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Monday, April 16, 2012

Strategic CSR - Chiquita

Two recent articles about Chiquita Brands, the multi-national banana producer, gave me pause for thought. The article in the first url below reports that Chiquita will be forced to face charges in Federal Court in the U.S. regarding its role in making payments (opponents say ‘bribes,’ defenders say ‘payments to protect employees’) to terrorists in Colombia:

Chiquita, the global banana producer, was ordered this week to face a federal court over their role in paying off right wing death squads in Colombia. … Cincinnati-based Chiquita has been growing bananas in Colombia since 1899. For over four decades these operations have been under attack … . Court documents show that Chiquita executives paid off [two terrorist] groups. FARC was paid between $20,000 and $100,000 a month. Chiquita has also admitted to making over 100 payments totaling $1.7 million to the AUC or affiliated organizations over seven years.

In contrast, the article in the second url below bemoans the fact that, although Chiquita has made great strides in becoming more socially responsible in recent years, it has not received nearly sufficient recognition for its efforts: 

Chiquita traces its origins to the late 1890s and the United Fruit Company, which treated some of the Central American countries it operated in as banana republics. In recent years, however, the firm has made huge efforts to promote social responsibility and sustainability, working with activist groups such as the Rainforest Alliance. … Chiquita has signed and largely upheld a global agreement with local and international food unions. It has embraced sustainable farming techniques and allows products to be certified for environmental and other standards. Last year it promised to promote more women and to ensure there is no sexual harassment on the plantations it owns and buys from.

The second article also notes that Chiquita’s progress is particularly notable in contrast to the absence of similar efforts by its main competitors, Dole and Del Monte:

Chiquita’s conspicuous lack of reward is beginning to worry some veteran campaigners. Neither Dole nor Del Monte has been interested in following Chiquita in signing a global union agreement, says Ron Oswald, head of IUF, the international foodworkers’ union.“It’s not sustainable for any company in a competitive sector to make progress and gain no recognition for it,” he grumbles.

So, what are we to make of this? It is true, for example, that Chiquita volunteered the information about its activities in Colombia that are now being used against it in court (information the firm’s opponents would not otherwise have been able to get hold of). Chiquita’s actions appear genuine, along with the claim that HQ was taken by surprise at what was going on in the country. It is also true that rumors suggest it was not the only firm engaging in such activities in the region, but it is the only firm that has come forward. Should we punish firms for revealing flaws as part of their effort to become more socially responsible (thus, discouraging other firms from making similar commitments)? Or, should we be lenient on past corporate actions that flouted laws, regulations, and social norms?

Hmmmm ……… , not easy. The conundrum reminds me somewhat of the Truth and Reconciliation Commission that was set up in the aftermath of Apartheid in South Africa to encourage a full accounting of all the crimes and atrocities that occurred during that period (http://www.justice.gov.za/trc/). While at times being very hard to swallow, such institutions can allow for the sort of progress and change that we need to see in firms today. But, as I said, the process is often hard to swallow.

Nevertheless, if we believe that social responsibility will be more effective when it is perceived by firms to be in their best interests, rather than bluntly mandated by government regulators, we will need to start swallowing and reward those firms that are willing to stick their necks out with our encouragement.

Take care
David


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Chiquita Banana To Face Colombia Torture ClaimChiquita, the global banana producer, was ordered to face a federal court over their role in paying off right wing death squads in Colombia that are alleged to have used “random and targeted violence” against villagers in exchange for financial assistance and access to Chiquita’s private port.
By Pratap Chatterjee
CorpWatch blog

Going Bananas
Chiquita has tried hard to be good—and got no credit for it
The Economist
March 31, 2012,
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