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53-252 PDF 2009

H.R. 3583, ‘‘AMERICAN SAMOA PROTECTION OF INDUSTRY, RESOURCES, 

AND EMPLOYMENT ACT’’ 

LEGISLATIVE HEARING 

BEFORE THE

SUBCOMMITTEE ON INSULAR AFFAIRS, 

OCEANS AND WILDLIFE 

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

Wednesday, November 4, 2009 

Serial No. 111-40 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

or 

Committee address: http://resourcescommittee.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

NICK J. RAHALL, II, West Virginia, Chairman 

DOC HASTINGS, Washington, Ranking Republican Member 

Dale E. Kildee, Michigan 

Eni F.H. Faleomavaega, American Samoa 

Neil Abercrombie, Hawaii 

Frank Pallone, Jr., New Jersey 

Grace F. Napolitano, California 

Rush D. Holt, New Jersey 

Rau ́l M. Grijalva, Arizona 

Madeleine Z. Bordallo, Guam 

Jim Costa, California 

Dan Boren, Oklahoma 

Gregorio Sablan, Northern Marianas 

Martin T. Heinrich, New Mexico 

George Miller, California 

Edward J. Markey, Massachusetts 

Peter A. DeFazio, Oregon 

Maurice D. Hinchey, New York 

Donna M. Christensen, Virgin Islands 

Diana DeGette, Colorado 

Ron Kind, Wisconsin 

Lois Capps, California 

Jay Inslee, Washington 

Joe Baca, California 

Stephanie Herseth Sandlin, South Dakota 

John P. Sarbanes, Maryland 

Carol Shea-Porter, New Hampshire 

Niki Tsongas, Massachusetts 

Frank Kratovil, Jr., Maryland 

Pedro R. Pierluisi, Puerto Rico 

Don Young, Alaska 

Elton Gallegly, California 

John J. Duncan, Jr., Tennessee 

Jeff Flake, Arizona 

Henry E. Brown, Jr., South Carolina 

Cathy McMorris Rodgers, Washington 

Louie Gohmert, Texas 

Rob Bishop, Utah 

Bill Shuster, Pennsylvania 

Doug Lamborn, Colorado 

Adrian Smith, Nebraska 

Robert J. Wittman, Virginia 

Paul C. Broun, Georgia 

John Fleming, Louisiana 

Mike Coffman, Colorado 

Jason Chaffetz, Utah 

Cynthia M. Lummis, Wyoming 

Tom McClintock, California 

Bill Cassidy, Louisiana 

James H. Zoia, Chief of Staff 

Rick Healy, Chief Counsel 

Todd Young, Republican Chief of Staff 

Lisa Pittman, Republican Chief Counsel 

SUBCOMMITTEE ON INSULAR AFFAIRS, OCEANS AND WILDLIFE 

MADELEINE Z. BORDALLO, Guam, Chairwoman 

HENRY E. BROWN, JR., South Carolina, Ranking Republican Member 

Dale E. Kildee, Michigan 

Eni F.H. Faleomavaega, American Samoa 

Neil Abercrombie, Hawaii 

Frank Pallone, Jr., New Jersey 

Gregorio Sablan, Northern Marianas 

Donna M. Christensen, Virgin Islands 

Diana DeGette, Colorado 

Ron Kind, Wisconsin 

Lois Capps, California 

Carol Shea-Porter, New Hampshire 

Frank Kratovil, Jr., Maryland 

Pedro R. Pierluisi, Puerto Rico 

Nick J. Rahall, II, West Virginia, ex officio 

Don Young, Alaska 

Jeff Flake, Arizona 

Doug Lamborn, Colorado 

Robert J. Wittman, Virginia 

John Fleming, Louisiana 

Jason Chaffetz, Utah 

Bill Cassidy, Louisiana 

Doc Hastings, Washington, ex officio 

(III) 

CONTENTS 

Page 

Hearing held on Wednesday, November 4, 2009 .................................................. 1 

Statement of Members: 

Bordallo, Hon. Madeleine Z., a Delegate in Congress from Guam ............... 1 

Prepared statement of ............................................................................... 2 

Brown, Hon. Henry E., Jr., a Representative in Congress from the State 

of South Carolina .......................................................................................... 27 

Prepared statement of ............................................................................... 28 

Faleomavaega, Hon. Eni F.H., a Delegate in Congress from American 

Samoa ............................................................................................................ 3 

Prepared statement of ............................................................................... 11 

Statement of Witnesses: 

Binotto, Donald J., President & Chief Executive Officer, StarKist Co. ....... 34 

Prepared statement of ............................................................................... 36 

Curto, Renato, President, Cape Fisheries Holdings, LLC ............................. 60 

Prepared statement of ............................................................................... 62 

Furchtgott-Roth, Diana, Senior Fellow and Director, Center for 

Employment Policy, Hudson Institute ........................................................ 57 

Prepared statement of ............................................................................... 59 

Hamby, Joe, Managing Director, Global Tuna Supply, Tri Marine 

International ................................................................................................. 48 

Prepared statement of ............................................................................... 49 

Lischewski, Christopher D., President & Chief Executive Officer, Bumble 

Bee Foods, LLC ............................................................................................. 42 

Prepared statement of ............................................................................... 44 

Pula, Nikolao, Director, Office of Insular Affairs, U.S. Department of 

the Interior .................................................................................................... 23 

Prepared statement of ............................................................................... 24 

Sawyer, John, Senior Vice President, Sales and Marketing, Chicken of 

the Sea, International ................................................................................... 40 

Prepared statement of ............................................................................... 41 

Tulafono, The Honorable Togiola T.A., Governor of American Samoa ........ 17 

Prepared statement of ............................................................................... 21 

Walsh, James P., Legal Counsel, South Pacific Tuna Corporation .............. 53 

Prepared statement of ............................................................................... 54 

(1) 

LEGISLATIVE HEARING ON H.R. 3583, ‘‘AMERICAN SAMOA PROTECTION OF INDUSTRY, 

RESOURCES, AND EMPLOYMENT ACT’’ 

Wednesday, November 4, 2009 

U.S. House of Representatives 

Subcommittee on Insular Affairs, Oceans and Wildlife 

Committee on Natural Resources 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 2:50 p.m., in Room 

1324, Longworth House Office Building, Hon. Madeleine Bordallo 

[Chairwoman of the Subcommittee] presiding. 

Present: Representatives Bordallo, Faleomavaega, Sablan, 

Christensen, Brown, and Flake. 

Also present: Representative Napolitano. 

Ms. BORDALLO. Good afternoon. The hearing by the 

Subcommittee on Insular Affairs, Oceans, and Wildlife will come to 

order. 

The Subcommittee is meeting today to hear testimony on 

H.R. 3583, the ‘‘American Samoa Protection of Industry, 

Resources, and Employment Act,’’ or the ASPIRE Act, which would 

provide a subsidy to sellers and buyers of fish delivered to 

American Samoa. 

I would like to make an announcement. I apologize for the delay 

in this hearing, but there are votes on the Floor. And we of the territories did our amendment voting, but we do have Members that 

are still down there for final passage. 

Also, I would like to say that I will give my opening statement. 

Mr. Faleomavaega, the author of the bill, will give his opening 

statement. And then we will recess if our colleagues are not back 

yet for a short time until they return, and then we will continue 

with the hearing. 

And I apologize to you, Governor and Mr. Pula, for having to 

begin late. This is life in the U.S. Congress. 

STATEMENT OF HON. MADELEINE BORDALLO, A DELEGATE IN 

CONGRESS FROM THE TERRITORY OF GUAM 

Ms. BORDALLO. First, there is no one here who has worked 

harder to represent and serve the needs of his district than the 

gentleman from American Samoa. As he and I both know from 

firsthand experience, it is not always easy to make our colleagues 

aware of the magnitude of some of the challenges we face in the 

2 

territories, given their geographic distance from the continental 

United States. Mr. Faleomavaega does not let that sway him, however, from his tireless efforts on behalf of his constituents. 

Second, there is no question that the tuna processing industry 

has been a linchpin in the economy of American Samoa for decades. 

Recent changes in minimum-wage requirements and the ongoing 

trend toward a truly global economy have threatened the sustainability of the American Samoa tuna industry at a time when they 

can ill afford it. 

Third, the recent tsunami that brought such devastation to the 

region and to American Samoa, in particular, only increases the 

urgent need to grow and diversify the economy of these islands to 

provide a vibrant and a sustainable future for their people. 

Today’s hearing will give us an opportunity to hear whether the 

legislation before us provides the tools that American Samoa needs 

to move its economy forward. I know we have witnesses on both 

sides of the issue who will provide their views. And, hopefully, in 

the case of those who do not support the bill, we will hear their 

suggestions for alternative policies that could provide economic 

benefits. 

We all share the goal of helping Congressman Faleomavaega and 

the people of American Samoa. The question is whether the policies 

embodied in H.R. 3583 have the support they will need to navigate 

the legislative process or whether further discussion will be needed 

to build consensus. So I look forward to hearing from the witnesses 

this afternoon on this point and again commend the gentleman 

from American Samoa for his efforts. 

[The prepared statement of Ms. Bordallo follows:] 

Statement of The Honorable Madeleine Z. Bordallo, Chairwoman, 

Subcommittee on Insular Affairs, Oceans and Wildlife 

The Subcommittee is meeting today to hear testimony on H.R. 3583, the American Samoa Protection of Industry, Resources and Employment Act, or the ASPIRE 

Act, which would provide a subsidy to sellers and buyers of fish delivered to American Samoa. 

In a few minutes, I will recognize my colleague and good friend, Eni 

Faleomavaega, to explain his legislation further, but before doing so I would like 

to make a few observations. 

First, there is no one who has worked harder to represent and serve the needs 

of his district than the gentleman from American Samoa. As he and I both know 

from firsthand experience, it is not always easy to make our colleagues aware of the 

magnitude of some of the challenges we face in the territories given their geographic 

distance from the continental United States. Mr. Faleomavaega does not let that 

sway him, however, from his tireless efforts on behalf of his constituents. 

Second, there is no question that the tuna processing industry has been a linchpin 

in the economy of American Samoa for decades. Recent changes in minimum wage 

requirements, and the ongoing trend toward a truly global economy, have threatened the sustainability of the American Samoa tuna industry at a time when they 

can ill afford it. 

Third, the recent tsunami that brought such devastation to the region and to 

American Samoa in particular, only increases the urgent need to grow and diversify 

the economy of these islands to provide a vibrant and sustainable future for its people. 

Today’s hearing will give us an opportunity to hear whether the legislation before 

us provides the tools that American Samoa needs to move its economy forward. I 

know we have witnesses on both sides of the issue who will provide their views, and 

hopefully, in the case of those who do not support the bill, we will hear their suggestions for alternative policies that could provide economic benefits. 

We all share the goal of helping Congressman Faleomavaega and the people of 

American Samoa, the question is whether the policies embodied in H.R. 3583 have 

3 

the support they will need to navigate the legislative process or whether further discussion will be needed to build consensus. I look forward to hearing from the witnesses today on this point and again commend the gentleman from American Samoa 

for his efforts. 

Ms. BORDALLO.And now I would like to introduce my colleague 

and my friend, Eni Faleomavaega, to explain his legislation further. The Senator from American Samoa—or the—— 

Mr. FALEOMAVAEGA. I just got promoted. 

Ms. BORDALLO.—Congressman from American Samoa. 

Mr. FALEOMAVAEGA. No, you can call me Senator. 

Ms. BORDALLO. It is good to promote. 

STATEMENT OF HON. ENI F.H. FALEOMAVAEGA, A DELEGATE 

IN CONGRESS FROM THE TERRITORY OF AMERICAN SAMOA 

Mr. FALEOMAVAEGA. Madam Chair, I sincerely thank you for 

your leadership and especially for calling this hearing on this bill 

that is very, very critical and important for the economic development of my district. And I sincerely thank you and the members 

of the staff for putting this hearing together and inviting our 

guests to testify, whether for or against the provisions of the proposed bill. 

Madam Chair, for more than 55 years, American Samoa has 

been the backbone of the U.S. tuna fishing and processing industries, just like for years Puerto Rico and the Virgin Islands were 

the backbone of the rum industry. Today, the U.S. tuna processing 

industry includes three major brands of canned tuna: StarKist, 

Chicken of the Sea, and Bumble Bee. 

StarKist is headquartered in Pittsburgh, Pennsylvania, and has 

about 1,800 employees in the Territory of American Samoa. 

StarKist is a U.S. corporation that pays U.S. taxes. StarKist is also 

a subsidiary of the Dongwon group, a leader in the food, beverage, 

and fisheries industries in South Korea. And this Dongwon group 

recently purchased StarKist from Del Monte for some $363 million. 

Chicken of the Sea is a subsidiary of Thai Union, the world’s 

largest producer of canned tuna, located in Bangkok, Thailand. 

Chicken of the Sea has about 200 tuna cannery workers in Lyons, 

Georgia, and also has corporate offices in San Diego, California. 

In 2004, Bumble Bee was sold off to Connors, a Canadian company. And, only recently, Bumble Bee was purchased by a group 

of U.S. investors. Mr. Lischewski, who will be testifying as the 

President and CEO of Bumble Bee, now personally owns a significant share of Bumble Bee. 

Bumble Bee claims to employ some 1,800 workers in the U.S., 

but how many of its U.S. workers are tuna cannery workers is undetermined, though I intend to ask the questions concerning this 

issue. The bulk of Bumble Bee’s employees are not U.S. workers, 

but thousands of foreign cannery workers who clean and cook the 

fish and then ship the tuna as cooked loins to the United States 

for canning and then sell to the U.S. consumer market. 

As many members of this Subcommittee know, more than 80 percent of American Samoa’s private-sector economy is dependent 

either directly or indirectly on two of the three major brands, 

4 

StarKist and Chicken of the Sea, which until recently employed 

more than 74 percent of our private-sector workforce. 

What you may not know, Madam Chair, is that 1 day after 

American Samoa was struck by the world’s most powerful earthquake and tsunami in the year 2009—it set off a tsunami that was 

some 20 feet, and untold damage and human lives were lost— 

Chicken of the Sea closed down its operations in American Samoa, 

leaving more than 2,000 workers without jobs. Chicken of the Sea 

left without the courtesy of even discussing departure, either with 

me or the Governor of American Samoa, although Samoan workers 

made Chicken of the Sea one of the most profitable brands of 

canned tuna in the United States. 

On the issue of minimum wage, Madam Chair, Chicken of the 

Sea left for Lyons, Georgia, where it now employs a skeleton crew 

of some 200 workers. Chicken of the Sea pays its workers in Georgia some $7.25 per hour or more. And yet, from 1954, Madam 

Chair, when Chicken of the Sea’s then parent company, Van Camp, 

first arrived in American Samoa, the company set about to suppress the wages of Samoan workers—yes, suppress the wages of 

the workers by demeaning their worth and work. 

In 1956, the company testified before the U.S. Senate Committee 

on Labor and Public Welfare, urging consideration of the legislation 

for the exemption of American Samoa from the wage and hour provisions of the Fair Labor Standards Act of 1938. 

So while you will hear much about minimum wage from those 

who oppose ASPIRE or this bill, including a think-tank witness 

that, in my opinion, is somewhat naı ́ve—anything but naı ́ve, let me 

share with you our history regarding equal pay for equal work so 

that my colleagues may know the truth about minimum wage in 

American Samoa, which has now barely reached $4.76 an hour 

after some 50 years of presence of our tuna industry in the territory. 

Let’s begin with a statement from Chicken of the Sea’s then 

parent company, Van Camp, commenting on its company’s desire 

to pay Samoan workers 27 cents per hour as opposed to the prevailing minimum wage rate at the time of $1 per hour. This is 

what the company officials testified before the Senate committee, 

and I quote: ‘‘Samoans are Polynesians. They are not American citizens.’’ And about the women of American Samoa, according to the 

company, ‘‘We now employ 300 Samoans, mostly women. The 

wages range from 27 cents per hour for the women who clean the 

fish to $1 per hour for one employee who is a technician.’’ 

‘‘The difference in labor costs is attributed to the lower production output in Pago Pago, where we have found that it takes from 

three to five Samoans to produce what one Stateside employee can 

produce.’’ Mr. Collins, the legal counsel for Van Camp, also put it 

this way: ‘‘The company found that it takes from three to five 

Samoan workers to perform what one continental worker in the 

United States will do. It is therefore felt that this justifies a lower 

rate for Samoans.’’ 

Forgive me for pausing here, Madam Chair, but what company 

in good conscience would suppress wages in a U.S. territory in the 

mid-1950s and claim that the more than 300 Samoan women cleanVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6602 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
5 

ing fish in American Samoa for 27 cents an hour were somewhat 

inferior to the Stateside employees being paid $1 an hour? 

While some in the room may think this does not matter, it does, 

and it does to me, especially when 55 years later Chicken of the 

Sea shut its doors in American Samoa and immediately pays Stateside workers in Lyons, Georgia, twice as much as they were currently paying our men and women in American Samoa. Different 

year, same Chicken of the Sea. 

And, yes, I would say that the U.S. tuna industry has exported well over $40 billion worth of canned tuna from American Samoa 

to the U.S. for the past 50 years, at tremendous profits, on the 

backs of the low-paid Samoan workers. Some say it is cheap labor; 

I say it borders on slave labor. 

This is the kind of prejudice and gender inequality we have been 

dealing with for 55 years in American Samoa. Quite frankly, 

Madam Chair, I think this is so unfair, and treats the people of my 

territory somewhat like second-class citizens. 

On the question of loins, testifying before this Subcommittee 

there will be two competing tuna canneries, Chicken of the Sea and 

Bumble Bee, both of which oppose this proposed bill. The current 

business model of having their tuna cleaned in low-wage countries 

where they pay workers 75 cents per hour or less and then employ 

skeleton crews in the U.S.—California, Georgia, and Puerto Rico, 

to be exact—pack and clean tuna or loin in order to take advantage 

of the duty-free treatment. I call this the outsourcing business 

model. 

This business model is based on loins. A loin is a fish already 

cleaned and cooked. And because 90 percent of labor employment 

costs come in the cleaning of the fish, the outsourcing business 

model maximizes profits but will severely reduce jobs in a U.S. territory like American Samoa, while increasing employment in lowwage countries. This is why both Chicken of the Sea and Bumble 

Bee employ more workers outside the United States than we do in 

the U.S. 

In my opinion, Madam Chair the outsourcing business model, as 

I have indicated, is an un-American way of doing business. And I 

believe if the American public knew what is really going on in the 

U.S. tuna industry, it would not support these kinds of practices. 

Nike and Gap are already under fire for adopting a similar business model in the garment industry and in other industries where 

low-wage workers in foreign countries are paid only 50 to 60 cents 

an hour and, by the time that Nike shoe reaches the American 

market, they charge $125. 

