Envío Digital
Central American University - UCA  
  Number 346 | Mayo 2010



Cargill: In the Belly of the Beast

For the past ten years an agribusiness monster has been operating in Nicaragua. Its head is invisible. Its tentacles destroy the rights of workers who sweat in its factories. Name: Cargill. Age: 145. Headquarters: Minneapolis, Minnesota. Ernesto, a Nicaraguan, got to know it from the inside.

William Grigsby Vergara

Cargill is a privately held transnational company that has grown out of all measure to become one of the US corporations with the biggest profit volume in the world. Its activities include buying, selling, processing and distributing grains and other agricultural products, making and selling livestock and poultry feed and selling ingredients for the pharmaceutical industry.

The invisible giant

To give a bit of an idea of this monster’s dimensions we can review some of its world records: in the 2009 financial year, Cargill made US$3.33 billion, 16% less than its record of US$3.95 billion the previous year. The value of its sales during 2009 was US$116.6 billion. According to Greg Page, Cargill’s president and executive director, “The year [2009] was a tale of two halves. Cargill posted record results through November. In the second half, earnings slowed considerably as the world economy contracted for the first time in six decades. In the end, the net effect was the second-best year in our company’s history.”

Cargill is responsible for 25% of all grains exported from the United States. It provides 22% of the meat consumed by the US market. It directly employs more than 158,000 workers in 1,100 sites in 66 different countries. It’s the biggest exporter of agricultural produce in Argentina and the biggest producer of poultry in Thailand. Have you tried McDonald’s chicken nuggets? All the eggs that hatched the chickens used in McDonald’s in the US passed through Cargill’s plants.

“The invisible giant of agribusiness,” as Canadian economist and theologian Brewster Kneen baptized it, came to Nicaragua 10 years ago and has already caused havoc. Its destructive power touched a Nicaraguan citizen whose real name we’ll omit for safety reasons. We’ll call him Ernesto.

How to turn serious
accidents into “first aid”

Ernesto survived Cargill’s exploitation and machinations, but his journey through the belly of the beast has marked him to the point that he decided to sue it under both labor and criminal law. For three years Ernesto was in charge of Industrial Safety and Occupational Health at Cargill and reported directly to the country manager of the company’s Animal Nutrition Business Unit.

Cargill’s global corporate guideline is an environmental, health and safety policy known by its initials EHS. As a thermometer for measuring this policy in every business unit in every country Cargill measures the hours not lost to accidents (those that would merit social security subsidy). It also measures the non-occurrence of work-related illnesses (those covered by each country’s social security system).

This measuring rod is applied equally to employees and contractors responsible for subcontracts. When a lost-time accident occurs or a work related illness is diagnosed by the social security system, it generates an entire organizational paranoia that unleashes a sort of witch hunt to find the guilty party.

The idea, as Ernesto explained it, is to “block out the sun with one finger,” preventing the accident reaching the social security system to avoid the company having to pay the resultant benefit. So, whenever possible an accident is classified according to Cargill’s universal lexicon not as a “lost-time accident” but as “first aid,” a “slight accident without time off” and the worker is relocated “with his/her consent” and with signed documentation to an area where he/she can work without discomfort to the injured body part.

In our vulnerable region, Cargill, which is a transnational expert in this type of maneuver, works this way in Guatemala, Costa Rica, Nicaragua and Honduras. In each of the four countries there’s a doctor (either a direct employee or a well paid subcontractor) in the Cargill installations who’s shamelessly responsible for ensuring that work-related accidents don’t reach the social security system. The accident thus avoids becoming a statistic in the system at the Minneapolis headquarters. The factories accumulate millions of hours without accidents, which the proud managers later display on huge billboards at their company entrance.

Registered name: Tip Top

Legally speaking Cargill doesn’t exist in Nicaragua. Its registered name here is Tip Top Industrial, S.A. For the Animal Nutrition branch, where Ernesto worked as a doctor, Cargill uses the brand name of another global food monster, the Swiss company Nestlé, owner of the PURINA brand, very well positioned in the popular Nicaraguan self-image. This brand doesn’t belong to Cargill but Cargill pays a user right for it. Cargill has so much money it can afford to buy already familiar corporate identities that have been positioned among people for a long time in the market, thus attracting a wide range of consumers.

