Case Study: ChiquitaFrom “Octopus” Company to Sustainable AgriculturePioneer?From the “Getting to Grips with CR” online CR course
United Fruit: A brief history• Founded by Minor Keith as UnitedFruit Company in 1899• Early/Mid 20th Century Monopolyon some countries in CentralAmerica• These became known as “BananaRepublics”
Chiquita: A brief history• United Fruit known as “El Pulpo”,The Octopus, by left wing opponents• Accused of bribery, workerexploitation, collusion in massacres,and highly monopolistic tendencies
Corporate colonialism?• Accused of destabilising Colombiain the 1920s• “Colluded” with CIA in overthrowof Arbenz Govt in 1954• Major influences on Cen. Am.conflicts & on Gabriel GarciaMarquez & Che Guevara
Corporate colonialism?• Supporters say UF providedemployment to tens ofthousands• Paid them nations best ruralwages• Offered employees medical careand rent-free housing• Six years free schooling for"countless" children
Their supporters also said..• Cleared and drainedthousands of acres of jungle- countrys most productivefarm lands• Converted Guatemala intomajor banana producer,ended coffee dependence.• All of which may be true• But for critics, thecolonialist way this wasdone meant the company’srole in destabilising centralAmerica far outweighed thebenefits of United Fruit
Turning points in sustainability• Early 1990s begins working withSustainable Agriculture Network ontwo farms• Persuaded by activist and nowRainforest Alliance Sust. agriculturehead Chris Wille to try newapproaches• Chiquita “founder member” ofRainforest Alliance
Turning points in sustainability• By 2000 all Chiquita-owned farmswere Rainforest Alliance certified• Issues covered included: waste,recycling, working conditions, safety,housing, sanitation and agri-chemicalreplacement. Today company focuseson all aspects of operations.
Not an easy journey…• 1998 investigation byCincinnati Inquirer newspaperrevealed series of ethicalbreaches at Chiquita• Ethics breaches ininvestigation meant Chiquitawon damages• 1998 Company also targetedby European activist groupslooking to improve bananasupply chain and productiontechniques• 2001 Chapter 11 bankruptcyprotection: Stayed committedto CR
Partnerships and positive change• Chiquita began, from 2000,working with independentsuppliers to help improvepractices• Credited by farmers with“revolutionising” practices(RA)• As of 2009, $20 millioninvested has resulted in morethan $100 million in savings• Trade Union agreement in2001 with COLSIBA &International Union ofFoodworkers on labour,working conditions
Modern Times• Company has been seen as a modelfor CR partnerships• First with Rainforest Alliance and theSustainable Agriculture Network,secondly with IUF / Colsiba• Now with ForestEthics to track andeliminate “Tar sands” oil fromoperations• Also widespread user of SA8000standards, seen as credible
Modern Times• Still criticised by labour and human rights NGOs:International Labor Rights Fund in 2013• Former subsid. Paid Colombian paramilitaries$1.7m from 1997-2004. Fined $25 million by USDoJ• Partnership with RA attacked as “greenwashing”• In 2008 ALL Lat Am banana operations hadSocial Accountability SA8000 certification,covering 17,000 people
Key lessons from Chiquita• Pilot projects play a key role• Eat the elephant a bite at a time• Stakeholder engagement can savemillions in operationalefficiencies• Partnerships, done right, offervital “License to Operate”• Stakeholder reputational capitalis vital, because something willalways go wrong!• Critics can emerge at any time…• For example EthicalOil.org urgesboycott due to Chiquita NOTbuying tar sands oil from Canada!
Key lessons from Chiquita• Past performance providesknowledge of engagement,experience of partnerships, butdoes not guarantee futuresuccess.• Company losing money in 2011-12. ($400m) Will this affectsustainability in longer term if itcontinues?• Sustainability, like anymanagement process orparadigm, is somethingcompanies must do every day,not once a year. Managementethos is vital to making it stick.• Chiquita not reported on CR since2008, a worrying sign…
References and further readingRainforest Alliance Chiquita Profile (2009)Wikipedia: Chiquita Brands International (2013)Big Fruit. New York Times Book Review (2008)Partnerships - Partners in sustainability, Ethical Corp(2012)Personal interviews, conference presentations anddiscussions with company executives, Unions andNGOs, since 2002Search Ethicalcorp.com for “NGO partnerships ,“NGO engagement”, “Rainforest Alliance”Chiquita – Voluntary disclosure’s banana skin, EthicalCorp (2008)Chiquita – Paying the price of honesty, Ethical Corp(2008)Ethical Corporation, Stakeholder Engagement SectionInternational Labour Organisation: The IUF/COLSIBA– CHIQUITA framework agreement: a case studyBusiness ethics, Going bananas, The Economist, 2012Chiquita’s Corporate Responsibility Reports (2008)
Want to know more?This presentation is part of the online CSR training course “Getting to Gripswith CR” which can be found at http://www.getting-to-grips-with-cr.com andfeatures more than 80 training videos and discussions on global CSRThe course is currently taking place with 70 managers around the worldtaking part. The next version will begin in September 2013. For more info orto sign up contact: Stefan.Jensen@stakeholderintel.com