Global Policy Forum

By Dana Frank

In the United States and elsewhere, the globalization debate still rages. Is it an exciting path to widespread prosperity? Or a dressed-up version of the old economic system that enriches some while leaving others behind?

One answer can be found on the banana plantations of Ecuador. For the past several years, the world's largest banana companies have become increasingly enamored of that country's low-wage, nonunion workforce. Ecuador now provides 28 percent of the world's bananas, according to U.N. figures.

Suddenly, however, there's trouble in paradise. Wildcat strikes have hit several planations; Noboa, an Ecuadorean company that is the nation's largest banana producer, sent an armed force of several hundred men to confront the striking workers; Human Rights Watch released a report alleging widespread abuses in the industry, including the use of child labor.

If globalization is to benefit all, why are the big banana companies so comfortable with the use of child labor, with violations of workers' rights and with substandard wages? A closer look at Ecuador -- and more broadly at the Latin American banana export industry -- provides a disturbing window on the bottom line of the global economy.

Before dismissing the subject as too distant to be important to Americans, consider this: Last year, 25 percent of the bananas we ate came from Ecuador, according to U.S. and U.N. figures. In Ecuador itself, the banana rules: It's second only to oil in generating export earnings and the industry employs an estimated 383,000 Ecuadorans.

Five companies, some with long-familiar names, dominate the Latin American banana industry. Noboa (whose bananas are labeled "Bonita" here in the United States) has become the world's fourth-largest exporter, joining Del Monte, Dole, Chiquita and Fyffes (the European giant) as the kings of bananas. For years, the transnationals have competed intensely with each other for the U.S. and European markets.

Since 1998, a drop in demand has led to overproduction -- and lower prices. Dole, Del Monte and Chiquita saw their stock prices fall, eliciting shareholder pressure to cut costs. As a result, banana production has become extremely mobile, as transnationals seek cheaper labor.

Abandoning their classic commitment to direct ownership of plantations, the corporations have turned more and more to contracting out production, especially in Ecuador. Increasingly, the exporters don't own the land or the company on a given plantation, but tightly control the technology, production quotas and transportation -- as well as the little label on the banana peel. Typically, the workers are hired by a subcontractor on an entirely temporary basis. Many workers, as a result, are never officially recorded as employees of a corporation -- and thus are locked out of state-mandated health, pension and other benefits.

The subcontractors, meanwhile, absorb most of the risk -- as well as the challenge of managing the workforce. The result is not unlike the subcontracting system in the garment industry, in which many transnationals famously evade responsibility for workplace conditions.

In sharp contrast to Latin American apparel workers, however, many banana workers have powerful unions representing them. I became involved in the world of banana exporting two years ago when activists with the U.S. Labor Education in the Americas Project (US/LEAP) asked me to help advise the Coalition of Latin American Banana Unions. I learned, to my surprise, that there are more than 40,000 unionized banana workers in the Latin American export sector, 18,000 in Colombia alone. With union contracts, banana workers have often been able to achieve an eight-hour workday, health and safety protections, adequate housing and a decent wage.

No wonder the big banana producers have been transferring production to Ecuador, which has been almost completely nonunion since the banana labor movement was largely crushed there in the 1970s. Dole now gets 31 percent of its bananas from Ecuador, Del Monte 13 percent, and Chiquita 7 percent, according to industry figures.

Bob Kistinger, president of Chiquita's international division, complained in August 2000 that Ecuador's rock-bottom wages were making it difficult for his company to compete elsewhere. Explaining the layoff of 650 workers in Honduras, Kistinger said in the Financial Times of London: "The costs in Ecuador are so much lower. There are no unions, no labour standards and pay is as low as two dollars a day." According to a 2000 study by US/LEAP, a banana worker's average monthly wage was $500 in Panama, $200 to $300 in Colombia, $150 to $200 in Honduras -- and $56 in Ecuador.

The transnationals are quick to play this card in contract negotiations with the banana unions. Last October, when Del Monte threatened to leave Guatemala for cheaper climes, banana workers gave up 30 percent of their wages, 70 percent of their health benefits and two-thirds of the funds for their children's school.

But that's not the end of the story. On Feb. 25, 1,400 workers at seven Noboa plantations in Ecuador walked out, demanding decent wages, health care and legally mandated benefits. Quickly learning they needed legal recognition, they went back to work the next day. On May 6, with legal status established, 1,000 workers struck again, and they're still out. Now, banana workers on other plantations (including one under contract to Dole) are talking strike.

Noboa's response? At 2 a.m. on May 16, between 250 and 400 armed men descended on the striking plantations. Local police, U.S. and Danish trade union observers, the strikers and others gave the following account: The armed men, many wearing hoods, pulled workers out of their homes, beat them and shot several, one of whom lost his leg as a result.

All this took place against the backdrop of the Human Rights Watch report, released April 25 and entitled "Tainted Harvest: Child Labor and Obstacles to Organizing on Ecuador's Banana Plantations." The New York-based group found children as young as 10 or 11 often working 12-hour days and handling dangerous fungicides, while getting paid an average of $3.50 a day.

The report also asserted that the industry was ignoring basic labor rights, the Ecuadoran Labor Code wasn't being enforced and employers could easily fire workers for union activity. Most importantly, the system of temporary employment had allowed banana employers to evade paying millions in government-required benefits.

Despite this international attention, Gustavo Noboa's government has been scarily slow to respond. The labor minister insists he can't control Noboa, but he's made no effort to enforce the meager protections already on the nation's books. Meanwhile, Alvaro Noboa, the head of the banana exporting company (no relation to Gustavo), has made clear his intention to run for the presidency.

The Ecuadoran banana story challenges easy narratives of globalization. Too often Latin American workers show up in these analyses as victims. Yes, the banana workers are vulnerable. But they're also capable of concerted action to assert their legal right to organize and improve their situation. The bottom can bite back.

More broadly, the banana companies' love affair with Ecuador refutes the romantic notion that globalization is somehow lifting all impoverished boats. We eaters of Ecuadoran bananas need to peel back the rhetoric and examine closely what we're being sold.

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