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Andreas Schotter Mary Teagarden Blood Bananas: Chiquita in Colombia

No one laughs at the banana in its areas of origin. It is too serious a business, on which jobs and lives depend. Peter Chapman, Author of Jungle Capitalists. For Chiquita Brands International, a pioneer in the globalization of the banana industry, bananas are not only serious business, they represent an array of economic, social, environmental, political, and legal hassles. Since its founding more than a hundred years ago as United Fruit Company, Chiquita has been involved in paying bribes to Latin American government officials in exchange for preferential treatment, encouraging or supporting U.S. coups against smaller nations, putting in place dictatorships in Central America’s “banana republics,” exploiting local workers, creating an abusive monopoly, and now doing business with terrorists.1 For American multinationals, the rewards of doing business abroad are enormous, but so are the risks. Over the past decades, no place has been more hazardous than Colombia, a country that is just emerging from a deadly civil war and the effects of wide-ranging narco-terrorism. Chiquita found out the hard way. It made tens of millions in profit growing bananas in Colombia, only to emerge with its reputation splattered in blood.2 In 2004, Chiquita voluntarily admitted criminal responsibility to the U.S. Justice Department that one of its Colombian banana subsidiaries had made protection payments from 1997 through 2004 to terrorist groups. Consequently, a high-profile investigation and legal trial followed. In 2007, Chiquita entered into a plea agreement to resolve the criminal prosecution. The interactions between the Justice Department and Chiquita were very contentious, but with the settlement, Chiquita expected that it could put the past behind and refocus on developing its business. However, in 2010, the victims’ families filed a separate lawsuit against Chiquita in an American court, demanding compensation. At the same time, investigators in Bogota and on Capitol Hill were looking at other U.S. companies that may have engaged in similar practices, dealing with terrorists as part of the conduct of business. 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?

Chiquita Brands International: Defendant The atmosphere in the Washington D.C. courtroom on September 17, 2007, was testy, with the lawyers on both sides pointing fingers at each other. The defendant, Chiquita Brands International Inc., had already signed a plea agreement that included a US$25 million fine and a five-year probation period. In addition, Chiquita was required to hire a permanent compliance officer.

The plea did not stop Assistant U.S. Attorney Jonathan Malis from taking a shot at Chiquita. He accused the company of making millions in proﬁts while paying off Colombian right-wing terrorist groups, including the AUC (United Self Defense Forces of Colombia), for almost seven years. He said the almost US$2 million in payments made by Chiquita “fueled violence” and “paid for weapons and ammunition to kill innocent people.”3

Copyright © 2010 Thunderbird School of Global Management. All rights reserved. This case was prepared by Professors Andreas Schotter and Mary Teagarden, with the assistance of Monika Stoefﬂ, for the purpose of classroom discussion only, and not to indicate either effective or ineffective management.

This document is authorized for use only by Nurbanur Demir in Managing in the Global Environment - MB46 taught by Michael Thomassen, Endicott College from July 2017 to August 2017. For the exclusive use of N. Demir, 2017.

Chiquita’s lead defense attorney, Eric Holder Jr., snapped back, accusing Malis of shading the facts, of “being a little too cute and a little too crafty,” as well as “a little deceptive.” Holder told the judge that the government was partly to blame for the company’s predicament. In 2001, the U.S. Secretary of State, Colin Powell, added Colombia’s AUC to the list of “specially designated foreign terrorist organizations” in company with mostly Middle East-based groups like Al Qaeda and Hamas. Holder argued that in 2003 Chiquita asked the U.S. Department of Justice if it should stop the payments to the terrorists. Holder said, “All the government had to do was, ‘yes, stop the payments,’ just say yes, but they never did.”

Bananas are Serious Business As one of the ﬁrst tropical fruits to be internationally traded, bananas are a cheap way to bring “the tropics” to North America and Europe. Over the years, bananas have become such a common, inexpensive grocery item that we often forget where they come from and how they get to us. Bananas ﬂourish in tropical regions, such as the Caribbean and Central America, where the average temperature is 80°F (27°C), and the yearly rainfall is 78-98 inches (198-249 centimeters). In fact, most bananas are grown within 10 degrees north or south of the equator. Iceland is an exception, where banana plants grow in soil heated by geysers.4

Bananas do not grow on trees; instead, they are perennial plants, which grow repeatedly from the same root system. They are related to the orchid, lily, and palm families. Bananas are harvested green and ripened during the transportation process, and as soon as the banana stem is cut from the plant, ripening starts. Within 36 hours, the fruit is packed in boxes and loaded onto refrigerated ships, where the cool temperatures slow down the ripening process. The whole trip, from plantation to grocery store, takes about two weeks.

The earliest recorded writings about the banana date from around 600 BC or earlier in India. There were several different varieties growing in the wild, all of which were inedible due to taste, and some varieties even made people ill. The Indian agriculturalists experimented with crossbreeding wild varieties of bananas, but while some of the resulting hybrids were edible, they were also sterile, which meant that the original plants needed to be crossbred each time someone wanted a new edible banana crop. Eventually, they came up with a hybrid that produced offshoots (suckers) that could be planted to grow into new plants full of sweet bananas.

Between 400-300 BC, bananas found their way eastward with Alexander the Great and his armies. The banana appeared in Chinese literature around 200 AD and then migrated westward to Africa. From there, it likely hitched a ride in the ships of Spanish explorers to the Canary Islands, Central and South America, the Caribbean, and other parts of the western hemisphere. Along the way, other hybrid breeds were created. New varieties were also developed in China. Somehow, a Chinese banana made its way to Great Britain and became famous as the “Cavendish Banana,” named after an important English family. The Cavendish became the great granddaddy of all commercial bananas sold in the 21st century. In 2010, there were 300 different varieties of bananas worldwide, of which about 20 varieties are being grown commercially, mainly in Africa, Asia, and Latin America.

In 2010, bananas were ranked third on the list of staple crops in the world after wheat and coffee, making them critical for economic and global food stability. Bananas are one of the biggest proﬁtmakers in supermarkets. The average American eats 27 pounds of them every year. Europeans also love bananas. For example, in Sweden the per-capita consumption was 35 pounds. In Eastern Europe, consumption was growing strongly and had already reached 20 pounds per capita per annum.

While bananas may simply be a humble fruit with a long history, the banana business creates serious environmental, economic, social, and political problems. Historically, the banana trade symbolized economic imperialism, injustices in the global trade market, and the exploitation of agriculture-dependent third-world countries.

