Chiquita Case Study from Octopus to CSR Pioneer
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Case Study: Chiquita From “Octopus” Company to Sustainable Agriculture Pioneer? From the “Getting to Grips with CR” online CR course
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From the online course: http://www.getting-to-grips-with-cr.com A look at how the company evolved to become an ethics pioneer, and where next?
Transcript of Chiquita Case Study from Octopus to CSR Pioneer
Case Study: Chiquita
From “Octopus” Company to Sustainable Agriculture Pioneer?
From the “Getting to Grips with CR” online CR course
United Fruit: A brief history
• Founded by Minor Keith as United Fruit Company in 1899
• Early/Mid 20th Century Monopoly on some countries in Central America
• These became known as “Banana Republics”
Chiquita: A brief history
• United Fruit known as “El Pulpo”, The Octopus, by left wing opponents
• Accused of bribery, worker exploitation, collusion in massacres, and highly monopolistic tendencies
Corporate colonialism?
• Accused of destabilising Colombia in the 1920s
• “Colluded” with CIA in overthrow of Arbenz Govt in 1954
• Major influences on Cen. Am. conflicts & on Gabriel Garcia Marquez & Che Guevara
Corporate colonialism?
• Supporters say UF provided employment to tens of thousands
• Paid them nation's best rural wages
• Offered employees medical care and rent-free housing
• Six years free schooling for "countless" children
Their supporters also said..
• Cleared and drained thousands of acres of jungle - country's most productive farm lands
• Converted Guatemala into major banana producer, ended coffee dependence.
• All of which may be true
• But for critics, the colonialist way this was done meant the company’s role in destabilising central America far outweighed the benefits of United Fruit
Turning points in sustainability
• Early 1990s begins working with Sustainable Agriculture Network on two farms
• Persuaded by activist and now Rainforest Alliance Sust. agriculture head Chris Wille to try new approaches
• Chiquita “founder member” of Rainforest Alliance
Turning points in sustainability
• By 2000 all Chiquita-owned farms were Rainforest Alliance certified
• Issues covered included: waste, recycling, working conditions, safety, housing, sanitation and agri-chemical replacement. Today company focuses on all aspects of operations.
Not an easy journey…
• 1998 investigation by Cincinnati Inquirer newspaper revealed series of ethical breaches at Chiquita
• Ethics breaches in investigation meant Chiquita won damages
• 1998 Company also targeted by European activist groups looking to improve banana supply chain and production techniques
• 2001 Chapter 11 bankruptcy protection: Stayed committed to CR
Partnerships and positive change
• Chiquita began, from 2000, working with independent suppliers to help improve practices
• Credited by farmers with “revolutionising” practices (RA)
• As of 2009, $20 million invested has resulted in more than $100 million in savings
• Trade Union agreement in 2001 with COLSIBA & International Union of Foodworkers on labour, working conditions
How to try and communicate complexity
Modern Times
• Company has been seen as a model for CR partnerships
• First with Rainforest Alliance and the Sustainable Agriculture Network, secondly with IUF / Colsiba
• Now with ForestEthics to track and eliminate “Tar sands” oil from operations
• Also widespread user of SA8000 standards, 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 US DoJ
• Partnership with RA attacked as “greenwashing” • In 2008 ALL Lat Am banana operations had
Social 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 save millions in operational efficiencies
• Partnerships, done right, offer vital “License to Operate”
• Stakeholder reputational capital is vital, because something will always go wrong!
• Critics can emerge at any time…
• For example EthicalOil.org urges boycott due to Chiquita NOT buying tar sands oil from Canada!
Key lessons from Chiquita
• Past performance provides knowledge of engagement, experience of partnerships, but does not guarantee future success.
• Company losing money in 2011-12. ($400m) Will this affect sustainability in longer term if it continues?
• Sustainability, like any management process or paradigm, is something companies must do every day, not once a year. Management ethos is vital to making it stick.
• Chiquita not reported on CR since 2008, a worrying sign…
References and further reading
Rainforest 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 and discussions with company executives, Unions and NGOs, since 2002
Search Ethicalcorp.com for “NGO partnerships , “NGO engagement”, “Rainforest Alliance”
Chiquita – Voluntary disclosure’s banana skin, Ethical Corp (2008)
Chiquita – Paying the price of honesty, Ethical Corp (2008)
Ethical Corporation, Stakeholder Engagement Section
International Labour Organisation: The IUF/COLSIBA – CHIQUITA framework agreement: a case study
Business ethics, Going bananas, The Economist, 2012
Chiquita’s Corporate Responsibility Reports (2008)
Want to know more?
This presentation is part of the online CSR training course “Getting to Grips with CR” which can be found at http://www.getting-to-grips-with-cr.com and
features more than 80 training videos and discussions on global CSR
The course is currently taking place with 70 managers around the world taking part. The next version will begin in September 2013. For more info or
to sign up contact: [email protected]