So that there is no misunderstanding about this, Madam Chair, 

I will be asking Chicken of the Sea to state for the record how 

many tuna workers are employed in Lyons, Georgia, versus how 

many tuna workers in its parent company, Thai Union, whose employees clean the bulk of the tuna Chicken of the Sea now puts in 

its cans. The answer will be something to the effect of 200 workers 

in Lyons, Georgia, versus, I would say, some 20,000 fish cleaners 

or cannery workers that work in Bangkok, Thailand. 

I will also ask Chicken of the Sea to tell us how much it pays 

its workers in Lyons, Georgia, how much it paid its workers in 

American Samoa, and how much its parent company, Thai Union, 

6 

pays its workers in Thailand. The answer to this question will be 

$7.25 per hour in Georgia, and barely reaching $4.76 per hour in 

American Samoa, and 75 cents per hour in the canneries in Thailand. 

While Bumble Bee touts before this Subcommittee that it employs a thousand U.S. workers, I would ask Bumble Bee to make 

it plain for the record how many actually are working in the tuna 

industry. 

As a matter of record, I will ask Bumble Bee to inform the Subcommittee how many tuna workers it employs in Puerto Rico and 

California versus the number of workers in Fiji and Papua New 

Guinea that clean the bulk of the tuna Bumble Bee puts in its 

cans. Members of this Subcommittee will learn that Bumble Bee 

employs about 325 workers in Puerto Rico, perhaps even less in 

California, both with the price of cheap labor, again, at 70 cents or 

less per hour in foreign countries. 

I will also ask Bumble Bee how much it pays its workers in 

Puerto Rico and California versus how much workers in Fiji or 

Thailand or Papua New Guinea are paid by contractual agreement. 

I hope my colleagues will understand more clearly the outsourcing 

business model that is now employed by these two canneries, and 

they couldn’t care less about StarKist trying to reestablish a viable 

tuna industry in my district. 

The bottom line, Madam Chair, is that neither Chicken of the 

Sea nor Bumble Bee makes mention of their low-wage contractual 

agreements with Fiji and Papua New Guinea and Thailand on 

their company Web sites. In my opinion, Bumble Bee whitewashes 

its way of doing business by stating that—and I quote—it ‘‘works 

continuously to drive higher production efficiencies and lower operating costs in an effort to maintain profitability.’’ That is just another way of saying Bumble Bee’s ideal efficiency is offshore American jobs to low-wage countries just to increase its profits. 

One only has to look at the thousands of workers Bumble Bee 

laid off in Puerto Rico and California in the past decade, and its 

way of doing business speaks for itself. And Chicken of the Sea is 

following the same procedure as Bumble Bee is doing now, and 

that is: Buy tuna loins at very cheap prices from foreign countries 

and then in the United States bring them in duty-free to a skeleton 

crew in California, Puerto Rico, and Georgia—thus maximizing its 

profits in terms of that price differential. 

As much as I oppose the outsourcing business model, Madam 

Chair, I do not blame Bumble Bee or Chicken of the Sea for their 

businesses practices. Because the fact is, none of our U.S. tuna 

companies can compete against low-wage countries which clean 

fish cheaper than workers in my district. 

That is why we are here today. And today we are here to bring 

the U.S. tuna industry back to America, hopefully, by offering 

grants to any company that wants to clean its fish in the Territory 

of American Samoa. The idea behind this bill is not much different 

than the rum excise tax we provide for Puerto Rico and the U.S. 

Virgin Islands. And I completely support this benefit that Puerto 

Rico and the Virgin Islands continue to get through the rum tax. 

Concerning the U.S. tuna fishing fleet, Madam Chair, the U.S. 

tuna fishing fleet is currently made up of 39 purse seiner vessels, 

7 

with one license still unavailable. About 14 of these vessels are 100 

percent U.S.-owned. The other 25 tuna boats are newer vessels 

built in foreign countries, with 51 percent U.S. ownership and 49 

percent foreign ownership. 

Most of the foreign-built boats are part of the company known as 

the South Pacific Tuna Corporation. Mr. Lischewski, the CEO and 

President of Bumble Bee, is a part owner of the South Pacific Tuna 

Corporation and also a majority owner of Bumble Bee. Chicken of 

the Sea and its parent company, Thai Union, is also a part owner 

of these foreign-built tuna boats that make up the South Pacific 

Tuna Corporation. 

The American Tunaboat Association, which represents all of the 

39 tuna boats, both U.S.- and foreign-built, was invited to testify 

today but unfortunately declined because not all the U.S. tuna boat 

owners agree with the South Pacific Tuna Corporation, as you will 

be hearing different opinions from the tuna boat owners. 

I want to note for the record, Madam Chair, that there is an obvious conflict of interest here in this proceeding. Both Mr. 

Lischewski of Bumble Bee and Chicken of the Sea/Thai Union have 

financial interests or ownership of these foreign-built purse seiners 

that make up the South Pacific Tuna Corporation. 

And, because of this, that South Pacific Tuna Corporation has 

been allowed to testify, I have asked that Mr. Renato Curto now 

be allowed to testify also on behalf of the U.S.-built tuna boats, of 

which he owns most as President of Cape Fisheries. 

I have also asked that Mr. Joe Hamby be invited to testify on 

behalf of Tri Marine. Tri Marine is one of the largest tuna supply 

companies in the world and has a contractual argument with 

StarKist. Neither StarKist nor Tri Marine has financial ownership 

in each other. 

On the point of our U.S. tuna fishing fleet, Madam Chair, whether U.S.- or foreign-built, all 39 tuna boats, or the entire U.S. tuna 

fishing fleet, fishes under the auspices of the South Pacific Tuna 

Treaty, a treaty between the United States and 16 Pacific island 

nations. Under the terms of the treaty, the U.S. Government pays 

out $18 million annually to the South Pacific parties in return for 

the right of our U.S. tuna boats to fish in the exclusive economic 

zones of these Pacific island nations. 

The U.S. tuna boats also pay the Pacific island parties approximately $3 million or more per year, depending on the amount of 

tuna they catch. According to the U.S. Department of State, the 

landed value of the catch last year was in excess of $200 million, 

but the value of the tuna, as it moves through the processing and 

distribution chain, may be worth as much as $400 million to $500 

million a year. 

Madam Chair, on the question of the whole fish, this is an aspect 

of doing business. In my opinion, ASPIRE is the American model 

for doing business; it is based on whole fish. For now, StarKist is 

the only major-brand canned tuna that follows the whole-fish business model, and it is the last remaining tuna cannery in American 

Samoa. 

In American Samoa, StarKist is about greater economic development, and the bottom line is jobs. Jobs are created when the cannery chooses to clean the whole fish rather than pack tuna loins 

8 

that have been cleaned elsewhere. As I stated previously, 90 percent of the value of the tuna is associated with any tuna cannery 

that is in the business of cleaning whole fish. 

While Chicken of the Sea and Bumble Bee have opted to 

outsource their fish-cleaning jobs to low-wage countries, StarKist 

has chosen to clean whole fish in American Samoa and thereby create more jobs for our workers in the territory. And this has put 

StarKist in a competitive disadvantage. 

StarKist cannot hold out much longer in American Samoa, giving 

an unfair trade advantage to Chicken of the Sea and Bumble Bee, 

which are using cheap labor to get ahead, when our U.S. tuna 

boats are selling off U.S. tuna to foreign countries rather than 

making direct deliveries to American Samoa. 

If these unfair trade practices force StarKist to leave American 

Samoa and adopt the Chicken of the Sea and Bumble Bee model 

of cleaning fish in low-wage countries, I submit, Madam Chair, 

American Samoa’s economy definitely will collapse. It is as plain 

and simple as that. 

To prevent a complete economic meltdown that will lead to nearly full unemployment, I ask my colleagues to act quickly if we are 

to save American Samoa’s jobs and economic development and if, 

more broadly, we are to bring the U.S. tuna industry back to U.S. 

shores. 

StarKist employs more than 1,800 workers in the territory. And 

while some may say that this hearing will try to discredit our 

workforce, let’s be straight about this: While many of our workers 

are from the neighboring islands of Samoa, they are legal residents, married to U.S. nationals—the same culture, the same language. Their children are also U.S. Nationals, and they are just as 

much a part of the family, unlike in other given situations. 

StarKist also abides by U.S. labor and environmental laws. Like, 

I don’t know, I question seriously the canneries in Thailand and 

Fiji in supplying Bumble Bee and Chicken of the Sea. 

What may not be so readily known, Madam Chair, is that American Samoa is a single-industry economy, entirely dependent on the 

tuna fishing and processing industries, just as Puerto Rico and the 

Virgin Islands were once solely dependent on the rum industry. 

Because of the fragile state of our economy, especially in the 

aftermath of a devastating earthquake and tsunami, if we lose our 

one remaining private-sector employer, it will be next to impossible 

for us to rebuild. If StarKist leaves, American Samoa will be left 

with no private-sector base. 

And while some of my colleagues and our so-called experts 

trivialize the situation by suggesting that we just need to adjust 

the minimum-wage rates, I am hopeful that my testimony has 

made clear the complexities of this matter. Whether or not minimum-wage rates are $3 per hour or $7.25 an hour in American 

Samoa, the entire U.S. tuna industry, including Chicken of the Sea, 

Bumble Bee, and StarKist, can no longer compete against lowwage-rate nations that pay their fish cleaners 75 cents or less per 

hour, which means the increase of minimum-wage rates in American Samoa only accelerated a process that was already under way 

the day Bumble Bee and Chicken of the Sea decided to outsource 

American jobs to foreign countries. 

9 

While Bumble Bee will testify that we just need to be like Guam 

in developing tourism, I would suggest that Mr. Lischewski take a 

hard look at American Samoa’s location in relation to Asia and also 

take a look around at our lack of land. American Samoa is not 

Guam. We are not benefiting from a $15 billion infusion into 

Guam’s economy as a result of troop transfer of some 8,000 Marines and their families from Okinawa to Guam. American Samoa 

is situated in the middle of the world’s best tuna grounds. Tuna is 

our main industry. Tuna is our past and our future. 

And while Bumble Bee will try and convince you today that, if 

ASPIRE is enacted, we will have to worry about U.S. trade violations, nothing could be further from the truth. Our Federal Government currently subsidizes almost every agricultural product made 

in the U.S., including sugar and corn and dairy products. And because the rule is, as long as American products are homegrown and 

headed for the U.S. market, which is where American Samoa’s 

canned tuna goes, there is no trade violation in this respect. 

So, despite the hype you will hear today, I am asking my colleagues to consider the facts and support ASPIRE or this proposed 

bill. The proposed bill is good for our tuna industry, and it is right 

for American Samoa. 

The U.S. cannot afford to sit idly by while American Samoa’s 

economy collapses and while members of the U.S. tuna fishing fleet 

sell hundreds of millions of dollars’ worth of tuna to foreign nations 

while the American taxpayer, in my humble opinion, gets nothing 

in return. 

For those Members of Congress from the States, respectively Hawaii, Alaska, California, or others who may have concerns about 

the fishing fleet, the proposed bill does not impact any other fishing 

fleet except the 39 tuna boats that fish in the U.S. South Pacific 

Tuna Treaty area. Because there was a technical error, this has 

been corrected. I just want for the record to make that known, 

Madam Chair. 

Finally—and I am sorry that I am taking this long, but I felt it 

is absolutely necessary that I share this with my colleagues—the 

question of how we are going to pay for this. For the Administration and a Congress that wants to know how this proposed bill will 

pay for itself and to address the false claim made by Republicans 

that this bill is a bailout that puts the American taxpayer on the 

hook, it estimated that the program would cost about $23 million 

per year and would increase by $2 million per year depending on 

Federal minimum-wage rates, about $11.2 million per year would 

be offset by the 6.25 tax on the value of the 180,000 metric tons 

of tuna now being transshipped to foreign nations by these tuna 

boats. If, however, the tuna boats offload more often in American 

Samoa, the offset would decrease. 

And approximately $4.2 million would be made available by the 

$250,000 licensing fees for tuna boats that do not make three direct 

deliveries to American Samoa per year. This figure is based on the 

current number of tuna boats that transship their fish to foreign 

countries. However, if more tuna boats direct-delivered to American 

Samoa, then this offset would also decrease. 

Madam Chair, while the American Samoa Government would 

need to provide input, I would be supportive of a cost-share arVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6602 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
10 

rangement between the Federal Government and the local government if ASG began to see revenues from the multiplier effect. In 

the discussions with the U.S. Department of the Interior, we are 

also looking at the possibility of the $10 million of the CIP projects 

that we get each year maybe as a means to encourage and support 

private-sector development, especially for the only major industry 

we now have in the territory, and that is the tuna industry. 

Long term, Madam Chair, it would be my hope that my colleagues in the Congress would establish a PAYGO plan modeled 

after the Caribbean Basin Economic Recovery Act, which provides 

a special rule for excise taxes collected on rum imported into the 

United States from any country. Such excise taxes are covered over 

to the treasuries of Puerto Rico and the Virgin Islands. And there 

is no reason why a similar program could not be established for 

tuna imported into the U.S. from foreign countries possibly. 

And while ASPIRE may not be perfect, Madam Chair, in the 

aftermath of the earthquake and tsunami that has left American 

Samoa teetering on the brink of economic collapse, we need action, 

and we really need it now. 

I continue to be open to make the necessary adjustments that 

would make this a win-win situation for the entire U.S. tuna industry, but I am not open to doing nothing. Nothing is not an option 

for the more than 68,000 residents of the territory who need and 

deserve support of our Nation. 

I believe, Madam Chair, that, as fellow Americans, we deserve 

equal treatment under the law. This is why I ask my colleagues to 

stand with us the same way we have stood with you, especially in 

the defense of our Nation. And, as has already been reported to 

Congress, the sacrifices of American Samoan soldiers in the Iraq 

war was tremendously disproportionate to the territory’s small size, 

approximately 138 percent, far higher than any State or territory, 

according to the USA Today report that was issued in March of 

this year. And I want to share that with my colleagues. 

For my Republican friends who have cheapened our sacrifice at 

this hearing by issuing a press release, which I would like to include for the record, calling this bill a ‘‘tuna bailout’’ before even 

listening to both sides of debate, I say, shame on you. Shame on 

you for trivializing our sacrifices, and shame on you for making a 

mockery of our call for help. While the color of our skin may be 

dark, our blood still runs red, white, and blue. 

And, finally, in response to the Republicans’ misinformation 

about minimum wages in the American Samoa, it was a Republican who introduced an amendment to the Iraqi Accountability Appropriation Act of 2004, which required the minimum wage in 

American Samoa to be increased in a phased manner until it 

reached the same level of the rest of the United States. 

So if the policy is a failure, it is a failure on the part of my Republican colleagues. The Republicans should also make it right, 

and not by asking Samoans to ride in the back of the bus, but by 

supporting legislation that puts American Samoa back to work. 

My people are not begging or asking for handouts, Madam Chair. 

We just want to work. And I think that this is the best possibility 

that we have, by this proposed legislation. And, again, I urge my 

colleagues to support this proposed bill. 

11 

Thank you, Madam Chair. 

[The prepared statement of Mr. Faleomavaega follows:] 

Statement of The Honorable Eni F.H. Faleomavaega, a Delegate in 

Congress from American Samoa 

Madam Chair, Ranking Member: 

I thank you for holding this hearing on ASPIRE, the American Samoa Protection 

of Industry, Resources, and Employment Act, or H.R. 3583, a bill I introduced to 

put American Samoa back to work and to put the U.S. tuna industry back in America. 

Before I begin, I would like to ask that the following letters of support be included 

for the record. 

For more than 55 years, American Samoa has been the backbone of the U.S. tuna 

fishing and processing industries, just like for years Puerto Rico and the Virgin Islands were the backbone of the rum industry. 

Today, the U.S. tuna processing industry includes three major brands of canned 

tuna—StarKist, Chicken of the Sea and Bumble Bee. 

StarKist is headquartered in Pittsburgh, Pennsylvania and has 1,800 employees 

in the U.S. Territory of American Samoa. StarKist is a U.S. corporation and pays 

U.S. taxes. StarKist is also a subsidiary of the Dongwon Group, a leader in the food, 

beverage and fisheries industries in South Korea. 

Chicken of the Sea is a subsidiary of Thai Union, the world’s largest producer of 

canned tuna. Chicken of the Sea has about 200 tuna cannery workers in Lyons, 

Georgia. 

In 2004, Bumble Bee was sold off to Connors, a Canadian company, and only recently was Bumble Bee purchased by a group of U.S. investors. Mr. Lischewski, who 

will be testifying as the President and CEO of Bumble Bee, now personally owns 

a significant share of Bumble Bee. Bumble Bee employs about 1,000 workers in the 

U.S. but how many of its U.S. workers are tuna cannery workers is undetermined, 

though I intend to ask during the course of this hearing. The bulk of Bumble Bee’s 

employees are not U.S., but foreign employees. 

As many members of this subcommittee know, more than 80% of American 

Samoa’s private sector economy is dependent, either directly or indirectly, on two 

of the three major brands—StarKist and Chicken of the Sea—which until recently 

employed more than 74 percent of our private sector workforce. 

What you may not know is that one day after American Samoa was struck by the 

world’s most powerful earthquake of 2009 that set off a tsunami that left untold 

damage and loss, Chicken of the Sea closed down its operations in American Samoa, 

leaving more than 2,000 workers without jobs. 

Chicken of the Sea left without the courtesy of discussing its departure either 

with myself or the Governor of American Samoa, although Samoan workers made 

Chicken of the Sea one of the most profitable brands of canned tuna in the U.S. 

Minimum Wage 

Chicken of the Sea left for Lyons, Georgia where it now employs a skeletal crew 

of about 200 workers. Chicken of the Sea pays its workers in Georgia some $7.25 

per hour. 

Yet from 1954 forward, when Chicken of the Sea’s then parent company, Van 

Camp, first arrived on American Samoa’s shores, the company set about to suppress 

the wages of Samoan workers by demeaning their worth and work. In 1956, the 

company testified before the U.S. Senate Committee on Labor and Public Welfare, 

urging consideration of legislation for the exemption of American Samoa from the 

wage and hour provisions of the Fair Labor Standards Act of 1938. 

So while you will hear much about minimum wage from those who oppose ASPIRE including a think-tank witness whose naive testimony is anything but expert, 

let me share with you our history regarding equal pay for equal work so that every 

Member of Congress may know the truth about minimum wage in American Samoa 

which has now barely reached $4.76 per hour for our tuna cannery workers. 