From Banana Plant to Supermarket Shelf The banana marketing chain is heterogeneous and depends on a variety of local characteristics in both producing

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and importing countries. While banana production primarily takes place in the tropics (Exhibit 1), the largest consumers are the U.S., the European Union, and Japan (Exhibit 2). Many European countries buy their bananas from their former colonies in Africa, the Caribbean, or Asia. Ecuador and Costa Rica are the largest global producers (Exhibit 3).5 Exhibit 1. Global Banana Production

Source: http://en.wikipedia.org/wiki/Banana.

Exhibit 2. Distribution of the World Banana Imports Exhibit 3. Top Banana-Producing Average on the 2002–2006 Period Nations—2007 (in million metric tons)

India 21.77 China 8.04 Philippines 7.48 Brazil 7.10 Ecuador 6.00 Indonesia 5.46 Tanzania 3.50 Costa Rica 2.08 Thailand 2.00 Mexico 1.96 Burundi 1.60 Guatemala 1.57 Colombia 1.50 Source: UNCTAD Secretariat from FAO statistics. Vietnam 1.36 Kenya 1.19 Bangladesh 1.00 Honduras 0.91 Egypt 0.88 Papua New Guinea 0.87 Cameroon 0.86 Uganda 0.62 World Total 74.0 Source: Food and Agriculture Organization of the United Nations.

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Bananas are critical cash crops for many of the lesser-developed countries in the Caribbean, Asia, and Africa, where a large number of smaller grower organizations and individuals are engaged in export-oriented banana cultivation. While the smaller, independent producers cannot supply large quantities of high-quality fruit on a regular basis, they compete with the MNCs in many markets based on lower prices for their smaller, less standardized, but greater variety of banana types. In contrast, in Ecuador and Colombia, national banana corporations and large transnational companies dominate the banana business. In fact, Chiquita, Dole, and Del Monte, known as “the big three,” control 60 percent of the global banana trade.

Bananas, being a highly perishable good, require the careful control of growing, packaging, transport, handling, ripening, and distribution processes, resulting in a highly vertically integrated value chain, from direct growing of bananas in the producing countries, through ownership of specialized refrigerated shipping and ripening facilities, to wholesale and distribution networks in the importing countries.

The high capital investment required in the export and international distribution of bananas enabled “the big three” to profit from economies of scale. They were the only suppliers able to consistently provide large quantities of high-quality bananas at lower costs to wholesale and retail clients in the U.S., Europe, and Japan. They also made investments that resulted in the development of technological innovations in production, shipping, and marketing. Eventually, “the big three” controlled the higher value-added segments of the banana trade. Their strongest advantage was that, despite the high concentration of production and export of bananas in developing countries, primarily developed countries captured the benefits of banana trade, through the scale and efficiency enjoyed by their large transnational banana marketing companies.

Starting in the early 1990s, “the big three” gradually moved away from direct growing to focus on the more proﬁtable, and less nature-dependent, marketing and distribution activities. They established long-term supply agreements with independent local banana growers, while specifying shapes, quantities, standards of quality, packaging, and so on. By moving away from direct growing, Chiquita, Dole, and Del Monte also avoided other production risks, including those related to the occurrence of natural disasters and other environmental and social problems. The local producers now had to bear these costs. These independent producers were usually organized in associations that negotiated contracts with multinationals. However, since most of the value added in the banana business comes from transport and distribution activities, “the big three” still kept the lion’s share of the margins. Several local producers attempted to internationalize, but with little success. For example, Comunbana, a multinational banana marketing company launched by the Union of Banana Exporting Countries, failed because it lacked the required scale and upfront capital to enter the international banana trade. Nonetheless, there had also been some success stories, such as Uniban, the number one banana company in Colombia, with 32 percent market share in banana exports. Uniban sells to many countries around the world, including the European Union, North America, and nontraditional markets, such as the Mediterranean Region, Russia, China, and the Middle East. Traditionally, transnational banana-marketing companies were the driving force in the international market; however, in the early 2000s, the situation began to change. During this period, banana companies faced challenges caused by the increasingly more powerful roles that supermarkets and retail chains were playing. Concentration and consolidation in the retail sector had improved retailers’ positions and allowed them to move up the value chain. In fact, according to BananaLink, an NGO that tracks the banana industry, supermarkets were the only player in the banana chain to consistently make money. This power shift caused increasing vertical coordination among retailers, mainly through supply-chain management practices by larger retailers. Supermarkets tended to build long-term relationships with preferred vendors in order to guarantee a continuous supply at the desired quality level. The aim was to streamline operations by eliminating nonvalue- adding transactions. For example, in order to conform to general developments in the food sector, Dole shifted its management attention from the supply to the marketing side of the business, paying much more attention to strengthening its distribution network and supply partnerships with the retail sector. Given the concentration in the U.S. retail sector, Dole focused on long-term partnerships built on a year-round supply and increasingly more sophisticated logistical support. Chiquita also paid special attention to retail developments and followed 4 TB0245

industry trends. In 2000, 62 percent of its North American and 32 percent of its European sales went to the top 20 retailers.

Dole, Del Monte, and Chiquita: The Big Three Dole Food Company, Inc., founded in Hawaii in 1851, reported revenues of US$6.9 billion in 2007, and was the world’s largest producer and marketer of high-quality fresh fruits and vegetables. Dole entered the banana business by purchasing Standard Fruit and Steam Shop Company in 1968, the second largest producer and im- porter of bananas at that time. The company does business in more than 90 countries and employs, on average, 45,000 full-time permanent employees, and 42,000 full-time seasonal or temporary employees, worldwide.

Del Monte Foods is an American food production and distribution company headquartered in San Fran- cisco, California. Del Monte was one of the country’s largest and most well-known producers, distributors, and marketers of premium quality, branded food, and pet products for the U.S. retail market, generating approximately US$3.4 billion in net sales in ﬁscal 2007. With a powerful portfolio of brands, including Del Monte, S&W, Contadina, College Inn, Meow Mix, Kibbles ‘n Bits, 9Lives, Milk-Bone, Pup-Peroni, Meaty Bone, Snausages, and Pounce, Del Monte products can be found in eight out of ten U.S. households. The company also produces, distributes, and markets private label food and pet products.6

Chiquita was the successor of the United Fruit Company, which was founded in 1899. In 1903, the company revolutionized the banana trade by using refrigerated ships for the ﬁrst time. They were the largest employer in Latin America for many years. In 1970, United Fruit merged with AMK Corporation to become the United Brands Company, with Eli M. Black as chairman, president, and CEO. In 1975, the Securities and Exchange Commission uncovered a US$1.25 million bribe that the company had agreed to pay a Honduran ofﬁcial in return for reducing taxes on banana exports. Subpoenas were also issued regarding possible payoffs in Italy, West Germany, Panama, and Costa Rica. Shortly thereafter, Black took his own life.

