Banana Terrorists Scourge of the Southern Americas

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Banana Terrorists Scourge of the Southern
Americas!!
Thomas Biedrzycki Matt McNally Gabriel Castillo
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Overview

• Chiquita Brands International admitted in federal
  court Monday March 19th that for years it paid
  Colombian terrorists to protect its most
  profitable banana-growing operation.
• Federal prosecutors noted in court that from 2001
  to 2004, when Chiquita made 825,000 in illegal
  payments, the Colombian banana operation earned
  49.4 million and was the company's most
  profitable unit.
• The company pleaded guilty to one count of doing
  business with a terrorist organization
• The plea is part of a deal with prosecutors that
  calls for a 25 million dollar fine

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More Details

• Prosecutors say the Cincinnati-based company
  agreed to pay about 1.7 million between 1997 and
  2004 to the United Self-Defense Forces of
  Colombia (Known as AUC for its Spanish initials)
• Chiquita said that it was forced to make the
  payments and was only acting to ensure the safety
  of its workers
• The U.S. government designated the AUC a
  terrorist group in September 2001
• The AUC has been responsible for some of the
  worst massacres in Colombia's civil conflict and
  for a sizable percentage of the country's cocaine
  exports

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The AUC and FARC

• In addition to paying the AUC, Chiquita made
  payments to the National Liberation Army (ELN)
  and the Revolutionary Armed Forces of Colombia
  (FARC)
• Leftist rebels, like FARC, and far-right
  paramilitaries have fought viciously over
  Colombia's banana-growing region
• The victims are most often noncombatants, such as
  local businessmen and peasants who are accused of
  cooperating with another paramilitary group
• Most companies in the area do however have
  extensive security operations to protect
  employees.

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VERSUS
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FARC, a local terror

• Chiquita supposedly paid the 1.7 million dollars
  to protect their employees from potential abuse
  such as the following atrocities committed by
  FARC
• FARC is responsible for most of the ransom
  kidnappings and murders in Colombia
• The November 2005 kidnapping of sixty people, who
  are currently being held hostage by FARC, until
  the government decides to release hundreds of
  their comrades serving prison sentences.
• The February 2002 kidnapping of a presidential
  candidate, Ingrid Betancourt, who was traveling
  in guerrilla territory

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More about FARC

• The February 2002 hijacking of a domestic
  commercial flight and kidnapping of a Colombian
  senator on board
• The October 2001 kidnapping and assassination of
  a former Colombian minister of culture
• The March 1999 murder of three American
  missionaries working in Colombia, which resulted
  in a U.S. indictment of FARC and six of its
  members in April 2002.

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MARKETING IMPLICATIONS
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Financial Repercussions

• The company is set to be sentenced June 1. By
  law, it faces up to nearly 100 million in fines
  if U.S. District Judge Royce C. Lambreth does not
  accept the 25 million deal with prosecutors.
• Chiquita stock was rising sharply since until the
  deal was announced and now the companys shares
  dropped down 17 cents at 13.35 Monday on the New
  York Stock Exchange.
• Dole, a private company and their largest direct
  competitor, already has a 1.3 billion edge in
  revenue from last year, the gap will likely
  increase as a result of the upheaval caused by
  the dealings.

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Other Terrorism Impacts on MNCs

• Doing business in less developed countries with a
  poor legal enforcement infrastructure often
  presents Multinational companies with these kinds
  of ethical hurdles.
• In Nigeria, local terrorist factions routinely
  kidnap Chevron and Royal Dutch Shell oil company
  workers for ransom or political motives. Most
  foreign based companies opt to pay the ransom,
  such an action would lead to similar criminal
  charges for an American based company.
• Halliburton and other American companies have
  dealt with politically motivated kidnappings in
  Iraq and Afghanistan.

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Ethical Socio-political Implications

• Many companies and foreign government agencies
  have been speculated to negotiate with terrorists
  when securing the releases of workers, but most
  cases go without investigation.
• When the same thing happens with criminal
  organizations in America the victims are not
  penalized for being extorted, they are aided and
  protected.
• Put yourselves in the shoes of the victims
  family would you want them left at the mercy of
  a criminal organization abroad?

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ANY QUESTIONS??
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