When commodity traders get caught

Companies and/or individuals involved: Chiquita Brands International, INC. (USA), Chiquita Fresh North America LLC (USA)

Charges: Financing a terrorist organization designated by the U.S. Treasury, breach of Alien Tort Claims Act and Torture Victims Protection Act, financing the murder of 8 Colombians

Swiss lawyers used: N/A

Countries affected: Colombia, Switzerland (after the establishment of Chiquita in 2008)

Proceedings: United States, Colombia    

Outcome: 

• United States: sentenced in 2007 to a USD 25 million fine, ordered in 2024 in civil proceedings to pay USD 38.3 million to the families of eight victims (appeal already announced by Chiquita)
• Colombia: pending

Asset recovery:  N/A

The case

Chiquita’s fate is closely tied to Latin America’s bloody history. In 1928, the company, known as the United Fruit Company, called in the Colombian police and army to subdue the 25,000 employees who were protesting for better working conditions. Hundreds of people were shot dead on the night of 5th to 6th December, during the “Banana Massacre”. In 1954, threatened by land reform in Guatemala, the United Fruit Company managed to convince Washington to overthrow President Jacobo Arbenz. Controlled by the CIA, the military coup triggered a 36-year civil war, which claimed some 200,000 lives. 

In 1989, the group decided to revamp its image, adopting the name of its mascot Chiquita. But while operating in challenging areas in Colombia, the company soon found itself plunged into the bloody conflict that had ravaged the country since 1964. As the Antioquia region was under the control of the FARC (Fuerzas armadas revolucionarias de Colombia – Revolutionary Armed Forces of Colombia) and the ELN (Ejército de Liberación Nacional – National Liberation Army), Chiquita began making payments to the left-wing guerrillas. But in 1997, the territory changed hands and the American multinational switched sides. In the following years, it paid USD 1.7 million, spread over about a hundred payments, to the Autodefensas Unidas de Colombia (United Self-Defence Forces of Colombia, AUC). This paramilitary group had a history of abducting civilians in the middle of the night, leaving it to their families to find their mutilated corpses.

In the territories they occupied, the AUC terrorized local communities, extorting from them or stealing their land to give it to wealthy Colombians or foreign companies. Peasants, trade unionists, Afro-Colombians and Indigenous people were murdered, while the AUC silenced any dissenting voices against major agricultural projects, and it was also involved in drug trafficking. 

According to testimonies from former Chiquita executives in Colombia and the minutes of internal communications, many of the company’s executives and directors were aware of these payments and approved them. Some of them even designed the payment systems and personally held discussions with the AUC to plan them. Chiquita, which admitted the facts in March 2007 and paid a fine of USD 25 million, has always denied any knowledge of the end use of the funds. 

There have been, to date, no charges brought against any Chiquita executive. And none of the victims’ families has received any compensation. A group of 17 of them, led by the NGO EarthRights International, has been fighting for two decades to get the multinational to recognize its share of responsibility in the deaths of their loved ones. More than 4,000 plaintiffs subsequently joined the lawsuits in the United States. Criminal proceedings against 13 former Chiquita executives were also launched in 2018 in Colombia.

Chiquita – which moved to the shores of Lake Geneva in 2008 – has been fighting for 16 years to defeat the actions brought against it. The group claimed to be a victim of extortion in Colombia and stated to have made these payments for the sole purpose of protecting its own employees threatened by paramilitary groups. The unclear circumstances surrounding the murders have also drawn the proceedings out. Chiquita argued that it was impossible for the plaintiffs to prove that their loved ones were killed by the AUC, while many violent groups were vying with each other across the territory. 

In June 2024, Chiquita was found responsible for eight murders committed by the AUC during a trial in Florida. The multinational, which will appeal against the decision, also says it was a victim of extortion in this case where, according to its lawyer, “cutting and running was not an option”.

Documents related to this affair

• DoJ: Chiquita Brands International Pleads Guilty to Making Payments to a Designated Terrorist Organization And Agrees to Pay $25 Million Fine (19th March 2007)
• DoJ: Chiquita Verdict (10th June 2024)

Timeline

Legislative loopholes 

• Producers of raw materials operating in territories plagued by violence and extortion, finding themselves de facto involved
• Failure to monitor compliance with minimum legal standards at group level, as well as with the Code of Conduct.
• Long procedure to have the territorial jurisdiction of the justice system recognized and then the responsibility of the company
• No specific supervisory authority in the commodities sector and no appropriate due diligence obligations for traders