The Banana File Part III: Colombia

Colombia

Chiquita has used a similar trust structure since 1992 in Colombia,
according to company sources and documents.

A March 27, 1992, internal memo from Chiquita lawyer David Hills to
company officials described how then existing and new farm companies
in Colombia would be “restructured” using newly created trusts in
Liechtenstein.

“All companies (except Compania Frutera de Sevilla) will be 100%
foreign- owned through combinations of Liechtenstein anstalts,” the
Hills memo said, referring to the trusts. The memo noted that existing
companies controlled by Chiquita through “nominee shareholders” would
have their shares transferred to one of the foreign trusts.

“To avoid affiliation for labor union purposes, no two companies will
have the same majority (trust) shareholder,” Mr. Hills wrote.

The names of Chiquita’s then-newly created Colombian farm companies
included El Porvenir S.A., La Finca S.A., Zungo, La Gurita S.A., El
Retiro, and La Marfranca S.A., according to company records.

Guatemala

In Guatemala, Chiquita’s secret banana operations are run by a farm
management company subsidiary called COBIGUA, according to company
records.

For example, one Chiquita -controlled farm is called Chinook. COBIGUA
manages Chinook’s operations, as well as other farms.

Chiquita officials repeatedly refused to answer Enquirer questions
about whether the company owns COBIGUA.

However, in an Oct. 11, 1997 voice-mail message by Chiquita lawyer
David Hills to another Chiquita lawyer, Joel Raymer, Mr. Hills said:
“Joel, one of the issues that’s come up in this Enquirer story is they
are asking for what Chiquita’s position is on the stalled labor
negotiations in Guatemala at our company-owned subsidiary COBIGUA.

“Our strategy is to answer that, first of all, that COBIGUA is not our
subsidiary, it’s just one of our (independent) associate producers –
wink, wink – because we have to take that position publicly. We cannot
possibly admit that COBIGUA is our subsidiary.”

Ecuador

Chiquita also used the trust structure to set up supposedly
independent banana farm companies in Ecuador. A March 1992 internal
company report reveals that Chiquita wanted to hide its control of
those companies.

Written by Chiquita financial analyst Paul M. White, the report
described the company’s rationale for restructuring its Ecuadoran
operations and the company officials’ belief that it complied with
Ecuadoran law.

“CBI ( Chiquita Brands International) prefers that some of its
Ecuadoran operations remain anonymous in order to facilitate
relationships with unions, governments and suppliers. By giving the
perception of Cartonera Andina being independent, for example, CBI is
able to reduce costs, and maintain improved relationships with the
above groups.

“Union negotiations. By having more companies, and thus more unions,
CBI is able to reduce its exposure to strikes and increase its
bargaining position,” the White report stated.

A Feb. 28, 1992, internal memo from Chiquita lawyer David Hills to
company officials also described how the company’s Ecuadorean
operations would be restructured under foreign trusts in
Liechtenstein, in part, to help prevent labor unions from organizing
on farms run by the newly created companies.

“To avoid affiliation for labor union purposes, no two companies will
have the same majority (trust) shareholder,” the Hills Ecuadoran memo
said. “The service and export companies will not have shareholders in
common with each other or with the farmcos (farm companies).”

The restructuring outlined in Mr.Hills’ memo never became fully
operational because there was a glut of bananas in the European market
and prices plummeted in 1992, forcing the banana company to halt its
expansion plans in that country at that time, according to company
sources.

Chiquita’s secret international trust structure

” Chiquita International Limited (CIL) The new managed farms are being
set up as a trust under CIL because they are easier to setup and
manage and provide greater confidentiality than the nominee
structure. Under the Honduran law, shares given in trust to a Honduran
bank are considered owned by the bank. There is no need to have and
keep track of 5 Hounduran nominees.”

“All companies (except Compania Frutera de Sevilla, “CFS”) will be
100% foreign-owned through combinations of Liechtenstein Anstalts.”

“Using more than one bank in Honduras and more than one country to
establish the offshore trusts further obfuscates the ownership of the
farms.”

Chiquita trust structure

Block by block

1. Chiquita Brands International Inc.

Company officials decide to create an international trust structure to
allow them to acquire and control additional land in Honduras.

2. Chiquita International Ltd. – Chiquita International Trading Co.

The Chiquita subsidiaries selected by company officials to control
decisions of overseas trusts.

3. Liechtenstein – Channel Islands trusts

Overseas trusts, such as King’s Mill, created for the benefit of
Chiquita subsidiaries to control decisions of Honduran trusts.

4. Honduran trusts

With Honduran banks as trustees, these trusts become the major
shareholders of newly created farm companies.

5. Honduran farms companies

These companies acquire Honduran farm land for Chiquita.

