Álvaro Noboa

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Álvaro Fernando Noboa Pontón (born November 1, 1950 in Guayaquil) is an Ecuadorian businessman and politician.

Noboa is actively involved in politics, running for president in 1998, 2002 and 2006. Noboa is the wealthiest man in Ecuador. He assumed control of the Noboa Group of companies after a lengthy legal battle with his siblings following the death of his father, a banana magnate and billionaire, in 1993 ^[1]. His foundation Crusade for a New Humanity ^[2] (Spanish: Cruzada Nueva Humanidad) draws on his personal fortune to fund social projects. Some have criticized this work, including former President Rodrigo Borja, who said that "Alvaro Noboa doesn't give out ideas; he gives out gifts."^[3]

Noboa has opposed campaigns for workers' rights within his own companies, and Noboa Group workers have been illegally dismissed for joining trade unions.^{[4] [5]}. In one 2002 incident striking workers at a Noboa subsidiary were attacked and–according to a Human Rights Watch report–several were shot by organized assailants.^{[6] [7]} Noboa Group was also criticized in a HRW investigation into child labor practices in the banana industry. ^[8]

Noboa is the leader of the Institutional Renewal Party of National Action (Partido Renovador Institucional de Acción Nacional, PRIAN)^[9], a populist party he founded himself after separating from the populist center-right Ecuadorian Roldosist Party (Partido Roldosista Ecuatoriano, PRE). He was presidential candidate of the PRE in 1998 and of PRIAN in 2002 and 2006. Both times he was defeated, placing second to winners Jamil Mahuad (in 1998) and Lucio Gutiérrez (in 2002). In 2006, he decided to run once again as presidential candidate for his party. With 99.5 percent of votes from the October 15 election officially counted, Noboa won 26.83 percent of the vote. His closest rival, Rafael Correa of the leftist Alianza PAIS party, received 22.84 percent of the vote. Noboa lost in the presidential run-off on November 26, making it the third time in a row that he has lost in a run-off.

Contents 1 Working conditions in banana plantations 2 Family business, inheritance and litigation 3 Business practices 3.1 Shell companies 3.2 Tax evasion 4 Political experience 4.1 Presidential runs 4.2 Campaign spending 5 References

[edit] Working conditions in banana plantations

In 2002 the New York Times reported on working conditions in Álvaro Noboa’s banana plantations in Ecuador. The article specifically mentioned the 3,000-acre plantation known as Los Álamos that employed about 1,300 people. ^[10]

The workers of Los Álamos unionized in March 2002. Noboa’s company responded by firing more than 120 of them. The article read: “When the workers occupied part of the hacienda, guards armed with shotguns, some wearing hoods, arrived at 2 a.m. on May 16, according to workers, and fired on some who had refused to move from the entrance gate, wounding two.”

Also, several workers spoke of child laborers at Los Álamos. The article quoted a 10-year-old worker, Esteban Menéndez, as saying: "I come here after school and I work here all day.” The boy’s job consisted of tying insecticide-laced cords between banana plants.

In April 2002 Human Rights Watch released a report ^[11] that “found that Ecuadorian children as young as eight work on banana plantations in hazardous conditions, while adult workers fear firing if they try to exercise their right to organize.” Chiquita, Del Monte, Dole, Favorita and Noboa’s company were all accused of being supplied by plantations on which children worked.

Noboa’s exporting company, Exportadora Bananera Noboa, had sales of $220 million in 2004 and $219 million in 2005 ^[12].

[edit] Family business, inheritance and litigation

The estate of Álvaro Noboa’s late father, Luis Noboa, the founder of the family’s banana business, was the subject of protracted litigation.

According to Forbes magazine,^[13] Luis Noboa’s heirs spent $20 million in legal fees culminating in a ruling by a British court: “In November 2002 a London judge found that Álvaro rightfully owned a 50.1% stake in Fruit Shippers Ltd., the holding company for the family business. That stake is worth $300 million, we estimate. Álvaro, who has made our billionaire's list previously, claims his assets are worth at least $1 billion. ‘It was a full victory,’ Alvaro says.”