Transnationals have invisible “heads” but they also have independent and mutually recognizable business units and brands. Cargill’s Animal Nutrition business unit in Nicaragua has the same trade name as Tip Top Industrial, but in Cargill’s world hierarchy the Human Nutrition unit is something different again. This means that the production and sale of chicken is a different business from the sale of concentrate for animal consumption.

Cargill‘s brands in Central America are Purina, Pollos Tip Top and Cainsa (in Nicaragua), Cinta Azul (in Costa Rica), Pollo Norteño and ALCON (in Honduras), Doggie and Gati (throughout Central America), and Biocamaronina (in Nicaragua, Honduras and Guatemala). Cargill is one of the main suppliers, if not the main one, of feed for the shrimp farms that export shrimp from Central America to Europe and the United States.

Faced with collaborating unions

Ernesto arrived at Cargill in 2007 with a certain ingenuousness, soon to realize the questionable procedures and arbitrary acts the company implements. He confesses that his first reaction when faced with the evidence was to resign, so as not to be a witness or accessory to the injustices being committed. But he decided to unsheathe his sword against the dragon and fight to extinguish the fire in its maw. He preferred to attack the monster from the inside to try to stop what was happening.

At the balanced feed factory, which directly employs 88 workers, Ernesto, a psychiatrist by profession who graduated from Managua’s National Autonomous University (UNAN) the same year he started work for Cargill, noted that when a worker had an accident or got hurt, the Cargill unions not only did nothing but helped relocate the employee to avoid a situation. If there are puppets in Cargill’s service, he says, they are without doubt the unions, which are “sold-out traitors in cahoots with the company’s top brass. I wanted to do the right thing and give the person involved in the accident their rightful benefit, but they started applying repressive measures to prevent me.”

Those who do the heaviest work

To ensure that everything works perfectly at Cargill and the beast can move freely, the corporation uses a method already common to savage capitalism: outsourcing work. The company’s riskiest and most laborious services are contracted and subcontracted out. This maintains a system that has become a lash the transnationals use to keep 21st-century slaves on their toes.

The idea is to do more with less. They do it with contractors who in turn have a series of subcontractors under their control. Cargill uses the contractor as an intermediary to punish the subcontractors and violate their rights. Then whenever there’s a problem of any sort with the subcontractor, the responsibility falls on the contractor and Cargill disdainfully washes its hands of the issue.

The subcontractors do the most dangerous work. They are the Cargill employees who die every year all over the world because they work without any kind of security. They are the ones who prune trees, clean toilets and lift heavy sacks. They do all the jobs with a higher probability of a serious or deadly accident. They work on scaffoldings, in silos and with machinery where it’s easy to get hurt. They work in their own country like migrants who work abroad do: for less pay and without rights. They are the ones who die anonymously, don’t get vacations and only receive half of their Christmas bonus.

While this is going on, there’s a bill on the shelf in Nicaragua’s National Assembly waiting for someone to dust it off. The Ministry of Labor (MITRAB) has yet to apply the “Law to regulate subcontracting and third-party employment” to any company operating in Nicaragua.

Subcontracted workers don’t even have the right to eat in the company canteen. They are the poor. “And who are the poor?” reflects Ernesto, recalling the ideas of Salvadoran theologian Jon Sobrino. “Those who don’t take their right to life for granted, those for whom living is their greatest task and the nearness of an unworthy death is part of their culture. The poor are those who die before their time.”

“Esthetic reprisals to make me leave”

There are some 1,300 direct and indirect workers in the company’s Human Nutrition unit in Nicaragua. Most of them work out at kilometer 17 on the Masaya highway, which is where Ernesto was obliged to develop a strategy for tackling Cargill. Within a few months they wanted him to resign for his “overly fair” respect for the employees.

When Ernesto arrived at Cargill the majority of the subcontracted workers weren’t insured, as the Labor Code stipulates. On one occasion one of them broke his hand, but he was “re-located” to the workshop of one of the company’s contractors. Ernesto found out and raised a legal ruckus demanding that all contractors and subcontractors be covered by the blanket insurance of the Nicaraguan Social Security Institute (INSS) to avoid human rights violations such as this.

Every time Ernesto gained something for the workers, his superiors mutilated his responsibilities as a way of applying pressure. First they took away his authority in the environmental area, next in the security area. In the end they left him with just the occupational health area. The way he explains it, “It was a very esthetic reprisal to get me to leave.”

