According to recent court filings, Chiquita Brands International Inc. (NYSE:CQB), owner of the Chiquita banana company, will face a lawsuit that accuses it of illegally providing support to left-wing criminal groups in Colombia who murdered five American missionaries a decade ago. Chiquita is one of many companies caught in a public relations pinch, due to bad press related to their operations in Colombia. In Colombia, Latin America’s fifth largest economy, foreign companies operate in an environment that can put them in a squeeze between sabotage, terrorist attacks, and kidnappings by left-wing guerillia groups on one side, and theft, extortion, and attack from right wing paramilitary and criminal groups on the other side.
Many companies have complained that the steps they must take to protect their operations in Colombia, can make them liable to criminal charges abroad. On February 4, 2010 U.S. District Judge Kenneth Marra in West Palm Beach, Florida, ruled that families of the murdered missionaries may to pursue claims that the Chiquita aided and abetted in the murder and provided material support and resources to the terrorists.
The families accuse Chiquita of paying the left wing guerilla group known as the FARC for protection and supplying it with weapons from 1989 to 1997. Chiquita initially sought dismissal of the case, which was the first under a 1992 law allowing Americans to sue U.S. firms over terrorism-related deaths abroad.
In his ruling, Judge Marra argued that “Plaintiffs have sufficiently alleged that Chiquita’s provision of money and weapons to FARC aided and abetted the commission of the kidnappings and murders at issue.”
Chiquita has already been fined US$25 million after pleading guilty in March 2007 to engaging in transactions with a terrorist group for paying Colombian paramilitary militias $1.7 million from 1997 to 2004.
Chiquita has been accused of paying the FARC to intimidate labor unions and sabotage rival growers. The Chiquita case raises the importance of good governance disclosure and effective and transparent corporate social responsibility policies. In the end, after all, Chiquita shareholders will see the value of their holdings fall due to the bad press and concern over settlements.
