Chiquita in Columbia

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Chiquita in Columbia

I. Overview of the Issue
In 1997, executives at Chiquita Brands Banadex were faced with a very serious ethical dilemma, which would severely impact the future of the company. The executives were confronted by the leader of one of the most powerful terrorist groups in the state of Columbia and the company had a significant choice to make; Chiquita could pay the terrorist group a penny for every dollar of bananas exported in return for the safety of their employees or they could refuse the arrangement and their employees would live in fear of the relentless violence and dangers that characterized the region. Even graver, the leader of the group, Carlos Castano threatened to personally harm the employees, as they had done in the past. The terrorist group, known as the Autodefensas Unidas de Columbia, coined “AUC” for short, was deemed to be responsible for some of the worst massacres that the country had ever seen and was also an influential member of the drug trade in the region. The AUC’s success in dominating the region could be largely attributed to the fact that they had many followers and were estimated to have approximately 15,000 to 20,000 troops. Thus, in many cases these groups outnumbered government-deployed units and used brutality and drugs to hedge their influence.

As highlighted in the case, according to the U.S federal law and more specifically the Foreign Corrupt Practices Act (FCPA) passed in 1997, it is considered a crime for a corporation to make payments to a terrorist group, and Chiquita was well aware of this at the time of the confrontation. However, it was not uncommon for companies in the region to pay off these groups in order to protect their business and, in many cases, the well being of their employees. Critics of the law might see a loophole in the FCPA which ignores extenuating circumstances including the safety of employees and the inability of a business to continue operations if the agreement with the

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