Let’s begin with this statement from Chicken of the Sea’s then parent company, 

Van Camp. Commenting on his company’s desire to pay Samoan workers 27 cents 

per hour as opposed to the prevailing minimum wage rate of the time at $1 per 

hour, the company said: 

‘‘The Samoans are Polynesians. They are not American citizens.’’ 

About the women of American Samoa, the company said: 

‘‘[We] now employ 300 Samoans, mostly women’’. [W]ages range from 27 

cents per hour for the women who clean the fish to $1 per hour for 1 employee, who is a technician... 

12 

The difference in labor costs is attributed to the lower production output 

in Pago Pago, where we have found that it takes from 3 to 5 Samoans to 

produce what 1 stateside employee can produce.’’ 

Mr. Collins, legal counsel for Van Camp, put it this way: 

‘‘The company has found that it takes from 3 to 5 Samoan workers to perform what 1 continental worker in the United States will do. It is therefore 

felt that this justifies a lower rate for Samoans.’’ 

Forgive me for pausing here but what company, in good conscience, would suppress wages in a U.S. Territory on the claim that the more than 300 Samoan women 

cleaning fish in American Samoa for 27 cents an hour were somehow inferior to the 

stateside employees being paid $1 per hour? 

While some of you may think this does not matter, it does, especially when 55 

years later, Chicken of the Sea shut its doors in American Samoa and immediately 

paid stateside workers in Lyons, Georgia twice as much as they were currently paying our women and men in American Samoa. Different year, same Chicken of the 

Sea. 

This is the kind of prejudice and racism and gender inequality we have been dealing with for 55 years in American Samoa and, frankly, we are tired of being treated 

like second class citizens and we are fed up with the attitude that is now permeating the U.S. tuna and fishing processing industries. 

Loins: The Outsourcing Business Model 

Testifying before this Subcommittee are two tuna canneries, Chicken of the Sea 

and Bumble Bee, both of which oppose ASPIRE because ASPIRE opposes their current business model of having their tuna cleaned in low wage countries where they 

pay workers $0.75 cents and less per hour and then employ skeletal crews in the 

United States—Georgia, California and Puerto Rico, to be exact—to pack the 

cleaned tuna, or loin, in order to take advantage of duty-free treatment. 

I call this the outsourcing business model. This business model is based on loins. 

A loin is a cleaned fish. Because 90% of labor costs and employment come in the 

cleaning of the fish, the outsourcing business model maximizes profits and decreases 

employment in America, while increasing employment in low-wage rate countries. 

This is why both Chicken of the Sea and Bumble Bee employ more workers outside 

of the U.S. than in the U.S. 

In my opinion, the outsourcing business model is an un-American way of doing 

business, and I believe if the American public knew what is really going on in the 

U.S. tuna industry it would not support these kinds of practices. Nike and the GAP 

are already under fire for adopting a similar business model in the garment industry, and there is not a Member in this room that supports off-shoring American jobs 

to low-wage countries. 

So that there is no misunderstanding about this issue, I will be asking Chicken 

of the Sea to state for the record how many tuna workers it employs in Lyons, Georgia versus how many tuna workers its parent company, Thai Union, employs to 

clean the bulk of the tuna Chicken of the Sea puts in its cans. The answer will be 

something to the effect of 200 workers in Lyons, Georgia versus thousands in Thailand. 

I will also ask Chicken of the Sea to tell us how much it pays its workers in 

Lyons, Georgia, how much it paid its workers in American Samoa, and how much 

its parent company, Thai Union, pays its workers in Thailand. The answer to this 

question will be $7.25 per hour for Georgia workers, barely reaching $4.76 for workers in American Samoa, and about $0.75 cents per hour for Thai workers. 

While Bumble Bee touts before this subcommittee that it employs 1,000 U.S. 

workers, I will ask Bumble Bee to make it plain for the record how many of these 

workers work in the tuna industry. Bumble Bee and I both know that it does not 

employ 1,000 tuna workers in the U.S., and its testimony is misleading on this 

point. 

As a matter of record, I will ask Bumble Bee to inform the Subcommittee how 

many tuna workers it employs in Puerto Rico and California versus the number of 

workers in Fiji that clean the bulk of the tuna Bumble Bee puts in its cans. Members of this Subcommittee will learn that Bumble Bee only employs about 325 workers in Puerto Rico, less in California, and thousands in foreign countries. 

I will also ask Bumble Bee how much it pays it workers in Puerto Rico and California versus how much workers in Fiji and/or Thailand are paid by contractual 

agreement. When Members of this Committee receive this information, they will understand more clearly the outsourcing business model. 

Because neither Chicken of the Sea nor Bumble Bee is proud of the outsourcing 

model they have adopted, neither company makes mention of their low-wage contractual agreements with Fiji and Thailand on their company websites. 

13 

Instead, before this Subcommittee, Bumble Bee whitewashes its way of doing 

business by stating that ‘‘it works continuously to drive higher production efficiencies and lower operating costs in an effort to remain profitable.’’ That’s just another way of saying that Bumble Bee’s idea of efficiency is to off-shore American 

jobs to low-wage countries just to increase its profits. One only has to look at the 

thousands of workers Bumble Bee laid off in Puerto Rico and California in the past 

decade, and its way of doing business speaks for itself. The same can be said of 

Chicken of the Sea. 

However, as much as I oppose the outsourcing business model, I do not blame 

Bumble Bee or Chicken of the Sea for their business practices because the fact is 

none of our U.S. tuna companies can compete against low-wage countries which 

clean fish cheaper than American workers. 

That is why we are here today. Today, we are here to bring the U.S. tuna industry back to America by offering grants to any company that wants to clean its fish 

in the U.S. Territory of American Samoa. The idea behind this bill is not much different than the rum tax we provide for Puerto Rico and the U.S. Virgin Islands, 

which brings us to the issue of our U.S. tuna fishing fleet. 

The U.S. Tuna Fishing Fleet 

The U.S. tuna fishing fleet is currently made up of 39 vessels, with one license 

still available. About 14 of these vessels are 100% U.S. owned. The other 25 tuna 

boats are newer vessels, built in foreign countries, with 51% U.S. ownership, and 

49% foreign-ownership. Most of the foreign-built boats are part of a company known 

as the South Pacific Tuna Corporation (SPTC). 

Mr. Lischewski, CEO and President of Bumble Bee, is a part-owner of South Pacific Tuna Corporation, and owns a significant share of Bumble Bee. Chicken of the 

Sea and/or its parent company, Thai Union, is also a part-owner of the foreign-built 

tuna boats. 

The American Tunaboat Association (ATA), which represents all 39 tuna boats, 

both U.S. and foreign-built, was invited to testify today, but declined. 

Given that the South Pacific Tuna Corporation only represents the foreign-built 

boats and also because Chicken of the Sea and/or Thai Union and Mr. Lischewski 

of Bumble Bee own financial interest in the foreign-built boats, I asked that SPTC 

be removed from the witness list so that there would be no conflict of interest, especially since Mr. Lischewski did not disclose his ownership in the SPTC, but only 

noted that he ‘‘owns a minority position in a U.S. tuna fishing company.’’ 

However, because SPTC has been allowed to testify, I asked that Mr. Renato 

Curto now be allowed to testify on behalf of the U.S.-built tuna boats, of which he 

owns most, as President of Cape Fisheries. 

I have also asked that Mr. Joe Hamby be invited to testify on behalf of Tri Marine. Regarding Tri Marine, Tri Marine is one of the largest tuna supply companies 

in the world, and has a contractual arrangement with StarKist. Neither StarKist 

nor Tri Marine has financial ownership in each other. 

On the point of our U.S. tuna fishing fleet, whether U.S. or foreign-built, all 39 

tuna boats, or the entire U.S. tuna fishing fleet, fishes under the auspices of the 

South Pacific Tuna Treaty, a treaty between the United States and 16 Pacific Island 

nations. Under the terms of the Treaty, the U.S. government pays out $18 million 

annually to the Pacific Island parties in return for the right of our U.S. tuna boats 

to fish in the exclusive economic zones (EEZ) of the Pacific Island parties to the 

Treaty. The U.S. tuna boats also pay the Pacific Island parties about $3 million or 

more per year, depending on the amount of tuna they catch. 

According to the U.S. Department of State, the landed value of the catch in 2008 

was in excess of $200 million but the value of the tuna as it moves through the processing and distribution chain may be as much as $400 to $500 million. 

Of the approximate 300,000 metric tons of tuna that is caught, which is referred 

to as whole fish, about 120,000 metric tons is direct-delivered to American Samoa 

per year. Direct delivery means the tuna boats actually pull into American Samoa’s 

port and offload their catch. Given Chicken of the Sea’s closure, the amount of tonnage direct-delivered to American Samoa is now less. 

Nonetheless, for purposes of this hearing, let us go ahead and consider that on 

average, 120,000 metric tons of tuna is direct-delivered to American Samoa. What 

happens to the other 180,000 metric tons, given that American Samoa has the capacity to process up to 280,000 metric tons with room for growth? 

Let me tell you. Remember the foreign-built tuna boats I spoke of earlier, the 

tuna boats owned by the South Pacific Tuna Corporation which Bumble Bee and 

Chicken of the Sea and/or Thai Union have part ownership in? These tuna boats 

are the last puzzle piece to the outsourcing business model because these are the 

14 

very tuna boats that transship their catch to foreign nations where the tuna is 

cleaned, or loined, for $0.75 cents and less per hour. 

In other words, 25 members of our very own U.S. tuna fishing fleet sell off their 

catch to foreign nations and then send the cleaned tuna loin back to Bumble Bee 

and Chicken of the Sea so that these two tuna canneries can maximize their corporate profits while off-shoring American jobs. These 25 members of the U.S. tuna 

fishing fleet do this despite the fact that they fly the U.S. flag and are subsidized 

by the American taxpayer to the tune of $18 million per year to fish in the South 

Pacific Tuna Treaty Area. And what does the American taxpayer get in return? A 

depleted tuna stock, that’s what we get. 

In the time it takes to make 3 direct-deliveries, the new foreign-built tuna boats 

can make 5 transshipment deliveries by off-loading their catch to a big mother ship 

meaning that they can return more quickly to the South Pacific Tuna Treaty fishing 

grounds where they can catch more and more tuna at a more maddening pace. 

For conservation reasons, too, we must change the way our tuna boats behave by 

rewarding tuna boats that direct-deliver their fish to the U.S. Territory of American 

Samoa or by taxing the value of the tuna which is transshipped to foreign nations, 

and by requiring a license fee for tuna boats that don’t direct-deliver at least 3 times 

per year. 

And this is why I have introduced ASPIRE. ASPIRE brings the U.S. tuna industry back to America and, above all, puts America Samoa back to work. 

Whole Fish: The American Model 

ASPIRE is the American model of doing business. It is based on whole fish. For 

now, StarKist is the only major brand of canned tuna that follows the whole fish 

business model and is the last remaining tuna cannery in American Samoa. 

In American Samoa, StarKist is about jobs, jobs, jobs. Jobs are created when a 

cannery chooses to clean whole fish rather than pack tuna loins that have been 

cleaned elsewhere. As I stated previously, 90% of the labor associated with any tuna 

cannery is in the cleaning of the whole fish. While Chicken of the Sea and Bumble 

Bee have opted to outsource their fish cleaning jobs to low-wage countries, StarKist 

has chosen to clean whole fish in American Samoa and thereby create jobs for our 

workers. 

And this has put StarKist at a competitive disadvantage. StarKist cannot hold out 

much longer in American Samoa, given the unfair trade advantages of Chicken of 

the Sea and Bumble Bee, which are using cheap labor to get ahead and when our 

U.S. boats are selling off U.S. tuna to foreign countries rather than making direct 

deliveries to American Samoa. 

If these unfair trade practices force StarKist to leave American Samoa and adopt 

the Chicken of the Sea and Bumble Bee model of cleaning fish in low-wage countries, American Samoa’s economy collapses. It’s as plain and simple as that. 

To prevent a complete economic meltdown that will lead to nearly full unemployment, Congress must act quickly if we are to save American Samoa’s jobs and economy and, if more broadly, we are to bring the U.S. tuna industry back to America. 

StarKist employs more than 1,800 workers in American Samoa, and while some 

at this hearing will try to discredit our workforce, let’s be straight about this. While 

many of our workers are from the neighboring island of Samoa, they are legal permanent residents, married to our U.S. nationals and citizens, and their children are 

also U.S. nationals, which make them a part of us. 

StarKist also abides by U.S. labor and environmental laws, unlike tuna canneries 

in Thailand and Fiji, which are supplying Bumble Bee and Chicken of the Sea. 

While StarKist has an operation in Ecuador, which are opponents will also try 

and use against us, let’s be clear about this, too. StarKist does not can any tuna 

in Ecuador. In Ecuador, StarKist produces pouch tuna under the provisions of the 

Andean Trade Agreement. And pouch tuna has nothing to do with ASPIRE. ASPIRE 

is about canned tuna, not pouched tuna, and Chicken of the Sea and Bumble Bee 

know this full well. 

What may not be so readily known is that American Samoa is a single-industry 

economy, entirely dependent on the tuna fishing and processing industries just as 

Puerto Rico and the Virgin Islands were once solely dependent on the rum industry. 

Because of the fragile state of our economy, especially in the aftermath of a devastating tsunami, if we lose our one remaining private-sector employer, it will be 

next to impossible for us to rebuild. 

If StarKist leaves, American Samoa will be left with no private sector base. And, 

while some of my colleagues and our so-called experts trivialize the situation by suggesting we just need to adjust the minimum wage rates, I am hopeful that my testimony has made clear the complexities of this matter. Whether or not minimum 

wage rates are $3.00 per hour or $7.25 per hour in American Samoa, the entire U.S. 

15 

tuna industry, including Chicken of the Sea, Bumble Bee and StarKist, can no 

longer compete against low-wage rate nations that pay their fish cleaners $0.75 

cents and less per hour which means the increase of minimum wage rates in American Samoa only accelerated a process that was already underway the day Bumble 

Bee and Chicken of the Sea decided to outsource American jobs to foreign countries. 

While Bumble Bee will testify that we just need to be like Guam and develop 

tourism, I would suggest that Mr. Lischewski take a hard look at American Samoa’s 

location in relation to Asia and also take a look around at our lack of land. American Samoa is not Guam. We are not benefiting from troop realignment or proximity 

to Asia. 

American Samoa is situated in the middle of the world’s best tuna grounds. Tuna 

is our oil. Tuna is our past and our future. And while Bumble Bee will try and convince you today that if ASPIRE is enacted, we will have to worry about U.S. trade 

violations, nothing could be further from the truth. 

America subsidizes almost every agricultural product made in the U.S.A. including sugar, corn, dairy, etc., because the rule is, as long as American products are 

home-grown and headed for the U.S. market, which is where American Samoa’s 

canned tuna goes, there is no trade violation. 

So despite the hype you will hear today, I am asking Congress to consider the 

facts, and support ASPIRE. ASPIRE is good for America and right for American 

Samoa. 

The U.S. cannot afford to sit idly by while American Samoa’s economy collapses 

and while members of the U.S. tuna fishing fleet sell off hundreds of millions of dollars worth of tuna to foreign nations while the American taxpayer gets nothing in 

return. 

Nor can we turn a blind eye to the depletion of our tuna stock in the Western 

Pacific Tropic. 

It is time for Congress to act, and to act quickly. 

For those Members of Congress from Hawaii, Alaska and California, or others 

who may have concerns about their fishing fleet, ASPIRE does not impact any other 

fishing fleet except the 39 tuna boats that fish in the South Pacific Tuna Treaty 

Area. Because there was a technical error on page 7, line 11, of H.R. 3583, with 

use of the word ‘‘or’’ which should have been ‘‘and’’, I have asked that we strike the 

reference to the Western Pacific Regional Fishery Management Council so as to 

avoid any further confusion about the Hawaii fishing fleet which will not be impacted at all once this correction is made before final passage. 

PAYGO 

Finally, for an Administration and a Congress that want to know how ASPIRE 

will pay for itself, and to address the false claims made by Republicans that this 

bill is a bailout that puts the American taxpayer on the hook, it estimated that the 

program would cost about $23 million per year, and would increase by $2 million 

per year depending on federal minimum wage rates. 

About $11.25 million per year would be offset by the 6.25% tax on the value of 

the 180,000 metric tons of tuna now being transshipped to foreign nations. If, however, the tuna boats offload more often in American Samoa, the offset would decrease. 

About $4.25 million would be made available by the $250,000 licensing fees for 

tuna boats that do not make 3 direct-deliveries to American Samoa per year. This 

figure is based on the current number of tuna boats that transship their fish to foreign nations. However, if more tuna boats direct-deliver, then this offset would also 

decrease. 

However, it is expected that if more tuna boats direct-deliver their whole fish to 

American Samoa rather than transship U.S. tuna to foreign nations, then the presence of these tuna boats in American Samoa would create a multiplier effect in the 

economy as the boat owners would have need to purchase fuel, food, and lodging 

while in port. 

While the American Samoa Government (ASG) would need to provide input, I 

would be supportive of a cost-share arrangement between the federal government 

and the local government if ASG began to see revenues from the multiplier effect. 

In discussions with the U.S. Department of the Interior, we are also reviewing the 

possibility of restructuring the $10 million Congress already provides the Territory 

for Capital Improvement Projects as a means to encourage and support private sector development. 

Long-term, it would be my hope that Congress would establish a PAYGO plan 

modeled after the Caribbean Basin Economic Recovery Act which provides a special 

rule for excise taxes collected on rum imported into the United States from any 

country. Such excise taxes are covered over to the Treasuries of Puerto Rico and the 

16 

U.S. Virgin Islands, and there is no reason why a similar program should not be 

established for tuna imported into the United States from any country. Tuna excise 

taxes, including those on any and all loins, would be covered over to the Treasury 

of American Samoa, making ASPIRE a fully pay-as-you-go program. 

While ASPIRE may not be perfect, in the aftermath of a tsunami that has left 

American Samoa teetering on the brink of economic collapse, we need action and 

we need it now. Still, I continue to be open to making the necessary adjustments 

that would make this a win-win for the entire U.S. tuna processing and fishing industries, but I am not open to doing nothing. Nothing is not an option for the more 

than 65,000 residents of American Samoa who need and deserve the support of our 

nation. 

We need help rebuilding our economy in a way that is as fair for American Samoa 

as the rum tax is for Puerto Rico and the Virgin Islands, or sugar subsidies are for 

Louisiana, or beef and dairy subsidies are for the heartland. 

As fellow Americans, we deserve equal treatment under the law. This is why I 

ask you to stand with American Samoa the same way we have stood with you. As 

has already been reported to Congress, the sacrifice of American Samoa in the Iraq 

war was disproportionate to the territory’s small size, as residents of the territory 

were 15 times more likely to be killed in action in Iraq than residents of the United 

States as a whole. 

