In the wake of the latest military coup in Honduras, the original ‘Banana Republic,’ Leonie Nimmo investigates the shocking history of Chiquita Brands International.
The phrase ‘Banana Republic’ describes a country heavily dependent on one type of plantation agriculture, controlled by a servile dictatorship and corrupt elite, in thrall to shady foreign powers with an iron grip over its economy. It was originally applied to Honduras, a country which has for the last hundred years been dominated by Chiquita Brands International Inc, formerly the United Fruit Company. In the 1920s the company controlled almost a quarter of the country’s arable land.
In June this year the democratically elected President of Honduras, Manuel Zelaya, was forced into exile at gunpoint, leaving a coup regime in his place. He was not a politician of radical left leanings but a ‘moderate reformist’. Nevertheless, the reforms he implemented, such as raising the minimum wage, had some serious opposition, not least from Chiquita Brands International.
According to activist John Perkins during his recent visit to Central America: “everyone I talked with there was convinced that the military coup had been engineered by two US companies, with CIA support.” He goes on to discuss the role of Chiquita and Dole Foods in Honduras. Other commentators are less willing to make such bold assertions, but questions are being asked about links between the coup backers, Chiquita, and certain individuals close to the Obama administration.
Gabriel García Márquez’s ‘One Hundred Years of Solitude’ describes the gradual ruin of a Latin American society at the mercy of the banana men. We trace one hundred years of the company’s interventions in Latin America.
Samuel Zemurray, later to become president of United Fruit, was an American banana plantation owner in Honduras. Unhappy with the US-Honduran agreement governing customs tax at that time, he decided to take matters into his own hands. He contacted a former president of the country, Manuel Bonilla, and enlisted the help of two mercenaries, who brought with them rifles, ammunition and a machine gun, in those days a rare and powerful weapon. They attacked Honduras and overthrew the government in six weeks.
Following the election of Bonilla as president, Zemurray was awarded a large tract of land by the new Honduran Congress, which also waived his obligation to pay taxes for the next 25 years. Zemurray once famously remarked: “In Honduras, a mule costs more than a member of parliament.”
United Fruit’s formula for success in Latin America was based on clearing forests, creating huge plantations, employing local people at below-poverty wages and colluding with local governments to seriously repress any attempts by workers to organise. In 1928 mass strikes by workers on United Fruit plantations in Colombia were violently crushed. On 6th December, the Colombian military opened fire on strikers, their families and supporters. The United Fruit Company themselves estimated the number of people killed to exceed a thousand.
Guatemala, 1954 – 1996
According to the United Fruit Historical Society, in 1954 Zemurray had an important role in “engineering the overthrow” of the democratically elected President of Guatemala, Jacobo Arbenz. Arbenz began his presidency by implementing an agrarian reform programme which would have seen unused land owned by the company being compulsorily purchased by the state.
From the US, Zemurray is said to have launched a campaign painting Arbenz as a dangerous communist, and eventually to have persuaded the CIA to sponsor a military coup against him. Rebels used United Fruit boats to transport troops and ammunition. The then CIA Director Allen W. Dulles, himself a former president of United Fruit, had financial connections with the company and his brother, John Dulles, was the main shareholder.
This event was to trigger 30 years of civil war in Guatemala during which hundreds of thousands of people were killed or displaced. The indigenous Mayan population was disproportionally affected by the violence: 80% of those displaced were indigenous. Burial is an important part of Mayan culture and to this day mass graves – including mass graves of children – are still being exhumed.
United Fruit’s business was not solely in bananas; it also owned what was, at times, the world’s largest private navy. In 1961 the company lent its ships to Cuban exiles backed by the CIA who tried to overthrow Fidel Castro at the Bay of Pigs.
Honduras, 1972: ‘Bananagate’
In perhaps the most revealing recent article about Chiquita in Latin America, Nikolas Kozloff points out that Honduran dictator General Oswaldo López Arellano was helped into power by United Fruit (by then renamed United Brands). He was forced to stand down in the wake of the ‘bananagate’ scandal: United Brands was accused by a US federal jury of bribing Arellano with $1.25m, with a promise of a further $1.25m in return for a reduction in fruit export taxes. During the scandal, United Brand’s President apparently committed suicide by throwing himself from a New York skyscraper.
Honduras, 1981 – 1985
The Honduran capital Tegucigalpa became “one of the largest nerve centres of the CIA in Latin America”, under US Ambassador John Negroponte, who played a significant role in overthrowing the Sandinista regime in Nicaragua. Negroponte has been criticised by human rights groups for: “ignoring human rights abuses committed by Honduran death squads which were funded and partially trained by the Central Intelligence Agency”.