From the court’s ruling:^[14]

“The principal business of [Luis Noboa] was the export of bananas. But at the time of his death his interests also included coffee, sugar refining, flour milling, shipping, banking, insurance and soft drinks. The principal Ecuadorian company engaged in the banana business was Exportadora [sic.] Bananera Noboa S.A. (EBN). The ultimate holding company and the company owning most of the overseas business was [Fruit Shippers Ltd.] a company incorporated in the Bahamas.”

The court found Álvaro Noboa “an impressive and attractive witness” who “gave his evidence in a forthright manner.” He was described as “plainly intelligent, direct, tough, strong-minded and a dominant personality.” Moreover, in the court’s words: “Alvaro did not believe his sisters were capable of running a business and it is not in issue that he alone of the siblings had the ability and experience to do so.”

[edit] Business practices

[edit] Shell companies

An 2005 investigation^[15] uncovered 99 companies in Ecuador registered to fictitious addresses. All were associated with Noboa’s business.

The companies, with names like Dalioca, Domintini, Abacus and Carani, were listed in the archives of Ecuador’s Ministry of Labor as being third-party labor-placement businesses, which served other, larger companies by hiring workers on their behalf. The same telephone number was found in all companies’ files and it connected to a recording that said that Corporacion Noboa had been reached. Then a person got on the phone and said that no companies with those names functioned at that location.

The shell companies were also traced to an address that corresponded to an abandoned warehouse in the city of Guayaquil. One company’s file, Empacadora Tropical, had written the warehouse as the address of Corporacion Noboa. The company’s shareholders were Fruit Shippers and New York Commodities, two companies based in CANADAand the Bahamas respectively.

The shell companies were used to dodge labor obligations on the part of the employer. Victoria Oliveira, Communications Director of Grupo Noboa, said to a newspaper that Noboa’s company knew nothing about these links.^[16]

[edit] Tax evasion

In March 2005, Ecuador’s government closed one of Noboa’s companies, Elaborados de Café, a coffee-processing business, for failing to file a tax return.^[17]

Also, the government determined that another Noboa company, Frutería Jambelí Frujasa, owed almost $20 million in back taxes, including about $7 million due to interest accrued. The amount was calculated as part of an audit of Noboa’s 114 firms. A newspaper contacted the firm and was told by employees that it no longer existed. The number was that of Corporacion Noboa.^[18]

Other Noboa enterprises were notified that they owed taxes, including: Industrial Molinera, a flour mill, ($2.4 million), Compañía Nacional de Plásticos, a plastic-manufacturing firm, ($1.1 million) and Manufacturas de Cartón, a cardboard box factory, ($3.1 million). A member of Noboa’s party and member of Ecuador’s congress, Sylka Sanchez, called the audits “blackmail” and said the arrears came to light after Noboa refused to join a legislative coalition headed by then-president of Ecuador Lucio Gutierrez.^[19]

Ecuador’s internal revenue director, Vicente Saavedra, denied that Noboa was being singled out and said audits were done on a million and a half taxpayers. “If that’s what they call persecution, then there ought to be a law so that politicians don’t have to pay their taxes,” he said to a newspaper.^[20]

[edit] Political experience

In 1996, Álvaro Noboa was named President of Ecuador’s Monetary Board by then-President of the Republic Abdala Bucaram.

