Victims of the bloody paramilitary conflict in Colombia are suing the US banana company Chiquita, accusing it of funding and arming guerrilla groups blamed for torture and thousands of killings.

The lawsuit, filed in New York, seeks $7.86 billion (£4 billion) on behalf of 393 victims and their relatives. They accuse Chiquita Brands of complicity in hundreds of murders carried out by the United Self-Defence Forces of Colombia, a right-wing paramilitary group known by its Spanish acronym AUC.

The company has courted controversy for more than a century amid claims about the aggressive tactics that it has used to influence the politics of the Central American countries in which it operates. In 1975 a US investigation revealed that it bribed the Government of the Honduran President – and military dictator – Oswaldo López Arellano to get banana export taxes reduced.

The company even spawned the term “Banana Republic”, first coined by the American humourist O. Henry in 1904, in reference to the American conglomerate United Fruit and its actions in Honduras. The company had dominated Central America since 1899 and changed its name to Chiquita Brands International in 1989.

This year Chiquita admitted that it had paid off rebel groups in Colombia, including the AUC, which is accused of carrying out massacres during Colombia’s long-running civil war before it began to disarm in 2003.

In March the company, based in Ohio, pleaded guilty to violating US antiterrorism laws after admitting that its subsidiary, Banadex, paid the AUC $1.7 million between 1997 and 2004. Similar payments were also made to the leftist Revolutionary Armed Forces of Colombia (Farc), and the National Liberation Army (ELN). It was fined $25 million.

Chiquita says that it paid protection money to the groups, who had threatened to turn death squads loose on its employees and banana plantations.

The new lawsuit makes far more serious allegations, accusing Chiquita of abetting atrocities including terrorism, war crimes and crimes against humanity. Jonathan Reiter, lawyer for the victims, said that Chiquita’s support for the AUC went beyond mere protection payments and included the shipment of thousands of rifles through a port facility owned by Banadex.

Mr Reiter said that the relationship with the paramilitary group “was about acquiring every aspect of banana distribution and sale through a reign of terror”. Michael Mitchell, a spokesman for the company, said that the lawsuit “grossly mischaracterised the payments made by Chiquita in Colombia”. The company sold its Colombian subsidiary in 2004 but continues to buy Colombian bananas from independent suppliers.

“We reiterate that Chiquita and its employees were victims and that the actions taken by the company were always motivated to protect the lives of our employees and their families,” Mr Mitchell said.

Álvaro Uribe, the Colombian President, has succeeded in reducing violence between the paramilitary groups, but they remain in place and well armed.

Growing influence in Central America

- In the 1920s United Fruit, Chiquita’s forerunner, controlled 650,000 acres of the best land in Honduras, nearly one quarter of all the arable land in the country, as well as the roads and railways used to supply it

- Under the influence of United Fruit, and its main competitor Standard Fruit, bananas represented 88 per cent of Honduran exports

- At their peak, bananas accounted for 7 per cent of Colombian exports.

- A strike in 1929 by banana workers was crushed violently by the Government

- In 2005 Colombia exported almost 1.5 million tonnes of bananas, equivalent to almost half of the number imported to America

- Colombia is the fourth largest exporter of bananas per capita in the world. All the other countries in the top five are in Central America

Sources: US FAO; University of Chicago; University of Florida

Times Recommends

• Tehran cannot live up to its rhetoric
• The new unicycle that will ‘change the world’
• We cannot wish away Iran’s bomb