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Chiquita in Colombia: Funding Paramilitary Groups to Protect Business and Employees
By Virginia G. Maurer
Virginia G. Mauer is the Huber Hurst Professor of Business Law and Legal Studies in the
Warrington College of Business Administration, at the University of Florida.
Teaching Notes
The Chiquita case highlights the moral and legal implications of doing business in a
politically unstable environment. Chiquita’s successive decisions pose a real-time and undeniable
threat to the firm. Whatever one thinks of the politics of the situation, it is obvious that Chiquita
has erred in managing this situation and the related problems. The challenge for the student is to
understand the facts, identify the alternatives, and determine whether the company selected the
“least worst” course of action at various points.
The case also highlights the conflicting demands of the various communities in which
Chiquita operates, formally and informally, voluntarily and involuntarily. At no time in the
relevant time period was the Colombian government able to provide the law and order on which
domestic peace and tranquility depend. While business can be a stabilizing force for peace in a
region, in the absence of the rule of law it may well create yet more instability.
In this case, unthinkable violence toward the community was the cost of preventing
unthinkable violence toward the company. The paramilitary groups used Chiquita’s funds and
assistance to pay guerillas and secure weapons to control territory by perpetrating violence.
Their methods included terrorizing the local population to suppress opposition, display power,
and subdue the population. Chiquita – and other multinationals in similar situations -- knew this
will happen when it provided financial support. To make matters worse, much of the battle for
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control of territory was a battle for control of the lucrative drug trade in Colombia. It was
impossible for Chiquita not to be an actor in this vicious drama created by forces exogenous to
the company and beyond its effective control.
It may be helpful for the instructor to post the relevant language of the Foreign Terrorist
Organization Act and the Alien Tort Claims Act on the course website, or to distribute copies
(web sites appear at end of teaching note).
Suggested classroom teaching methods
1. Case analysis in class discussion.
Case analysis should focus, first, on making certain that all members of the class fully
appreciate the facts, which means just getting the facts straight. Then it can focus on identifying
the alternatives at various points in time, and analyzing the ethical content of each successive
decision.
Possible options for Chiquita to consider in the 1990s include:
a. Providing private security on the plantation. This option implicates the possibilities of
c. Abandoning the region, or revisiting the wisdom of having returned to it in the 1980s.
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In further discussion, students often move to the question of what kind of strategic
analysis and planning accompanied the decision to return to the Urabá region.
In addition, students often seek to identify what kinds of organizational structures
increase the likelihood of top management seeing the apparent contradictions between Corporate
If the students are familiar with Thomas Donaldson and Thomas Dunfee’s “Integrated
Social Contract Theory” (see references), they may be encouraged to look at Chiquita’s problems
through the lenses of micro-social contracts.
Consider what parties are affected by Chiquita’s actions and decisions, and what relationship
Consider the microsocial contracts into which Chiquita has entered by adopting its Corporate
Consider the way the microsocial contract with the paramilitary bodies iinvolves Chiquita
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Consider the microsocial contract with the specific employees in the Uraba, who are
In particular, students can consider the nature of consent involved in each of these
If the students are familiar with the Albert Hirschman’s work, Exit, Voice, and Loyalty
(see references), they can consider the nature of and extent of each stakeholder’s options to
2. Preparatory or Out of Class Activities
The class can be divided into groups that have specific tasks, which could include:
a. Exploring the purposes, goals, and boundaries of the Foreign Terrorist Organization
Act.
b. Exploring the issues associated with bringing private securities forces into both
domestic and foreign soil.
c. Exploring the purposes, goals, and boundaries of the Alien Tort Claims Act.
d. Exploring the characteristic problems of the banana growing industry
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e. Exploring the nature and activities of environmental and human rights
The tasks may be generated in class discussion and assigned to groups or they may be
3. Debate or Face-Offs
The instructor can create resolutions related to the case for debate by class teams that
prepare affirmative and negative cases. Resolutions could include:
In 1989, should Chiquita re-enter Colombia?
In 1990s, after several employees have been killed, should Chiquita fund a paramilitary
group to protect its plantation and employees?
In 2000s, should Chiquita pay the victims of paramilitary massacres?
This debate can be done several ways.
a. Formal debate. The affirmative team is allocated 15 minutes to present its position in
support of the resolution, followed by 15 minutes for the negative to present its
position in opposition to the resolution, followed by a 5 minute period for the
negative team to rebut the affirmative position, followed by a 5 minutes period for the
affirmative team to rebut the negative team’s position.
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b. Face-offs. The instructor poses a question about the case to two teams, Team A and
Team B, who sit n front of the class in game-show format. The teams are given 2
minutes to confer and prepare, after which they flip a coin to determine which team
responds to the question. If Team A wins the flip and responds the question, Team B
then is entitled to ask one question of Team A related to Team A’s answer. Team A
has 30 seconds to confer and then has one minute to answer the question.
The instructor then poses a second question that Team B will answer, and the process
just outlined is followed. Thus, each team has an opportunity to answer and to ask
questions. The class votes on which team has done the more effective job.
4. Group written case analysis
Groups within the class can be assigned a point in time at which a decision had to be
made – for example
The decision to re-enter the Uraba, the successive decisions to pay the paramilitary groups.
The decision not to analyze and systematically consider alternatives to making payments.
The decision to continue payments to AUC after discovering the illegality of the payments
The decision to continue making payments after the confrontation with the US Department of
Justice
The decision not to settle the civil cases
Each group writes an analysis considering the defenses and criticisms of one of
Chiquita’s choices along the way. These defenses and criticisms should incorporate discussion of
the obligations the company’s core values and corporate responsibility program create with all
stakeholders.
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Other References
Thomas Donaldson and Thomas Dunfee, “Toward a Unified Conception of Business
Ethics: Integrative Social Contracts Theory,” Academy of Management Review, 19, 2 (1994):
252-284.
Albert O. Hirschman, Exit, Voice, and Loyalty: Responses to Decline in Firms,
Organizations, and States (Cambridge, MA: Harvard University Press, 1970).
Web sites:
Foreign Terrorist Organizations: http://www.state.gov/s/ct/rls/other/des/123085.htm,
accessed 8/30/10.
Alien Tort Claims Act: http://cyber.law.harvard.edu/torts3y/readings/update-a-02.html,
accessed 8/30/10.
Victims Lawsuit: Tania Julin, et. al., v. Chiquita Brands International, available at
http://www.osen.us/upload/104902-04-10%20Chiquita%20Decision.pdf, accessed 8/30/10.
“Report of the Special Litigation Committee of Chiquita Brands International, Inc.,”
February 25, 2009: http://chiquitabrandsinternational.com/pdfs/SLC_Report.pdf, accessed
8/30/10
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