When our protagonist couldn’t change things from within given that he was already being persecuted by Cargill’s hierarchy, he decided to look for support from the State and its institutions, particularly MITRAB and INSS. When he arrived at these institutions, they couldn’t get rid of him easily because he had power in the company’s line of command. His persecutors within Cargill had to resort to coercive measures in a discreet, camouflaged way to avoid a highly visible crisis.

For defending Cargill’s serfs

Ernesto dealt with various cases. On one occasion a worker broke both legs when a scaffold fell on him during construction of a warehouse. Before that another worker had already suffered severe bruising when a hoist crushed his foot and left him unable to walk for several days. They wanted to relocate the worker who’d broken his legs so he could work sitting down instead of sending him home to rest. Ernesto’s boss, who was a friend of the production manager, pressured him to relocate the victim but he refused. In response, the boss gave the order that once the injured worker’s ten day sick leave was over, he would be punished with two weeks without pay for committing the “crime” of suffering an accident.

With an attitude not unlike that of Rosa Parks when she faced US racism all alone, Ernesto presented a dossier of known cases to MITRAB and INSS. The outsourcing of work complicated things. Cargill was saving a lot of money by not hiring the subcontracted workers directly and by giving orders to the intermediaries so as not to have to pay the consequences of its decisions later. With the third party work arrangement, they violated the rights of the lower-down workers, keeping them defenseless. It turned them into serfs in Cargill’s modern fiefdom. The contractor as the middleman in the hiring can do whatever he wants with these subcontracted serfs.

Ernesto couldn’t stand what he was seeing. “As I wouldn’t leave despite the pressure, they handed me a letter terminating my contract on March 5,” he said, but not before being threatened by Cargill’s general manager in Nicaragua. The manager told Ernesto the company had a doctor who worked in a company clinic attending to the workers but that unlike Ernesto he was able to avoid giving leave to employees and contracted workers and that if Ernesto maintained his stand they would close the clinic, which is what they did. When Ernesto lost his job they planned to subcontract a doctor from the Military Hospital.

The other problem facing the 34-year old Nicaraguan in getting somewhere with his accusations is that Cargill exists everywhere, but isn’t anywhere. He couldn’t launch a direct attack. Its body in Nicaragua is Tip Top, but where is its head? In Minneapolis? And if it’s there, what could the Nicaraguan State do? Ernesto was caught between Cargill’s immunity and the national government’s powerlessness.

It always competes with advantages

Cargill’s philosophy is not to compete where it doesn’t have an advantage. This means competing where there aren’t many laws and where the government doesn’t interfere too much. For Cargill, Nicaragua is excellent terrain to work in and that’s why it’s here.

Ernesto swears that the company manager in Nicaragua was very skilled in covering up safety-related labor problems. “If Cargill’s real top brass were aware of how many accidents their companies’ workers suffer in Nicaragua and the casualties they’ve had due to incidents that have been covered up, they might doubt whether to carry on in our country.”

Cargill hasn’t stopped at labor exploitation in its plants. It has also competed underhandedly in the commercial field. It recently set up a stand in the Oriental market to sell its Tip Top chickens at low prices in unfair competition with the small independent chicken retailers that have done business there for years. Thanks to the ruckus the venders had to make to rescue their sales, Managua municipal councilors intervened and after several months of lobbying, the mayor’s office put an end to Tip Top’s presence in the Oriental Market.

Daniel Ortega: “In Nicaragua
they have every guarantee”

Cargill doesn’t gain any advantages confronting the State. These days the appearance of another growing monster, Albalinisa (ALBA-Feed), worries Cargill because it is losing some of the advantages it saw ten years ago when it sunk its claws into national territory in a different political context.

Despite this, Ernesto has come to believe that some complicity might exist between Cargill and the current FSLN government. Cargill’s constant and unpunished workers’ rights violations and the scant reaction from both MITRAB and INSS to his continual complaints have aroused his suspicions. Is it institutional fear or a deal behind the people’s back? Either possibility would leave Daniel Ortega’s government, which says it puts “the world’s poor” on high, looking bad.