For my Republican friends who have cheapened our sacrifice and this hearing by 

issuing a press release—which I would like to include for the record—calling this 

bill ‘‘a tuna bailout’’ before listening to both sides of the debate, I say, ‘‘Shame on 

You.’’ Shame on you for trivializing our sacrifice and shame on you for making a 

mockery of our call for help. While the color of our skin may be dark, our blood still 

runs red, white and blue. 

And finally, in response to the Republican’s misinformation about minimum wage 

in American Samoa, it was the Republicans who introduced an amendment to the 

U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability 

Appropriations Act of 2007 which required the minimum wage in American Samoa 

to be increased in a phased manner until it reached the same level as the rest of 

the United States. So, if the policy is a failure, it is a Republican failure, and the 

Republicans should make it right, not by asking Samoans to ride in the back of the 

bus, but by supporting legislation which puts American Samoa back to work and 

ends the outsourcing of American jobs to foreign countries. 

Enough is enough. Support H.R. 3583. 

Ms. BORDALLO. I thank the gentleman from American Samoa, 

the author of H.R. 3583. 

And I would like, at this time, to welcome my colleagues, The 

Honorable Donna Christensen, representing the Territory of the 

Virgin Islands, and Mr. Kilili Gregorio Sablan, representing the 

CNMI. 

I would now like to ask for just a very brief recess to allow our 

colleagues in the minority who are still voting, and also the majority, to make their way back here. I understand it will be just probably another 10, 15 minutes. 

Mr. FALEOMAVAEGA. Madam Chair? 

Ms. BORDALLO. Yes? 

Mr. FALEOMAVAEGA. I just wanted to have something inserted 

into the record, if I may—— 

Ms. BORDALLO. Yes. 

Mr. FALEOMAVAEGA.—ask unanimous consent that I have several 

letters that I have received in support of the proposed bill from 

about 10 to 15 companies, business interests in American Samoa 

to be made part of the record. 

Ms. BORDALLO. On behalf of the gentleman from American 

Samoa. 

Mr. FALEOMAVAEGA. Also, a copy of USA Today newspaper dated 

March 18, 2009, concerning the contributions of the American 

17 

Samoan soldiers in the defense of our Nation, especially the war 

in Iraq. 

And, also, a copy of this press release that was just issued yesterday, entitled, ‘‘A Fish Too Big to Fail,’’ issued by our friends from 

the other side of the aisle. I want to make that as part of the 

record. 

[NOTE: The information submitted for the record has 

been retained in the Committee’s official files.] 

Ms. BORDALLO. There is no objection to adding these to the 

record. So ordered. 

Mr. FALEOMAVAEGA. Thank you. 

Ms. BORDALLO. So we will recess just very briefly, if you don’t 

mind, before we begin hearing from our first panel. And, again, my 

apologies to the Governor of American Samoa and Mr. Pula. 

[Recess.] 

Ms. BORDALLO. I would like to resume the hearing of the Insular 

Affairs, Oceans and Wildlife Subcommittee. 

And, again, I apologize to the Governor of American Samoa for 

having to wait this long—I am very sorry, sir—and also to Mr. 

Pula, representing the Department of the Interior. 

On the first panel of witnesses, of course, is The Honorable 

Togiola Tulafono—was that good, Governor? 

Governor TULAFONO. Perfect. 

Ms. BORDALLO. Well, Eni helped me out. 

—the Governor of America Samoa and Mr. Nick Pula, the Director of the Office of Insular Affairs, United States Department of the 

Interior. 

Ms. BORDALLO. And I would now like to welcome you, Governor, 

back before the Committee and invite you to testify for 5 minutes. 

And, Eni, would you mind if we just go ahead, because we are 

running so very late. 

Mr. FALEOMAVAEGA. Madam Chair, I just apologized to the Governor in his Samoan language for his patience, and he has accepted 

our apology. 

Ms. BORDALLO. Thank you. Thank you very much. 

And so, Governor, you are welcome to begin with your testimony. 

And you can take as much time as you wish. 

STATEMENT OF HON. TOGIOLA T.A. TULAFONO, 

GOVERNOR OF AMERICAN SAMOA 

Governor TULAFONO. That is quite all right. 

Talofa and greetings to you, Madam Chairwoman Bordallo and 

the honorable members of the Committee. 

Special greetings to our Congressman Faleomavaega. 

I greatly appreciate this opportunity to testify before the Committee on the urgent need for passage of H.R. 3583, the American 

Samoa Protection of Industry, Resources, and Employment—the 

ASPIRE—Act. 

But before I begin my testimony with respect to that, I wish to 

address an important issue that has received much attention owing 

to a recent three-part CNN story on the tragic September 29, 2009, 

earthquake and tsunami disaster. I feel that a statement on behalf 

of the American Samoa government is timely, as the story has creVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
18 

ated a cloud of suspicion that affects the way that we are viewed 

as a government and as a people. 

On September 29th, as you all know, we suffered the effects of 

a destructive tsunami, so large that no one in the South Pacific has 

any living memory of a similar event. There has been no natural 

disaster in our region with which to compare this event in both loss 

of life and severe damage to property. 

The single issue of the absence of a territory-wide alert system 

for such a disaster was chosen as an issue for the media story. 

Clearly, it was not American Samoa’s choice to be without such an 

alert system nor was it our choice to be without Federal funding 

to run our emergency coordination and preparedness programs. 

These were situations borne out of a most unfortunate situation 

that we have been trying to resolve with Federal counterparts over 

several months of hard work and difficult decisions. 

Just weeks before the disaster, however, we were informed by 

Federal officials that our funding, which was frozen for some time, 

was just being released. This was the culmination of a long and arduous process whereby the American Samoa government had to 

come to terms with the fundamental flaws with our local programs 

as well as severe staff problems. 

With the help of our Federal funding agency and our new local 

staff, we were able to work through our challenges and set a new 

action plan for bringing our programs in line with Federal requirements encouraging accountability and transparency. In opportunistic fashion, however, reports about our funding freeze as a link 

to a delayed, territory-wide alert system was seized upon. 

The simplistic portrayal of an island without an island-wide alert 

system leading to deaths was sensational, this, even more so with 

the mention of public corruption. However, the report mentioned 

nothing of the work done by the Territory’s Department of Homeland Security in preparing our islands for such disasters. 

Without our Federal funding for full-scale emergency planning 

and preparedness, our local agency worked long and hard in public 

outreach and education. With significant portions of our population 

living within close reach of the coastline, there is little doubt that 

without the public outreach and preparedness education efforts, 

American Samoa would have lost countless more lives. However, 

nothing in the media report suggests that this was ever done. 

Further, there was no discussion with current American Samoa 

Department of Homeland Security officials who are most informed 

about the issues involved. And at every turn in the report there is 

the implication that had there been a territory-wide warning system in place, there would have been no deaths and widespread 

damage would have been avoided altogether. This was highly speculative and irresponsible. 

In a recent study conducted by the Australian Tsunami Research 

Center in the aftermath of the recent tsunami, where they engaged 

the help of 96 scientists, they found that the partnerships of the 

government and local village communities to react to earthquakes 

without waiting for an official tsunami warning worked to save 

many more lives in Independent Samoa. 

Ultimately, the question was asked, could a more effective warning system have saved more lives in this incident? The conclusion 

19 

was ‘‘no.’’ In quote, their report states, ‘‘The detection, monitoring 

and warning systems worked well and could not have done anything different. The earthquake that caused the tsunami occurred 

so close to the coast of Samoan islands that there simply was not 

enough time to process the seismic data and issue an effective 

warning.’’ The distance between the two islands was about the 

same from the epicenter of that earthquake. 

The American Samoa government takes issue with the report, 

and we look forward to presenting our case with regard to these 

and other issues once our recovery is substantially complete. 

We recognize that mistakes have been made, but when those 

mistakes have been made, we have worked hard to correct them 

and to ensure that they are not repeated. This is not the sign of 

a government that is rampant with corruption. 

At the outset of my comments, now turning to H.R. 3583, let me 

be very clear, the American Samoa government, including our leadership and our Office of Samoan Affairs, supports this legislation 

in its current form, and we respectfully request and look forward 

to a favorable report out of your Committee, ma’am. 

As of September 30, 2009, one of our tuna canning plants, Chicken of the Sea, discontinued its tuna canning operations in the Territory. Samoa Packing has roots in the Territory dating back to 

1959; Samoa Packing directly employed over 2,000 residents. Together with StarKist, Samoa Packing was directly and indirectly 

responsible for over 80 percent of employing American Samoa’s private sector and approximately 46 percent of employment as a 

whole. 

Together, the tuna canning industry canneries were responsible for infusing approximately $80 million into the American Samoan 

economy. These numbers are contained within our DOI-funded report, American Samoa’s Economic Future and the Cannery Industry, by McPhee & Associates. Copies of this report have been submitted to both the Subcommittee and the Department of the 

Interior. I would be glad to provide the report to any of the members of the Subcommittee or the witness panel gathered here today. 

As you may be aware, over the past 2 months the American 

Samoa government has been engaged with Samoa Packing in discussions to purchase the assets in the canning operation located in 

the Territory. We are informed that the American Samoa government purchase may have an ill effect on this important legislation. 

As such, these discussions have been suspended. Nonetheless, the 

American Samoa government’s explanation of this move should be 

understood by this Committee. 

The purchase of the assets was explored with one motivation in 

mind: to keep the operation whole. ASG was convinced that the 

maximum potential of the business assets may only be achieved if 

the operation remains a whole, self-contained tuna canning plant. 

The prospect of a turnkey operation is much more attractive than 

a collection of assets that do not support a whole operation. This 

was the intent of the discussions with Chicken of the Sea Samoa 

Packing to protect the future possibility of a tuna canning operation. 

We see H.R. 3583 as an integral part of carrying out our intent, 

which is why we are here today. At present, we understand that 

20 

Samoa Packing has the operational capacity to produce at least 

four product lines with their current assets remaining in American 

Samoa. 

As this Subcommittee may also be aware, my administration has 

had some serious discussion with our Congressman over this legislation which may require some explanation with regard to our position. To be clear, my administration has never disagreed with the 

main intent of the bill, which is to provide much-needed assistance 

to our tuna cannery and our fishing fleets. 

The main concern that we have had with H.R. 3583 is the minimum wage provisions, namely section 3(w)(1)(A)(i) of the bill, 

which provides for an automatic adjustment of the assistance offered by this bill should the minimum wage escalate every year per 

the current U.S. minimum wage law for American Samoa. 

It has always been the American Samoa government’s position 

that minimum wage increases must be based in economic reality. 

Before the recent change, which provides for mandatory increases 

annually, there was a careful economic analysis that took place 

every 2 years conducted by the Secretary of Labor and presided 

over by a special industry committee. These committees would take 

into consideration the positions for all industries, as well as the 

state of the economy in American Samoa. Only after careful consideration of whether increases would result in a substantial curtailment of employment did the committees make their decisions as to 

the final minimum wage for each industry in American Samoa. 

The belief in the U.S. Congress, which resulted in the mandatory 

escalators, was that the committees were artificially depressing the 

minimum wage in American Samoa. However, it is our position 

that mandatory increases with no basis in economic conditions of 

the Territory are even more dangerous. Thus, the inclusion of the 

provision noted above in this legislation was for ASG, akin to lending credence to a process that we have been diametrically opposed 

to from its inception. Furthermore, ASG viewed this provision as 

a wedge issue that would effectively remove the canneries from 

supporting the common view that the minimum wage escalators 

were arbitrary and without any economic foundation. 

We have since, however, changed our view in light of the worsening global and local economic conditions. We also have placed 

much trust and faith that a workable resolution to the minimum 

wage issue may result from the current General Accountability Office study that is currently being conducted and which will be presented to Congress in early 2010. 

And having said that, it is my testimony today, madam, that we 

are in full support of the bill as submitted and as proposed by our 

Congressman. 

And, last, I would like to thank the members of the Committee 

and the individual members of the witness panel for their wonderful support for the Territory owing to the September 29, 2009, 

earthquake and tsunami disaster in American Samoa. Your prayers, thoughts and condolences during this difficult time have made 

a lasting impression on all of American Samoa’s residents. During 

the whole ordeal we have never felt that we faced any of it alone; 

for this, we are grateful to all of you. 

21 

We also thank you for your donations and man-hours for cleaning cleanup activities, monetary donations to relieve the suffering 

of our disaster victims and your overall support for our general recovery. 

As recovery efforts are continuing in American Samoa—and it 

looks to be a long time before we reach true recovery—we ask that 

you continue to keep us in your prayers. 

Madam Chairwoman and members of the Committee, I thank 

you once again for allowing me to express our thoughts on this important legislation. I thank Congressman Faleomavaega for his 

leadership and his foresight in introducing this legislation. And I 

look forward to your favorable report of this legislation out of Committee. 

I also ask for your support of H.R. 3583 to The Honorable Chairman Rangel and members of the House Ways and Means Committee, which also has jurisdiction over this bill. I remain available 

to the Committee and to individual Members to discuss this legislation and other matters affecting the Territory. 

Thank you again for the opportunity. Soifua. 

[The prepared statement of Governor Tulafono follows:] 

Statement of The Honorable Togiola T.A. Tulafono, 

Governor of American Samoa 

Talofa and greetings Madame Chairwoman Bordallo and honorable members of 

the Committee. I greatly appreciate this opportunity to testify before the Committee 

on the urgent need for passage of H.R. 3583, the American Samoa Protection of Industry, Resources and Employment (ASPIRE) Act. This legislation would provide 

much needed assistance for American Samoa to stabilize its current employment 

base and in turn, to shore up our ongoing economic development efforts. 

At the outset, let me be as clear as possible—the American Samoa Government, 

inclusive of the Fono leadership and the Office of Samoan Affairs which represents 

local government, supports H.R. 3583 in its current form, and we look forward to 

a favorable report out of this subcommittee. 

As of September 30, 2009, one of our tuna canning plants, Chicken of the Sea 

(COS) Samoa Packing discontinued its tuna canning operations in the Territory. 

COS Samoa Packing has roots in the Territory dating back to the 1959. Samoa 

Packing directly employed over two thousand residents. Together with StarKist 

Samoa, COS Samoa Packing was directly and indirectly responsible for over eighty 

percent of employment in American Samoa’s private sector and approximately forty 

six percent of employment as a whole. Together, the tuna canning industry canneries were responsible for infusing approximately $80,000,000 into the American 

Samoa economy. These numbers are contained within our DOI funded report American Samoa’s Economic Future and The Cannery Industry, by McPhee and Associates. Copies of this report have been submitted to both this Subcommittee and the 

Department of Interior. I would be glad to provide the report to any of the members 

of the Subcommittee or the witness panel gathered here today. 

As you may be aware, over the past two months the American Samoa Government 

has been engaged with Samoa Packing in discussions to purchase the assets of the 

tuna canning operation located in the Territory. We are informed that the American 

Samoa Government purchase may have an ill effect on this important legislation. 

As such, these discussions have been suspended indefinitely. Nonetheless, the American Samoa Government’s (ASG) explanation of this move should be understood by 

this Committee. The purchase of the assets was explored with one motivation in 

mind—to keep the operation whole. ASG was convinced that the maximum potential 

of the business assets may only be achieved if the operation remains a whole selfcontained tuna canning plant. The prospect of a turn-key operation is much more 

attractive than a collection of assets that do not support a whole operation. This was 

the intent of the discussions with COS Samoa Packing—to protect the future of possibility of a tuna canning operation. We see H.R. 3583 as an integral part of carrying out our intent, which is why we are here today. At present, we understand 

that COS Samoa Packing has the operational capacity to producing at least four 

product lines with their current assets which remain in American Samoa. 

22 

As this Subcommittee may also be aware, my administration has had some very 

serious discussions with the Congressman over this legislation which may require 

some explanation with regard to our position. To be clear, my administration has 

never disagreed with the main intent of the bill, which is to provide much needed 

assistance to our tuna canneries and our fishing fleet. The main concern that we 

have had with H.R. 3583 is the minimum wage provisions namely Section 

3(e)(1)(A)(i) of the bill, which provides for an automatic adjustment of the assistance 

offered by this bill should the minimum wage escalate every year per the current 

U.S. minimum wage law for American Samoa. 

It has always been the American Samoa Government’s position that minimum 

wage increases must be based in economic reality. Before the recent change which 

provides for mandatory increases annually, there was a careful economic analysis 

that took place every two years conducted by the Secretary of Labor and presided 

over by a Special Industry Committee. These committees would take into consideration the positions of all industries as well as the state of the economy in American 

Samoa. Only after careful consideration of whether increases would result in a substantial curtailment of employment did the committees make their decisions as to 

the final minimum wage for each industry in American Samoa. 

The belief in the U.S. Congress, which resulted in the mandatory escalators, was 

that the committees were artificially depressing the minimum wage in American 

Samoa. However, it is our position that mandatory increases with no basis in the 

economic conditions of the Territory are even more dangerous. Thus, the inclusion 

of the provision noted above in this legislation was for ASG, akin to lending credence to a process that we have been diametrically opposed to from its inception. 

Furthermore, ASG viewed this provision as a wedge issue that would effectively remove the canneries from supporting the common view that the minimum wage escalators were arbitrary and without any economic foundation. 

We have since changed our view in light of the worsening global and local economic conditions. We also have placed much trust and faith that a workable resolution to the minimum wage issue may result from the current General Accountability 

Office study that is currently being conducted and which will be presented to Congress in early 2010. 

The one concern that we have regarding funding of this initiative is whether the 

fees contemplated in Section 3(e)(2)(A) are the sole funding source for this assistance. If so, then I am unsure as to whether this would be sufficient for paying for 

the trust fund by itself. Further, I would ask whether with this new law, fishing 

vessels contemplated by the provision are expected to continue in their current status? Would reflagging be an issue and would this affect the funding stream available for the trust fund? These answers and others would be helpful in understanding further H.R. 3583, a measure which is highly welcome and very timely. 

While the growth of the fish canning industry boosts employment and spurs development in the territory, such a heavy reliance on this single industry however is 

not economically sound, and my administration with assistance from the Department of Interior continues to pursue opportunities to diversify the territory’s economy. The territorial government has actively promoted business investment opportunities in agriculture, fisheries, tourism, call centers, electronic information processing, and earlier this year, the installation and launching of a fiber optic cable 

connection for American Samoa. The premise of the fiber optic cable connection was 

to expand telecommunications technology sectors in the Territory, encourage new 

business and to attract high-tech businesses to American Samoa, especially call U.S. 

call centers. If American call centers can operate in India and Guatemala, they 

should certainly be able to operate in American Samoa. 