In 1985, Cincinnati businessman Carl H. Lindner, Jr., who had a reputation in the ﬁnancial community for “bottom ﬁshing,” assumed the helm. The company changed its name in 1990, this time to Chiquita Brands International, and has operated with that name ever since. Lindner’s majority ownership of the company ended when Chiquita Brands International exited a Chapter 11 bankruptcy on March 19, 2002.

The company and the industry experienced considerable volatility in the ensuing years. According to CEO Fernando Aguirre, “Volatility is enemy No. 1 for the company.” In addition to ﬁnancial volatility, the industry was facing shifts in consumer preferences for healthy, convenient foods, such as prepackaged salads, sliced fruits, and bananas that stayed ripe, but not overripe, for several days.

In a 2007 interview with CEO Magazine, Aguirre commented, “Our key challenge is to control costs while supporting innovation efforts. Cost-saving programs have not been nearly enough to offset higher industry and other costs.” He continued, “The second challenge is to remain agile in a competitive, fast-paced marketplace that is characterized by growing consumer expectations. To strengthen our business and the power of our brand, we are developing strategies based on consumer brands for healthy, fresh foods and focusing on diversiﬁcation and innovation.” He concluded, “We are transitioning from low-margin commodities to more proﬁtable, value- added products, while maintaining excellence in food safety, cold-chain management, product quality, customer service, and in-store execution.”

In 2007, Chiquita was the leading distributor of bananas in the United States, with annual revenues of US$4.7 billion. In the fifteen months prior to this, Chiquita Brands had encountered significant challenges, including the European Union imposition of an “onerous tariff” on bananas imported from Latin America, their biggest market for that product; a tainted spinach scare that “tanked sales of Chiquita’s bagged salads”; and a US$25 million fine by the U.S. government.

For decades, the fruit giant was synonymous with the notion of the rapacious multinational. Farm workers labored long hours in dangerous conditions, agrochemical runoff contaminated water, and tropical forests were cleared for expansion. However, in 1992, Dave McLaughlin, Managing Director and VP, Agriculture of TB0245 5

the World Wildlife Fund, used his two Costa Rican farms as test beds to rein in environmental abuses in an en- deavor named the Better Banana Project. The changes he made, and their impact on the bottom line, persuaded Chiquita in 1996 to allocate US$20 million to overhaul the environmental and employment standards at all of its 127 farms, which employed 30,000 workers in seven Latin American countries. Chiquita phased out toxic pesticides, built new warehouses to store chemicals, began monitoring water quality, provided workers with better safety equipment, and started recycling programs. In late 2006, Chris Wille, sustainable-agriculture chief for the New York City-based environmental group Rainforest Alliance, which certiﬁed Chiquita’s progress, said, “It would be a challenge to ﬁnd a company that has come so far and so fast!”7

Colombia The Republic of Colombia is bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the northwest by Panama; and to the west by the Paciﬁc Ocean. With a population of over 45 million people, Colombia has the 29th largest population in the world and the second largest in South America, after Brazil. Colombia had the third largest Spanish-speaking population in the world, after Mexico and Spain.

Indigenous peoples originally inhabited the territory of Colombia. The Spanish arrived in 1499 and initiated a period of conquest and colonization, killing or taking almost 90 percent of the native population as slaves. They then created the Viceroyalty of New Granada (comprising modern-day Colombia, Venezuela, Ecuador, the northwest region of Brazil and Panama), with its capital in Bogotá. Independence from Spain was won in 1819, but by 1830, “Gran Colombia” had collapsed with the secession of Venezuela and Ecuador. What are now Colombia and Panama emerged as the Republic of New Granada. The new nation experimented with federalism as the Granadine Confederation (1858), and then the United States of Colombia (1863), before the Republic of Colombia was finally declared in 1886. Panama seceded in 1903 under pressure to fulfill financial responsibilities towards the United States government to build the Panama Canal.

Colombia has a long tradition of constitutional government. The Liberal and Conservative parties, founded in 1848 and 1849, respectively, are two of the oldest surviving political parties in the Americas. Colombia is a standing middle power with the fourth largest economy in Latin America, although income inequality is prevalent due to very uneven wealth distribution.

In 1999, at the inception of “Plan Colombia,” the World Bank stated that more than half of Colombians were living in poverty; the proportion of poor had returned to its 1988 level, after having declined by 20 percent between 1978 and 1995. The mid-1990s recession contributed to a rise in inequality, a decline in macroeconomic performance, and a doubling in unemployment. In 1990, the ratio of income between the poorest and richest ten percent was 40-to-one. Following a decade of economic restructuring, this ratio had climbed to 80-to-one by 2000.

Colombia is ethnically very diverse, and the interaction between descendants of the original native inhabit- ants, Spanish colonists, Africans brought as slaves, and 20th-century immigrants from Europe and the Middle East has produced a rich cultural heritage. This has also been inﬂuenced by Colombia’s varied geography. The majority of the urban centers are located in the highlands of the Andes mountains, but Colombian territory also encompasses Amazon rainforests, tropical grassland, and both Caribbean and Paciﬁc coastlines. Ecologi- cally, Colombia is one of the world’s most biodiverse countries. The Uraba region is carpeted with lush foliage of banana plantations, which have long provided a livelihood for the people of northern Colombia. For the better part of a century, its best-known product was the Chiquita banana.

Colombia, Bananas, and the Terrorists Since the 1980s, the business of bananas in Colombia had been punctuated with gunfire. The Colombian Armed Conflict and Colombian Civil War are terms that refer to the asymmetric low-intensity armed conflict in Colombia that began in the mid-1960s. At that time, the Revolutionary Armed Forces of Colombia (FARC) and later the National Liberation Army (ELN) were founded and subsequently began their guerrilla insurgency

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campaigns against successive Colombian administrations. The origins can be traced back to a conflict known as La Violencia, which had been triggered by the 1948 assassination of populist political leader Jorge Eliécer Gaitán. The subsequent targeting of civilians and public infrastructure by the different armed factions contributed both to the creation of the guerrillas and private paramilitary groups organized to fight against them. After the fall of the Soviet Union, the spread of the illegal drug trade, the emergence of powerful drug cartels, and the U.S.- backed War on Drugs increased the intensity of the conflict.

