How Corporations Breed Conflict

Corporations have only one objective – make more money. Greed is the singularly most potent drive for most corporations across the world, regardless of industry. Innovation, research and development, business expansion, compliance, customer service, corporate social responsibility or corporate sustainability, sponsorships and donations or charity are various facets of corporations and they do get varying fillips but nothing matters more than profit. In an attempt to generate more revenue and increase profit, corporations have often bred conflict in markets and adapted questionable means to an end. Some of the questionable means have been outright illegal and many companies have been taken to court, where a few have been compelled to plead guilty and others have been proven to be guilty. Many companies have managed to emerge unscathed through legal scrutiny.

Not all corporations remain limited to manipulating markets, stocks, prices and quality of their products to make more money. Most corporations invest heavily in lobbying, which is a sanitized version of traditional bribing. In countries where corporations can offer outright bribes, they do so and get their way or they make a way by creating conflict. Several countries have plunged into war solely because some corporations wanted to profit from it. Such profits are not confined to weapons and ammunitions. There are many other industries that are directly benefited by war. Let’s explore how corporations breed conflict and how they have taken down governments, lead people to fight against one another, destroyed economies and even violated fundamental rights of entice populaces.

 

The Banana Republics of the World

Many political commentators, journalists and activists as well as some citizens often use the term banana republic to describe a country that is not governed by rules or laws of the land. Much before there was an apparel brand by the same name, the term had been comprehensively described and students of political science have studied it at length. Literally, banana republic is a state or country, which is relatively small in size, politically unstable and economically undeveloped, because it is dominated by one or a few corporations for their own interested. In most such cases, the corporations are foreign and the resulting profits from their operations do not benefit the local population or the country. The definition in political science is a little more nuanced. A banana republic is a country or state whose economy is primarily dependent on the export of one or a few products. These are not unlimited but finite resources for the country and its people.

While the product may be any natural resource such as a mineral, coil, oil or natural gas, bananas got associated with the phenomenon because that is how it all started. The United Fruit Company created the first banana republic to facilitate its uninterrupted growth in many countries across Latin America, Central America and the Caribbean. The American corporation dates back to 1899 but its banana trading business predates the inception of the company. Minor C. Keith was into banana trading and there was a Boston Fruit Company owned by Andrew W. Preston. They merged to form the United Fruit Company. The corporation had a glorious run ever since its inception and for many decades in the twentieth century owned enormous territories in Latin America, Central America and the Caribbean. Massive transportation networks across several countries in the region were also directly under the control of the United Fruit Company.

United Fruit Company had a monopoly in many countries, especially Honduras, Costa Rica, Guatemala, West Indies, Colombo and Ecuador. To hold on to its massive territories, trade routes, transportation networks and imports of bananas among other tropical fruits, the company bred conflict and financed favorable people to be in government, interfered with local governance, its legislation and policy, laws and overall economic development or the lack of it. The corporation was later merged with AMK owned by Eli M. Black and renamed as United Brands Company, which eventually became Chiquita Brands International. Chiquita Brands International is still operational today.

Crimes of United Fruit Company

Most of what the United Fruit Company did in several countries would be considered as crimes in the United States of America. The corporation routinely bribed government officials to get preferential treatment. The corporation and its affiliates exploited local workers. They paid very little as taxes. There was no government regulation pertaining to wages. It is an understatement to say that the corporation operated ruthlessly in several countries where political instability and economic weakness allowed them to flex their will.

The entire operation of the United Fruit Company has been researched, scrutinized, critiqued and lambasted by many activists, journalists and citizens throughout the twentieth century. Popular voices that raised innumerable brutalities of the corporation included those of Costa Rica’s Carlos Luis Fallas and Carmen Lyra, Honduras’ Ramón Amaya Amador and Guatemala’s Augusto Augusto Monterroso and Miguel Ángel Asturias. Two Nobel laureates, Pablo Neruda of Chile and Gabriel García Márquez of Colombia have written about banana plantations and other crimes of the United Fruit Company, stating their name in nonfiction while fictionalizing their accounts in novels. Criticism of the United Fruit Company was not limited to those who had been directly or indirectly affected. Politicians, artists and journalists in America also raised the issues from time to time.

