Chiquita is blamed for the actions of two terrorist organizations that extorted money from the company. Victims and their families of the attacks performed by these two terrorist organizations are looking for compensation from Chiquita, claiming that the company is responsible for making those attacks happen. Chiquita has to make a decision whether or not to take the responsibility for the actions performed by the two organizations.
Key Facts/Background FARC and AUC (two Colombian organizations currently designated by the U.
S. as terrorist organizations) purportedly threatened Chiquita’s executives to hurt employees in the Colombian plant if the company failed to provide the payments for their “protection. ” Chiquita continued to do so until two years after the U. S. designated AUC as a terrorist organization. The U. S. government fined Chiquita for giving “protection money” to FARC and AUC.
Now the victims and families of FARC and AUC are coming forward to claim compensation for damages they incurred due to actions that were financed in part by the money provided by Chiquita.
If the law that permits victims and their families to sue providers of support to the terrorist organizations passes, Chiquita may face multiple lawsuits for providing this support to FARC and AUC, which may amount to millions of dollars. The law is not yet in place but the problem that Chiquita is facing is already here. Stakeholder Analysis
Based on the case one of the main stakeholders is Chiquita. Giving money to FARC and AUC in the first place was not only illegal (after 2001) but also not aligned with, what could be perceived as company’s dedication to protect its employees—giving money may have (and actually did) encourage the AUC to continue to threaten Chiquita just like FARC did.
The company did not show that they are constant and coherent in their vision of corporate and social responsibility. They did not care about the communities they operated in as much as they cared about their own well being.
The issue is that the payments were already made and the company admitted to it, which ended with a plea agreement with the U. S. government. Now, the challenge is whether or not to admit that Chiquita is responsible for actions of FARC and AUC because “extortion” money has been paid. This may result in either lawsuits or settlements for all the damage incurred by the two terrorist organizations, which in turn will result in definite lowering of the bottom line and losing credibility.
At the same time (just like with the Tylenol case) if Chiquita acknowledges by itself the wrongdoing, it may recover its image of socially responsible company and show that it is aligned with their beliefs of protecting people (just as they protected their employees, they should protect all the people who are affected by their actions). If Chiquita will wait until law is passed and then fight over the responsibility, it will be costly, but also the company will loose all the credibility they built with the customers and shareholders over the decades. The U. S. judicial system is another main stakeholder.
If the law is passed, the courts in U. S. will be tasked with making a decision of whether Chiquita is indeed liable for, what the company was believing to be, paying the extortion and “protection” money to safeguard their employees against harm from FARC or AUC. Here the court may be in a dilemma, since the illegal activity that Chiquita engaged itself in was believed to be because it was trying to protect lives of their employees. Now, with one more law in place—to compensate those who suffered from FARC and AUC—the dilemma will boil down to determining if what Chiquita believed to be the reasoning behind these payments, was indeed it.
If yes, could we punish Chiquita for trying to protect their employees? The other main stakeholders are the victims (and their families) of FARC and AUC’s actions. They are trying to bring to justice people who are responsible for their suffering. Now, the challenge is that they are trying to bring to justice a company that was not directly but rather indirectly harming them. The reasoning behind this is the belief that the money Chiquita paid was indeed used in hurting those people. The victims and their families have right to demand justice.
The question remains, of who actually should be brought to justice. Options Analysis Based on the current situation (company already admitted to paying the money, internal documents that the money did provide benefits exceeding the protecting of the employees were unveiled, threat of lawsuits), Chiquita has couple limited options, which are based on justice and duty. First option is to come out now and take the responsibility for the actions of FARC and AUC. The law may not be in place yet, but this decision may show that Chiquita is standing by its promise to protect people affected by its actions.
This option definitely addresses the claims of victims and their families—they will get the compensation they are seeking. Chiquita will face multiple lawsuits and will be harmed financially, which affects shareholders of the company. In this case the reasoning behind the payments is brought in place—whether it was for corporate gain or protection of employees. Another option would be to refuse paying compensation to victims of FARC and AUC based on the fact that Chiquita did nothing directly to harm them. Moreover, they were protecting people by paying the terrorist.
If the law holding the company responsible for these actions is not in place, the company and the U. S. justice system are “off the hook” and the victims and families can’t seek to have their claims fulfilled. If the law holding the company responsible is in place, then Chiquita is going to be brought to justice and both the justice system and the victims will have their legal claims fulfilled. Recommendation It comes down to determining whether the company benefitted in other ways than protecting their employees from paying for the “protection” from FARC and AUC. From the information provided in the internal documents it seems like it did.
Even without the internal documents, Chiquita did benefit financially from being present for all those years in Colombia (Chiquita in Colombia Case, p. 4: according to AUGURA, “productivity on Latin and Central American plantations were three times greater than in the Caribbean, and costs to import were 50% lower”). The company had the direct benefit in paying the FARC and AUC for their “protection. ” Doing business in Colombia was lucrative and giving it up was (at that time) more damaging than paying terrorist. That’s why my recommendation to Chiquita is to come forward and admit to their wrongdoing and pay the claimants for their damages.
It will be hard to run a company with such past, but this lesson will (hopefully) help avoid such issues in the future (not only for Chiquita but also other companies who are doing business internationally in unstable political and security environments). Action Let’s say someone is threatening to kill me unless I give him or her my car. I know he or she may kill someone else with it—I wouldn’t give it up even if I paid with my own life for it. If my family is threatened—I give it up, since I am responsible for more people.
If the situation repeats over many years and every month I give up the car to protect myself and my family, more and more people are being killed. Do I admit to what that someone does? Am I responsible for this? I would want to think that not. But if there is a case of repeat actions like this, I would have to take that responsibility. And that’s why Chiquita should act on their core social responsibility values they preach. Synopsis By giving money to FARC and AUC, Chiquita approved of the actions of the two organizations. The solution is to now take the responsibility for these actions.
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