A relationship with the Rainforest Alliance that stretches back to 1992 laid the foundations for a concerted drive to transform the company into a socially and environmentally responsible corporation beyond reproach. Tommy Leighton talks to George Jaksch, senior director corporate responsibility and public affairs, Chiquita International.
As a consumer brand that wants to maintain a business in Europe, being a responsible partner is indispensable, especially in the UK. Expectations have changed markedly over the last few years, which is amply illustrated by the growth of Fairtrade and organics. Demand for higher standards of production has come from a variety of sources, from non-governmental pressure groups to the Ethical Trade Initiative and this has created momentum for the movement.
Chiquita is a 104 year-old, $2.6 billion turnover premium brand associated heavily with its principal product - bananas. Jaksch says: "At a company like ours, as relatively important players in the European marketplace, we are inevitably high profile. The banana business has been followed by a lot of people, since attitudes were very different a generation ago. People at Chiquita and all other banana companies acted very differently in the past."
As the voice of the opponents to the multinational operators of the banana industry got louder, it became more apparent to Chiquita that it was time to step up to the plate and be counted. "We are producers in developing countries, which distinguishes us from many other banana companies. We employ 15,000 people in the Americas and West Africa and with that comes a high degree of social responsibility."
Jaksch himself has risen tot he position he holds now through jobs in the production sphere in Panama, Colombia and the Ivory Coast, which gives him an important familiarity with the agronomic climate in those countries and therefore a sound platform from which to gauge the viability of social and environmental decisions. "I grew up in Europe, so have the perspective of what the European public wants too, so my background, through a range of happy coincidences, has given me a good basis for doing this job," says Jaksch.
He says that Chiquita was faced with two options: the race to the bottom, through oversupply, commoditisation and discount prices; or the race to the top, where leadership, differentiation and premium pricing are the order of the day. A no-brainer on paper, but taking the latter option required a huge ongoing commitment to a process that by its nature had to be carried out in the full glare of the public eye.
"The challenge of society was mapped out by the Johannesburg Declaration in 2002," says Jaksch. It stated: "companies have a duty to contribute to the evolution of equitable and sustainable communities and societies." But Chiquita's road to corporate responsibility had begun 10 years previously with its decision to work with the Rainforest Alliance to set a social and environmental criteria for banana production.
The relationship has led to a 10 year, $20m effort to bring 29,000 hectares of plantations in five countries up to certified standards. At this stage, all of Chiquita's 127 owned farms and 75 per cent of its supplier network are certified and annually audited by independent NGO experts.
The first landmark was to accept the concept of cooperation between a banana company and an NGO, which was alien to both sides until that point. Chiquita decided that external standards had to be brought in, independently verified by experts with full accessibility. It took eight years to get it implemented across five countries and the annual audits continue and can be failed.
"The investment is not a small amount of money for a company that, during this period, has not been making big profits,” says Jaksch. “It represents a long-term commitment and extends well outside of our own production areas. Some 50 per cent of our bananas are sourced from out-suppliers and we have urged all of them to pursue certification. Seventy-five per cent have attained it and we expect that to reach 100 per cent in the very near future."
The initial agreement with the Rainforest Alliance has been stepped up since 1998, when Chiquita established an internal steering committee to oversee development of its corporate responsibility programme. It began by setting out core values and facilitating third-party pilot audits, before formalising the pilot schemes and drafting a code of conduct based on SA8000 standards.
Every Chiquita supplier now has a contract committing it to obtain Rainforest Alliance certification within a year, or in exceptional circumstances, as soon as is practically possible. There is a small financial incentive for compliance, but says Jaksch, it is small enough that growers are doing these things on principle rather than for financial gain. Chiquita provides whatever technical assistance is necessary, but the aim is to create change through persuasion, not obligation.
The publication of Chiquita's first Corporate Responsibility report in 2001 was a significant moment. It detailed the successes of the company's efforts to date, but simultaneously laid bare the areas where progress was much slower. It opened the company up to the possibility of external criticism, but the fact that it did so in such a transparent manner won widespread plaudits. The report was placed 19th in the United Nations Environment Programme's Trust Us survey of corporate sustainability reporting, issued by UNEP and SustainAbility, and gained positive coverage for an industry that badly needed the kudos in the media around the world.
A book published this year, Smart Alliance - How a global corporation and environmental activists transformed a tarnished brand, charts the progress of Chiquita's relationship with the Rainforest Alliance and leaves the reader with an overwhelming feel-good perspective.
Its authors J Gary Taylor and Patricia Scharlin are president and vice president of The Environment Group in New York and came from a sceptical beginning, tarred inevitably by the historical reluctance of global corporations and pressure groups to join forces, to reveal the inside story of how corporate executives, banana workers, local leaders and conservation advocates formed an unlikely alliance and found ways to work together and most importantly trust each other.
Chiquita employs “... the largest number of agricultural workers in Latin America. Over its hundred-year history, it had acquired a notorious record of unsavoury habits. When a single company can give an entire region its reputation as a collection of "banana republics", it has much to live down ... Chiquita's decision to travel alone down the new path of environmental and social responsibility thus becomes a matter of international significance," the book says.