There remain challenges to setting up call center operations in the Territory. One 

of these challenges is the constantly increasing minimum wage for industries in the 

private sector. However, while we may be able to work through these challenges, 

stability in the single largest private sector industry is critical to these efforts. The 

failure of one of our canneries has created a precarious position for the Territory, 

whereby the ASG will have to forego millions of dollars in revenue as well as general economic activity that COS Samoa Packing once contributed to our economy. 

H.R. 3583 would go a long way toward shoring up the activities of our remaining 

tuna cannery StarKist Samoa, as well as creating an environment that would encourage the entry of any one of a number of canneries to do business in the Territory. 

Lastly, I would like to thank the members of this committee and the individual 

members of the witness panel for their wonderful support for the Territory owing 

to the September 29, 2009 earthquake and tsunami disaster in American Samoa. 

Your prayers, thoughts and condolences during this difficult time have made a lasting impression on all of American Samoa’s residents. During the whole ordeal, we 

23 

have never felt that we faced any of it alone. For this, we are grateful to all of you. 

We also thank you for your donations of man-hours for clean up activities, monetary 

donations to relieve the suffering of our disaster victims and your overall support 

for our general recovery. As recovery efforts are continuing in American Samoa and 

it looks to be a long time before we reach true recovery, we ask that you continue 

to keep us in your prayers. 

Madame Chairwoman and members of this committee, I thank you once again for 

allowing me to express our thoughts on this important legislation. I thank Congressman Faleomavaega for his leadership and his foresight in introducing this legislation and I look forward to your favorable report of this legislation out of committee. 

I also ask for your support of H.R. 3583 to Honorable Chairman Rangel and members of the House Ways and Means Committee, which also has jurisdiction over this 

bill. I remain available to the committee and to individual members to discuss this 

legislation and other matters affecting the Territory. 

Soifua ma ia manuia. 

Ms. BORDALLO. I thank you very much, Governor. And, again, I 

wish to apologize on behalf of the Subcommittee for having to have 

you wait so long when you have traveled so far to be here. So 

thank you, again, very much for your testimony. 

And before we begin, before I introduce Mr. Pula, I would like 

to introduce another one of our Members, Mrs. Grace Napolitano, 

who is a Subcommittee Chair on Natural Resources as well. And 

she hails from California. 

So thank you, Grace, for being with us. 

Mr. Pula, please go ahead. 

STATEMENT OF NIKOLAO I. PULA, JR., DIRECTOR, OFFICE OF 

INSULAR AFFAIRS, U.S. DEPARTMENT OF THE INTERIOR 

Mr. PULA. Thank you. Madam Chair and members of the Subcommittee, thank you for the opportunity to discuss H.R. 3583, the 

American Samoa Protection of Industry, Resources, and Employment Act. 

The prospects for the American Samoa economy have been of 

concern for some years now. For a substantial time, there have 

been predictions that the two tuna canneries would leave the Territory. Now Chicken of the Sea has left. Until this year, the two tuna 

canneries operating in American Samoa since the 1950s have 

shipped virtually all their finished products to the United States as 

if it were manufactured in the 50 States. 

The canneries have been the backbone of the Territory’s private 

sector. In 2007, the two canneries employed 4,600 workers, about 

27.2 percent of total employment in the Territory. The canneries 

also have supported a wide range of activities directly and indirectly, including most of the local trade and services sector. 

A GDP estimate for American Samoa was 483.1 million for 2007. 

The value of manufacturing output in American Samoa, nearly all 

tuna, was 22.3 percent of the total GDP. 

An important part of the financial mix that sustained the canneries over the decades has been tax and economic activity credits 

allowed under Federal tax rules. Other key factors contributing to 

financial viability of the canneries have been local financial incentives, duties on U.S. imports of canned tuna and relatively low 

wages. 

Ending years of speculation, one of the canneries, Chicken of the 

Sea Samoa Packing ended its operation in September of this year. 

It appears that the unique mix of factors—low-cost labor, duty-free 

24 

export to the United States and tax and other credits from the Federal Government and the American Samoa government—that sustained canneries for more than 50 years is no longer sufficient for 

financial viability. Also, in a larger context, moving the basic laborintensive manufacturing activities to low-cost labor markets has 

been a trend in the United States and other industrial countries for 

some years now. 

It is reasonable to say that American Samoa lost some comparative advantage in financial viability after it became subject to minimum wage, Federal minimum wage rules in July 2007. What 

makes the loss of even one cannery so critical is the proportion of 

the economy that is eliminated. There is no economic activity on 

the horizon to replace a cannery’s economic value. 

With the loss of over 2,000 jobs, or 12.7 percent of total employment, American Samoa will lose roughly 21.7 million in annual 

wages. That would be 10.7 percent of the Territory’s total wage bill 

under normal conditions. 

Wage losses in other economic activities will depend on the degree of their dependence on the canneries. All together, the immediate losses in wages following a shutdown of one of the canneries 

may amount to an estimated 31.5 million a year. This amount represents 15.6 percent of the Territory’s total estimated wages of 

202.5 million. 

Whether it is the loss of workers or wages, loss of one of the canneries and the activities it supports directly and indirectly is the 

equivalent of a major economic disaster. If the other cannery follows suit, it would mean at least double the economic and financial 

losses. 

H.R. 3583 is intended to support the remaining tuna cannery in 

American Samoa. The Administration is supportive of efforts to 

strengthen the economy of American Samoa, but has some concerns 

regarding the implementation of H.R. 3583. 

First, the Administration is actively working in the WTO to 

strengthen the rules regarding fisheries, and the proposed legislation may have implications for that effort. Finally, the Administration notes that the bill increases mandatory spending which would 

need to be fully paid for in this congressional session out of the Administration’s pay-as-you-go proposal as provided for in H.R. 2920. 

The Obama Administration appreciates the magnitude of the 

current problems faced by American Samoa, including the potential 

departure of the tuna canneries and the impact of the Federal minimum wage requirements. The Administration would like to work 

with this bill’s sponsors and the American Samoa government to 

address these significant economic problems in the near future. 

Thank you. 

[The prepared statement of Mr. Pula follows:] 

Statement of Nikolao I. Pula, Jr., Director, Office of Insular Affairs, 

U.S. Department of the Interior 

Madam Chair and members of the Subcommittee, thank you for the opportunity 

to discuss H.R. 3583, the ‘‘American Samoa Protection of Industry, Resources, and 

Employment Act.’’ 

The prospects for the American Samoa economy have been of concern for some 

years now. For a substantial time, there have been predictions that the two tuna 

canneries would leave the territory. Now, Chicken of the Sea has left. ASPIRE, with 

its proposed aid for tuna processors and fishing vessels, is an attempt to strengthen 

25 

conditions for retaining the other cannery, StarKist. While we support the ultimate 

goal of preserving jobs and protecting the remaining economy of American Samoa, 

the Administration has significant concerns related to PAYGO requirements. Also, 

the United States is working to eliminate practices in ongoing World Trade Organization (WTO) negotiations that have for decades let to over-capacity and over-fishing, particularly with regard to the build-up of foreign fishing fleets. This legislation 

could have implications for that important effort. 

BACKGROUND 

Until this year, the two tuna canneries operating in American Samoa since the 

1950s have shipped virtually all their finished product to the United States as if 

it were manufactured in the fifty states. The canneries have been the backbone of 

the territory’s private sector. In 2007, the two canneries employed 4,633 workers, 

27.2 percent of total employment in the territory, according to American Samoa Statistical Yearbook 2007. The canneries also have supported a wide range of activities 

directly and indirectly, including most of the local trade and services sector. This 

includes retail stores, restaurants, car repair shops and other service providers. The 

two canneries have paid more than half of American Samoa’s corporate taxes, 

which, in turn, support a large number of American Samoa Government (ASG) 

workers, as well as benefitting the American Samoa Power Authority. An unofficial GDP estimate for American Samoa was $483.1 million for 2007. The 

value of manufacturing output in American Samoa, nearly all tuna, was 22.3 percent of total GDP. The American Samoa Government followed the canneries with 

a 19.8 percent share of GDP. Local retail trade was in third place with 14.1 percent. 

Other important contributors were agriculture, including subsistence production, 

and information and business services with a 9.6 percent share each. In fifth place 

was wholesale trade, with 8.2 percent. These five sectors of the economy made up 

83.8 percent of GDP. 

Financial Viability of the Canneries 

An important part of the financial mix that sustained the canneries over the decades has been tax and economic activity credits allowed under Federal tax rules. 

Other key factors contributing to financial viability of the canneries have been local 

financial incentives, duties on U.S. imports of canned tuna, and relatively low 

wages. 

Ending years of speculation, one of the canneries, Chicken of the Sea Samoa Packing, announced in May 2009 that it would end its tuna canning operations in American Samoa at the end of September 2009. According to media accounts, the parent 

corporation of COS Samoa Packing, a Thai seafood conglomerate, has moved the 

labor-intensive part of its fish processing (cleaning) to Vietnam where the cost of 

labor is about 70 cents an hour. That wage contrasts with the roughly $5.10 minimum wage paid in American Samoa today, after three consecutive 50-cent raises 

of the minimum wage rate since July 2007. The mechanical part of fish processing 

(sorting, canning and handling) of the American Samoa operations is being accommodated in Lyons, Georgia, with a highly automated plant that processes frozen fish 

arriving in pouches from Vietnam and delivers canned fish to U.S. consumers via 

American supermarkets. 

It appears that the unique mix of factors (low-cost labor, duty-free export to the 

United States and tax and other credits from the Federal Government and ASG) 

that sustained the canneries for more than 50 years is no longer sufficient for financial viability. Also, in a larger context, moving the basic, labor intensive manufacturing activities to low-cost labor markets has been a trend in the United States 

and other industrial countries for years now. It is reasonable to say that American 

Samoa lost some comparative advantage in financial viability after it became subject 

to Federal minimum wage rules in July 2007. 

It is important to note the losses the American Samoa economy is enduring and 

potential future losses it may further endure. There are economic, financial and social losses. What makes the loss of even one cannery so critical is the proportion 

of the economy that is eliminated. There is no economic activity on the horizon to 

replace a cannery’s economic value. 

Potential Wage and Work Losses 

According to a letter the Governor of American Samoa wrote to the Secretary of 

the Interior on May 14, 2009, a total of 2,172 jobs were estimated to have been lost 

with the closing of COS Samoa Packing. The two canneries, according to the Governor, account for 60 percent of all economic activity in the territory. With the loss 

of 2,172 jobs or 12.7 percent of total employment, American Samoa will lose roughly 

$21.7 million in annual wages. That would be 10.7 percent of the territory’s total 

wage bill under normal conditions. 

26 

Excluded from these figures are the immediate, secondary and tertiary losses resulting from the shutdown. These would include goods and services provided to fishing fleets and crews and other suppliers of the canneries. After accounting for all 

wages, salaries and benefit losses directly connected to the cannery, the total loss 

is likely to be significantly higher than the $21.7 million in lost wages. 

Given the proportion of American Samoa’s economic activity that depends on the 

canneries, indirect job losses resulting from the shutdown may also be substantial. 

The ASG Department of Commerce estimated in 2006 that ASG would lose 700 

‘‘local government’’ workers following a closure of both canneries. 

Wage losses in other economic activities will depend on the degree of their dependence on the canneries. While it is currently not known whether a shutdown of 

both canneries would lead to large losses in the retail trade sector, anecdotal evidence suggests that this area depends heavily on the canneries, and major losses 

may be incurred in the near future. This sector, according to the U.S. Department 

of Labor data, employed 964 workers in 2006. If the shutdown of one cannery causes 

the layoff of half of that total, wage losses to the retail sector could approach $5.4 

million a year. Also, one cannery’s closure may eliminate half of the shipping and 

transport workers, and could eventually cause losses in a wide range of activities, 

from printing and publishing to construction. Altogether, the immediate losses in 

wages following a shutdown of one of the canneries may amount to an estimated 

$31.5 million a year. This amount represents 15.6 percent of the territory’s total estimated wages of $202.5 million. 

Unlike the loss of wages, the loss in the number of workers is likely to be greater 

as a percent of the total because most of these workers are in the lower-wage brackets. Still, the immediate loss in payroll employment directly and indirectly attributable to the cannery’s closure could approach 2, 954 workers, or 17.3 percent of 

total employment in the territory. 

Whether it is the loss of workers or wages, loss of one of the canneries and activities it supports directly and indirectly is the equivalent of a major economic disaster. If the other cannery follows suit, it would mean at least double the economic 

and financial losses. In that case, the American Samoa economy would likely never 

recover to pre-closure levels in our lifetimes. 

CANNERY CLOSURE AND FEDERAL OUTLAYS 

For many years, observers have been predicting that the canneries in American 

Samoa will leave the territory, and that without the canneries, American Samoa 

would become even more dependent on Federal largesse than it is currently. By a 

substantial amount, the Federal budget outlays as a consequence of cannery closure 

would likely surpass, by a substantial amount, the $25 million authorized in 

H.R. 3583 as aid for tuna canneries and vessels. For example, taking into consideration Federal aid for residents of American Samoa and their families, those who 

may move to Hawaii or the mainland United States, and Federal programs such as 

the Supplemental Nutrition Assistance Program (formerly food stamps), TANF, WIC 

and Medicaid, the Federal cost would likely surpass the amount contemplated in the 

bill. 

While the bill involves costs for the Federal government, those costs could be less 

than Federal cost for remedial aid to the territory. 

H.R. 3583 

H.R. 3583 is intended to support to the remaining tuna cannery in American 

Samoa. 

H.R. 3583 would amend the insular areas technical assistance program to provide: 

• payments to canneries in the amount of $200 per metric ton for whole tuna 

processed in American Samoa (which amount shall be adjusted annually according to the following ratio: increase in Federal minimum wage applicable to 

American Samoa over the Federal minimum wage applicable in American 

Samoa during the prior year), 

• payments to specified fishing vessels in the amount of $200 per metric ton of 

tuna delivered in American Samoa for processing, 

• payments to such specified fishing vessels that are U.S.-documented in the 

amount of $100 per metric ton of tuna delivered in American Samoa for processing, 

• payment of an annual fee of $250,000 by all such vessels to the United States 

treasury, which fee shall be waived if the vessel has made not less than three 

direct deliveries of whole tuna to processors in American Samoa during the year 

for which the fee is paid, 

27 

• payment of a fee by each U.S.-documented vessel in the amount of 6.25 percent 

per metric ton for each delivery it makes to another vessel or non-American 

Samoa location for the purposes of transshipment, which is expected to generate 

approximately $15 million a year that can be used as aid for tuna canneries 

and vessels, 

• deposit of all fees in an ‘‘American Samoa Economic Development Trust Fund’’ 

to be administered by the Office of Insular Affairs for the benefit of the territory 

of American Samoa, and 

• authorization of $25 million for Fiscal Year 2010 and such sums as may be necessary thereafter for the aid to the American Samoa canneries and vessels. 

INTERIOR POSITION 

The Administration is supportive of efforts to strengthen the economy of American 

Samoa, but has several concerns regarding the implementation of H.R. 3583. First, 

the Administration is actively working in the WTO to strengthen the rules regarding fisheries, and the proposed legislation may have implications for that effort. 

Finally, the Administration notes that the bill increases mandatory spending, 

which would need to be fully paid for in this congressional session under the Administration’s pay as you go proposal as provided for in H.R. 2920. 

The Obama Administration appreciates the magnitude of the current problems 

faced by American Samoa, including the potential departure of the tuna canneries 

and the impact of the Federal minimum wage requirements. The Administration 

would like to work with the bill’s sponsors and the American Samoa government 

to address these significant economic problems in the future. 

Ms. BORDALLO. Thank you very much, Mr. Pula. 

And I would like to ask unanimous consent that Congresswoman 

Napolitano be allowed to participate in the hearing. 

Hearing no objection, so ordered. 

And now I would like to introduce the Ranking Member of our 

Committee, who just came from the Floor after voting, The Honorable Henry Brown from South Carolina and also The Honorable 

Jeff Flake from Arizona. 

Henry, if you would like to begin. 

STATEMENT OF HON. HENRY E. BROWN, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF SOUTH CAROLINA 

Mr. BROWN. Thank you, Madam Chair. And I apologize for the 

inconsistency in our scheduling. We have no control over when we 

might vote, but we certainly appreciate the witnesses being here. 

Madam Chairwoman, I will give my formal statement. 

The loss of 2,000 jobs, when one of only two tuna canneries in 

American Samoa moved its operation, was a tremendous loss to the 

economy of American Samoa. To then be hit by as tsunami has 

been a one-two punch that has been economically disastrous to my 

friend from American Samoa’s district. I completely understand his 

interest in trying to maintain a vibrant, stable economic base in 

American Samoa and understand his interest in trying to bring 

back those canneries that have abandoned American Samoa. 

Unfortunately, I have strong reservations about the direction this 

legislation takes to address this problem. While I understand the 

need to maintain jobs in American Samoa, I will have a hard time 

telling my constituents why their tax dollars should be used to 

prop up just one company. 

I am afraid I also have concerns with manipulating the market 

by requiring all U.S.-flag vessels, even those vessels that have 

never delivered to American Samoa, to deliver to one company or 

be charged an annual fee and a percentage of their earnings. 

28 

Madam Chair, I would like to help my friend from American 

Samoa, but I cannot support this legislation. Having said that, I 

would like to ask our witnesses to help us come up with some more 

innovative way of addressing this problem and to find ways to not 

just maintain, but to create jobs in American Samoa. 

I look forward to hearing from our witnesses, and I look forward 

to working with you, Madam Chair, and my great friend from 

American Samoa. 

Thanks. I yield back. 

[The prepared statement of Mr. Brown follows:] 

Statement of The Honorable Henry E. Brown, Jr., Ranking Republican, 

Subcommittee on Insular Affairs, Oceans and Wildlife 

Madam Chairwoman, the loss of 2,000 jobs when one of only two tuna canneries 

in American Samoa moved its operations was a tremendous loss to the economy of 

American Samoa. To then be hit by a tsunami has been a one-two punch that has 

been economically disastrous to my friend from American Samoa’s district. 

I completely understand his interest in trying to maintain a vibrant, stable economic base in American Samoa and I understand his interest in trying to bring back 

those canneries that have abandoned American Samoa. 

Unfortunately, I have strong reservations about the direction this legislation takes 

to address this problem. While I understand the need to maintain jobs in American 

Samoa, I will have a hard time telling my constituents why their tax dollars should 

be used to prop up just one company. I’m afraid I also have concerns with manipulating the market by requiring all U.S.-flag vessels—even those vessels that have 

never delivered to American Samoa—to deliver to one company or be charged an 

annual fee and a percentage of their earnings. 

Madam Chair, I would like to help my friend from American Samoa, but I cannot 

support this legislation. Having said that, I would like to ask our witnesses to help 

us come up with some innovative ways of addressing this problem and to find ways 

to not just maintain, but to create, jobs in American Samoa. 