According to an account of Bucaram’s last day in office (he was overthrown before his term expired) Noboa was the last person to leave the presidential palace in Quito before Bucaram himself left the building 30 minutes later in the evening of February 7, 1997.^[21]

While in office Bucaram used his presidential powers to sway the dispute between Noboa and his siblings. Early in his short-lived administration, when Exportadora Bananera Noboa was not yet in Noboa’s hands, Bucaram ordered the Superintendent of Companies to intervene in the company citing as a pretext the lowering of the price paid for bananas in bulk.^[22] Then in January 1997 Bucaram threatened Noboa’s siblings with the possibility of expropriating a large estate.^[23]

During his short tenure as head of Ecuador’s Monetary Board (August 1996-February 1997) Noboa owned a small bank, Banco Litoral, and collaborated as part of an economic team that included Domingo Cavallo, the architect of Argentina’s monetary convertibility policy during the 1990s and special foreign advisor to Bucaram,David Goldbaum, head of the National Finance Corporation and owner of Banco Territorial, and Roberto Isaias, then-president of now-defunct Filanbanco, one of Ecuador’s largest banks, who served as economic advisor.^[24]

Noboa pledged to stop the privatization program began by the previous administration of Sixto Durán Ballén and replace that with a policy of capitalization of state-owned enterprises, like the program implemented by Gonzalo Sánchez de Lozada in Bolivia.^[25] However, Noboa did not outright dismiss the idea of privatizing some state-owned companies.^[26]

The administration planned to eliminate gas subsidies, except for the poorest, and to sell off part of EMETEL, the national telephone company, as well as parts of state-owned energy industries. Noboa, faced with a budget shortfall, claimed that Ecuador’s government could have raised hundreds of millions of dollars by going after tax evaders and late-payers of taxes.^[27]

[edit] Presidential runs

In 1998 Noboa ran for president for the first time. In the first round of elections, held on May 31, Noboa got 1,022,026 votes, 26.61% of valid ballots. That placed him second behind Jamil Mahuad (1,341,089 votes, 34.92% of valid ballots) and both battled in a runoff held on July 12. Noboa lost the runoff by 102,519 votes. Mahuad won with 2,243,000 votes.^[28]

After the election Noboa claimed that fraud had been committed. He accused Supreme Electoral Tribunal President Patricio Vivanco of refusing to conduct a recount as was his request. He said that some precinct acts had been corrected using whiteout and others showed no blank votes.^[29]

He ran for president a second time in 2002, again reaching the runoff, though he received only 17% of the vote in the first round. He lost the November 24, 2002 second round to Lucio Gutiérrez (2,803,243 or 54.79% to 2,312,854 or 45.21%).^[30]

In 2006, he decided to run once again as presidential candidate for his party. With 99.5 percent of votes from the October 15 election officially counted, Noboa won 26.83 percent of the vote, Rafael Correa the closest opponent received 22.84 percent of the vote. The two candidates contested a run-off on November 26. With 98.91% of the votes cast, Correa had an unassailable lead with 56.8% of valid votes cast. Noboa refused to accept defeat, and has suggested that he might challenge the legitimacy of the ballot count.

[edit] Campaign spending

Noboa was fined more than $2 million for exceeding campaign spending limits in 2002. Noboa spent $2.3 million in his campaign, 98% above limit. The fine equaled twice the excess.^[31]

In 2004 Noboa offered to pay not with cash but with financial instruments which would lose up to half their face value when exchanged.^[32] Ecuador’s Supreme Electoral Tribunal, the agency responsible for enforcing campaign spending law accepted Noboa’s terms. The Supreme Electoral Tribunal was first headed by Nicanor Moscoso, a member of Noboa’s party and his former campaign treasurer, and then by Wilson Sanchez, co-founder of Noboa’s party and his personal friend.^[33]

[edit] References

PABLO MARTINEZ-ROJAS== External links ==

• (Spanish) PRIAN campaign official website

• Documentary excerpt – Attacks on strikers at Los Alamos plantation
• Ecuador's Presidential Election: Background on Economic Issues, issue brief from the Center for Economic and Policy Research

Persondata
NAME	Noboa, Álvaro
ALTERNATIVE NAMES
SHORT DESCRIPTION	Ecuadorian businessman and politician
DATE OF BIRTH	November 1, 1950
PLACE OF BIRTH	Guayaquil, Ecuador
DATE OF DEATH	living
PLACE OF DEATH