It is critical in places of some of the worldwide pressure groups that have heaped pressure on the banana multinationals, saying "not all protestors have motives of unalloyed virtue". Some of the most vocal protestors, it is claimed, get funding from their governments for work in Latin America, while others are "business rivals in other garbs, who gain when Chiquita loses". The book also suggests that the Better Banana Program (BBP) seal of approval created by the Rainforest Alliance in conjunction with Chiquita is in an "unavoidable contest" with Fairtrade, organics and the Ethical Trading Initiative. "Oxfam and Christian Aid, among others, financed certain of those interests," says the book.
It is against this background that Chiquita has won its own seal of approval. Having researched the book, the authors wrote: "... we came to believe companies and NGOs could work together in addressing environmental and social issues. We also became personally acquainted with people both inside and outside many companies. The work was gratifying, especially as we confirmed how similar human beings are, no matter where they labor [sic]."
Jaksch says: "One of the keys to successful co-operation is the ability to maintain a respectful arms length relationship and Chiquita and the Rainforest Alliance have managed that. It has certainly helped that the last two chief executives of Chiquita have shared the same personal vision of ethics and social responsibility and the rolling four-year plan of corporate responsibility actions we have in place now ensures that this is an on-going, long-term commitment."
Chiquita has produced a Code of Conduct to ensure that everyone involved with the company lives by its core values. Former chief executive Steven Warshaw, in the foreword of the code booklet, related his belief in the importance of its content. "Our success depends upon our ability to consistently demonstrate that we are trustworthy, that we deliver what we promise, that we adhere to the highest level of ethical and lawful conduct, and that we behave as a responsible corporate citizen in our communities," he wrote.
Within two years, the code was cascaded down throughout the Chiquita business, until each and every member of its workforce had been made aware, in their own mother tongue, of its meaning and practicalities. Incorporated within the code were the requirements of Social Accountability 8000 (SA8000), a standard developed by the Council on Economic Priorities Accreditation Agency (CEPAA) and based on the norms of the United Nations and the International Labour Organisation.
"We placed our bets on a code that was considered a promising newcomer at the time, but which is now considered a rigorous set of standards with robust mechanisms of control and third party verification," says Jaksch. "SA8000 was developed by a coalition of experts on human and labour rights and sets a very exacting standard. It was considered appropriate to bring in an external standard rather than develop it ourselves. This covers the fundamental ethics at all levels of Chiquita."
The plantation workers represented the biggest challenge as far as participation in the ideals and training were concerned. "It was dismissed by sceptics as nothing more than a PR effort," says Jaksch, "but we worked extensively with the IUF (International Union of Foodworkers) to develop a model for workers in tropical environments. The IUF represents more than 10 million workers around the world and we signed an agreement of co-operation that sees us meet every six months to discuss problems and analyse the progress of programmes and a joint health and safety project. To my knowledge we are the only company in this industry to have done that."
Importantly, there is also a drive in place to gauge the results of these efforts. A joint group interviews a cross-section of Chiquita employees every year for feedback and to measure progress. NGOs and authorities of the respective regions are invited to participate from start to finish in a bid to maximise transparency of the process.
"We were the first in Panama, Colombia and Costa Rica to receive SA8000 accreditation for our banana plantations," claims Jaksch. "And transparent reporting through our annual corporate responsibility report, now labelled Sustaining Progress, maintains a warts and all perspective for all interested parties.
“We have even extended the reporting to our fleet of ships this year for the first time, which adds another tier to our open-ness."
He concludes: "This is not reputation management. Reputation depends very heavily on whether you actually do what you say you do. Our focus is on creating hard facts. They are there, they are visible and they are supported by an awful lot of evidence. Gaining recognition is the relatively easy part - to change a reputation permanently takes years."
REACH FOR THE STAR
The Banana Group is an organisation that has proved that, with consistent commitment and funding, consumer consumption of a fruit can be increased on an annual basis.
The last quarter alone has seen the volume of bananas sold in the UK increase by five per cent (TNS 12 weeks ending August 15, 2004), a time when banana sales traditionally show a small dip due to the arrival of the soft-fruit season.
Industry estimates put the 2003 import figures at 760,000 tonnes, equating to an annual consumption increase from 5.5kg to 13kg, for every man, woman and child in the UK, since the formation of the Banana Group in 1984.
Now in its 20th year, the Banana Group is set to deliver another focussed campaign that will influence consumer purchases in the fresh fruit aisles.
Joining forces with national newspaper, The Daily Star, the Banana Group is launching ‘Be A Fit Banana’. This new initiative is a consumer campaign aimed at getting readers and their children to exercise and eat more healthily.
The campaign comprises a week long celebrity-backed editorial series promoting the benefits of eating more fruit, in particular bananas.
Already firmly established as the favourite energy-giving fruit of sports stars, The Daily Star will focus on healthy eating and fitness tips from some of the country’s leading TV celebrities.
David Read, the Banana Group chairman says: “We know that to drive consumption even higher we must continue to give both frequent and less frequent banana purchasers very real reasons, linked to an instant benefit, to increase their weight of purchase.
“We know linking diet and fitness to celebrity endorsement will be such a driver in achieving this.”
The campaign, due to break at the end of October, will deliver its energy-giving message to over 1.5 million readers, and will potentially include support from retailers to raise the profile of the campaign in-store.
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