I look forward to hearing from our witnesses and I look forward to working with 

you, Madam Chair, and the Gentleman from American Samoa. 

Thank you. 

Ms. BORDALLO. I thank the gentleman from South Carolina for 

his opening statement. 

And now we are going to go to the Members, alternating between 

the majority and the minority. And I am going to have to tell you, 

I am going to hold on to a 5-minute limit very strictly, because we 

do have two panels after this, and I am going to put the two panels 

together. 

So those on the third panel, be ready; we will put you all together for the next panel. 

So at this time I would like to introduce the author of the bill, 

Mr. Faleomavaega from American Samoa. 

Mr. FALEOMAVAEGA. First of all, Madam Chair, I do want to 

thank our distinguished Ranking Member for his comments. And 

I totally respect his concerns about some of the provisions of the 

bill. 

If I may just restate the very beginning, the advent of—the purpose of the bill is not just to help the only remaining cannery that 

we have. Basically, it is to reestablish our tuna industry. And this 

is just to benefit StarKist, because StarKist is the only one that we 

have, but it is also to encourage other tuna processing companies 

to come and be part of the industry as we have it. 

The unfortunate situation to my good friend from South Carolina 

that—I have been a member of this Committee for 20 years, and 

29 

it is a real challenge knowing that the tuna industry are never together or unified. Under most conditions, they are constantly at 

each other’s backs or cutting each other’s throats, I would best say, 

about competition. 

And as I have said from the very beginning, as I was trying to 

meet with as many members of our tuna industry—both the fishing 

boats as well as the processors—was that I am open to any suggestion so that everybody could mutually benefit from the proposed 

bill. 

My situation, to my friend from South Carolina, is that—as I 

have said earlier in my statement, is that the whole U.S. tuna industry has changed—some 55 years now, has completely changed 

from what it was 50 years ago. Now we are getting much greater 

competition from foreign countries. And as it is, three brand names 

are now in place where some 20—80 percent of the tuna consumer 

in the United States is produced by these three brand names— 

StarKist, Chicken of the Sea and Bumble Bee. 

I had hoped that we would come up with some kind of a compromise where everybody would mutually benefit. But I am sad to 

say that this has not been the case in my experience in trying to 

figure out how we can best work together so that everybody would 

mutually benefit. 

So, with that—also, Madam Chair, I just want to say I am sorry 

that the Governor had left, but I do want to thank him for his support of this proposed legislation. 

And I also want to say that his earlier comment about the CNN 

video controversy that was brought to bear, I think it is a real sad 

commentary on how the media has taken issues, especially something that is so important in my own territory. I was interviewed 

by CNN for 15 minutes; and when this video was shown, I was 

given, I think, only 30 seconds of the 15-minute part. And I was 

trying to explain about the situation with the grant programs; and 

this issue, totally taken out of context, in my opinion of how this 

whole thing has come about, and giving a real bad name for the 

Territory. 

And basically what I have said is true with all Territories and 

States: Federal agencies are responsible for each of these grants 

and funding; and they have oversight responsibility, and if something goes wrong, they are then to report it to the FBI and let the 

U.S. Attorney prosecute the people and put them in jail. 

And we have had cases like that in the Territory where people 

who violate the law go to jail. But it is unfortunate that the way 

they come out and say that there is total corruption down there, 

that people are stealing blind. I just really am saddened that this 

is the state of how we—the media in our day have taken issues 

that are so important, and yet twist it, take it out of context and 

put it in such a bad—there is no question it has been an embarrassment to my people. 

And the sad part about it is, there is no way we can return the 

favor by saying, can we have another source that we can explain 

in a better way the accusations that were made. 

I know my time is up, Madam Chair, and I haven’t even had a 

chance to thank and to welcome Mr. Pula, from the Interior Department. And I do look forward to working with him to see how 

30 

we can better strengthen this bill. I am open to any suggestions by 

our processors, as well as in the tuna boat industry. And I will take 

very seriously the suggestions and the concerns that my good 

friend from South Carolina has said. 

Thank you. 

Ms. BORDALLO. I thank the gentleman for his statements. 

And now I would like to turn to the Ranking Member from South 

Carolina, Mr. Brown. 

Mr. BROWN. Thank you, Madam Chair. And I want to let my 

good friend know—I mean, having visited you all and experienced 

the hospitality of your great people, certainly my compassion is for 

you and them as you were inflicted by the tsunami the other day. 

And I am sure some of the same people that we met on our visit 

were impacted by the tsunami. 

Coming from South Carolina, not many years back we were confronted with a similar—not a tsunami, but we were confronted 

with a similar economic situation where we were very heavy in textiles. And we have lost, I guess, 120,000 or more jobs in the textile 

industry, that has now been exported to some of the other countries 

that you are having to compete with today. 

I know we met with some of the cannery people that have actually exited you all; and their wage base—from where the minimum 

wage has taken you, which is something—I don’t know whether 

anybody has addressed that or not. 

Is there anything that can be done to not mandate the minimum 

wage on your people? 

Mr. FALEOMAVAEGA. Will the gentleman yield? 

Mr. BROWN. Yes, sir. 

Mr. FALEOMAVAEGA. I just want to say that the way the whole 

tuna industry has now taken a turn is that rather than having 

U.S. workers clean the fish—90 percent of the value of the tuna 

comes from cleaning and processing the fish in their country. But 

what has happened is that foreign countries now clean the fish at 

60 cents an hour or less. 

So with the higher wages—it is the same way that the textile industry was lost. What has happened is that some of our tuna processors have gone on to these foreign countries to buy loins that 

were produced by workers at 60 to 70 cents an hour, and then 

bring it duty free, and then just hire maybe 200 to 300 people in 

the United States just to can it and then—just sell it then to the 

consumers. 

So the disproportionate pricing because of the labor costs is what 

makes these—Bumble Bee as an example, as well as Chicken of 

the Sea; that is finally what Bumble Bee is going to do. This is the 

only way that they can offset or increase their profit margins is by 

letting these poor countries do the cheap labor and then bring it 

in and then increase it. 

Just like how we produce Nike shoes, 25 or 50 cents an hour in 

Third World countries, and by the time it reaches the U.S. market, 

it is $125 a pair. So this is where we are having the problem right 

now with it. 

Mr. BROWN. Well, I am certainly interested in the dollar. I know 

we try to reach as much, I guess, input as possible so that we can 

make the best solution we can. We even talked about trying to reVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6602 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
31 

tool and try to become, in a manufacturing environment, different 

from the tuna market. And I am not sure exactly how that would 

work, but we are looking to help with the problem. We just don’t 

think that this solution is going to be a long-lasting solution. 

Ms. BORDALLO. I thank the Ranking Member, Mr. Brown, from 

South Carolina. 

Now I would like to recognize the gentlelady from the Virgin Islands, Mrs. Christensen. 

Mrs. CHRISTENSEN. Thank you, Madam Chair. And I am sorry 

that the Governor had to leave. I did convey my sympathy for what 

the people of American Samoa had to go through, in private; but 

on the record I wanted to say to my colleague here that, having 

been there several times, my heart really and our prayers from all 

of my community have gone out to the people of American Samoa. 

And we hope that you have received some of the goods that we 

have sent over there from the Virgin Islands. 

Mr. Pula, welcome back to the Committee. You list two areas 

that—or two reasons why the Administration doesn’t support the 

bill as it is, but is willing to work with the Committee and the Congressman from American Samoa. 

The first one is cost. Just why is it that every time it is a terri- torial issue cost, $25 million, becomes a problem? We have gone 

through this with health care reform and here we are again. 

You have already said in your testimony that cost may be even 

more with the closure to support WIC, Medicaid and all of the 

other—TANF, and all of the other programs that may come into 

play. So that the funding that might be needed in the event the 

cannery closes, the last remaining cannery closes, the cost to the 

Federal Government may be more. 

So isn’t it better to help support the industry and economic development to teach the people to fish rather than give the fish, so 

to speak? 

Mr. PULA. I thank the Congresswoman for the question. 

Yes, it is true. The question on funding, as I stated in our testimony, has to deal with the PAYGO situation here. 

But based on your question about, is it better to teach the people 

to fish, I totally agree. 

Mrs. CHRISTENSEN. And the other one is a WTO issue. 

Somebody in another—on the next panel made a suggestion, if I 

remember correctly, about maybe the excise tax on imported fish 

loins being lower here than other places. 

Are there other proposals being considered, like raising the tax 

on tuna loin, if that is a proper term, imported from outside the 

United States or any other way that you might be able to assist 

the tuna industry in the absence of the outlay of $25 million? 

Mr. FALEOMAVAEGA. Will the gentlelady yield? 

Mrs. CHRISTENSEN. I would be glad to yield. 

Mr. FALEOMAVAEGA. Currently, it is my understanding that on 

oil-packed tuna, imported—coming from foreign countries, we put 

a 25 percent tariff on it. And if it is a water-packed tuna, I believe 

it is 13 to 15 percent tariff that we put on it. And the money goes 

into Uncle Sam’s Treasury, of course. But this is the way the situation is being placed at now. 

Mrs. CHRISTENSEN. OK. Like I said, that answers my question. 

32 

I don’t have any further questions, Madam Chair. I don’t have 

any further questions. 

Ms. BORDALLO. I thank the gentlelady. 

And now I would like to recognize the gentleman from Arizona, 

Mr. Flake, for any questions he may have. 

Mr. FLAKE. Just a brief question. You had mentioned that the 

Administration supports the goal, obviously, of improving the economy of American Samoa, but has some issues with this legislation. 

Can you spell out specifically some of the issues that you have 

with, as you mentioned, implementation of the legislation? 

Mr. PULA. Like, I think, the other departments within the Administration dealing with WTO issues with the USTR, I have concerns about that. And I think it is something that we had mentioned to the Congressman that we would be willing, the Administration, to work with the sponsors of the bill regarding these 

issues. 

Mr. FLAKE. But—that is in relation to other international obligations or agreements that we have, but do you have any specific concerns about the legislation itself or expenditure of these monies? Or 

is that—— 

Mr. PULA. No, not necessarily. It is mostly on that issue and the 

PAYGO issue, looking for funding for that. 

Mr. FLAKE. All right. Thank you. 

Ms. BORDALLO. I thank the gentleman. 

And now I would like to recognize Mr. Sablan, the Representative from CNMI. 

Mr. SABLAN. I don’t have any questions. Thank you. 

Ms. BORDALLO. The gentlelady from California, Mrs. Napolitano. 

Mrs. NAPOLITANO. Thank you, Madam Chair. I wish the Governor would have been able to sit through it a little bit more. 

But, Mr. Pula, there are a lot of questions, and I agree and associate myself with the remarks of my colleagues in regard to the impact it has in our U.S. cannery. I have the only U.S.-owned— 

privately owned cannery in my district, Bumble Bee. 

They produce—I have been there twice. I visit them; I know intimately how they operate and how they affect my local economy. So 

the 200 and almost 300 workers in my area and $200 million worth 

of economy in my area would be gone, essentially they would disappear, because this would give unfair advantage to American 

Samoa. And there has got to be a better way to be able to help, 

be more cognizant of how we can get that economy recovered in 

American Samoa so that we do not affect U.S. jobs. My area pays $13.75 an hour. There is no way you can compete 

with outside interest. 

So it is a subsidy that sounds great, but we would actually be 

targeting one individual company for assistance, and to the detriment of U.S. jobs, the U.S. economy and U.S. sites. 

That would put in jeopardy the possibility opening the Georgia 

site. I have spoken to my colleague Mr. Pierluisi from Puerto Rico, 

and he is adamantly opposed to it. So is the Governor of Puerto 

Rico. 

Again, we need to sit at the table and figure out how best we can 

actually help the area without—to the detriment of U.S. jobs and 

U.S. economy. I am very sympathetic to the plight, and somehow 

33 

we do neglect our brothers and sisters away from this area, and we 

should be more cognizant of how their plight really affects us. 

I understand the Department of Labor is undertaking a study on 

the impact of the minimum wage law on the American Samoa economy, but that won’t be done until sometime in April of 2010. That 

study probably will provide some insight as to what can be done 

to assist or provide some of the answers that might be able to help 

the area. 

But I totally, totally oppose it; and I hope that we are able to 

work together to assist in any other way except taking the bread 

from the mouths of my constituents, very simply. There has got to 

be a better way, and somehow—I am more than happy to sit with 

anybody and try to figure out how do we support recovery in a better way in a way that will help that economy in American Samoa 

without hurting ours in the United States. 

Thank you, Madam Chair. 

Mr. FALEOMAVAEGA. Will the gentlelady yield? 

Mrs. NAPOLITANO. Yes, sir. 

Mr. FALEOMAVAEGA. I just want to say that I share the 

gentlelady’s concerns, and I have no intention whatsoever of trying 

to cause the loss of jobs in your district or our good friend from 

Puerto Rico or others. 

I just wanted to bring up that this is where the tuna industry 

is faced with. And the problem here is that I am in real dire straits 

as far as, if nothing is done, that this is—another area that I wanted to share with my good friend, this is not just to help StarKist. 

The bill is to propose in trying to reestablish—our tuna industry, 

as it has now, realistically, been taken. And basically, if I don’t get 

any assistance—this is just for StarKist or any other tuna cannery 

that may want to show presence—then our economy collapses. That 

is the bottom line. 

And I would like to work with the gentlelady to see how we can 

resolve this. 

Mrs. NAPOLITANO. I would be happy to, and I will reclaim my 

time. 

I am looking at a report that StarKist is owned by Dongwon of 

Korea and Chicken of the Sea, by Thai Union Frozen of Thailand. 

Bumble Bee a private U.S. company. You know where my 

thoughts are. 

Thank you, Madam Chair. 

Ms. BORDALLO. I thank the gentlelady from California. 

And I have one quick question before I release you, Mr. Pula. 

You pointed out that until recently the tuna packing industry was 

responsible for 80 percent of private sector employment and 46 percent of employment as a whole. However, it appears this may not 

be a sustainable employment model. 

What could the Administration and the Congress do, then, to 

help diversify the American Samoa economy? I guess I am kind of 

following up on Congressman Flake’s question. 

Mr. PULA. In the recent past, in particular for American Samoa, 

we funded out of the Department of the Interior an economic commission. And out of that the report produced several options for the 

government of American Samoa. As in any community, diversification of the economy is a good thing, and that is what the DepartVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6602 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
34 

ment of the Interior has been trying to do in working with all our 

territories. In such—and some of you have attended and know that 

we have done business conferences, we try to attract U.S. businesses to go to the U.S. territories. We have done different things 

and provided some technical assistance grants, perhaps smaller 

than the scale we are talking about with the canneries, to try to 

help the different industries like tourism and a variety of things 

that were done. 

It is a challenge, especially for American Samoa in this particular instance because its major private sector is a one-industry 

tuna cannery. But we have been working along with all the U.S. 

Territories in terms of trying to diversify their respective economies. Of course, they all have challenges in locations, distance and 

such, but it is an ongoing, continuing battle to deal with that. 

Ms. BORDALLO. Thank you very much, Mr. Pula. And you can be 

excused now. Thank you very much for your statement and answering our questions here. 

Mr. PULA. Thank you. 

Ms. BORDALLO. And please extend our apologies again to the 

Governor of American Samoa. 

Mr. PULA. Will do so. 

Ms. BORDALLO. And now I would like to call on our second and 

third panels to come up to the table. Would the staff please arrange more chairs? 

We have on this panel Mr. Donald—if you would, sit in according 

to the way I am going to call you—Mr. Donald Binotto, President 

and Chief Executive Officer of StarKist Company; Mr. John Sawyer, Senior Vice President for Sales and Marketing, Chicken of the 

Sea International; and Mr. Chris Lischewski, President and Chief 

Executive Officer of Bumble Bee Foods. 

And following those witnesses we have Mr. Joe Hamby, Managing Director of the Tree Marine Global Tuna Supply; Mr. James 

P. Walsh, Legal Counsel, South Pacific Tuna Corporation; Mr. 

Renato Curto, President of Cape Fisheries; and Ms. Diana 

Furchtgott-Roth, Senior Fellow and Director, Center for Employment Policy, the Hudson Institute. 

Ms. BORDALLO. I want to thank you all for being here today, and 

to remind you again that we are on a tight time frame here. I understand there are going to be further votes on the Floor, so if you 

would keep your statements to 5 minutes or less. 

And we will begin with Mr. Binotto. 

Mr. Binotto, you can begin. 

STATEMENT OF DONALD J. BINOTTO, PRESIDENT AND CEO, 

STARKIST CO. 

Mr. BINOTTO. Thank you. Madam Chair, Ranking Member and 

members of the Subcommittee, thank you for inviting me today to 

testify. My name is Don Binotto, and I began my career in the tuna 

industry with StarKist more than 20 years ago. I am proud to be 

their President and CEO today. 

As you know, American Samoa was recently struck by a tsunami, 

and I witnessed this devastation 1 week later; and the impact on 

our employees, their families and the community was immense. 

Words cannot describe what will happen if we are forced to leave 

35 

and the impact it will have on the already fragile economy, yet that 

is why we are here today. American Samoa faces the imminent loss 

of its tuna industry which employs 80 percent of all private sector 

employment. 

A little bit about StarKist Seafood. We are a U.S. Corporation, 

we are headquartered in Pittsburgh, Pennsylvania; and we have 

more than 1,800 U.S. employees and we pay U.S. taxes. StarKist 

is also a U.S. subsidy of the Dongwon Group, headquartered in 

Seoul, South Korea. 

I am here today, fighting to save the jobs of our American Samoa 

workers and the very economic foundation of this U.S. territory. I 

am asking the Committee to quickly pass this critical economic stabilization proposal. You will hear testimony from our competitors 

about the threat ASPIRE supposedly poses to the U.S. tuna industry. They will tell you it favors one company at the expense of another. But I caution you to listen very carefully, because when you 

strip away the rhetoric, the reality is, this proposal is about two 

starkly different ways of doing business. 

The difference is quite simple. They use a business model that 

outsources the most labor-intensive jobs to foreign countries which 

pay as little as 60 cents per hour. 

My company is resisting that business model, but we need your 

help. My competitors also want all the privileges of a U.S.-flag tuna 

fleet, so that they can utilize our fishing license and prime fishing 

grounds only to exploit these resources to benefit foreign economies. 

ASPIRE seeks to change that behavior so that the benefit of 

these U.S. resources return back to the U.S. workers and territories. 

StarKist operates a full-scale tuna cannery that begins with the 

whole tuna fish. It is known as the round fish. This fish is cleaned; 

it is then cooked and then it is packed into a can or a pouch. This 

cleaning and preparation process accounts for 80 percent of the 

total labor process. 

