Ortega’s Repression Damages “Corporate Reputation”

In her farewell speech, the now former US Ambassador in Nicaragua, Laura Dogu, warned of the risk for the reputation of companies due to the political crisis, caused by Ortega’s massacre against citizens’ protests. “In today’s global economy, companies cannot afford to take on reputational risks. I have already seen campaigns in the United States asking companies why they are buying products from Nicaragua,” said Dogu.

On social networks and messaging applications such as WhatsApp circulates a video that calls not to buy products under the sports brand Under Armour, because many of its items are made by companies in Nicaragua, where they say that “more than 400 people have been murdered by the Police and paramilitary groups that support the Government of Daniel Ortega.”

In Nicaragua, Under Armour products are manufactured by the free trade zone company New Holland Apparel. Confidencial tried unsuccessfully to interview the representatives of the company in Nicaragua.

“These campaigns are similar to campaigns against “blood diamonds” that come from Africa. Companies can buy the same textiles, coffee or meat from other countries without putting at risk their reputation. This problem of reputation will not change as long as the current government remains in power,” said Dogu.

James Scott Vaughn, President of the Nicaraguan Association of Textile and Apparel Industry (ANITEC, in Spanish), stated that the campaign began two months ago, but that neither the company nor the organization he leads are interested in making statements on the issue, so as not to give them “publicity.”

Guillermo Jacoby, President of the Association of Producers and Exporters of Nicaragua (APEN), said that since last September they had warned on the risk to corporate reputation in Nicaragua. At that time, the warning was given because some high-quality cacao producers were considering dropping the Nicaragua brand because abroad the country is seen negatively, it is associated with terrorism, repression and assassinations.

The video on Under Armour repeats in various ways that the Government of Nicaragua violates human rights and represses citizens, so that the products of that brand are “stained with the blood” of Nicaraguans. “Made in Nicaragua, made with Nicaraguan blood,” is one of its messages.

Jacoby points out that it takes years to recover from a corporate reputation problem, in addition to investing a lot of money because the campaigns are aimed primarily at consumers abroad.

He explained that such campaigns mainly affect value-added products, since consumers do not search for origin in agricultural goods.

Yali Molina Palacios, former President of the American Chamber of Commerce of Nicaragua (AmCham), commented that the case of Under Armour is not an exception, because soon consumers asked themselves why they are giving their “money to a country that kills and imprisons its people.”

“We in AmCham worked before with [the government’s] ProNicaragua on the image of Nicaragua at international forums, logically it was difficult because of the discourse of the Government,” said Molina, who stressed that “we handled the country risk factor very lightly, the risk to business people.”