(Copyright 1998)

———————————————————————
Chiquita SECRETS Revealed; Environment; “At first we had thought it
could be the solvent that people were smelling, but approximately 16
to 17 samples were taken outside of the plant for chlorpyrifos and
15 of them turned up positive in fairly high quantities.” – Roger
Theodoredis, Chiquita executive assigned to investigate the Polymer
Plastipak problems; Smokestack emits toxins; ‘We cry for our
children’

Publication: Cincinnati Enquirer
Date: May 3, 1998
By: MIKE GALLAGHER AND CAMERON MCWHIRTER
———————————————————————

A Chiquita subsidiary is exposing more than 500 men, women and
children of Barrio Paris to a toxic chemical that the company knows
is spewing from a San Jose factory smokestack in high quantities,
internal company records reveal.

Chiquita officials in Cincinnati have been aware of the problem for
several months, but their efforts to solve it have been
unsuccessful, according to company sources and internal voice-mail
messages provided the Enquirer by a high-level company source.

The plant manufactures plastic bags impregnated with a pesticide
called chlorpyrifos. The bags are used to cover bananas ripening on
plants to protect them from insects. Community leaders and neighbors
in Barrio Paris have complained to the national health ministry that
fumes have caused residents – including children and pregnant women
– to suffer chronic respiratory problems, blistered skin and other
serious ailments.

The U.S. EPA classifies chlorpyrifos as a highly-toxic pesticide
that is dangerous to humans if inhaled or if it comes into contact
with skin for a protracted period of time. According to the EPA,
universities and chemical manufacturers, chlorpyrifos can cause
delayed nerve damage, multiple sclerosis, loss of use of limbs, lung
congestion, paralysis, convulsions, dizziness, mental disorders,
blurred vision, chest pain, loss of reflexes and death.

For years plant officials of the Chiquita subsidiary, Polymer
Plastipak, have denied those claims to Costa Rican health officials,
according to more than a dozen letters from company officials and
lawyers sent to the Ministry of Health since 1992. The company has
conceded only that the plant emits a “bad odor.”

Despite company claims that the fumes are harmless, a 1997 Costa
Rican national laboratory report asserted that the company
repeatedly failed to conduct government-mandated air tests to
determine whether the plant is discharging the pesticide into the
atmosphere and causing health problems for nearby residents.

The report, translated for the Enquirer, also stated that the
company’s use of chlorpyrifos results in “high risk for … health
of the neighbors.”

“It is proven that extended exposure to this pesticide (especially
children and pregnant women)produces health problems to people,” the
report said.

The March 20, 1997, report was prepared by Defensoria de Los
Habitantes, a Costa Rican congressional agency created to ensure
that other government departments protect citizens on health,
environmental, and other issues.

Testing at the plant, conducted by Chiquita after the Enquirer began
questioning company officials about the problem, revealed high
quantities of chlorpyrifos were being spewed into the air through
the plant’s smokestack. The pesticide also is being released inside
the plant and into the atmosphere where the bags are cut and
separated, the Enquirer has learned.

In an Oct. 3, 1997 voice-mail message to Robert Olson, Chiquita’s
chief counsel in Cincinnati, Roger Theodoredis, a company executive
in Cincinnati assigned to investigate the Polymer problems,
confirmed that Polymer Plastipak was emitting chlorpyrifos into the
atmosphere in “high quantities.”

“At first we had thought it could be the solvent that people were
smelling, but approximately 16 to 17 samples were taken outside of
the plant for chlorpyrifos and 15 of them turned up positive in
fairly high quantities,” Mr. Theodoredis said in the message.

“I wanted to alert you to that. There appear to be two sources of
chlorpyrifos getting out into the atmosphere. One is the smokestack
which is part of the process. That is when the bags are formed in
the extrusion process; heated exhaust air goes up the stack and
apparently there is chlorpyrifos going up the stack.

“The second, unexpected source of chlorpyrifos is taking place in
another room of the factory in which the bags are cut. That cutting
of the bags is causing chlorpyrifos to be emitted,” he added.

A tape recording of the voice-mail message was provided to the
Enquirer by a company source who asked not to be identified because
of fear of retribution. In the message, Mr. Theodoredis also told
Mr. Olson of the long-standing problems between Polymer Plastipak
and the Costa Rican Ministry of Health over the toxic fumes issue.

“There is a history of contention between the plant and the Ministry
of Health. On August 8th, for example, the Ministry of Health shut
down the Polymer (Plastipak) plant for about 12 hours due to the
smell issue. Currently the plant is working under a temporary
suspension of that shutdown order.”

