Congressman Faleomavaega announced today that he has requested to meet with the Chairman and President of Thai Union during his upcoming visit to Thailand scheduled for the July recess when Congress is out of session. The full text of Faleomavaega’s letter, which was copied to Senator Daniel Inouye, the Governor, Lieutenant Governor, the Fono, and John Signorino and Jim Davet, President and VP of Chicken of the Sea/Samoa Packing, is included below.
Dear Mr. Chansiri:
As Chairman of the Foreign Affairs’ Subcommittee on Asia, the Pacific, and the Global Environment and also as the Member of Congress representing the people of American Samoa in the US House of Representatives, I am writing to request an appointment with you during my upcoming visit to Thailand. I will be in Thailand on Sunday July 1 and Monday July 2 and will be available at your convenience.
Yesterday, I met with the Honorable Krit Garnjana-Goonchorn, Ambassador of Thailand to the United States, to also request his assistance in arranging this appointment. The purpose of my request is to discuss your tuna operations in the Asia Pacific region, and the future of your subsidiary, Chicken of the Sea/Samoa Packing, in American Samoa.
Recently, Chicken of the Sea (COS) announced that it would lay off 200 workers in American Samoa as a result of legislation which increases minimum wage by $0.50 per hour beginning July 24, 2007 and every year thereafter until wages in the Territory are comparable to the United States. In a letter (attached) dated June 11, 2007, Jim Davet, Senior Vice President of Operations for Chicken of the Sea, wrote a letter to your competitor, Del Monte, stating that your subsidiary has “conducted an extensive analysis of the minimum wage bill and its impact on our business. If the US Government does not act quickly, Samoa Packing will have to reduce its workforce by 80% within the next three years.”
Mr. Davet further states, “The current tax legislation Congressman Faleomavaega has proposed will not keep Samoa Packing from having to make this work force reduction. Therefore, Chicken of the Sea cannot support Congressman Faleomavaega’s 30A tax legislation.”
While Mr. Davet did not copy me on his letter, I am writing directly to you because I believe that as Chairman of Thai Union, the parent company that owns Chicken of the Sea, you should know that the law to which Mr. Davet refers also directs the Department of Labor to begin a study no later than 60 days after enactment to assess the impact of the wage increases, and project the impact of further wage increases on living standards and rates of employment in American Samoa and CNMI. The Department of Labor is federally mandated to issue its report to Congress no later than 8 months after the day of enactment rather than 32 months later as originally proposed. In other words, if the Department of Labor finds that the economy cannot bear this increase, then Congress will reconsider its position.
Regarding 30A tax credits, it is my understanding that this credit is worth about $5 million a year in savings to Chicken of the Sea. Last year, my colleagues in the US Congress supported my efforts to extend this credit for two years. This year, the Honorable Charles Rangel, Chairman of the House Committee on Ways and Means, which has oversight for taxes, has agreed to my request of providing a ten-year extension which would provide Chicken of the Sea with more than a $50 million tax break.
In light of Mr. Davet’s letter in which he implies that Chicken of the Sea does not want these benefits, I would like to meet with you since I suppose Mr. Davet does not ultimately speak for Chicken of the Sea or Thai Union. While I am also in receipt of letters from John Signorino, CEO of Chicken of the Sea, I have not responded to each individual letter he has written since he gave me his commitment in November of last year and again in January 2007 that COS would support 30A tax credits. Having received his commitment, I requested Chairman Rangel’s support. After obtaining Chairman Rangel’s support, Mr. Signorino decided, upon further review, that COS would like the federal government to offer up some credit other than 30A, as well as an energy subsidy.
Unfortunately, the US government is not in the business of subsidizing tuna canning operations. However, Chicken of the Sea, has been subsidized by the American Samoa Government (ASG) since it began doing business in the islands more than 50 years ago. For example, COS does not pay one penny for the healthcare costs of its workers because ASG assumes these costs. It is my understanding that this subsidy costs ASG more than $5 million per year. ASG also provides local tax breaks to COS and StarKist which ASG does not make public but which I suspect over the years has totaled millions of dollars.
For your information, workers in American Samoa are also paid well below the US federal minimum wage of $5.15 per hour. In fact, for too long our workers have been paid too little and it is shameful that corporate executives who are paid millions in the US now complain that the hard-working Samoans upon whose backs they have made their profits will now receive a small increase of $0.50 per hour, or less than $1,000 per year per employee.
While I am very aware that tuna is a labor-intensive, global commodity and follows international wages and while I also know that wages in Samoa are currently almost five times higher than the international wages competitor canners pay to process and clean tuna fish, I do not support the assumption that a slight increase in minimum wage should lead to automatic job loss, as Mr. Davet has put forth. If this were the case, Chicken of the Sea should be equally troubled by the exorbitantly high salaries of its corporate executives.
To date, I have not heard Chicken of the Sea call for a review of its corporate salaries. Therefore, if and when Chicken of the Sea decides to lay off 200 cannery workers or move production elsewhere, as Mr. Davet has threatened in response to recently passed legislation, I will make it clear to the people of American Samoa and the US Congress that Chicken of the Sea’s decision to move its business has nothing to do with minimum wage but has everything to do with corporate profits.
This said, I want to set the record straight about where I stand on the issue of minimum wage. I do not, have not, and will not support escalator clauses which mandate yearly increases of $0.50 per hour. In fact, I met with Chairman George Miller before, during, and after the minimum wage debate to make my position known. While I am disappointed that current law now mandates yearly increases, I have written to the Honorable Donna Christensen, Chairwoman of the Natural Resources’ Subcommittee on Insular Affairs, and requested a hearing on the impact of this law on the economies of American Samoa and CNMI.
I have also requested that the US Department of the Interior, the US Department of Labor, StarKist, Chicken of the Sea, ASG, the US tuna boat owners, and other vested stakeholders be invited to testify at this hearing. I have also asked StarKist, Chicken of the Sea, and ASG to provide my office with information pertinent to convincing Congress that they cannot afford further increases as mandated by escalator clauses.
In the interim, it is not helpful for a Vice President of Chicken of the Sea to make reckless statements to the press and demand that the US government bail out Chicken of the Sea. With a $50 million tax credit on the table, I believe Mr. Davet’s comments are out of line. I also believe his suggestion of layoffs show a lack of appreciation for the Samoan men and women who stand on their feet and clean fish for 8 hours a day while he collects his high-end salary from the comfort of his air-conditioned office.
Given his insensitive statements and my concerns about the future of your company in American Samoa, I would welcome the opportunity to meet with you during my upcoming visit to Thailand. I will also be visiting with your Prime Minister and other government officials to discuss ways the US and Thailand can begin to renew our long-standing relationship, and I would very much be interested in your perspective as Chairman of one of Thailand’s largest corporations.
Faleomavaega concluded his letter by saying, “It is my understanding that you have already been informed by Thai officials of my upcoming visit and, in turn, they have informed me that you welcome the opportunity to meet. I thank you for this opportunity and look forward to also touring your facility which I understand is now considered to be the largest tuna canning operation in the world.”