Chiquita, the Oppressor -- Part Two

According to Chiquita officials, the company currently owns 22 plantations in Honduras. However, Chiquita's battle against its former workers at Tacamiche has given rise to a chain of events which has produced questions about and counter-claims to the Cincinnati-based fruit company's ownership. During a 1994 strike, Chiquita closed four of its Honduran plantations and fired 1,200 strikers. Some of those workers in the company town of Tacamiche defied eviction orders and promptly began planting crops on part of Chiquita's defunct plantation. In February of this year, Honduran police and troops raided the town, destroyed crops, leveled buildings and arrested 100 "Tacamiches." Yet, despite support for the action from the Honduran courts, the Honduran president and a significant element of the press, Chiquita's grasp on those lands may now be less secure than it was before the company evicted the 123 Honduran families who had called Tacamiche home.BUYER BEWAREAccording to human rights groups and the Tacamiches themselves, Chiquita had no legal right to take action against them. The Tacamiches cite the Honduran land reform law, which mandates redistribution of defunct plantation land formerly used for export agriculture, as a justification for their land occupations. That law mandates that any holding over 250 hectares (or, about 625 acres) by a single owner be re-distributed by the government. One exception to this "holdings cap" is land which is in use for export agriculture deemed "essential" to the Honduran economy. By Chiquita's own admission, however, the land is no longer productive for large-scale banana production.Michael Windfuhr, executive director of FIAN-International, a human rights group based in Heidelberg, Germany, also questions whether Chiquita actually owns the land. During a visit to Honduras in August, Windfuhr obtained photocopies of documents which indicate that Chiquita has sold the land since its original acquisition. In fact, according to documents researched by Windfuhr at the Honduran title registry, the fruit company has sold the land three times since its original $1 "purchase" in the 1930s. "That is a problem not only relevant to Tacamiche; it is a general problem for the ownership claims of Chiquita in Honduras generally," says Windfuhr, who adds that he plans to return to Honduras to follow up on that title search and its implications.But Chiquita vice president Manuel Rodriguez claims the title is water-tight. "With respect to these lands, there is no question that we are the owners," says Rodriguez, citing a litany of evidence. Rodriguez points to the fact that the land is in the public title registry under the name of the Tela Railroad Company, Chiquita's Honduran subsidiary and that Chiquita has proven its ownership numerous times in Honduran courts. The president of the National Institute for Agrarian Reform has presented a certificate of ownership to Chiquita. And, as Rodriguez rather proudly points out, even the president of Honduras, Carlos Roberto Reina, appeared on television to affirm Chiquita's claim. That appearance, however, did little to convince those who say that Chiquita "ownership" of Honduran politics may be more secure than its title to the land.Following the February eviction, president Reina explained his decision to evict the squatters in the following terms: "It has not been understood, though I've said it a thousand times, that in Honduras we live under a state of law. That means that when coercion must be used, it must be used within the law -- ungovernability would be chaos, and disrespect for the law is a challenge to democracy."U.S. Ambassador William Pryce also took the opportunity to express his satisfaction that "the government has complied with the law, since the land is property of the Tela Railroad Company. "I have always said that respect for the law helps investment, and national and international investment helps economic development, and that helps the people, including the workers."Chiquita also had support for the eviction from some of the Honduran media. Writing two weeks before the eviction, an editorialist for the influential El Periodico suggested: "The social aspects involved in the problem should be looked at only after taking the appropriate measures called for by real estate law and juridical rights." But Honduran law may be subordinate in this case to international law. Whether or not Chiquita actually owns the land, FIAN International says the eviction violated a United Nations agreement. According to Windfuhr, "Honduras is a state party to the International Covenant on Economic, Social and Cultural Rights, and is therefore duty-bound to respect and protect the right to feed oneself as recognized in Article 11 of the Covenant."The eviction has also been challenged under local law by several Honduran organizations. The Roman Catholic Bishops of Honduras, the Committee for the Defense of Human Rights (CODEH), the Coordinating Council of Campesino Organizations (COCOCH), and the National Workers Center (CNTC) all argue that the court order that began the February incident called only for the squatters' arrest, not for the demolition and confiscation of property and homes. But Rodriguez says that throughout the demolition, a "field judge" directed police, troops, and Chiquita workers. Machine Gun Maloney's Report to the Board Be that as it may, since the eviction, simmering opposition continues to Chiquita's claim to the 3,000 