Blood Bananas

Sunday evening’s 60 Minutes provided an interesting example of business ethics. It seems that Chiquita has banana growing operations in Columbia. Columbia has struggled with civil war and terrorism in the last couple of decades. Chiquita responded by paying protection money to whomever was in power in the region they had their operations (first the leftists then the rightists). Apparently these terrorists were quite brutal; several incidents were described including the murder of children in plain sight during the daytime as intimidation.

Chiquita defended its decision to pay the protection. Not only was their operation profitable, but they felt like they were making the payments for their employee’s protection. They employed upwards of 3,500 people in the region in question. Without Chiquita’s support, they felt like the employees would be at risk for exploitation. A counter view of the situation might accuse Chiquita of actually financing the terrorists. Chiquita responds by saying they were the victim, not the perpetrator of the violence.

In 2001 the US gov’t labeled the rightist groups as terrorists. This meant that any payments made to them were illegal under US law. Chiquita continued to make the payments for another 2 years because they said they didn’t know the terrorists had been labeled as such.
Ultimately Chiquita had a management change, sold their Columbian operations, and self reported their transgressions to the gov’t. The company pled guilty to a felony and paid a $20MM fine. (I wonder if they still buy Columbian bananas under contract). Many of the rebel terrorists have now disbanded and the central government has reestablished control in the region where Chiquita had its operations.

I acknowledge Chiquita’s coming clean of their crimes, but what took so long? What is a company’s responsibility when its main raw material is tainted (blood bananas like blood diamonds)? I think Chiquita could have done more and they seem to agree (somewhat) which I acknowledge. It seems like Chiquita is using a Utilitarian argument to defend their actions. We've seen the problems with Utilitarianism (although it can work for some things) and in this case a more Kantian approach is needed.