FARC is a Marxist-Leninist revolutionary guerrilla organization. It is a peasant army, which has proclaimed itself as a revolutionary agrarian, anti-imperialist organization of Bolivarian inspiration. It claims to represent the rural poor in a struggle against Colombia’s wealthier classes, and opposes the United States’ inﬂuence in Colombia, neoimperialism, monopolization of natural resources by multinational corporations, and paramilitary/government violence. It funds itself mainly through ransom kidnappings and “taxation” of the illegal drug trade.

FARC remains the largest and oldest insurgent group in the Americas. According to the Colombian government, FARC had an estimated 6,000-8,000 members in 2008, down from 16,000 in 2001. From 1999 to 2008, the FARC-EP, together with the ELN guerrilla group, was estimated to control up to 40 percent of the territory in Colombia. The largest concentrations of FARC guerrillas are believed to be hiding throughout the southeastern parts of Colombia’s 193,000 square miles of jungle and in the plains at the base of the Andes mountain range.

The ELN is a revolutionary Marxist guerrilla group that has been operating in several regions of Colombia since 1964. Their membership, as of 2009, was estimated to be about 1,500, down from a peak of around 4,000 in 1999. The ELN, less well-known than FARC, was strongly inﬂuenced by liberation theology at its founding. The ELN’s main source of income was levying of “taxes” on businesses and middle-class civilians in its areas of operation. To enforce these “taxes,” they frequently took civilians captive to use as leverage. While the ELN used the terms “war taxes” and “retentions” for these actions, critics insisted they were, in fact, “extortion” and “kidnapping.” The U.S. State Department had listed the ELN as a foreign terrorist organization, ostensibly because of its reputation for ransom kidnappings and armed attacks on Colombia’s infrastructure. In April 2004, the European Union added the ELN to its list of terrorist organizations for those actions and its breaches of humanitarian laws.

To counter the FARC and ELN, the AUC was created in 1997 as an umbrella organization of regional far-right Exhibit 4. AUC Members paramilitary groups in Colombia, each intending to protect different local economic, social, and political interests by ﬁghting insurgents in their areas. It was estimated to have more than 20,000 militants. The AUC was considered a terrorist organization by many countries, including the United States and the countries of the European Union. The AUC claimed its primary objective was to protect its sponsors and its supporters from insurgents and their activities, because the Colombian state had historically failed to do so. The AUC asserted itself as a regional and national counter-insurgency force. In 2000, former AUC leader Carlos Castaño Gil Source: Kevin Gray. The Banana War. claimed that 70 percent of the AUC’s operational costs were http://www.portfolio.com/news-markets/international- ﬁnanced with cocaine-related earnings, the rest coming from news/portfolio/2007/09/17/Chiquita-Death-Squads. “donations” made by its sponsors. In total, Chiquita made over 100 payments totaling over US$1.7 million to the AUC.8

As of August 2004, the U.S. had 400 military personnel and 400 civilian contractors on the ground in Colombia, and had spent US$3 billion in military aid. Before the Iraq war, Colombia was the third largest recipient of U.S. military aid, behind Egypt and Israel. The bulk of AUC demobilized by early 2006, and its former top leadership was extradited to the U.S. in 2008. However, local successors such as the Black Eagles continued to exist.

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As in many other places where they have operated, Chiquita found itself again trying to do business in an unstable environment, one in which the local government and its army were of no help. Fernando Aguirre, who became Chiquita’s CEO long after all this happened, described the situation: “These lands were lands where there was no law. It was impossible for the government to protect Chiquita employees.”

Aguirre reﬂected that the company was forced to pay “taxes” to the guerillas when they controlled the territory in the late 1980s and early 1990s. In 1997, when the AUC took over the jungle, they demanded the same thing, according to Aguirre:

There was a very, very strong signal that if the company would not make payments, that things would happen. They had already killed at least 50 employees of the company, it was clear to everyone there that these guys meant business.

Dealing with the Realities in Lesser-Developed Countries While in the banana-consuming countries in the West, the famous singing and dancing Chiquita mascot re- ﬂected happiness and often made one crave a banana, in the jungles of the rainforests violence ruled. A dark side remained to the banana business. The realities of doing business in some of the most dangerous places on the planet had been part of the management’s day-to-day life from the beginning. Few American companies operating in Latin America had been more consistently criticized than Chiquita and its predecessors, including the United Fruit Company.

Early on, the United Fruit Company owned vast tracts of land in the Caribbean lowlands. At its peak, it owned or leased approximately 3.5 million acres in Guatemala, Honduras, Costa Rica, Nicaragua, Panama, Cuba, Jamaica, the Dominican Republic, Colombia, and Ecuador. During the 1930s, United Fruit employed upwards of 100,000 people, more than 90 percent of them Latin Americans. The company also dominated regional transportation networks, including railways and a ﬂeet of steamships. One of the company’s primary strategies for maintaining market dominance was to control the distribution of banana lands. United Fruit claimed that hurricanes, plant diseases, and other natural threats required them to hold extra land or reserve land.

In practice, what this meant was that United Fruit, known as “the octopus” because of its reputed broad reach and inﬂuence over governments and the lives of its employees, was able to prevent the government from distributing banana lands to local individuals who wanted a share of the banana business. The United Fruit Company relied heavily on manipulation of land use rights in order to maintain its market dominance; this fact had a number of long-term consequences for the region. For the company to maintain its land holdings, government concessions were often required. This, in turn, meant that the company had to be politically involved in the region, even though it was an American company. In fact, the heavy-handed involvement of the company in often-corrupt governments created the term “banana republic.”

The United Fruit Company had a mixed record on promoting the development of the nations in which it operated. In Central America, the company built extensive transportation infrastructure, provided employment, and built numerous schools for the people who lived and worked on company land. On the other hand, it allowed vast tracts of land under its ownership to remain uncultivated and, in Guatemala and elsewhere, it discouraged the government from building highways, which would lessen the proﬁtable transportation monopoly of the railroads under its control.

In 1928, military forces in Ciénaga, Colombia, murdered thousands of United Fruit Company workers who were protesting against the bad working conditions in the company plantations. This episode was known in the history of Colombia as the “Masacre de las Bananeras” (Banana Massacre).

In Cuba, the 1959 revolutionary government led by Fidel Castro expropriated United Fruit Company holdings, which included sugar mills. In April 1960, Castro accused the company of aiding Cuban exiles and supporters of former leader Fulgencio Batista by initiating an invasion of Cuba directed from the United States. In one of many combative diplomatic exchanges before the failed Bay of Pigs invasion of 1961, Castro warned

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the U.S. that “Cuba is not another Guatemala.” Despite signiﬁcant economic pressure on Cuba, United Fruit was unable to recoup cost and compensation from the Cuban government for its expropriated assets.