acres of land bought from the Honduran government for one dollar in 1936 -- land which includes the now-demolished village of Tacamiche. According to the former residents and their supporters, while Chiquita may have justified its claim in local courtrooms, it has failed to do so in the more universal courts of history and human rights.These critics could cite such ethical authorities as Harvard philosophy professor Robert Nozick, whose book Anarchy, State and Utopia promotes a distribution of property based on two principles: justice in acquisition and justice in transfer: "Justice in holdings is historical; it depends upon what actually has happened," Nozick contends.When the normally smooth Rodriguez was asked how his company originally came to own the land encompassing the Tacamiche plantation, the Chiquita vice president laughed nervously. "I don't know," he said. "We have 22 farms and I just don't know how, decades ago, we came to own them. We can do the historical search, but that may take a while."Despite Rodriguez' fuzziness on the subject, however, the story of how one American company came to own so much Honduran territory is well known. And, when one takes even a cursory look at "what actually has happened" in the history of Chiquita's acquisition of land in Honduras, opposition to the company's claims is not hard to fathom. For most of its corporate life, the American-controlled company now called Chiquita was known as the United Fruit Company. When Eli Black bought the company in 1970, he changed the name to United Brands. The Lindner family, which now holds 46 percent of Chiquita's stock, took control of United Brands in 1987 and in 1990 changed the name to Chiquita.It was a savvy marketing decision, aimed at distancing the Lindner family interests from the monolithic overtones inherent in the United Brand/United Fruit name and, even more importantly, from the bloody and oppressive history of those companies. United Fruit, the company which founded the legacy of American businesses' questionable dealings in Honduras, got a large portion of its land in a railroad giveaway engineered by Samuel Zemurray, an American banana baron. In violation of U.S. law, Zemurray personally financed the overthrow of Honduran president Miguel Davila in 1911, after Davila had insisted on receiving a U.S. loan that would have meant higher export taxes. Rather than taking his chances on the open market, Zemurray decided to take control of the Honduran political process and enlisted the aid of Manuel Bonilla, a former Honduran president, and two famously disreputable American soldiers of fortune, "General" Lee Christmas and his sidekick Guy "Machine Gun" Maloney. Zemurray sent this crew to Honduras aboard his former U.S. Navy yacht, the Hornet. Equipped with a case of rifles, a machine gun and ammunition, the Zemurray contingent captured Puerto Cortez, gathered enough supporters to overthrow Davila, and shortly thereafter installed Bonilla as president.BONILLA'S BOUNTYBonilla immediately repaid his debt to Zemurray's Cuyamel Fruit Company, by extending to it -- and to the United Fruit Company -- tax breaks, port development rights and extensive railroad concessions. These considerable benefits led to expanded banana production and improved quality -- and afforded virtual monopolies for each company in the purchase of bananas within its respective regions of influence. In addition to these enormous incentives, Bonilla granted the American fruit companies large amounts of land to lay track. United Fruit received the Tela and Trujillo regions while Cuyamel got the western side of the Chamelecon River.In 1913, United Fruit formed its Honduran subsidiary, the Tela Railroad Company. Today the Tela Railroad Company -- now Chiquita's subsidiary -- owns the disputed Tacamiche land. As part of Bonilla's payback, for each kilometer of railroad the companies built in the 1910s and 1920s, they received 250 to 500 hectares. In an attempt to prevent them from exerting total control in any given region, the government reserved alternate lots for homesteaders. But the companies often illegally purchased or leased this reserved land for a nominal price through Honduran intermediaries.In addition to this subversion of law, United Fruit broke its original contract in several ways. That contract specified railway construction far into the interior highlands and ultimately to the capital city -- the kind of railway expansion which would have opened more of the country to economic development. But the companies preferred concentrating on the flat and fertile lowlands suitable for banana plantations. Predictably, the company railways tended to run parallel with the coastline. To maximize the acquisition of land, some lines even consisted of double and triple loops. The original deal also specified reversion of railway ownership to the government if the company ceased operation. In 1935, however, United Fruit dismantled 125 kilometers of track when it temporarily abandoned its Trujillo division, shipping rails and bridges out of the country.After the initial concessions, United Fruit slowly extended its holdings by periodically calling for "re-measurement." Local officials friendly to the company would survey adjoining lands -- and characteristically discovered they had smaller boundaries than previously recorded. The companies would then register the additional land in the name of United Fruit.The companies' control of the banana market and their ownership of the