Corporate Responsibility at Chiquita

1
Corporate Responsibility at Chiquita

• Michael Mitchell
• Director, Corporate Communications
• Chiquita Brands International
• April 7, 2004

2
Our Company

• International producer and marketer of fresh
  produce
• 105-year-old company
• 3 billion in revenues
• Premium brand
• Healthy, nutritious, quality, fresh
• Operations and sales in more than 60 countries
• 24,000 employees worldwide, including 19,000 farm
  workers
• About three-quarters unionized
• Successful Chapter 11 restructuring completed
  March 2002
• New strategic focus on core fresh produce
  business, cost reductions and increased financial
  flexibility

3
Chiquitas situation 1990s

• A century of history, intrigue and reputation
• Pressure from NGOs for alleged environmental and
  human rights abuses
• Negative media

4
Our Initial Steps

• 1992 Rainforest Alliance
• Nine measurable and verifiable environmental and
  social standards for sustainable banana
  production
• 100 owned farms certified since 2000
• Annual farm-by-farm certification audits by
  independent NGO experts
• 8-year, 20 million effort
• 5 countries
• 120 farms
• 60,000 acres
• Expanding to independent suppliers

5
Our Core Values
Steering Committee 8
Employees 1,000
Senior Management 12

6
Verifiable Standards

• Rainforest Alliance Certification
• plus
• Social Accountability Internationals SA8000
• Multistakeholder contributions, including labor
  unions
• Based on core International Labor Organization
  and other human rights standards
• Similar to Ethical Trading Initiative Base Code
• Management systems, including procedures for
  continuity
• External verification and certification by
  accredited auditors

7
Organization Accountability

• Corporate Responsibility Officer reports to Audit
  Committee of the Board of Directors
• CR specialists in all divisions
• Management systems
• CR integrated into company strategy planning
• Annual CR objectives and bonus for managers
• All managers sign annual code of conduct
  compliance statement
• Education At all levels

8
Employee Participation Training
Letter boxes for confidential complaints and
suggestions
More than 17,000 workers in Latin America trained
in 2002
9
Performance Measurement
10
Transparent Reporting

• Strategy
• Standards Goals
• Performance
• Verification
• Key Issues
• Focus on Latin American Banana Operations
• 2002 Expand to include global logistics
  operations

2000
2001
2002
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Earning Credibility
Chiquita continues to impress. The transparency
of its corporate responsibility reporting and the
use of highly respected independent observersis
a track record which is unmatched in our work in
Latin America. While the road is long, Chiquita
has traveled far in a few short years. Stephen
Coats, Executive Director
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Engagement

• IUF-COLSIBA-Chiquita Agreement June 14, 2001
• Employment in Latin American banana operations
• Core ILO conventions
• Collaboration on worker health and safety
• Fair dealing and continuous improvement
• Negotiate in good faith
• Communicate in open, honest and straightforward
  manner
• Avoid public international campaigns or
  anti-union retaliatory tactics
• Collaboration on worker health and safety
• Committee to review serious or systemic
  violations

13
A Model for Labor Relations
We have seen real progress as a result of the
Agreement in a number of Chiquita operations. We
need to work hard to confront the serious
challenges that remain, particularly with some
Chiquita suppliers. I remain impressed with the
good faith and serious intent Chiquita has
brought to this process Ron Oswald, General
Secretary
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Timeline of key CR events
2002
2000
2003
1992
2004
Code of Conduct(SA8000) CR Officer 1st
internal audits 100 RA Certification
2nd internal audit with observers ETI
member Worker training Top 20 Sustainable
Stock Picks (SB20) 2nd Report SA8000 in Costa
Rica BSR Board
Rainforest Alliance Engagement
CERES-ACCA Sustainability Reporting Award SAI
Advisory Board SAI Corporate Conscience
Award SA8000 in Colombia and Panama EUREPGAP
in Colombia, Panama and Costa Rica 3rd report
with logistics SB20 again
OAS Corporate Citizen of the Americas Award
1998
Steering Committee Created
1999
Core Values 3rd-party pilot audits
2001
IUF / COLSIBA Agreement 1st CR Report
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Challenges

• Building understanding commitment at all levels
  
• Overcoming negative perceptions
• Limiting fears transparency, observers, etc.
• Integrating into management systems
• Extending standards oversight to more locations
  and suppliers
• Balancing priorities
• Sustaining momentum through Chapter 11 and change
  in leadership
• Raising industry accountability
• Demonstrating benefits

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Benefits

• Reputation management
• Risk management
• Employee satisfaction
• Innovation and learning
• Access to capital
• Financial performance

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Keys to Success

• Conviction
• Performance, not public relations
• Commitment
• Fundamental commitment to values
• Ownership by operating managers
• Communication
• Open, honest, direct communications with all
  stakeholders
• Consistency
• Everyday management and reward systems
• Continuous improvement
• Credibility
• Clear measurement and transparent reporting
• Building trust by committing and delivering

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Questions?

• More information about corporate responsibility
  at Chiquita is posted at www.chiquita.com
• Michael Mitchell
• Director, Corporate Communications
• Chiquita Brands International
• mmitchell_at_chiquita.com
• 513-784-8959