Nowhere had the company been more castigated than in Guatemala. In 1954, the democratically elected Guatemalan government of Colonel Jacobo Arbenz Guzmán was toppled by U.S.-backed forces led by Colonel Carlos Castillo Armas, who invaded from Honduras. Abetted by the Eisenhower administration, this military opposition was armed, trained, and organized by the U.S. Central Intelligence Agency. The directors of the United Fruit Company had lobbied to convince the Truman and Eisenhower administrations that Colonel Ar- benz intended to align Guatemala with the Soviet Bloc. At the same time, United Fruit perceived a threat from the Arbenz government’s agrarian reform legislation and new labor code. United Fruit Company was the largest Guatemalan landowner and employer, and Arbenz’s land reform included the expropriation of 40 percent of United Fruit Company land. U.S. ofﬁcials had little proof to back their claims of a growing communist threat in Guatemala.

The relationship between the Eisenhower administration and United Fruit demonstrated the influence of corporate interest on U.S. foreign policy. American Secretary of State John Foster Dulles was an avowed op- ponent of communism, whose law firm of Sullivan and Cromwell had represented United Fruit. His brother, Allen Dulles, was the director of the CIA, and was a board member of United Fruit. It was the only company known to have a CIA cryptonym. The brother of the Assistant Secretary of State for Inter-American Affairs, John Moors Cabot, had once been president of United Fruit. Ed Whitman, who was United Fruit’s principal lobbyist, was married to President Eisenhower’s personal secretary, Ann C. Whitman. Many individuals who directly influenced U.S. policy towards Guatemala in the 1950s also had direct ties to United Fruit Company. The overthrow of Arbenz, however, failed to benefit the company. Its stock market value declined, along with its profit margin. The Eisenhower administration proceeded with antitrust action against the company, which forced it to divest.

In 1972, the company sold off the last of its Guatemalan holdings to Del Monte after more than a decade of decline. In 1975, an SEC investigation revealed that the company had bribed Honduran President Oswaldo López Arellano and Italian ofﬁcials. While it was not illegal at the time to bribe government ofﬁcials, it was illegal to hide bribe payment from shareholders. The scandal was named Bananagate. When the bribe was revealed, it provoked the overthrow of the Honduran military government.

Exposé and Corporate Responsibility On May 3, 1998, the Cincinnati Enquirer published an 18-page section under the title, “Chiquita Secrets Re- vealed.” In this article, investigative reporters Michael Gallagher and Cameron McWhirter accused the company of mistreating the workers on its Central American plantations, polluting the environment, allowing cocaine to be brought to the United States on its ships, bribing foreign ofﬁcials, evading foreign nations’ laws on land ownership, forcibly preventing its workers from unionizing, and a host of other misdeeds.

Chiquita denied all the allegations, and sued the newspaper after it was revealed that Gallagher had repeatedly hacked into Chiquita’s voice-mail system. (No evidence ever indicated that McWhirter was aware of Gallagher’s crime or a participant.) A special prosecutor was appointed to investigate, because the elected prosecutor at the time had ties to Carl Lindner, Jr. On June 28, 1998, the Enquirer retracted the entire series of stories, published a front-page apology, and paid the company a multimillion-dollar settlement. Chiquita’s Annual Report men- tions “a cash settlement in excess of US$10 million.” Gallagher was ﬁred, although Chiquita until today has not formally challenged any of the claims raised in the original articles. It seemed that the victory over the Cincinnati Enquirer was only a stage win in a much bigger case.

This “particularly damaging series of articles” was a catalyst that led Chiquita’s senior management to re- consider the personality of their company. They recognized the need to have a “uniform standard of corporate responsibility and the systems in place to consistently be able to demonstrate Chiquita’s quality and trustworthi- ness in regards to [Corporate Responsibility].” The company’s cooperation with the Rainforest Alliance through the Better Banana Project and the values of the new CEO, Steve Warshaw, were driving forces in the company

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formally embracing corporate responsibility. Chiquita’s managers reported that, “The CEO’s personal drive probably was the single most important factor in energizing the company for CR.”9

In August 1999, after formation of a Senior Management Group for Corporate Responsibility, nearly a year of discussion with senior leadership, and solicitation of input from almost 1,000 Chiquita employees, the company adopted a set of four Core Values (Exhibit 5) to guide the daily actions of all employees and provide a context for strategic business decisions. These were widely distributed on small cards for individual use and on posters for the entrance at each Chiquita location. In addition, the company created a senior ofﬁcer for corporate responsibility position.

Exhibit 5. Chiquita’s Core Values

Our Core Values resulted from interviews and discussions with approximately 1,000 employees worldwide about their personal values and the values they believe Chiquita should stand for. It is clear that these same values we hold dear as employees are also critical to sustaining trusting and successful relationships with our consumers, shareholders, suppliers, host governments, and communities.

Integrity •฀ We฀live฀by฀our฀Core฀Values. •฀ We฀communicate฀in฀an฀open,฀honest,฀and฀straightforward฀manner. •฀ We฀conduct฀business฀ethically฀and฀lawfully.

Respect •฀ We฀treat฀people฀fairly฀and฀respectfully. •฀ We฀recognize฀the฀importance฀of฀family฀in฀the฀lives฀of฀our฀employees. •฀ We฀value฀and฀benefit฀from฀individual฀and฀cultural฀differences. •฀ We฀foster฀individual฀expression,฀open฀dialogue,฀and฀a฀sense฀of฀belonging.

Opportunity •฀ We฀believe฀the฀continuous฀growth฀and฀development฀of฀our฀employees฀is฀key฀to฀our฀success. •฀ We฀encourage฀teamwork. •฀ We฀recognize฀employees฀for฀their฀contributions฀to฀the฀company’s฀success.

Responsibility •฀ We฀take฀pride฀in฀our฀work,฀in฀our฀products,฀and฀in฀satisfying฀our฀customers. •฀ We฀act฀responsibly฀in฀the฀communities฀and฀environments฀in฀which฀we฀live฀and฀work. •฀ We฀are฀accountable฀for฀the฀careful฀use฀of฀all฀resources฀entrusted฀to฀us,฀and฀for฀providing฀appropriate฀returns฀to฀our฀ shareholders.

Source: www.chiquitabrands.com/CorporateCommitment/CoreValues.aspx.

Being Held Accountable In 2004, Chiquita voluntarily revealed that one of its Colombian banana subsidiaries had made protection payments from 1997 through 2004 to terrorist groups. The Justice Department began a criminal investigation that examined the role and conduct of Chiquita and some of its officers in the criminal activity. This resulted in a plea agreement in 2007, through which Chiquita became the first major U.S. company ever convicted of financial dealings with terrorists.