The United Fruit Company owned massive tracts of land in the lowlands of the Caribbean. It virtually controlled the International Railways of Central America and dominated maritime trading routes with the Great White Fleet of steamships. The corporation created and sustained its monopoly by completely controlling the distribution of lands where banana plantations were developed. It needs to be noted that the corporation effectively denied rights to the citizens of these countries to own any land that can become a sizeable banana plantation. The corporation controlled the government land distribution schemes. It used various tactics to own any and every large parcel of land that could be converted to banana plantations. They would keep lands unused if they could not expand promptly but they would still not allow local companies or citizens to start their own enterprises and benefit from the natural resources that they had the first right to.

The corporation did not just denied the fundamental rights to the people where it held influence but also caused serious environmental degradation. Expanding their operations required widespread deforestation. Entire ecosystems were destroyed by the company. Biodiversity was devastated. If a particular government in any of these countries chose to work against their best interest, the company plotted coup d’état or created conflicts. The President of Guatemala, Jacobo Árbenz Guzmán was overthrown circa 1954 when he tried to redistribute some of the lands to the citizens. The corporation sponsored Colonel Carlos Castillo Armas of Honduras to invade Guatemala, manifesting the conceived coup d’état. Interestingly, this major intervention or interference was actually backed by the Central Intelligence Agency and in all likelihood by the Eisenhower administration. CIA trained, armed and organized the military opposition.

From Cuba to Colombia, the United Fruit Company wielded unaccountable power and exercised it often. The corporation planed another invasion in 1961 against Fidel Castro who warned that Cuba was not Guatemala. The invasion through Bay of Pigs failed. Many decades earlier, the corporation had actively caused the banana massacre in Colombo. According to estimates, up to three thousand workers of the corporation who were on strike and protesting were gunned down by the Colombia Army at the behest of the United Fruit Company. This event has been chronicled in La Casa Grande by Álvaro Cepeda Samudio. García Márquez also wrote about the event in his literary masterpiece One Hundred Years of Solitude.

The United Fruit Company has also aided and abetted a terrorist organization. This was not in some distant past. Chiquita Brands International pleaded guilty in March, 2007, at a federal court in the United States that it has paid over $1.7 million to AUC or the United Self-Defense Forces of Colombia. It is recognized as a terrorist organization by the United States since 2001. Chiquita Brands paid $25 million in damages and restitution to families of victims of United Self-Defence Forces of Colombia. The organization was paid the money to protect and secure the interests of the corporation in the region. Chiquita Brands, formerly known as the United Fruit Company, did not just pay money but also smuggled and supplied 3,000 AK 47 rifles to the organization.

Developing Countries being held Hostage by Big Tobacco Companies

One cannot be faulted to presume that what the United Fruit Company did throughout the twentieth century across Latin America, Central America and the Caribbean is not possible today. However, that is not the reality on the ground. Big corporations are still breeding conflict and outright threatening governments of developing countries in Africa and other parts of the world with dire consequences if their interests are not protected. Many African nations are now being held hostage by big tobacco companies. The governments are being bullied. Subtle and blatant threats are being issued. Lawsuits have also been filed to facilitate the unchecked expansion of the tobacco industry in various markets across Africa.

British American Tobacco and many other multinational tobacco companies are in conflict with more than eight African nations. They demand the dilution of many protections and complete axing of certain regulations that are hindering their progress in the region. The progress is essential more money for the owners, shareholders and top executives. Should the protections and regulations be axed or even diluted, millions of people would be exposed to severe health risks. Africa had the lowest fatality caused by tobacco among nations observed by the World Health Organization in 2010. That is poised to change if the tobacco companies have their way.

BAT or British American Tobacco, which is one of the largest tobacco corporations in the world right now, has asked the Kenyan government to quash several anti-smoking regulations. It has also filed a case against the government for the tax levied on cigarettes. British American Tobacco Kenya, the local subsidiary company owned by the parent corporation, lost the case at the High Court. They filed an appeal in the Supreme Court. The company has adopted a similar approach in Uganda. It claims the Tobacco Control Act of Uganda is in contravention and inconsistent with the constitution. BAT is bullying governments of Togo, Namibia, Gabon, Ethiopia, Burkina Faso and Democratic Republic of Congo. It is intimidating the governments and threatening them with charges such as violating international trade agreements. As BAT acquires Reynolds, the largest tobacco corporation in the United States, for $49 billion, it would become the largest tobacco company to be publicly listed in the world.

