From CIA to CSR: the influence of the United States and US companies on labour rights in Guatemala

From CIA to CSR: the influence of the United States and US companies on labour rights in Guatemala

In 1954 CIA sponsored a coup d’état to protect the interests of US fruit companies at the expense of labour union rights. Through trade agreements and private standards they now intend to restore the damage and force Guatemala to improve its labour laws.

Guatemala has been a member of the International Labour Organization (ILO) since the ILO’s foundation in 1919, with the exception of the period between 1938 and 1945. The year that Guatemala resumed its membership also marks the beginning of a period in the country's history that is commonly known as ‘The Ten Years of Spring.’ During this decade free elections were held and presidents Arévalo (1945-1951) and Arbenz (1951-1954) pushed for social reforms. The two ILO treaties on freedom of association were ratified in 1952, formalising the country’s first labour obligations under international law.

The Ten Years of Spring were ended in 1954 by a CIA-sponsored coup, masterfully detailed by Stephen Schlesinger and Stephen Kinser in their classic book ‘Bitter Fruit: the story of the American coup in Guatemala’. The social-economic reforms of the Arévalo and Arbenz governments were perceived as a threat to the interests of several large American companies, most notably the United Fruit Company (which later became Chiquita Brands International). The coup led to a 36-year civil war, the bloodiest of its kind on the Latin-American continent which cost the lives of around 200,000 people. In this conflict, anyone who stood up for their (economic) rights was labeled a ‘communist’ and earned a spot on the government’s hitlist. Unionists and other labour rights activists were among the most targeted individuals. Throughout the civil war, however, the successive military dictators could count on the warm support of the US, which was desperate to contain the perceived ‘communist threat’ in the western hemisphere. In this context, labour rights were not a priority on the US foreign policy agenda.

Democracy was eventually reinstalled in Guatemala in the 1990s. However, the country is still one of the most dangerous in the world to be a trade unionist and it has a poor record of compliance with ILO and other human rights treaties. Their respective supervision mechanisms are based on ‘naming and shaming’ and generally unable to effect improvements. This has led to the inclusion of social clauses in Free Trade Agreements (FTAs). Making the benefits of free trade conditional upon compliance with certain labour rights is seen as a more effective incentive because it involves economic rather than reputational loss.

With the cold war and the anti-communist paranoia in the past, the US has over the last couple of years become more supportive of labour rights and other human rights issues in Guatemala. In 2004 Guatemala signed an FTA with the United States, other Central American countries and the Dominican Republic. In the social clause the parties ‘reaffirm’ their commitments to the ILO, and promise that they "shall not fail to effectively enforce its labor laws." In 2010 the Obama Administration requested consultations with Guatemala on its alleged failure to comply with this provision. The letter argued that there is a "sustained or recurring" pattern of failure to investigate and take action against violations of trade union rights. Initially both countries failed to negotiate a solution and the United States requested an arbitral panel, which could eventually lead to a $15 million penalty to be spent on labour law enforcement in Guatemala. In April 2013, however, this request was suspended when Guatemala and the US agreed on a detailed enforcement plan. In April 2014, an evaluation will determine whether or not arbitration is still necessary. Thus, in an ironic role reversal, the US is now supporting those it helped to oppress for decades while its former allies, the military and the economic elites, are suddenly decrying American imperialism in their country.

In addition, some of the multinational companies that are active in Guatemala are engaged in corporate social responsibility (CSR). According to the ILO “CSR is a voluntary, enterprise-driven initiative and refers to activities that are considered to exceed compliance with the law.” CSR is thus based on the premise that current protection of labour rights in Guatemala is insufficient. US companies like Chiquita(!), Del Monte and Dole, which control most of the banana production worldwide, have codified their own labour rights commitments and adhere to external standards like Global G.A.P., the Rainforest Alliance (RA) and SA8000 to certify plantations. Currently around 40% of the total area of banana production is certified, and workers on these plantations benefit from better labour rights protection than Guatemalans working in other sectors.

Thus, in 2014 Guatemala is still dancing to the tune of the United States and US multinationals, but luckily the song is different.

1 Comment


very nice post, Hanna and Ruben!
A concise overview of the history of Guatemala; a natural transition from the general background to the theme; and a very vivid concluding sentence...
well, I am looking forward to feel the rhythm of the dance song over there by listening to the most fresh story you will bring back months later.

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