In contrast, our competitors outsource this labor-intense aspect, 

the cleaning and preparing of the tuna itself, to low-wage countries. Having outsourced most of the jobs, they then import frozen 

tuna loins into the U.S. where they operate small loineries that use 

minimal U.S. employment to pack the final product for destination. 

They are proud to admit that they have stripped nearly all the 

labor cost from their products. 

I have been asked a dozen times, why doesn’t StarKist just do 

the same. The answer is really simple. It is about preservation of 

jobs. If we were to outsource these jobs, it would leave this important U.S. Territory with a wrecked economy; it will have greater 

than 50 percent unemployment and virtually no hope to attract a 

replacement industry. 

Equally problematic for American Samoa is the fact that the majority of U.S.-flag vessels now deliver to the nearest transshipment 

carrier bound for foreign countries. Today, direct deliveries to 

American Samoa are less than one-third of what they were just 15 

years ago. 

Direct delivery, they create jobs. When a boat delivers fish directly, they refuel, they buy nets, they buy fuel, they buy food and 

36 

they spend hundreds of thousands of dollars per trip. The decline 

in direct deliveries creates a downward drag on the economy. 

If American Samoa loses both tuna processors, the industry will be reduced from having contributed $80 million in wages from 

5,000 jobs to contributing almost nothing. The only resource to 

make up for this shortfall would be direct assistance from the U.S. 

Government. 

In my view, it would be more prudent to make a modest investment to create real jobs than face sending mere subsistence checks 

to a territory that has lost nearly all employment. 

ASPIRE seeks to level the competitive playing field against 

outsourced, low-wage labor. It doesn’t pick any winner or loser, and 

it is not really singling out StarKist, but it does help anyone wanting to create employment in American Samoa by providing a grant 

for processing whole fish directly delivered by a U.S. fleet. This encourages processors to remain and employment to return, thus establishing what we would see as a viable, long-term economic stimulus and improved tax base. 

ASPIRE encourages boat owners to make direct deliveries and it 

is also creating disincentives for transshipping, a practice that results in vessels spending more than 80 percent more time fishing. 

It is also fully consistent with U.S. Policy directed at improving 

fishery sustainability. Quite plainly, more direct delivery means 

fewer fish that will be caught. 

In summary, StarKist supports ASPIRE. We believe it gives 

Samoa, American Samoa, its last if not its best chance at survival; 

and we urge you to support ASPIRE as well. 

Ms. BORDALLO. I thank the gentleman, Mr. Binotto. 

[The prepared statement of Mr. Binotto follows:] 

Statement of Donald J. Binotto, President and Chief Executive Officer, 

StarKist Co. 

On behalf of the StarKist Company, I want to thank Chairwoman Bordallo, Ranking Member Brown, and the Members of the Subcommittee for inviting me to discuss the importance of the American Samoa Protection of Industry, Resources, and 

Employment (‘‘ASPIRE’’) Act to our company and its employees in American Samoa. 

I also want to thank Representative Eni Faleomavaega for his dedication to American Samoa and his leadership in introducing this important economic stabilization 

proposal. 

My name is Don Binotto, and I began my career in the tuna industry with 

StarKist more than twenty years ago as a member of the Company’s finance department. Since then, I’ve worked in operations, marketing and sales for StarKist, and 

am proud to now lead a team of several thousand dedicated U.S. employees as 

President and CEO. 

As you know, American Samoa was recently struck by an earthquake and subsequent tsunami, which devastated the island. I know and can speak to that devastation first hand because I traveled there less than a week later to offer StarKist’s 

support and to assess the damage to our own facilities. The impact on our employees, their families and communities was immense; I saw first hand the lives and 

homes lost to this catastrophe. I will be forever moved by the plea of one of our 

workers asking to borrow money to bury her young children. But however destructive the tsunami was, this natural disaster is going to be quickly matched by a rapidly moving economic disaster that is already developing. 

It is not hyperbole to say that when Chicken of the Sea closed its factory doors 

and took 2,000 jobs away on September 30th, leaving my company as the only remaining large employer in American Samoa, it was the economic equivalent of the 

earthquake that gave rise to the tsunami. And now, if we were to have to close our 

doors, it would be like another wave washing across the island to complete the economic devastation. Over eighty percent of the private employment would be wiped 

away, with no apparent replacement anywhere on the horizon. 

37 

American Samoa faces the imminent loss of what remains of its tuna industry— 

the island’s economic engine—due to massive competition from low-wage countries 

and diminished incentives for fishing vessels to deliver whole fish to American 

Samoa. I believe ASPIRE’s economic development framework will provide the modest assistance to the Territory that is necessary to address these issues. And I believe ASPIRE has the clear and achievable goal of once again making American 

Samoa globally competitive. StarKist, therefore, wholeheartedly supports Congressman Faleomavaega’s efforts to preserve a viable private sector economy in American 

Samoa. 

About StarKist 

StarKist is a leading manufacturer, distributor, and marketer of shelf-stable seafood products in the United States, best known for our tuna products and our beloved icon Charlie the Tuna. We are a U.S. corporation headquartered in Pittsburgh, 

Pennsylvania, we have more than 1,800 employees in the United States, and we pay 

U.S. taxes. StarKist is also a subsidiary of the Dongwon Group, a leader in the food, 

beverage and fisheries industries in South Korea. Our plant in Pago Pago, American 

Samoa is our largest processing facility. 

Our biggest challenge to remaining in American Samoa is a supply chain profile 

that is no longer competitive on a global basis. Consequently, we continue to lose 

market share to low-cost, foreign-manufactured products that come in the form of 

private label tuna on U.S. store shelves. ‘‘Private labels’’ are the store-brand products you see at your grocery chains. In shelf-stable tuna, private label has grown 

more than any other brand over the past three years, and private label is the only 

brand with positive sales during that period. Private label’s share in one of our core 

category segments (chunk light halves) is up 57 percent to date versus 2004. Private 

label competes mostly on one metric: price. 

StarKist in American Samoa 

Our company’s long history in American Samoa provides some insight into why 

the island and its people are important to us, and why we are working hard to stay. 

Tuna canneries first arrived in American Samoa in the early 1950s. StarKist’s facility was built in the early 1960s, and we have been there ever since. It was American 

Samoa’s prime location in the heart of the most prolific fishing ground in the world 

that drew processors to the island initially. The advantages that come with being 

a U.S. territory also drew processors; specifically, the ability to send finished tuna 

product to the mainland U.S. duty-free. Because of these and other factors such as 

wages, American Samoa offered a favorable cost structure for many years. 

It was in this environment that the tuna industry thrived, growing to be the island’s largest source of private sector employment by far. Until the closure of the 

Chicken of the Sea facility September 30th, tuna processing accounted for 80 percent of American Samoa’s private sector employment. It is also important to note 

that most of the other private sector employers in American Samoa are dependent 

on the tuna industry, as their businesses consist of providing goods and services to 

us, the fishing vessels that come into port to supply us, and to our employees. 

StarKist alone employed 40 percent of the island’s private sector workers. StarKist 

has employed generation after generation of American Samoans, and we value the 

dedication the island’s people have demonstrated to StarKist for decades. We recognize that our success has in many ways been due to their hard work and commitment. 

While these factors have historically combined to attract whole-fish processors to 

American Samoa, in today’s global economy, the fierce foreign competition faced by 

U.S.-based processors means that mere proximity to fish and a favorable trade status are no longer enough to make American Samoa competitive. 

Changes in the Tuna Processing Business 

Two Different Business Models 

The increasingly global nature of the tuna business has enabled the industry to 

shift operations from one location to another, allowing producers to adjust more easily to supply and demand and the changes in input costs and prices. An example 

of this dynamic is the shift made by my competitors to outsource the most labor 

intensive aspects of tuna processing to low-wage countries, and then make final 

product and packaging from imported frozen tuna loins. The loin is the light, meaty, 

edible part of tuna. 

In a full scale tuna cannery, such as the cannery we (and until recently, Chicken 

of the Sea) operate in American Samoa, the manufacturing process starts with a 

whole fish—known as a ‘‘round’’ fish—and ends with a consumer-ready product in 

a can. Upon delivery to our dock, the whole fish is cleaned, cooked, combined with 

38 

other ingredients and packaged into cans by our American Samoan workforce. We 

then ship those cans directly to the U.S. mainland and distribute throughout the 

country for sale. 

In contrast, the alternate business model adopted by my competitors is the use 

of outsourced foreign labor for nearly all of the tuna preparation and then a small 

domestic loinery for final product packaging. In their business model, they have 

outsourced the most labor intensive aspect of tuna processing to extremely low wage 

countries. In these mostly South Asian factories, workers making as little as sixty 

cents per hour clean, prepare, and cook the whole tuna fish and transform it into 

a tuna loin. That loin is then frozen and exported to the Unites States nearly duty 

free. Having removed nearly 80 percent of the labor expense, my competitors then 

take the frozen loin and use minimal U.S. employment to place the product into 

cans for consumers. To illustrate the impact, Chicken of the Sea was able to replace 

its 2,000 person workforce in American Samoa with fewer than 300 workers in 

Georgia. 

As you can see, two different business models have emerged in the tuna industry. 

One model involves outsourcing the bulk of the labor-intensive work to low-wage 

countries, using as little U.S. labor as possible to create the finished product and 

avoid import duties. The other model—the model we are trying to preserve in American Samoa—uses more U.S. labor to manufacture a can of tuna. The owners of 

loineries in the United States have already maximized their competitive advantage 

by using an outsourced labor approach. 

I have frequently been asked why StarKist simply does not do the same thing its 

competitors have done. The answer is simple—jobs. We prefer to not cut our personnel to the minimal number needed for processing frozen tuna loins, leaving the 

American Samoan people with two or three thousand fewer jobs than currently are 

available to them today. The citizens of American Samoa have been committed to 

us for more than fifty years, and we owe it to them not to give up on the island 

without working to preserve these jobs. In order to do this, however, we need a 

mechanism, such as has been outlined in ASPIRE, to level the competitive playing 

field between American Samoa and the lower-wage frozen loin processing model 

that has already taken so many jobs away. 

Imbalances Created by Transshipping Tuna to Foreign Ports 

At the same time, the economics of the tuna fishing industry have evolved such 

that fishing vessels are finding that it benefits them to deliver their catch to huge, 

centralized transshipment carriers rather than come to port in Pago Pago and deliver the fish to a cannery there. By transshipping, the vessel spends less time at 

a port, more time out fishing, and is able to catch more fish. The unfortunate culmination of all of these changes is that boats do not have to come into American 

Samoa as often, or at all. Today, our direct deliveries of fish from U.S.-flagged vessels are less than one-third of what they were fifteen years ago. The decline in direct deliveries of course creates a ripple effect on American Samoa’s economy, since 

it depends on fishing vessels to generate much of its economic activity. 

Transshipping also creates a more fundamental imbalance. Fishing vessels that 

enjoy the advantages of flying a U.S. flag, and have access to waters secured by a 

U.S. treaty, send their catch to foreign countries, whose ports and labor force reap 

the benefits. In this scenario, the United States is not receiving the maximum benefit of its resources, especially when it comes to jobs. We believe it is more fair that 

the U.S. resources in American Samoa be directed toward a program that will result 

in maximum number of jobs and the strongest overall economic stimulus. 

A Perfect Storm Affecting American Samoa’s Tuna Industry 

In light of the tsunami that struck American Samoa last month, to say that a 

‘‘perfect storm’’ is affecting American Samoa is an unfortunate metaphor. Yet it 

aptly describes what has happened to the tuna industry on the island: 

• First, because there is very little elasticity in what consumers will pay for 

canned tuna, processors confronted with comparatively high manufacturing 

costs in American Samoa are extremely limited in how much they can charge 

for their product. In contrast, our competitors who have adopted outsourcing as 

a business model simply lower their shelf price below our cost, making it very 

difficult for us to compete. In fact, it now costs us over $23 million more, after 

duties, to manufacture in American Samoa than if we were to adopt the same 

business model as our competitors. 

• Second, the duty advantages that American Samoa historically enjoyed are 

gone. They have been more than offset by globalization and open trade policies. 

As markets continue to open, it has become easier for domestic processors to 

39 

outsource labor-intensive work away from places like American Samoa and into 

low-wage countries such as Thailand. 

• Third, the current trend in the tuna fishing industry is to have vessels transship their catch via carriers rather than coming into port to directly deliver it, 

stunting tuna production on the island and igniting a downward economic cycle 

among supporting businesses, which then makes it even less attractive for boats 

to come to port. 

These factors have combined to create an environment where it is too cost-prohibitive for processors of whole fish to operate in American Samoa without assistance, 

and where the boat owners are losing any incentives to deliver whole fish to the 

island. We have already seen Chicken of the Sea leave American Samoa. Under 

these conditions, it should come as no surprise that StarKist’s operation in American Samoa is not viable, and that we have been forced to lay off nearly 1,000 workers in the last 18 months. 

We continue to do everything in our power to make the economics work in American Samoa. If StarKist is forced to leave, there will be almost no private sector jobs 

left on the island. The tuna industry has already gone from employing almost 5,000 

people in 2004 down to fewer than 1,700 today—more than 3,000 jobs lost. 

With the loss of both processors and the boats that supplied us, American Samoa’s 

tuna industry will be reduced from having contributed $80 million of the Territory’s 

annual labor income, as the Department of Labor recently reported, to contributing 

almost nothing. The only resource that will remain to make up this $80 million 

shortfall will be direct assistance from the U.S. government. And American Samoa 

must now add the daunting task of dealing with the devastation from the tsunami 

to the list of tremendous challenges ahead. 

How ASPIRE Addresses the Challenges We Face in American Samoa’s Tuna 

Industry 

ASPIRE’s economic development framework will provide assistance to American 

Samoa’s tuna industry to counteract the biggest challenges to the industry’s existence—an uncompetitive cost structure and diminished incentives for fishing vessels 

to deliver whole fish to American Samoa. 

Since American Samoa-based processors can no longer compete against those that 

are able to pay their workers substantially less for the most labor intensive phase 

of tuna processing, ASPIRE seeks to level this competitive playing field. ASPIRE 

would help us improve our cost structure by providing a grant for processing whole 

fish in American Samoa. It should be noted that the grant is specifically limited to 

processing whole fish rather than frozen tuna loins. This will ensure that the grant 

goes only to entities that carry out their most labor-intensive work, hence creating 

the greatest number of jobs, in American Samoa. 

By providing some minimal income replacement grants for vessels willing to directly deliver to American Samoa rather than make more lucrative transshipment 

deliveries, ASPIRE also incentivizes a fishing practice that is more sustainable, 

while providing a huge economic boost to American Samoa as well. Each vessel delivering directly to American Samoa provides several hundred thousand dollars’ 

worth of direct economic activity, setting off an important economic multiplier effect 

for related businesses. 

We believe that with these incentives, and continued hard work on the part of 

our management and employees, we can help make the whole-fish processing business in American Samoa globally competitive once again, and re-establish American 

Samoa as a hub for the tuna industry. 

Conclusion 

Starkist supports ASPIRE because we believe it gives American Samoa’s fifty year 

‘‘whole tuna’’ processing business a chance at survival. It benefits the entire island 

by creating jobs and a viable tax base. American Samoa has already experienced 

one natural disaster. And it is on the brink of suffering a complete economic disaster 

with the loss of the tuna processing industry. Therefore, we urge you to support ASPIRE as well. 

Ms. BORDALLO. And now I would like to recognize Mr. John 

Sawyer, Senior Vice President of Chicken of the Sea International. 

40 

STATEMENT OF JOHN SAWYER, SENIOR VICE PRESIDENT, 

SALES AND MARKETING, CHICKEN OF THE SEA 

INTERNATIONAL 

Mr. SAWYER. Good afternoon, Chairwoman Bordallo, Ranking 

Member Brown and members of the Subcommittee. My name is 

John Sawyer. I head up the Sales and Marketing Department for 

Chicken of the Sea. 

I appreciate the opportunity to testify on H.R. 3583; but because 

H.R. 3583 is harmful to the tuna industry and, specifically, Chicken of the Sea, we oppose this legislation. 

Chicken of the Sea dates back to 1914. Chicken of the Sea 

brand—— 

Ms. BORDALLO. Would you move a little closer to the microphone, 

Mr. Sawyer? 

Thank you. 

Mr. SAWYER. Chicken of the Sea dates back to 1914, and the 

brand has been worldwide known since 1952. We provide a variety 

of seafood products—canned, pouched, frozen, as well as refrigerated. 

Chicken of the Sea recently closed a plant in American Samoa 

after 55 years of operation. We had a tremendous relationship with 

the island, its community, as well as our workforce. We struggled 

to be profitable, fueled by increased transportation cost, utility and 

injury cost, as well as increased labor cost as of recent years. We 

have made numerous attempts on numerous occasions to work with 

the Samoan government, as well as the U.S. Government, unsuccessfully coming up with a resolution. Thus, we were forced to 

move from Samoa to Lyons, Georgia. 

We are excited about repatriating jobs in Lyons, Georgia. The 

Lyons plant is in Congressman John Barrow’s district. It employs 

just over 200 employees with future plans to expand. 

We support efforts related to American Samoa and economic development; however, we believe diversifying the economy is critical 

versus subsidizing one profitable tuna category leader. 

H.R. 3583 subsidizes sellers and buyers delivering tuna to 

Samoa; and its intentions are to stabilize employment and promote 

economic development. We understand that. But the bill does not 

consider international competition related to the industry. 

The bill has a number of objectionable outcomes. First of all, minimally, it would cost the taxpayers approximately $25 million 

and north. This would subsidize, at this point in time, one company, which happens to be the number one tuna branded company. 

This $25 million could either be applied to the bottom line or essentially put into the marketplace as a competitive disadvantage 

versus the remaining part of the industry. 

In addition, the tuna fleet potentially will be impacted—U.S.- 

flagged fleet—through incremental fees, inconvenience costs, 

penalties—which would really encourage the relocation of the fleets 

to other parts of the world. In addition, the Hawaiian longliners 

could also be impacted through expensive $250,000 fees, face taxes 

on their earnings and, thus, could potentially put boat owners out 

of business. 

And last, we believe that this bill puts Chicken of the Sea at a 

complete competitive disadvantage. 

41 

We have invested a lot of capital in Lyons, Georgia. We are 

proud of repatriating positions here on mainland USA. It puts at 

risk our further investment in those positions moving forward. It 

subsidizes the number one brand. And it puts us at a competitive 

disadvantage related to pricing, which essentially could mean 

Chicken of the Sea downsizing or, essentially, brand elimination 

within the marketplace in years to come. 

So we encourage the Subcommittee to explore more efficient 

ways to help American Samoa and the economy. We are empathetic 

related to the situation. And we are willing to help in that endeavor. 

Thank you very much for allowing me to share my views. 

