees. While Chiquita didn’t kill the victims directly, they funded the terrorist organization to buy weapons that killed the people. Chiquita had several opportunities to address the issue and change course but they didn’t. Even after being advised by their attorney that the payments
Colombian Defense Minister Juan Carlos Pinzon reported that the FARC brought in approximately $3.5 billion in 2012 (Hanson & Renwick, 2009). Reports from the US government claim that the FARC is responsible for 60 percent of all Colombian cocaine that is exported into the United States. (Hanson & Renwick, 2009)
Literary estimates show that FARC was responsible for the trade of nearly $2 million per day in drug trafficking. Money and political strength were near the heart of the groups’ daily functions. The finance of terrorism is also where the vulnerability in their maintenance lives. As described by Roberge (2013), “Financing terrorism’s main conclusion, which is more implicit than explicit, is that while combating terrorism financing is important to diminishing a terrorist group’s capacity to inflict harm, it is only one instrument among many with which to target organizations” (p.407). Through land rights, political participation, or economic reform, Columbia would work diligently to bring an end to a battle in 2014.
The video tells a story about a paint remover company, Phaust, which happens to be French company, Chemistre’s division in the United States. Phaust produces a paint remover called “Old Stripper” but they found out that their competitor company, Chemitoil, was planning to introduce a new product, “Eazy Strip” to the market which according to Hal, their market analyst, “was poised to make a dent” in Phaust’s market. To stay in competiton, they decided to develop a new product but since they wanted to save money, they made plans to construct a new plant in Mexico to produce this new product. They hired Fred Martinez, a chemical engineer and former consultant to Chemitoil, their competitor. Later in the video, Chemistre decided to cut down budget and Fred was tasked to reduce cost of construction costs
In the book, Banana: The Fate of the Fruit That Changed the World (2008), Dan Koeppel talks about the historical background of banana. He also talks about its’ importance to African farmers and its’ importance to Latin America and Asia in economic terms. He describes that a disease called blight has caused serious threats to banana crops, as it is rapidly destroying the banana crops around the world (Koeppel, 2008). In this book, the author describes the role of two mega companies; Dole and Chiquita. They are committing massacres in the name of producing cheap banana. In Latin, America Chiquita is exploiting the labor. It also supports
It seems that in going through Chiquita’s company background, that they have been somewhat of a shady brand since its origin. Eli Black, CEO in 1970, paid a US$1.25 million bribe to Honduran official in return for them reducing taxes on the company’s banana exports. He then proceeded to kill himself. The next CEO, Carl Linder, was know for ‘bottom fishing’ and led the company into bankrupty in 2002. Next in line to assume the title was Agguire.
Chiquita Brands International seems to have an autocratic leadership style locally but laissez-faire at headquarter level. In the 1960s, the Revolutionary Armed Forces of Colombia (FARC) and National Liberation Army (ELN) was founded and this cause guerrilla warfare. The FARC was against “the United States influences in Colombia, neoimperialism, monopolization of natural resources by multinational corporations, and paramilitary/government violence” (Schotter & Teagarden, 2010). They was aware of problems involving “farm workers labored long hours in dangerous conditions, agrochemical runoff contaminated water, and tropical forests were cleared for expansion” (Schotter & Teagarden, 2010). Furthermore, the drug cartels were within the country and providing illegal drug trades; which is when the United States backed the War on Drugs. Somewhere between late 1980’s and beginning of 1990’s, Chiquita paid “taxes” to the illegal drug trade while hoping to keep employees safe. No changes were made until 1992 when Dave McLaughlin, Managing Director and
South American groups continue to control the U.S. cocaine and illegal drug market for many reasons. Geographically, places, such as Colombia, are well-positioned both to receive drugs and to export the processed drugs to the United States. In addition, the area’s huge forests successfully hide clandestine laboratories and air strips, which aid the drug traffic. Most importantly, organizations have evolved from small groups into divided organizations that are sophisticated in their approach to trafficking in the U.S.
Ever since the "War on Drugs" campaign began there has been a more complex relationship between the U.S and Latin America. While the media portrays the U.S as providing aid to Latin America to combat such issues, the U.S is also seen as a victim in the war on drugs. Over the course of the war on drugs numerous human rights violations have been reported. In some Latin American countries, such as Mexico and Colombia, the U.S ' military and economic aid involvement contributes to human rights violations while creating and guaranteeing new spaces of investment for large private
Coca-cola boasts of being the world’s largest beverage company serving approximately one billion customers daily. The most dominant products distributed by Coca-cola are Coke, Fanta, Sprite and Diet Coke. This strategy is aimed at ensuring that every customer gets satisfied whenever they use a Coca-cola brand. Coca-cola has large distributions across the globe making it the largest distributor in the world. The late Roberto Goizueta termed Coca-cola to be an American company with large international business and a sizeable American business (Ferrell, 2008). This has helped a lot with brand selling as it is the most recognized brand in the whole world. “Coca-Cola has the most valuable brand name in the world and, as one of the most visible companies worldwide, has a tremendous opportunity to excel in all dimensions of business performance” (Ferrell, Fraedrich, & Ferrell, 2008). Coca-cola, however, has not been smoothly running over the decades in operation. It has on numerous occasions been criticized for overlooking some ethical standards that it should have rather upheld. This essay aims at looking into some of the issues facing Coca-cola, the most significant of them, how they were resolved and how Coca-cola should have solved them.
The Coca-cola bottlers’ incident where union members and the workers are murdered started on the 1990s. This incident is considered as a corporate crime. A corporate crime is a crime made by a company that harms other people’s lives. Sometimes they harm the ecosystem as well. However, on this case, the Coca-cola bottlers did not harm the ecosystem but they hurt their own workers and the union members. Coca-cola bottlers hired illegal paramilitary groups to intimidate, threaten, and kill their own workers. These paramilitary groups also threatened to lease a bomb attack on the union headquarters. All they did was to scare the lives of the union members and the workers. They also hired far-right militias of the United Self Defence Forces of Colombia (AUC) to murder nine union members. Coca-cola was able to dodge from this case as they claimed that they weren’t involved with the death of the union members. The killer itself is the AUC soldier and they got an order from the Coca-cola
Noca-Cola, an international soft drink company based in the U.S. has strategically located manufacturing plants in many developing countries around the world. One such plant is located in Colombia. According to sources, the general population are satisfied with the increased number of local jobs and improvements to the county’s economic status. Conversely, the indigenous populations of Colombia recently initiated an informal claim purposing that Noca Cola’s Colombian based plant is situated on indigenous territory. In response, Noca Cola avows that the Colombian government granted permission to place the plant in indigenous territory, due to its potential benefit to the county’s economy. That being said, the Colombian government has a demonstrated record of ignoring the needs and rights of its indigenous groups, in exchange for royalties.
The Colombian Confederation of Chambers of Commerce (Confecámaras) recognized that Colombia had a set of norms and instruments for detecting, controlling, and punishing corrupt practices in Colombia. However, these mechanisms were not often applied, partly because of corrupt politicians. Confecámaras worked with local businesses to have clear rules and codes of conduct in procurement processes and to demonstrate the benefits of compliance.