In the case against Chiquita, the Justice Department focused on its payments to AUC. Chiquita’s Colombian subsidiary, Banadex S.A., ﬁrst began funding AUC in 1997 after receiving veiled threats directed at its property and employees. Before that, Banadex had paid FARC. Chiquita sent money to the AUC roughly each month “to protect the employees and property of Banadex.” Payments were always disguised as either a check to a third party who passed the money to the AUC, or as income to a Banadex employee who paid the AUC in cash.10

When U.S. District Judge Royce Lamberth accepted Chiquita’s plea in September 2007, the company did not receive the highest ﬁnancial penalty possible. Under the International Emergency Economic Powers Act, the 10 TB0245

company could have faced a maximum fine of twice its financial gain. Chiquita earned about US$49.4 million from its Colombian banana operations from September 2001 to January 2004, and could have been fined up to US$98.8 million. In determining the fine, prosecutors took Chiquita’s self-disclosure and full cooperation into account.

Judge Lamberth did not take the plea decision lightly. Despite accepting the plea, he was troubled by the fact that no company ofﬁcers were speciﬁcally named or held directly accountable. However, Prosecutor Malis had informed several of Chiquita’s executives, including former general counsel Robert Olson, that they would not be indicted for their roles in the scandal. Judge Lamberth let the prosecutor’s decision stand.

As a result, back in the rolling hills of Cincinnati, where Chiquita was based and 60-year old Olson enjoyed retirement, the ex-general counsel was able to begin putting the pieces of his shattered life back together. For nearly four years, the federal probe had hung over Olson. If he had been charged under a statute that penalizes offering material support to terrorists, he could have faced a maximum penalty of life in prison. Although Olson never discussed the trial in detail, he stated, “The entire experience was a [Kafkaesque] nightmare that haunted me day and night for years.” During the trial, Olson’s role in the scandal emerged in fascinating detail from the U.S. Attorney’s 18-page criminal complaint, the plea deal, the 23-page sentencing memorandum, and Chiquita’s ﬁlings with the Securities and Exchange Commission. It is the stuff of spy thrillers, describing veiled threats of violence, secret payments, and an excruciating moral dilemma. These documents, as well as interviews with attorneys from both sides of the case, paint a portrait of a company giving in to extortion, and paying terrorists to protect their employees. Olson was an executive more accustomed to dealing with the Cincinnati Opera, where he was a trustee, than with terrorists. Even after the four-year ordeal, he still believed in what he did: What kept me going was the knowledge that I had done nothing wrong…I had at all times tried to do the right thing in giving the company legal advice to help it decide how to deal with a horribly difficult situation. Even while admitting its guilt in the plea deal, Chiquita’s general counsel, James Thompson, defended Chiquita’s actions as morally right. The company was not facing idle threats of violence; in the past, left-wing guerrillas had killed four Chiquita employees in two separate incidents. Prosecutors did not accept excuses. Chiquita had a choice, Malis told the court: Chiquita “…could have left Colombia, but it made a business decision to stay. For Chiquita to say it had no choice but to be, quote, ‘a victim’ of extortion for years while it reaped the profits of those Colombian operations ... does not stand any legitimate scrutiny.” Payments to AUC Olson was aware of AUC’s true nature. He assigned an in-house attorney to investigate the payments in the fall of 2000. The lawyer’s research concluded that the AUC was “a widely known, illegal vigilante organization.” Whether to pay them was strictly an ethical question, because at that time it was not yet a crime in the United States or Colombia to give money to nondesignated terrorist groups. Olson and the in-house attorney reported the study’s results to the audit committee of Chiquita’s board of directors. The report by the company lawyers concluded that making the payments was extortion and “not a voluntary decision,” the records say. However, the directors decided to continue the payments. In 2001, the AUC’s legal status changed. Then-Secretary of State Colin Powell added the AUC to the roster of “specially designated foreign terrorist organizations.” Being placed on this list, which contains mostly Middle East-based groups like Al Qaeda and Hamas, meant that U.S. companies could not legally do business with them. Chiquita claimed that its executives never saw the news coverage of that designation, despite reports carried in major U.S. newspapers, the local Cincinnati newspapers, and nearly everywhere in Colombia. The payments continued.

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Olson claimed they first learned that the AUC was a designated terrorist group when an unidentified in-house lawyer stumbled across the designation on the Internet in February 2003. Olson then alerted Hills, a former chairman of the SEC, whose wife was Carla Hills, the U.S. trade representative under President George W. Bush. At least three top Chiquita executives took part in the decisions to pay off the AUC. Though court documents identify them only as individuals A, B, and C, sources close to the case say they were Cyrus Freidheim Jr., then chief executive officer of Chiquita and subsequently CEO of the Sun-Times Media Group in Chicago; Roderick Hills, director and head of Chiquita’s audit committee until he left earlier that year; and Olson. Lawyers for all three insist that they did nothing wrong under the circumstances.

Soon afterward, Olson called Chiquita’s outside counsel, Laurence Urgenson, in the D.C. ofﬁce of Kirkland & Ellis. Urgenson told Olson and the company on at least ﬁve different occasions in February and March 2003 that the payments were illegal and that Chiquita “must stop them.” Later on, when Chiquita waived its attorney- client privilege, notes taken by Urgenson’s associate during these conversations became part of the public record. Still, Chiquita did not halt the payments.

Eventually, Urgenson advised Olson to either end the payments or report them to the Justice Department. After Urgenson’s warning, Olson replied that he was of the opinion to “just let them sue us, come after us,” and said that Freidheim and Hills agreed. However, Olson took Urgenson’s advice to the full board of directors, and the members decided that the company should disclose the payments to the Justice Department and seek its guidance. So in April 2003, Olson and Hills trekked to Washington to meet with Justice ofﬁcials led by Michael Chertoff, then-assistant attorney general for the criminal division at the Justice Department, and then-President Bush’s secretary of Homeland Security. Urgenson joined them.

Olson and Hills told Chertoff that if the company simply stopped paying the terrorists, Chiquita would be endangering its employees. Moreover, suddenly pulling out of Colombia would have serious economic and political repercussions for that country, a close U.S. ally. Chiquita suggested that Chertoff consult with the U.S. Department of State and other federal agencies concerned about Colombia’s stability.

Exactly what Chertoff told the Chiquita executives became a hot-button issue in the case. The Justice Department admitted in the plea deal that Chertoff said the payments were illegal, but “the issue of continued payments was complicated.” According to Chiquita’s lead defense attorney Eric Holder, Chertoff told the Chiquita ofﬁcials that “This is a heavier meeting than I expected,” and that he would get back to them. Olson and Hills believed, according to attorneys close to the case, that there was an “unspoken, but clear understanding” with Chertoff that they could temporarily continue the payments while Chertoff considered the options.

