Chiquita denies responsibility to Hondurans

It is with nothing but dismay that I regard Chiquita Brands International Inc.’s response to Hurricane Mitch’s devastation in Central America. The company has reneged on its responsibility to cushion the blow of Hurricane Mitch in Honduras, the base of its Central American banana operations.

The tragic destruction visited on Honduras and Nicaragua last October by Hurricane Mitch will not easily be repaired. The United States has committed $170 million to relief efforts, in addition to canceling $40 million of Honduras’ formidable debt. But some economists have estimated damages to infrastructure and crops in both countries to be at least $5.4 billion, not to mention the thousands of lives lost in the storm and ensuing floods.

What is equally upsetting is the role Chiquita, as one of Honduras’ largest employers, has played in the humanitarian crisis. Chiquita owns much of Honduras’ infrastructure, including bridges, power plants, warehouses, irrigation systems, wharves and railroads, as well as holding responsibility for much of the nation’s GNP. Honduras, the original Banana Republic, is heavily dependent on the banana industry for employment. Chiquita’s wages and hiring policies have the power to decide for thousands of Hondurans the difference between subsistence and starvation. In light of this dependence, Chiquita has, at the very least, a responsibility to set a livable wage and to enforce fair hiring practices and compensation.

Chiquita, it has demonstrated, feels no such responsibility. In the immediate aftermath of Hurricane Mitch, Chiquita Brands International, Inc. informed the Honduran government that it would be laying off thousands of its 7,000 banana workers, some with half-pay but most without compensation until the company can assess the storm’s damages. When interviewed for a November 13 article in the New York Times, Steven Warshaw, president of Chiquita Brands International, Inc. would only comment that “We’re planning on assessing the damage as soon as possible…Then we will make our plans accordingly.”

No stranger to industry abuse, Chiquita Brands International, Inc. also came under criticism last May when Michael Gallagher of the Cincinnati Enquirer reported its violent monopolistic practices in Honduras. In an 18-page special section titled “Chiquita Secrets Revealed,” Gallagher documented that officials at Chiquita’s Latin American operations may have used life-threatening pesticides, orchestrated the kidnapping of a competitor’s former agent, had the Honduran Army raze a village close to a plantation, bribed Colombian officials and, through lax supervision, allowed drugs to be smuggled to Europe on its ships (Los Angeles Times, June 19, 1998). At the time of the article’s publication, the U.S. Securities and Exchange Commission was conducting its own investigation of Chiquita’s potential abuses.

Two months later, the Cincinnati Enquirer fired Michael Gallagher for unethical conduct for breaking into the voice mail system of Chiquita’s Cincinnati corporate headquarters and accessing the accounts of several of the company’s top executives. Chiquita won the suit, and the Enquirer not only retracted the May 3 articles and removed them from its website, but it also issued an apology stating that it “had now become convinced that the above representations, accusations and conclusions are untrue and created a false and misleading impression of Chiquita’s business practices.” (June 28, 1998)

Gallagher’s actions were illegal, and therefore the article was unprintable, but the Enquirer’s apology was more than just a condemnation of Gallagher’s shoddy ethics; it was a complete repudiation of any and all accusations of Chiquita’s dubious business practices. If anything, the fact that Gallagher pirated information from the company’s private voice mail system reinforces the accuracy of his accusations.

In a courtroom last week, Michael Gallagher named the source at Chiquita responsible for much of the information printed in the exposé. The April 7th New York Times article criticizes Gallagher’s decision to violate a journalist’s responsibility not to reveal sources, quoting a former colleague saying that “Gallagher sold out everybody.”

Prompted in part by Gallagher’s exposé, the Coordination of Latin American Banana Workers Unions (COLSIBA) launched what it called “The Chiquita Initiative” in September of last year to hold Chiquita accountable for poor working conditions and habitual abuses of its labor force. Negotiations were scheduled for October, but Hurricane Mitch struck the area less than two weeks before the meeting was to be held. In its aftermath, Chiquita became a vocal contributor to the hurricane relief effort, shipping emergency medical supplies and food to the region. (A very penitent Cincinnati Enquirer ran a story on Chiquita’s call for donations from the Cincinnati area.)

However, most of its workforce remains laid off. With many banana workers facing the prospect of indefinite unemployment, COLSIBA has less leverage to make demands of Chiquita. Temporary emergency aid is winding down and banana workers have few prospects for the future. Chiquita has used the current crisis as a justification for “streamlining their operating costs” by cutting the salaries of remaining employees, reducing health care benefits, and closing plantations. When Honduras is at its most fragile, Chiquita is beginning the process of disinvesting itself. For a nation with few other alternatives, Chiquita’s actions are a dramatic blow.

Nobody is suggesting that Michael Gallagher acted in an acceptable, or even legal manner. Chiquita cannot be faulted for Gallagher’s morally reprehensible decision to break into the company’s voice mail system to report his story. Nor can Chiquita be faulted for Hurricane Mitch’s disruption of the negotiation process with COLSIBA. Nor was it a particularly unusual business practice for Carl Lindner, the man who controls Chiquita’s parent company, to contribute substantially to both the Clinton and Dole campaigns in 1996 to lobby Europe to loosen its trade restrictions on the export of Central American bananas. In fact, there is very little for which we can blame Chiquita. The casual web browser wouldn’t even know Hurricane Mitch had touched down in Honduras if they relied on Chiquita.com for their information. They would, however, learn of Chiquita’s generous support of the “Friends of the Birds” for its endangered Great Green Macaw breeding program. Perhaps if Honduran banana workers were to gain endangered status from the World Wildlife Federation, then Chiquita would do its duty.