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Chiquita Subsidiary Reaches Agreement with Honduran Union and Workers

PRNewswire, 28 June 2000

CINCINNATI, June 28 /PRNewswire/ -- Tela Railroad Company, a subsidiary of Chiquita Brands International, Inc. ("Chiquita") (NYSE: CQB), announced today that it has reached agreement with over 650 workers whose labor contracts were suspended after Hurricane Mitch devastated Honduras in November 1998. This agreement was achieved as a result of ongoing consultations and dialogue between the Company, representatives of the Honduran Government and the SITRATERCO labor union (a member of COLSIBA, an organization of labor unions representing banana workers in Central America and Colombia).

Prior to Hurricane Mitch, the Company's Honduran production facilities covered over 7,000 hectares (15,000 acres). Since 1998, over 3,200 hectares have been rehabilitated, requiring over $75 million of new investment. As the result of this redevelopment over 3,000 workers of the originally suspended workforce eventually returned to active employment. During the rehabilitation period, an increase in surplus production from Ecuador and continuing restrictions imposed by the European Union banana import quota have rendered further rehabilitation in Honduras economically infeasible and unsustainable.

The agreement contains many provisions for ongoing actions by both the Company and the Honduran Government. These include:

  • The donation by the Company of the employee housing, social halls and other community infrastructure to the affected workers who currently occupy them.
  • The contribution by the Company of the medical clinics, including all equipment, it currently operates in the area. WorldVision, a non-governmental organization with a long-standing presence in Honduras, has agreed to assume the continued operation of the clinics with the existing staff.
  • The Company has also agreed to continue operating schools on the farms throughout the current school year, after which the Government of Honduras will operate the schools.
  • All the affected workers will receive full severance, and outstanding loans will be forgiven.
  • The Company will donate the use of approximately 275 hectares of agricultural land to enable affected workers to cultivate agricultural products. The Fundacion Hondurena para la Investigacion Agricola (FHIA) has offered to provide technical and commercial assistance to these ventures.
  • The Company has made available a long-term, interest-free loan as seed capital for other worker-sponsored ventures.

Arnaldo Palma, General Manager of Tela Railroad Company, stated: "The devastation caused by Hurricane Mitch combined with the difficult economic conditions within our industry have sadly left us with no other course of action. It is never an easy process, however we are extremely grateful for the hard work and cooperation of the affected workers, the SITRATERCO union, the Government of Honduras, FHIA and WorldVision in achieving resolution of this difficult issue."

SOURCE Chiquita Brands International, Inc. Web Site: http://www.chiquita.com