The Price Of Bananas

Steve Kroft On How Colombian Paramilitaries Landed A U.S. Corporation In Hot Water

This story was first published on May 11, 2008. It was updated on Aug. 9, 2009.

For American corporations, the rewards of doing business abroad are enormous, but so are the risks. And over the past 25 years no place has been more perilous than Colombia, a country that is just beginning to emerge from the throes of civil war and narco-terrorism.

Chiquita Brands International of Cincinnati, Ohio, found out the hard way. It made millions growing bananas there, only to emerge with its reputation splattered in blood after acknowledging it had paid nearly $2 million in protection money to a murderous paramilitary group that has killed or massacred thousands of people.

As correspondent Steve Kroft reported last year, the victims' families are now suing Chiquita in an American court, and investigators in Bogota and on Capitol Hill are looking at other U.S. companies that may have done the same thing.

From the air, the plains of the Uraba region are carpeted with lush foliage of banana plantations, which have long provided a livelihood for the people of northern Colombia. And for the better part of century, its best known product has been the Chiquita banana.

But since the 1980's, the business of bananas there has been punctuated with gunfire. First, the area was taken over by Marxist guerillas called the "FARC," whose ruthlessness at killing and kidnapping was exceeded only by the private paramilitary army that rose up to fight them. Chiquita found itself trying to grow bananas in the middle of a war, in which the Colombian government and its army were of no help.

"These lands were lands where there was no law. It was impossible for the government to protect employees," says Fernando Aguirre, who became Chiquita's CEO long after all this happened.

Aguirre says the company was forced to pay taxes to the guerillas when they controlled the territory in the late 1980s and early 90s. When the paramilitaries, known as the "AUC," moved in in 1997 they demanded the same thing.

"Did the paramilitaries state, specifically to you, that if you didn't make the payments, your people would be killed?" Kroft asks.

"There was a very, very strong signal that if the company would not make payments, that things would happen. And since they had already killed at least 50 people, employees of the company, it was clear to everyone there that these guys meant business," Aguirre says.

Chiquita only had a couple of options and none of them were particularly good. It could refuse to pay the paramilitaries and run the risk that its employees could be killed or kidnapped, it could pack up and leave the country all together and abandon its most profitable enterprise, or it could stay and pay protection, and in the process, help finance the atrocities that were being committed all across the countryside.

"These were extortion payments," Aguirre says. "Either you pay or your people get killed."

"And you decided to pay," Kroft remarks.

"And the company decided to pay, absolutely," Aguirre says.

There was no doubt in the company's mind that the paramilitaries were very bad people, Aguirre says.

Just how bad was already becoming evident. The paramilitaries, who were funded initially by large landowners, and later by the cocaine trade, not only drove the Marxist guerillas from the area, they tried to eliminate anyone who might have leftist sympathies, from labor leaders to school teachers. Sometimes entire villages were wiped out in the most grisly fashion. Gloria Cuartes was the mayor of Apartado, and witnessed much of it with her own eyes.

"I was a mayor whose job was just to gather the dead," Cuartes says.

In 1996 she went to a school to talk to the children about the violence that surrounded them. While she was there, the paramilitaries arrived and murdered a 12-year-old boy, whose only crime had been to announce their presence.

"They cut off his head, and they threw the head at us," Cuartes remembers. "I went into a state of panic. They were there for four hours, with their weapons, firing shots toward the ceiling. One hundred girls and boys were with me. The children did not scream. They were in shock."

Asked if they said anything to her, Cuartes says, "No. Their language was death. Their message was that if they could do this to children, they could do it to me."

As the atrocities piled up all across the country, Chiquita continued to make the payments to the paramilitaries, viewing itself as a victim of the violence, not a facilitator.