Holder told the sentencing court that he suspected the government did not want to explicitly say to stop the payments “and then have blood on its hands if someone was, in fact, killed.” So Justice took what Holder called a middle position—acknowledging that the payments were illegal, but not explicitly saying “stop.” Holder was clearly outraged by the department’s wafﬂing. He said in court that if Chiquita’s disclosure had occurred during the time when he was deputy attorney general, and if his Justice Department staff had failed to act on it, “heads would have rolled.”

However, Chertoff failed to act. Olson and Hills reported to Chiquita’s board of directors that there would be “no liability for past conduct,” but there was “no conclusion on continuing the payments.” They said Chertoff would get back to them, but he never did. The executives did, however, eventually hear from the U.S. Attorney’s Ofﬁce. Chertoff handed off the case to U.S. Attorney Roscoe Howard Jr., then the U.S. Attorney in D.C., just before Chertoff left ofﬁce in June 2003. Howard then opened the Chiquita probe as a murder investigation. Murder? Howard asked: “They [terrorists] were capturing American citizens in Colombia and holding them for ransom or killing them. What would you call it?”

By that autumn, Howard said, his ofﬁce made it very clear to Chiquita that it would be held accountable for both past and future payments, “regardless of what they thought [Chertoff] had told them.” Records sup-

12 TB0245

ported Howard’s assertion. In the fall of 2003, Kirkland’s Urgenson sent Olson a note advising that, “Justice ofﬁcials have been unwilling to give assurances or guarantees of nonprosecution...and cannot endorse current or future payments.”

But Chiquita continued the payments. Then, in December, Hills e-mailed other directors that an audit committee investigation of the payments was under way “…because we appear to be committing a felony.”

By early 2004, Hills hired Richard Thornburgh, the former U.S. attorney general, to represent the audit committee. Thornburgh’s involvement triggered a pitched battle inside the Justice Department over whether to charge the company. When Chiquita “didn’t hear what it wanted to hear” from the U.S. Attorney’s Ofﬁce, Howard said, the company “ran back across the street” to the Justice Department. Records suggest that Justice’s criminal division began playing tug-of-war with Howard’s ofﬁce over how to handle Chiquita. The company continued sending funds to the AUC through February 2004.

Howard decided to serve a search warrant on the company and subpoenas on the directors. On March 24, 2004, sources close to the case said David Nahmias, then senior counsel in the criminal division in D.C., called Howard’s office to try to persuade him to cancel them. Howard confirmed the call. Despite Nahmias’ plea to wait, Howard’s office pushed on. The same day Nahmias called, federal agents served the warrants on Chiquita’s Cincinnati headquarters, taking documents and other materials. At the same time, agents served subpoenas on the directors, who were meeting in Fort Lauderdale. Prosecutors informed Chiquita that they were investigating both the company and individual officers’ roles in the case.

There was no payment to the AUC that March, nor would there be any more. In June 2004, after a few months of legal negotiations, Chiquita sold its Colombian banana holdings, also known as Banadex S.A., to a local company for over US$43.5 million. The deal included long-term contracts to buy more than US$33 million worth of bananas from the same farms.

The Plea By this time, Howard had left the U.S. Attorney’s Ofﬁce for private practice, but another prosecutor involved in the case recalled trying to go forward with charges: “We wanted to go to the grand jury and seek an indictment for providing material support to terrorists.”

Under the “material support” law, violators could be ﬁned and imprisoned for up to 15 years. However, if the death of any person resulted from the material support, then a violator could be imprisoned for life. The prosecutor said he waited for the deputy attorney general to sign off on presenting the evidence to the grand jury, “and that usually takes a couple weeks.” With this case, though, it took more than three years. Among other things, he said, Thornburgh wrote a letter to then-Attorney General John Ashcroft that successfully delayed the proceedings while Chiquita tried to convince Justice to drop the case, or at least agree to a nonprosecution agreement.

The strategy almost worked. From mid-2004 to late 2005, a noticeable gap appeared in the investigation’s progress. For one thing, the company’s SEC ﬁlings discuss no new events. For another, records show that Chiquita’s legal fees related to the investigation dropped from US$8 million in 2004 to US$2 million in 2005. After the investigation was rebooted in late 2005, legal fees jumped back up to US$8 million in 2006, and US$6 million for the ﬁrst half of 2007 as the company closed its plea deal.

Part of the delay also seemed due to shifting Justice Department personnel. From the time of Chiquita’s disclosure to the day of its plea, the case had passed through three U.S. Attorneys for the District of Columbia, numerous Assistant U.S. Attorneys, and four Deputy Attorneys General in the Justice Department. In addition, at the department, the case passed from the Criminal Division into the hands of the newly created National Security Division. Spokesman Dean Boyd rankled at the suggestion that there was a tug-of-war between depart- ments that delayed the case:

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“The [tug-of-war] allegations are unfortunate and distorted,” he said. “In fact, the department does not acknowledge any delay. We reached the plea agreement after an extensive investigation and discussion.”

The final decision to accept a plea deal was a three-way compromise hammered out among the U.S. At- torney, Chiquita, and the National Security Division of Justice. The key person in this pact was Justice’s Kenneth Wainstein. In the fall of 2005, he was confirmed to replace Howard as U.S. Attorney and inherited the case. A year later, Wainstein was promoted to Assistant Attorney General in charge of the National Security Division. By late 2006, when plea negotiations began, the Criminal Division at Justice had turned the case over to Wainstein’s unit. In essence, according to those close to the new Assistant Attorney General, he convinced his new staff and his former staff to end the tug-of-war. It was Wainstein who finally settled on the plea deal, and it was he who decided not to charge the individuals.