The Fédération des Entreprises du Congo or the chamber of commerce in the Democratic Republic of Congo recently sent a letter to the president to present the concerns of the tobacco industry. As many as twenty nine points have been raised citing stringent tobacco control regulations as apparently violating the constitution, domestic law and international agreements. Imperial Tobacco sent a letter to the health minister of Burkina Faso warning that the regulations or restrictions on packaging and labeling cigarettes would cause social and economic damage. The government is being threatened with breaching the obligations to World Trade Organization. Similar tactics have been employed by Philip Morris International in Ethiopia and Togo. BAT is doing the same in Gabon and Namibia.

Comedian and host of the show Last Week Tonight, John Oliver, published a scathing attack on this type of behaviour by the tobacco companies.

Lockheed is the Leading Beneficiary of War

War is profitable for many corporations, especially those in the business of manufacturing weapons, ammunition, gears and gadgets, essentials for battlegrounds and everything that is precious in armed conflicts. While many companies profit from war, the leading beneficiary in the world right now is Lockheed Martin. The publicly listed American corporation is a leader in aerospace, security, advanced technology and defense. It is a reputed brand with interests around the world. The corporation has its headquarters at North Bethesda in Maryland and has more than a hundred thousand employees worldwide.

One of the largest players in aerospace, security, defense and technology, it is actually the largest defense contractor in the world right now. Almost 80% of its revenues are reliant on military sales. It is the largest contractor and vendor for the United States federal government. Around 10% of the total funds owed by the federal government is paid by Pentagon. In 2010, Lockheed Martin sold arms worth $35.73 billion and its total sales were $45.80 billion. It recorded a profit of $2.93 billion. The sales were primarily of aircrafts, missiles, electronics and space technologies & equipment.

The sale of arms and aircrafts, missiles and electronics would not have been an issue had the corporation refrained from selling their state of the art equipments and tools to support armed conflicts and wars. Lockheed Martin products are being widely used in Yemen. Both the Houthi militia and the Hadi government are using precision missiles and many technologically advanced weapons made by Lockheed Martin. Clearly there is a supply chain and the corporation cannot just wash its hands off. Historically, weapons manufacturers have profited from wars and they have funded, caused and supported armed conflicts around the world.

Lockheed Martin has been in this business for a long time now. A consumer electronics brand like Samsung has also been accused of supporting wars. Samsung Techwin, the South Korean weapons manufacturer, sold arms worth $960 million in 2013 alone. Its total sales stand at around $2,660 million. Arms sales account for around 36% of its total business. It raked in a profit of $121 million from the sale of arms in 2013. The company employs around five thousand people. Samsung Techwin is now Hanwha Techwin. Hanwha Group took over the brand owned by Samsung in 2014. It was perhaps planned to disassociate the consumer electronics brand from the weapons manufacturer. Clearly, it is unviable for a brand like Samsung to operate in space where public backlash around the world can hit the sale of billions of phones and other appliances at any point in time. Such concerns are not relevant for Lockheed Martin and the others like BAE Systems, Boeing, Northrop Grumman and General Dynamics. All these benefit from wars but have nothing to do with consumers directly so they can continue to kill people, indirectly at least and still remain fully operational, profitable and lawful.

Corporations will keep Conflicts Alive

Conflicts are opportunities for corporations. The entire Middle East underwent an unprecedented transformation ever since oil was discovered in the region. Today, militias use oil to raise funds so they can continue to pursue their quest. Dictators were supported by corporations to get first and exclusive access at times to natural resources and precious assets. Religious extremism and other conflicts were fuelled for purely commercial interests. Free speech and many other fundamental rights were suppressed to enable a favourable government in control of the riches of the region. A similar story had played out in the not so distant past. The phenomenon of blood diamonds is still fresh and it is still a reality in some places. From De Beers to lesser known names in the industry, most played active roles and benefited immensely with blood diamonds.