Chiquita denied to the Enquirer that there is any threat to nearby
residents. In a statement issued through its lawyers, Chiquita made
no reference to any concerns about chlorpyrifos levels it or the
government may have had about Polymer:

“Investigation by Chiquita and independent consultants (hired by the
company) confirms that the Plastipak plant does not pose a threat to
the surrounding community. Any concentrations of chlorpyrifos
measured at the surrounding residences fall well within the Average
Acceptable Ambient Air Concentrations used in the United States.”

Chiquita did not respond to Enquirer requests to provide the
newspaper with copies of its complete Polymer test results.

Additionally, the letter said: “Any concentrations of pesticides
within the plant pose no health threat to workers.”

Chiquita officials refused to provide the Enquirer with any written
test results, reports or findings of its independent consultants who
performed the tests on the plant’s emissions.

And according to Defensoria and Health Ministry officials, neither
Chiquita nor its Plastipak company executives have submitted the
written findings of its consultants’ plant emission testings to them
for review.

Residents of Barrio Paris described for the Enquirer health problems
they attribute to the Polymer Plastipak plant and their fears for
their children’s health.

“We have a very huge problem here,” Blanca Brenes Morales, 62,
president of the Barrio Paris Neighborhood Association, said through
a translator. “They (Polymer) use a chemical that goes right up into
the air and we breathe it. All of us knew when we moved here that
we would live in an industrial area, but no one, not even the
government, knew or agreed that they could poison us with their
chemicals.”

Ms. Brenes said that whenever the fumes become heavy in the air, she
calls Polymer plant officials.

“They always tell me they are just changing their filters,” she
said.

She said most of her fears center around the children in the
neighborhood. “We don’t really know how this poison will affect us
in the future. We cry for our children.”

Ms. Brenes said she and many other residents of Barrio Paris are too
poor to leave their homes and wouldn’t be able to find comparable,
affordable housing elsewhere.

Criticisms in Defensoria’s report were not only aimed only at
Polymer Plastipak.

Defensoria repeatedly criticized offices of the Costa Rican
government’s own Health Ministry for failing to conduct needed blood
tests of the Barrio Paris residents to monitor the harmful effects
of the chlorpyrifos.

In 1993 the Health Ministry did take blood samples from the
residents after repeated complaints that fumes from the Polymer
Plastipak plant were making people ill. But necessary follow-up
tests to confirm the levels of pesticide in the residents’
bloodstreams never were taken because health ministry officials
cited a lack of manpower, according to the Defensoria report.

Polymer Plastipak officials in Costa Rica declined requests for
interviews from Enquirer reporters.

Since the 12-hour shutdown in August, Polymer and Chiquita officials
have failed to provide the Health Ministry any documented proof of
“substantive changes to either the mixture or its filtration system
that would prevent further harm to the company’s own workers or the
residents who live near there,” said Rodrigo Alberto Carazo, a
director in Defensoria.

Mr. Carazo said that Polymer officials have for years not only
denied toxic fumes were affecting workers at the plant or nearby
residents, but also that the “non-harmful smell problem had not been
contained because of ongoing problems with a plant filtration
system.”

“That has been their excuse for many, many years,” said Mr. Carazo.
“We’ve been receiving letters like that since at least 1993 or
1994.”

Plastipak’s letters hold little sway with Gerardo Campos Cartin, 48,
who cites his own doctor’s findings that he has been contaminated by
chlorpyrifos. Chiquita’s plant in Barrio Paris is the only company
in that section of the city using chlorpyrifos, according to Health
Ministry records.

Walking out to a children’s playground located directly behind the
Polymer plant, Mr. Campos talked of a respiratory disease he said
his doctor has linked to the plant’s poisonous fumes.

“It is so bad that many times I cannot breathe without help (from
drugs or a respirator)”, Mr. Campos said through a translator. “When
the factory is running and the smokestack belches out those fumes, I
must run inside my house and hide under my bed. If I smell (the
fumes) at all I begin choking. My skin also turns red with rashes
and I become so sick I sometimes want to die.”

But Mr. Campos said his greatest fear is for Barrio Paris’ children.

“Look at this playground right here by the plant,” he said, pointing
to the swing set, teeter-totter, climbing bars and small basketball
court. “All the children play here. They have no place else to go.”

In another development, the Enquirer also has learned from company
sources that Chiquita plans to sell its Polymer operations. When
asked through its attorneys about the plans, Chiquita officials did
not respond.

In internal company voice-mail messages obtained by the Enquirer
from a high-level company source, several Chiquita executives and
lawyers discuss plans to sell its Polymer operations, including the
Plastipak plant in Costa Rica.

“We don’t really know how this poison will affect us in the future.”
– Blanca Brenes Morales, 62

(Copyright 1998)

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