Embeddedness of Chiquita’s banana production in Panama: potential to mitigate social and ecological problems

Veronica Soldati

Abstract

Multinational enterprises (MNEs) such as Chiquita are often accused of exploiting the society and the environment in which they are operating. The study examines the operations of Chiquita in the banana production region in Panama. Despite the challenging circumstances that some MNEs operate under, this study looks for the potential for Chiquita to generate positive externalities for the local communities, the local economy and the local environment through its business activities in the remote region of Changuinola.

The study looks at the use of technology and standards and partnerships to mitigate the major social and ecological problems in the communities.

Given the geographical remoteness of the operations, the study examines the socio-political context in which Chiquita operates. It highlights which areas Chiquita needs to address in order to improve its sustainability and to further embeddedness of the company in Panama. The study also highlights key recommendations expressed by local experts and workers.

The study reveals the embedded ties that create value through mechanisms such as trust, knowledge transfer, and jointly seeking solutions to solve pertinent problems; bringing international standards to local businesses and integrating them into markets. By assessing the quality and extent of «local embeddedness» the study contributes to the designing of a tool-kit that should measure the degree of embeddedness and the positive sustainability effects of locally embedded Swiss-based multinational companies in developing countries.

Keywords: Panama, Chiquita, socio-political context, paternalism, communication, partnership

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