In January 2007, during the first days of his government, President Daniel Ortega received Cargill magnate Warren Stanley in Managua. The new President put Stanley’s mind at rest even though Cargill is a transnational symbolic of the corporations that dominate the world of “savage capitalism” repeatedly denounced by Ortega in his speeches and the development model it represents is the antithesis of the food security and sovereignty Ortega’s government says it is promoting with the food production bond distributed by the Zero Hunger program, among other ways.

“Here you’ll find every guarantee and security with which to continue your investments,” Ortega assured him. “We’re convinced that what you’ve invested in the country, the jobs you’re creating, the direct and indirect social and economic impact are all heading in the direction of the fight against poverty… Nicaragua is a country willing to continue working and expanding these investments. What is important is that you feel good, that you feel untroubled and secure.”

Seduced by Cargill

Ernesto was seduced by Cargill at first. The company offered him a salary of nearly US$1,000 a month, as well as excellent food and medical insurance in Managua’s Metropolitan Hospital. An infallible fishhook with which to catch any Nicaraguan. But in only a few months, even with the company’s concealment tactics, Ernesto realized the price for these perks was very high. His salary no longer caressed him and he entered headfirst into a fight to demand justice from the multinational.

Cargill offered Ernesto privileges, something it never does with workers, who lose their freedom the minute they are hired. When he started work Ernesto found out about a graduate program in health and safety at the University of Engineering (UNI) in Managua. The program cost $1,800. Ernesto enrolled using his own resources, because he liked the look of it. When he told his boss, Cargill offered to pay half the course fee. “When they see you’ve got potential they want to start molding you so they can fit you into the organization. So they make you this sort of offer,” says Ernesto.

Environmental and health violations

Ernesto also worked at kilometer 32.5 on the Masaya-Caterina highway where the feed for the chicken farms is processed. That’s where he witnessed another Cargill violation, this time an environmental one.

Ernesto explains that some feed is buried by the ton in the plant grounds if it isn’t sold by its expiration date. In 2008, a quantity of processed shrimp feed was sold to shrimp farms even though it didn’t pass the quality management test. Although the plant acknowledged the mistake and recalled the product, it didn’t recycle the processed feed that remained in the factory. Instead it sent subcontractors to bury it on an abandoned farm out by Sébaco.

“If you bury this sort of out-of-date food like that, you’re burying antibiotics that can create bacterial resistance and could end up in water sources and contaminate the environment.” Ernesto told the MITRAB and INSS inspectors about it. A woman who worked with the Maria Elena Cuadra Women’s Movement also filed a complaint with a governmental body. They weren’t listened to. Ernesto also pressured the company itself, arguing that burying out-of-date products that don’t conform to quality standards is illegal under environmental law. He sent emails to the plant’s legal adviser and environmental administrator, but they were ignored. “If the government’s regulatory bodies won’t do anything, what can I do on my own?” a frustrated Ernesto pointed out.

Cargill was also guilty of noise pollution and disturbing the public peace, as typified in the new Penal Code. The noise made by the generator where Ernesto worked broke the rules to save energy. The law establishes a 55-decibel limit when within one meter of a neighborhood, but the factory was capable of putting out up to 90 decibels. When Ernesto filed a complaint about this too, Cargill lowered the noise level by 10 decibels, but continued breaking the law. Cargill cynically told Ernesto that it “had no money” to invest in noise reduction measures. As the people who lived nearby started to complain, they took their concerns to the Ministry of Health, which sent an inspector to the Cargill factory. But to everyone’s surprise, he didn’t even have a sound meter to measure the decibels to demonstrate to the factory that it was breaking the law. Yet more proof of the government’s incompetence in the face of this monster.

That’s apparently how Cargill works wherever it is. In August 2006, an International Conference of Cargill Workers was held in São Paulo, Brazil, at which the Latin American regional secretary of the International Union of Food Workers, Gerardo Iglesias, said the following: “We won’t rest in the fight against this transnational that has created a new feudalism, causing its workers serious illnesses due to the intense pace of work they are subjected to, adopting anti-union practices and causing serious socio-environmental problems in countries where it sets up.”

