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In Colombia, it pays to be protected

Dan Grech Mar 19, 2007

TESS VIGELAND: Today in Federal court, Chiquita Brands International pleaded guilty to charges it paid right-wing paramilitary groups to protect its lucrative banana business in Colombia. The company was fined $25 million, peeling — had to do it — about two years’ worth of profits from Chiquita’s Colombia operation.

But the banana producer isn’t the only company paying for protection. From the Americas Desk at WLRN, Marketplace’s Dan Grech has more.

DAN GRECH: Colombia is mired in a decades-old civil war. Marxist guerillas and right-wing paramilitaries often extort foreign companies to fund their causes.

Colombia expert Bruce Bagley is with the University of Miami.

BRUCE BAGLEY: This is a kind of mafia-like extortion scheme on both the far right and the far left. If you don’t pay them, the mafia comes and breaks your knees. In Colombia, they come and kill your workers or burn down your plant or destroy your cargo.

Major U.S. corporations, from Coca Cola to Del Monte to Occidental Petroleum, face allegations of paying these armed groups for protection. Chiquita admitted today to paying the United Self-Defense Forces of Colombia $1.7 million dollars over seven years.

Michael Shifter is with the Inter-American Dialogue, a think tank in Washington, D.C.

MICHAEL SHIFTER: It’s simply a practical necessity. Businesses need protection and they have to get it from somewhere.

But why would corporations want to do business in a war zone?

SHIFTER: Colombia is a dangerous place, but it’s also a profitable place. It has a good labor force, there’s a lot of natural resources. Businesses basically assess the risks and realize that the risks are worth taking.

The U.S. crackdown on terrorist financing could make it harder to do business in Colombia. Bagley says that could force companies to hire the Colombian military or create their own security squads.

BAGLEY: Things could become much hotter and more dangerous in Colombia.

Colombia’s president says he may seek the extradition of senior executives at Chiquita over the illegal payments.

I’m Dan Grech for Marketplace.

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