As for handling the payments to the AUC, Olson’s attorney, Robert Litt, argued his client acted appro- priately: If your child is kidnapped by terrorists who demand money to return your child, will you pay it? I think yes, you would. I would! There was no other way to protect [Chiquita’s] people. The top three executives who were under federal investigation were gone. Freidheim, who left at the end of 2003, had gotten into trouble as CEO at the Sun-Times Media Group because, according to SEC records, he failed to tell the board that he was the subject of a federal investigation. Freidheim argued that he did disclose it once it became public knowledge. Hills left Chiquita quietly in January 2007, when he chose not to stand for reelection to the board. Olson left the company in August 2006 in what was announced as an early retirement, but the terms of his leaving, spelled out in SEC records, suggest otherwise. He received a year’s pay and bonuses, plus compensation for a management consultant to work with him on unspecified matters, as well as payment for the lawyer who negotiated his termination package. Olson, who worked for 16 years in the legal department at Penn Central Corporation and rose to general counsel there before joining Chiquita in 1996, would say only that he retired. The Future In 2010, Chiquita’s new CEO was still grappling with fallout from the company’s dealings with terrorists. Fami- lies of Colombians killed or tortured by the AUC had filed at least three lawsuits against Chiquita—one a class action, accusing the company of funding the violence. Fernando Aguirre believes he understands the long journey that Chiquita had taken from its beginnings to its current situation. Bananas still represent 43 percent of Chiquita’s sales and remain key to the company’s future. He is optimistic that the company has the right products to deliver consistency, and observes, “The real challenge for us is to make them more available, [through] more distribution points and more opportunities for all of us to be able to grab them, buy them, and consume them.” He is still faced with the challenge to position the company on a more positive trajectory and escape the negative legacy and administrative heritage that continues to saddle the company.11 What specifically should he do? Had Olson and Chiquita taken the higher moral ground, as was claimed? Or had they, as Malis contends, made the “expedient” choice?

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Exhibit 6. Timeline of Events

Source: In The United States District Court for the Southern District of Florida Case No. 08-01916-Md-Marra/Johnson PowerPoint: In Re: Chiquita Brands International, Inc.

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List of Key Actors Aguirre, Fernando Chiquita’s CEO (since 2004) Ashcroft, John U.S. Attorney General (2001-2004) AUC United Self-Defense Forces of Colombia (Autodefensas Unidas de Colombia in Spanish), an umbrella organization of regional far-right paramilitary groups Banadex S.A. Chiquita’s Colombian subsidiary Chertoff, Michael Assistant Attorney General for the Criminal Division at the Department of Justice (2001-2003), Judge of the United States Court of Appeals for the Third Circuit (2003-2005), Secretary of Homeland Security (2005-January 2009) Freidheim Jr., Cyrus President and CEO of Chiquita (2002-2004), CEO of the Sun-Times Media Group in Chicago (2006-2009) Gallagher, Michael Investigative reporter for the Cincinnati Enquirer (1995-1998) Hills, Roderick SEC chairman (1975-1977), Director and Head of Chiquita’s Audit Committee (2002-2007) Holder Jr., Eric Chiquita’s lead defense attorney, now U. S. Attorney General (since 2009) Howard Jr., Roscoe U.S. Attorney (2001-2003), U.S. Attorney for D.C. (2001-2004) Lamberth, Royce Federal judge in the U.S. District Court for D.C. (since 1987) Lindner Jr., Carl H. CEO of Chiquita Brands International (1984-2002) Litt, Robert Robert Olson’s attorney Malis, Jonathan Assistant U.S. Attorney for D.C. McWhirter, Cameron Investigative reporter for the Cincinnati Enquirer (1994-1998) Nahmias, David Attorney for the Criminal Division at the Department of Justice (2001-2004) Olson, Robert Senior Vice President and General Counsel for Chiquita (retired 2006) Thornburgh, Richard U.S. Attorney General (1988-1991), Attorney for Chiquita Audit Committee (since 2004) Urgenson, Laurence Lawyer for Kirkland & Ellis, and Chiquita’s outside counsel Wainstein, Kenneth Senior positions within the FBI (2002-2004), U.S. Attorney for D.C. (2004-2006), Assistant Attorney General for National Security with the Department of Justice (2006-2009) Notes 1 Anup Shan, The Banana Trade War. “Bananas are serious business.” http://www.globalissues.org/article/63/the-banana- trade-war April 2010. 2 CBS News, The Price of Bananas, Steve Kroft on how Colombian paramilitaries landed a U.S. corporation in hot water. Aug. 9, 2009. 3 Sue Reisinger, Corporate Counsel (November 26, 2007). Blood Money Paid by Chiquita Shows Company’s Hard Choices. Corporate Counsel online, pp. 1-27. http://www.corpcounsel.com retrieved April 2010. This case relies extensively on this source for background information on the lawsuit and uses quotations drawn from the transcripts presented in the article. All quotations pertaining to the lawsuit are excerpted from this source. 4 Patty Inglish, A Guide to the Banana—A Political Fruit. http://hubpages.com/hub/Banana-Guide. Retrieved April 2010. Anup Shan, The Banana Trade War. http://www.globalissues.org/article/63/the-banana-trade-war April 2010. This section relies on these sources for background information. 5 Banana, Marketing Chain. http://www.unctad.org/infocomm/anglais/banana/chain.htm. Retrieved April 2010. This section relies on this source for background information. 6 Dole Food Company, SEC 10-K Report 2007, pp. 1, 25, 127; Del Monte Foods, SEC 10-K Report 2007. pp. 8, 11; Chiquita History. http://www.chiquitabrands.com/CompanyInfo/History.aspx; Richard Gibson (2007), Chiquita Sees an End to Storm, The Wall Street Journal, July 18, 2007, p. B3B; Dale Buss (2007), Agenda 2008, Chief Executive, 2:30, p. 37. This section relies on a variety of corporate and media sources for background information. 7 Jennifer Alsever (2006, November 17), Chiquita Cleans Up Its Act. CNNMoney.com: http://money.cnn.com/magazines/ fortune/fortune_archive/2006/11/27/8394414/index.htm. Retrieved April 2010. 8 Multinational Monitor, March/April 2007, p. 52; Andy Court (2009, August 9), The Price of Bananas, CBS NEWS. Retrieved April 2010. These sources provide the basis for this and the subsequent section. 9 The Cincinnati Enquirer expose and Marco Werre (2003), Implementing Corporate Responsibility—The Chiquita Case, Journal of Business Ethics, 44, p. 251. This section relies on these sources for background. 10 Unless otherwise noted, the remainder of this case relies on Sue Reisinger, Corporate Counsel (November 26, 2007), Blood Money Paid by Chiquita Shows Company’s Hard Choices, Corporate Counsel online, pp. 1-27. http://www.corpcounsel. com. Retrieved April 2010. Background information and all quotations are excerpted from this article. 11 Richard Gibson (2007), Chiquita Sees an End to Storm, The Wall Street Journal, July 18, 2007, p. B3B. http://cincinnati. bizjournals.com/cincinnati/stories/2007/04/23/daily20.html. 16 TB0245

This document is authorized for use only by Nurbanur Demir in Managing in the Global Environment - MB46 taught by Michael Thomassen, Endicott College from July 2017 to August 2017.