Colombia, 1997 – 2004
In 2007 representatives for United Fruit’s successor, Chiquita Brands International, admitted to a US court the company had made payments to Colombian paramilitary forces that were designated a terrorist organisation by the US and the EU. Prosecutors alleged that payments totalling $1.7m were made between 1997 and 2004. An out-of-court settlement of $25 million was agreed. None of those that approved the payments went to jail.
The Annual Survey of Violations of Trade Union Rights reported an escalation of violence against trade unionists in Guatemala in 2008, with trade unionists and their families “becoming the targets of murder, intimidation, harassment, firearm attacks, assaults and abuse”. On 2nd March, a founding member of a banana workers union, Miguel Enríquez, was shot dead. He worked at a plantation that supplied Chiquita, and, prior to his death, is said to have been “forced to resign from the union under strong pressure and threats from the company”.
A century after Samuel Zemurray re-negotiated his company’s tax position with a machine gun, democratically elected President Manuel Zelaya was deposed in what the Los Angeles Times described it as “a classic Latin American coup”. According to Kozloff, “While there’s no evidence linking Chiquita to the recent coup in Honduras, there’s enough of a confluence of suspicious characters and political heavyweights here to warrant further investigation.”
Some of these characters lurk in the story told above. Former US Ambassador to Honduras John Negroponte is now Vice Chairman at Covington and Burling, a legal firm that has received $70,000 in lobbying fees from Chiquita in the last three years. A former partner in the firm, Eric Holder, defended Chiquita in the Colombian payments to terrorists case. He is the current US Attorney General and was a senior legal advisor in the Obama campaign.
The coup regime, euphemistically labelled the ‘interim government’ by the BBC, justified seizing power by claiming Zelaya was attempting to extend his presidency unconstitutionally. In reality Zelaya had merely planned a referendum on potentially changing the constitution; a constitution many Hondurans regard as enshrining the power of the oligarchy. He had also advocated raising the minimum wage by 60%, a policy unsurprisingly criticised by Chiquita.
And there’s a bigger picture here. Some commentators suggest the minimum wage increase would have knock-on effects on wages in the region – and a message has been sent to other left-leaning Latin American presidents.
At the time of writing, November 2009, Zelaya is under siege in the Brazilian Embassy, having sneaked back into Honduras in September. Since then, the coup regime has done its best to crush the opposition. Amnesty International has denounced police violence, mass arrests of demonstrators and intimidation of human rights groups.
In a letter to Obama on the 14th November, Zelaya described the casualties as follows: “3,500 people detained in a hundred days, more than 600 people wounded and injured in the hospitals, more than one hundred assassinations and an unknown number of people subjected to torture committed against citizens who dare to oppose and express their ideas of liberty and justice in peaceful demonstrations.” 
Media criticism inside Honduras has been silenced. Hopes that a US-backed power sharing deal would create a path out of the current deadlock have been crushed: the coup regime has refused to reinstate Zelaya or to have any of his supporters in cabinet. And the US has stated that it will recognise forthcoming election results, whether Zelaya and allies participate or not. As one source puts it: “Those responsible for the care and transport of the ballots and the ballot boxes will be the same armed forces who carried out and continue to maintain the coup d’etat.”
Manchester, UK: November 2009
Down the road in ASDA the price of bananas is at an all time low, part of a vicious supermarket price war. In October a Guardian article reported that they were selling for 38p per kilo in ASDA and 35p per kilo in Tesco. That’s less than half the cost than in early 2008 when I spent a few months working on a fruit and veg van in Manchester. I realised then how much bananas sustain our cities, and also the effectiveness of the supermarkets’ banana price war. The van was a funded project and our mark ups were minimal, but we couldn’t compete with the supermarket price of bananas. People would walk onto the van, look at the cost of bananas and walk straight off again without bothering to look at the prices of other products.
ASDA says it’s paying for the price slashing from its own margins, not passing the cuts down the supply chain. But what about the long-term effects? Following the last banana price war in 2002 wages dropped by 30-50% in some plantations. And as the history of United Fruits shows us, not all banana wars are fought between supermarkets.
2 ‘Honduras: Military Coup Engineered By Two US Companies?’, John Perkins, 7th August 2009.
4‘Jungle Capitalists: A story of globalisation, greed and revolution’, P.Chapman, 2007, Canongate Books
6 Interview with a former human rights worker in Guatamala, Manchester, 6th November 2009
9‘The high-powered hidden support for Honduras’ coup ‘, 23rd July 2009, Los Angeles Times
11 ‘Day 128, November 2, 2009 from Oscar’, available from http://quotha.net/node/533 [viewed 06/11/09]
This article originally appeared in Ethical Consumer 122, January/February 2010