railroads in turn provided another avenue of land grabbing. They would simply refuse to buy from, and thus ruin, small independent plantation owners. The company could then buy the abandoned or confiscated farms for a song. In 1912, United Fruit owned 6,000 acres in Honduras. By 1924, the company had received as cost-free subsidy for railroad construction some 175,000 additional acres, and had acquired another 225,000 acres by other means.PLANTING BANANAS, SOWING THE SEEDS OF REVOLTThe losers in this game were poor Hondurans. As the population grew, land scarcity caused unemployment, fragmentation of holdings, and forced landless peasants into overpopulated urban areas and onto unproductive soil. Attempts by displaced Hondurans to cultivate wilderness areas in turn led to the erosion of topsoil on hillsides and to the beginnings of deforestation. In 1929, Cuyamel merged with United Fruit, with Zemurray the largest shareholder of the expanded company. Its control of the country's banana industry complete, United reduced its purchase price for banana bunches by 30 cents, reduced wages by 20 percent, and fired 800 employees.A strike in opposition to these conditions broke out in 1931, but government soldiers and armed groups loyal to United Fruit, acting under a declaration of martial law, arrested strike leaders and deported some by airplane to El Salvador. In the strike settlement, the company promised to provide housing and sustenance for workers, but refused to withdraw the wage reductions or rehire the hundreds of fired workers. While poor Hondurans scraped at unproductive soil, the American company accumulated more fertile land than it knew what to do with. In fact, with much of that land, the company did nothing at all. In 1946, United Fruit's ownership in Honduras had climbed to 410,000 acres. But the company planted only 20 percent of that land with crops. The surplus land gave United little incentive to construct irrigation systems, which it avoided doing until the 1930s -- when irrigation increased production fourfold. The excess land also allowed United to avoid the cost of developing disease- resistant crops until the mid-1950s.Along with its monopolization of Honduran land, United began to monopolize the nation's water supply. In 1932, the government granted United Fruit a 25-year contract for irrigation rights on 35,000 hectares. Partly as a result of this concession, general strikes and rebellions began throughout the Tela region.THREE STRIKES, YOU'RE OUTThe biggest Honduran labor dispute occurred in 1954, when a 69-day general strike, led by 25,000 United Fruit workers and 3,700 workers of various trades, crippled the country. The cost of living had increased 400 percent since 1945, while wages had risen only 40 percent. The workers demanded a 50 percent wage increase, but United Fruit offered only 19 percent. When the workers rejected the offer, the company persuaded the Honduran president Juan Manuel Galvez (a former United Fruit Company lawyer) to clamp down on the growing unrest by jailing the more vocal labor leaders, instituting curfews, limiting travel between towns, confiscating loudspeakers and assaulting union deputations. And -- just as Chiquita did in 1994 -- United Fruit evicted many strikers from company towns. In place of the jailed leadership, more compromising individuals took control of the strike council, which many workers denounced as traitorous. On July 9, 1954, shortly after United Fruit and the CIA overthrew the Arbenz presidency in Guatemala to forestall sweeping land reform there, the new Honduran strike leadership caved into company demands to settle the strike for a 20 percent wage increase. In that year, Honduras became virtually the last country in the hemisphere to provide a legal right to unionize.Perhaps in response to 1954's massive mobilization, between 1958 and 1960 the democratically-elected administration of president Ramon Villeda Morales distributed nearly 75,000 acres to landless Hondurans, most of which came from the enormous holdings of United Fruit. In 1962, Villeda shepherded through the first Honduran agrarian reform -- over howls of protest from United Fruit and its smaller competitor, Standard Fruit. A new agrarian workers organization, the National Federation of Honduran Peasants (FENACH), began organizing renters and other marginal tenants on United Fruit land.Villeda's support of agrarian reform led to his undoing. With the support of United Fruit, a Col. Oswaldo Lopez Arellano of the Honduran air force orchestrated a coup. On October 3, 1963, Col. Lopez Arellano seized power and deposed the Villeda government. Immediately thereafter, he halted the agrarian reform and repressed FENACH.THROWING HUMAN RIGHTS -- AND SOME HUMANS -- OUT THE WINDOW The United Fruit name may no longer exist, but the style it pioneered in Honduras seems to have survived. In 1975, United Brands paid Honduran government officials, including president Lopez Arellano, $1.25 million to lower a banana export tax, saving the company $7.5 million in the first year alone. After the bribes became public knowledge, however, Eli Black, chairman of United's board and its largest shareholder, flung his briefcase through his sealed office window and followed it 44 floors to his death on the pavement of New York City.Following the defenestration of United's chairman, the Honduran government collapsed. In 1990, Chiquita used the Honduran courts, military and -- according to some reports -- bribery, attempted kidnapping, death