The high emotional cost

The emotional cost for Ernesto during his stay at Cargill has been high. Being a psychiatrist, he went to a colleague for help. In December 2009 the doctor recommended he resign after observing that Paroxetine (an anxiety-reducing anti-depressant) wasn’t working for him. The psychiatrist suggested he get out of such a hostile environment and go on holiday to recover his peace of mind and get the company out of his system. Ernesto was diagnosed with an anxiety condition due to workplace bullying and not being allowed to develop his medical responsibilities fully in the company where he worked. Despite this diagnosis, he went on working a few months longer, when they fired him on March 5, 2010, under Article 45 of the Labor Code.

When they ended his contract, the manager asked Ernesto to sign a settlement through a lawyer, stating that although he was leaving quite satisfied with the company, he wouldn’t have any contact with it by mail, phone or any other way. It was the company’s way to avoid being sued. Ernesto didn’t sign. When he declined, Cargill refused to give him his severance pay and deposited it with a judge in Masaya pending a judicial conciliation process. The lawyer drew up another official document to support the unwilling¬ness to give him his pay (some 80,000 córdobas, a little over $4,000 dollars). When the lawyer asked Ernesto why he wouldn’t sign the severance agreement, he answered her with a terse: “I’m availing myself of my freedom not to sign.”

The next chapter?

Cargill implemented persecutory measures against Ernesto once it became aware of his ethical rebelliousness. According to corporate jargon, these measures are known as “labor mobbing” and are a crime in various parts of the world. Between June 2007 and March 2010, when they fired him, Ernesto was harassed and spied on both inside and outside the company for his actions. Once unemployed, he received calls from the same lawyer who ended his contract asking him if he was going to sue Cargill. When he said he was, the lawyer asked him to meet with the company’s general manager, his former boss. Monetary compensation for not suing the company?

Ernesto is waiting for a reply from the authorities at INSS, MITRAB and MINSA, to whom he wrote detailing the inadequate administration of the company’s middle management. One of these institutions told him that the minister had read, analyzed and studied the document and had coordinated with the general safety director to conduct an interdisciplinary audit on Cargill. The first inspection confirmed Ernesto’s complaints. What will the next chapter in this story be?

“For my CV”

Cargill has been accused in various countries for violating human and environmental rights, but it’s the first time the company has faced an accusation of this caliber in Nicaragua.

In July 2005, the International Labor Rights Fund brought a case against Cargill, Nestlé and Archer Daniels Midland (ADM) before the Federal Court of Los Angeles. California, in representation of a group of children from Mali who were trafficked to the Ivory Coast and forced to work 12 to 14 hours a day with no pay, no food and frequent beatings. The three children who represented their fellows did so anonymously for fear of reprisals from the owners of the cocoa crops they worked on. Cargill was accused of child trafficking, torture and enslavement of the children who tend and harvest for the companies that export to Cargill from Africa.

In November 2007, Cargill, one of the biggest meat producers in the world, announced it was withdrawing more than a million pounds of ground beef from the market due to possible contamination by the E. coli bacteria. In October of the same year Cargill had to withdraw over 800,000 pounds more for the same reason.

There’s a Cargill motto that declares as a supreme truth; “Safety first.” One has to ask: whose safety? History has proved that all the most heroic struggles for labor rights have come from “those at the bottom,” and that the blood shed by the workers is what has brought about change. In Cargill, safety isn’t first for the weakest, but rather for the sharks, those who settle things from their management positions.

Ernesto has a final thought on his passage through this ruthless monster. “This is a minus for my work résumé, but it’s a plus for my life résumé. I came to Managua to study medicine when I was 16 after a childhood spent in my native Boaco. Now I’m pressuring the State to take Cargill on and make it obey the laws that protect Nicaraguan workers. I will keep on with my personal suit against the general manager until the final consequences. I’m not so much interested in my work résumé as my life résumé.”

Brewster Kneen has written a number of extensively researched books on food systems and agribusinesses, including two specifically on Cargill. When he presented Invisible Giant: Cargill and Its Transnational Strategies, which denounces the practices of this giant that is invisible because it only shows us what it wants us to see, he explained that he was motivated by the need for people, particularly farmers, to know what Cargill is about in order to decide. According to Kneen, what’s important is/ to understand the dominant system, to learn that there are spacesbetween this giant’s feet from which to fight it. We have to learn to see those spaces to know what action to take: whether to play Cargill’s game or change the rules.

Ernesto decided not to play Cargill’s game, but to open a space between the beast’s talons.

William Grigsby Vergara is a Nicaraguan social commentator.

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