threats, and the derailing of a train loaded with bananas, to keep one of its growers, the Echeverria family, from switching to Fyffes, a Dutch exporter and Chiquita competitor. Fyffes had offered more for the bananas, which meant wages for Echeverria's workers rose from $5 to as much as $10 for a twelve-hour day. A reporter for the Wall Street Journal commented, "The spectacle of Chiquita squashing a Honduran grower that had managed to get better terms from Chiquita's much smaller competitor has rekindled Honduran's historical resentment of 'the Octopus'" (the popular term for United Fruit because its tentacles were reputed to reach into every area of Honduran life).On June 25, 1990, 10,000 Chiquita workers in Honduras struck in response to skyrocketing inflation caused by an International Monetary Fund-imposed 50 percent devaluation of the currency. Workers had not received a wage increase for five years. To keep the farms going, the Honduran army escorted 2,800 strike-breakers past angry picket lines. During one demonstration in front of Chiquita's Honduran headquarters in La Lima, a soldier fired his machine gun into the crowd, wounding two workers and an undercover police officer. When the conflict threatened to develop into a nationwide general strike, the government censored all radio broadcasts except official communiques.Currently, 25,000 workers from twelve different countries, including Honduras, are suing Chiquita and two other banana companies. The workers say Chiquita used the pesticide DBCP for several years after it became known in 1977 that DBCP caused sterility in men and may also cause birth defects and cancer. Chiquita says that its use of DBCP was of shorter duration than other companies' and that it is fighting the lawsuit in court.A SLIPPERY BUSINESSEven such an apolitical source as Destination Honduras, a travelogue series, makes the point in describing the country: "Honduras was the original banana republic, and is still one of the least developed and industrialized countries in Central America. Despite its turbulent history, the poor cousin of the region has barely registered on Western consciousness -- apart from its short role in the 1980s as a breeding ground for U.S. covert operations."Given the strong presence of Chiquita/United Brands/United Fruit in the country's politics and history, it is no accident that many consider Honduras the quintessential example of a banana republic. Bananas account for more than a third of Honduras' export dollars, and Chiquita produces the lion's share. But the company is bigger than the country. Chiquita's total annual sales exceed the Honduran gross national product. The 1990 Chiquita strike cost Chiquita a few cents per share; the Honduran economy, however, was devastated by an estimated $60 million loss.By 1990, even the Honduran president, Rafael L. Callejas, was referring to his country as a banana republic. After government troops helped defeat a strike, Callejas told the Los Angeles Times: "We want to be a banana republic, but not in the pejorative term of the past. We want to produce more bananas. We should become the largest producer of bananas in the world."However, unless Chiquita becomes more successful in living up to its responsibilities as one of the country's largest employers and in living down its violent corporate legacy, Honduras may instead become, in the waning years of the century, one of the world's largest producers of social unrest.Chiquita owns 126,000 acres of land outright, and leases another 41,000 acres, mostly in Costa Rica, Panama, and Honduras. The company has 35,000 employees in Central and South America, including 25,000 workers covered by 85 separate labor contracts due to expire between now and 1999. As Chiquita warns in a recent shareholder prospectus, further strikes are likely whenever labor contracts expire.To cleanse the term "banana republic" of its distasteful meaning, the Honduran government and Chiquita may have to be guided less by the wishes of the international investment community and more by the basic needs of Hondurans impoverished by a century of American corporate hegemony. Chiquita is the world's largest supplier of bananas, which account for 60 percent of its sales. No company that depends on such an inherently slippery business can afford to ignore public opinion indefinitely.In the United States, Chiquita brand bananas have higher name recognition than that of any other fruit company and Chiquita is trying to capitalize on that name recognition by extending it to a line of high-value frozen and processed foods. Industry observers say Chiquita's current investment in brand name extension, and the company's intense domestic competition with Dole (the fruit company, not the candidate) and European fruit companies, makes it particularly vulnerable to consumer actions such as a boycott.Meanwhile, increased international scrutiny regarding the impact of Chiquita's policies on living conditions and human rights in Central America may have begun to take a toll both on the company's public image and its industry standing. This year a corporate watchdog publication, Multinational Monitor, named Chiquita one of the world's top-ten worst corporations. Given the stakes, and the attention being focused on its future dealings with workers and the evicted Tacamiches, Chiquita might be well advised to add to its corporate balance sheets a line item labeled "human rights."

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