Ms. BORDALLO. I thank you very much, Mr. Sawyer. 

[The prepared statement of Mr. Sawyer follows:] 

Statement of John Sawyer, Senior Vice President, Sales and Marketing, 

Chicken of the Sea, International 

Chairwoman Bordallo, Ranking Member Brown, and members of the Subcommittee, my name is John Sawyer, Senior Vice President for Sales and Marketing 

at Chicken of the Sea, International. I appreciate the opportunity to testify on behalf of Chicken of the Sea on H.R. 3583, the American Samoa Protection of Industry, Resources and Employment Act. Because of H.R. 3583’s harmful impacts to the 

tuna industry in general, and to Chicken of the Sea specifically, Chicken of the Sea 

opposes this legislation. 

Introduction 

Chicken of the Sea’s history dates back nearly a century, when fishermen referred 

to the white albacore tuna as ‘‘Chicken of the Sea’’ because of its white color and 

mild flavor. Since 1952, the Chicken of the Sea brand and iconic Mermaid logo have 

been known worldwide. With more than 90 years of experience in the self-stable 

seafood business, Chicken of the Sea provides consumers a variety of canned, 

pouched, frozen, and refrigerated seafood products. 

We are headquartered in San Diego, California and have a processing facility in 

Lyons, Georgia where we employ more than 200 people. We opened our processing 

facility in Lyons, Georgia in Congressman John Barrows’ District within the last 6 

months. It employs more than 200 people and has sufficient space for expansion in 

the future. This is an exciting trend for us, as we have been successful in repatriating to the mainland United States some of the many jobs that have moved offshore. 

After 55 years of operation in American Samoa, Chicken of the Sea closed its tuna 

processing facility in September of this year. We enjoyed a tremendous relationship 

with the island, community and our workforce, as demonstrated recently with our 

donation of more than $200,000 of food, labor and medical supplies to the island 

community in the aftermath of the tragic earthquake and tsunami. Despite being 

a part of this close knit community, we struggled to remain profitable, due to the 

high costs of operating there, including increasing transportation, packaging, utilities and specifically labor costs in recent years. Although we have attempted on numerous occasions to work with the government of American Samoa as well as the 

U.S. Federal Government to address these issues, we ultimately were unsuccessful. 

Consequently, we had no choice but to close the facility and relocate. 

We are very supportive of efforts to enhance economic development in American 

Samoa and provide answers to the economic and employment challenges there. 

However, we urge caution in trying to simply subsidize our way out of the problem 

instead of diversifying the economy of the island for a successful future. This is especially true when the one processing company that would benefit from this subsidy 

has stated that it will not stay in Samoa if ASPIRE does not pass. Creating a monopoly by legislation is a dangerous precedent which is made even more onerous if 

it is done under a threat. 

H.R. 3583 

H.R. 3583 creates a subsidy to sellers and buyers of fish that deliver directly to 

American Samoa, with the intention of stabilizing employment and promote economic development, including ‘‘incentives for the continued operation and development of American Samoa’s tuna processing industry.’’ Unfortunately, the legislation, 

42 

which completely ignores the international competitiveness of the tuna industry, has 

several objectionable outcomes. 

With a minimum cost to the Untied States taxpayers of approximately $25 million 

annually, H.R. 3583 virtually ensures that the one remaining tuna processing plant 

operating in American Samoa remains profitable by providing its owner with financial hand-outs, thereby affording that company an unfair market advantage. This 

bill appears to be tailored to ensure the success of the leading tuna brand in the 

U.S. This legislatively imposed windfall discourages competition and encourages 

waste, with limited benefit to the American Samoan workforce and economy. Nearly 

80 percent of those working in the tuna canning industry are Western Samoans 

temporarily residing in American Samoa. Furthermore, the needs of American 

Samoa are to diversify, which is distorted by putting all the subsidy dollars in one 

company in only one industry. 

The U.S. tuna fleet will also suffer under the bill. Tuna boats could be compelled 

to relocate to other areas as boat owners are forced to abandon the U.S. flag due 

to the fees that the legislation will impose. In addition, a limited number of U.S. 

flagged tuna boats are able to deliver their catch to American Samoa. Thus, in addition to significant financial penalties, boat owners will also be subjected to severe 

inconvenience and additional costs as they attempt to comply with the terms of the 

legislation by delivering their catch to the one cannery operating in American 

Samoa. 

Moreover, American Samoa’s only cannery does not have the capacity to handle 

the amount of tuna delivered, should processors and fishermen make deliveries 

there as encouraged under the bill. Finally, Hawaiian long-line fishing could be 

harmed due to the requirement to deliver fish to American Samoa, or face taxes on 

their catch and $250,000 annual fees, which would put many if not most of these 

owners out of business. H.R. 3583 also puts at a competitive disadvantage Chicken 

of the Sea’s newly-opened facility in Lyons, Georgia affecting the livelihood of its 

200 employees and discouraging further expansion there. The bill subsidizes the 

number one tuna brand, giving it a monopolistic position on tuna supply in addition 

to the already strong competitive advantage in the marketplace. The bill in turn will 

severely punish Chicken of the Sea, which left American Samoa for legitimate business reasons, and has made a significant investment in developing a facility in 

Georgia, bringing jobs back to the U.S. mainland. 

The competitive advantage provided by H.R. 3583 to the one remaining American 

Samoa-based tuna processor could force competitors both Chicken of the Sea and 

Bumble Bee to downsize or even close domestic U.S. operations, with no guarantee 

of either increasing jobs of the economic welfare of the island. We encourage the 

Subcommittee to explore more effective ways to help the economy of American 

Samoa without harming the other participants in the U.S. tuna processing and fishing sector. We stand ready to assist with that effort. 

Thank you for the opportunity to share Chicken of the Sea’s views on H.R. 3583. 

Ms. BORDALLO. And now I would like to recognize Mr. Chris 

Lischewski, the CEO of Bumble Bee Foods. 

STATEMENT OF CHRIS LISCHEWSKI, PRESIDENT AND CEO, 

BUMBLE BEE FOODS, LLC 

Mr. LISCHEWSKI. Thank you, Chairman Bordallo, Ranking Member Brown and Committee members. 

My name is Christopher Lischewski. I am the President and 

CEO of Bumble Bee Foods. I have held this position for 10 years, 

and I have held senior positions in the tuna industry for more than 

20 years. 

Before I start my testimony, I would like to clarify a few statements made by the Congressman for the record: 

One, I have a minority ownership stake in Bumble Bee, not a 

majority ownership stake. 

Two, I have absolutely no ownership stake, management role or 

any other stake in SPTC, which will be testifying on its own behalf. 

I do own a minority 5 percent stake in 12 American vessels manVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
43 

aged by SPTC, but is purely a passive interest for which I receive 

financial statements and have no other operating interest. 

Going forward, Bumble Bee is the last significant tuna processor 

that is U.S.-owned. Over the last 10 years, we have grown to be 

the largest branded seafood company in North America. In addition 

to the tuna, we offer a full line of canned salmon, sardines, clams 

and specialty seafood products. We are committed to U.S. operations and employ more than 1,000 workers in the seafood processing facilities in California, Louisiana, Maine, New Jersey, Puerto Rico and Washington. 

Like StarKist in American Samoa, we operate in an extremely 

competitive global marketplace with major competitors in Southeast Asia. We respond to that by driving higher production efficiencies in our factories, introducing new technologies and continually innovating our processes. 

We do not come to Congress to ask for handouts and are surprised that ASPIRE, which is asking U.S. taxpayers to subsidize a 

foreign-owned company that employs predominantly non-Americans is even being considered by this Subcommittee. 

H.R. 3583 creates a new fishery subsidy program that generally 

benefits StarKist. As the last remaining tuna processor in American Samoa, StarKist has forced the introduction of ASPIRE with 

a threat to shut down their operation and move to Thailand if they 

don’t receive substantial taxpayer-funded subsidies. 

H.R. 3583 is built upon the false premise that the only solution 

for retaining a tuna processing sector in American Samoa is for 

U.S. taxpayers to subsidize an inefficient processing operation. This 

operation with a workforce that is more than 80 percent foreign 

has refused to adapt to changing global economic conditions, which 

companies like Bumble Bee have done successfully. This is in spite 

of the fact that they already benefit from a minimum wage 31 percent below the Federal level, obtain preferential fish costs, are eligible for duty-free importation into the U.S. and obtain substantial 

Federal tax benefits. 

The unfair competitive advantage that would be provided to 

StarKist under ASPIRE would force Bumble Bee to downsize or 

even close our domestic U.S. processing operations. More than 

1,000 U.S. processing jobs would be lost, along with an equal number of jobs in related support industries. As a U.S.-owned and -operated company, we simply cannot compete against this type of preferential treatment. 

Passage of H.R. 3583 would also have damaging international 

trade ramifications. The direct payment of incentives by the United 

States to process tuna in American Samoa would be viewed as a 

specific subsidy, actionable under the WTO. This would invite the 

imposition of countervailing import duties on all U.S. tuna exports. 

Another major concern is that none of the monies being questioned by ASPIRE are targeted for the people of American Samoa 

or the other private sector businesses. Furthermore, none of the 

funds are to be utilized to improve education or development of the 

American Samoa economy. Rather than expend its efforts to justify 

taxpayer subsidizes in support of a company that has a history of 

threatening to leave, I might recommend that American Samoa examine how it can more effectively utilize the direct grants it alVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6602 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
44 

ready receives from the U.S. Federal Government to improve its 

local economic situation. CNN has recently reported that American 

Samoa has received more than $2 billion in direct Federal grants 

since 1995. This level of funding that American Samoa already receives should provide adequate resources to help attract and develop new, sustainable businesses. 

In closing, it is our expectation that ASPIRE will not receive support from the Subcommittee for the following reasons: 

The bill only benefits one company in American Samoa with less 

than 20 percent of its employees actually being from American 

Samoa; 

It includes a $25 million to $40 million escalating price tag to 

U.S. taxpayers without a commensurate revenue-generating offset. 

Importantly, it should be noted that if the massive benefits provided under ASPIRE drive more tuna production in American 

Samoa, as will be suggested in the public testimony of what are the 

upcoming panel members, the price tag to U.S. taxpayers could 

quickly spiral to greater than $100 million; 

Third, there are no incentives to develop new industry or jobs 

that can support the future economic independence of American 

Samoa; and 

The bill potentially destroys domestic tuna processing operations 

in California, Puerto Rico and Georgia. 

Based on my experience, I know that American Samoa can be a 

competitive player in the global tuna industry, but it must be prepared to change. Creating a new taxpayer-funded subsidy program 

to maintain obsolete and uncompetitive processing practices is not 

the answer. 

Thank you. 

Ms. BORDALLO. I thank the gentleman for his testimony. 

[The prepared statement of Mr. Lischewski follows:] 

Statement of Christopher D. Lischewski, President and 

Chief Executive Officer, Bumble Bee Foods, LLC 

Chairwoman Bordallo, Ranking Member Brown and Committee Members, my 

name is Christopher Lischewski and I am the President and CEO of Bumble Bee 

Foods, LLC. I have been in my current position for 10 years and have held senior 

management positions in the tuna industry for more than 20 years. 

Bumble Bee Foods, an American owned company, is North America’s largest 

branded shelf-stable seafood company offering a full line of canned and pouched 

tuna, salmon, sardine, clam and specialty seafood products. In the U.S. our products 

are marketed under leading brands including Bumble Bee®, Brunswick®, Beach 

Cliff® and Snow’s® and in Canada under Clover Leaf®. Bumble Bee Foods has invested heavily in fishery production facilities and employs more than 1,000 workers 

in the U.S. and 3,000 globally. In the U.S. we currently own and operate: 

• Two of the last three U.S. canned tuna production facilities in Santa Fe 

Springs, California and Mayaguez, Puerto Rico, 

• One of the last two U.S. canned clam facilities located in Cape May, New Jersey, 

• The last U.S. canned sardine production facility located in Prospect Harbor, 

Maine 

• A research and development facility in Violet, Louisiana, formerly the last 

shrimp canning factory in the U.S., which was rebuilt after hurricane Katrina 

without any federal or state aid and, 

• A salmon labeling operation in Kent, Washington. 

We have continuously shown a commitment to maintaining our U.S. facilities and 

U.S. jobs in the face of extremely competitive, low cost, foreign competition. And we 

are succeeding. 

45 

Relevant to today’s hearing is that Bumble Bee, with its headquarters and operations center located in San Diego, California, is America’s last significant U.S. 

owned shelf stable tuna company. Despite our North American leadership position, 

we work continuously to drive higher production efficiencies and lower operating 

costs in an effort to remain profitable in an intensely competitive global environment. 

I would like to thank you for the opportunity to address our concerns with and 

opposition to H.R. 3583, the American Samoa Protection of Industry, Resources and 

Employment Act. Because others on the panel will discuss the concerns of U.S. tuna 

boat owners, my comments will be limited to the likely destructive impacts of the 

legislation on the U.S. tuna processing industry, and specifically on Bumble Bee. 

H.R. 3583 creates a new fisheries subsidy program for the benefit of only one 

tuna processing company, Korean-owned StarKist, which is the last company operating a tuna processing facility in American Samoa. The bill, with a minimum annual cost of $25 million—and potential cost of more than $40 million—to U.S. taxpayers, is ostensibly designed to offset the increased cost of labor at StarKist’s tuna 

processing factory due to the recent application of the U.S. minimum wage law to 

American Samoa and make the company competitive with Southeast Asian tuna 

processors. In reality, the bill represents a last ditch effort to continue an uncompetitive way of doing business while ignoring the international competitiveness of 

the global tuna industry. Furthermore, the $25 to $40 million price tag is based on 

a benchmarking ‘‘study’’ prepared by StarKist comparing its cost of doing business 

in American Samoa with the alternative of shutting down and moving its production 

to Thailand. No one with knowledge of the tuna industry (outside of StarKist and 

its Korean parent company) has seen or vetted this purported ‘‘study’’ other than 

the Congressman from American Samoa. As someone who has been in the tuna industry for more than 20 years, I find these numbers to be highly suspect. While it can be argued that increasing the minimum wage from $3.50 an hour in 2006 to $5.00 an hour in 2008 is significant, the reality is that the minimum 

wage in American Samoa remains 31% below the federal minimum wage level of 

$7.25 an hour. The current minimum wage in American Samoa compares to average 

hourly wage rates of $13.75 an hour and $7.75 an hour being paid by Bumble Bee 

to its hourly employees at its California and Puerto Rico tuna canning plants, respectively. And we are not asking for a subsidy. 

In evaluating the cost of tuna processing, it becomes clear that wages represent 

a small fraction of the total cost of production. If we dissect the cost of a can of 

lightmeat tuna, about 65% of the cost is represented by fish with another 20% represented by cans and packaging materials. The balance of 15% is made up of overhead costs and labor with labor representing less than 10% of the cost. 

With a work force estimated at about 2,000, we project the total cost impact on 

StarKist related to the wage increase between 2006 and 2009 to have been about 

$5.8 million per year. This represents a total cost increase of about 1.5% relative 

to our estimate of total StarKist production costs in American Samoa of about $400 

million. If we look at this on a cost per can basis, our estimate is that this has impacted their cost by less than 1 penny per can—a can which is currently selling in 

U.S. supermarkets for about $0.90. The actual cost impact of the minimum wage 

increase is far less than the $25 to $40 million subsidy that is being requested and 

is a cost increase that could be offset if the American Samoa-based tuna processor 

were prepared to change its operating methods—like Bumble Bee has done—to become more cost competitive. 

Another issue to be highlighted is that it is estimated that about 80% of the workers at the StarKist tuna processing facility are not citizens of American Samoa. 

Most of the workers come from the neighboring island of Samoa and a substantial 

portion of their wages are sent back home to their families. In effect, much of the 

$25 to $40 million subsidy being requested for American Samoa’s tuna processing 

industry would not benefit American Samoans at all—rather it would benefit inhabitants of the neighboring island of Samoa. 

To appreciate the potential lethal impact of the bill on Bumble Bee’s domestic operations, it is important to understand the global nature of the canned tuna market. 

Canned tuna is a global commodity traded in all the major world markets and the 

industry is extremely competitive. U.S. tuna companies must compete with companies in low-wage countries who benefit from lower production costs as they are not 

required to adhere to the food safety, employee safety, regulatory, environmental 

and conservation measures required of companies operating in the U.S. Some pay 

hourly wages as low as $0.50 an hour. Based on these global competitive realities, 

U.S.-based tuna processors have been forced to adapt the way they do business in 

order to survive and retain U.S. manufacturing jobs, such as we have done in Puerto Rico and California. 

46 

Today, successful U.S. tuna canneries undertake the initial labor intensive cleaning of fish (loining) in areas closer to the fishing grounds and then ship the cleaned 

frozen tuna (loins) back to the U.S. for canning. Canning is the most sensitive step 

in the processing cycle in terms of food safety and quality and retaining this capacity in the U.S. helps to ensure a safe and high quality product. Having our fish 

cleaned and loined outside the U.S. has allowed Bumble Bee to continue to pay excellent wages to our plant workers in the U.S. as demonstrated earlier. While we 

would prefer to undertake all of the fish cleaning and loining in our U.S. facilities, 

it simply isn’t feasible if we are to remain economically competitive with foreign producers. 

H.R. 3583 is built upon the false premise that the only solution for retaining a 

tuna processing sector in American Samoa is for U.S. taxpayers to subsidize a foreign owned private company that continues to utilize inefficient and uncompetitive 

processes. This, in addition to the fact that they already benefit from a minimum 

wage 31% below the federal minimum wage level, obtain preferential fish costs from 

vessels delivering to American Samoa, are eligible for duty-free importation to the 

U.S. and are exempt from many regulatory statutes required of companies operating 

in the U.S. 

Imagine if the federal government adopted the approach of subsidizing uncompetitive businesses across our country. Are we prepared to subsidize every company that 

has a labor disadvantage versus Thailand or China and refuses to modify its business processes? I doubt such proposals would ever be considered by Congress. In today’s global economy, companies must continuously improve their operating efficiencies and cost competitiveness if they are to survive. We cannot expect the U.S. 

tax payer to subsidize our inefficiencies. 

Unfortunately, H.R. 3583 embodies the philosophy that the U.S. taxpayer is expected to bail out inefficient companies by creating a new $25 million fisheries subsidy program that only benefits one private, foreign tuna processor, a processor who 

has shown no willingness to change other than to threaten to leave American 

Samoa if it does not receive at least $25 million in U.S. taxpayer subsides. 

I note that none of the funds authorized by the bill are targeted for the people 

of American Samoa or the other private sector businesses. Furthermore, none of the 

funds are to be utilized to improve education, health care or develop new domestic 

industry. Despite the recent quote by the Congressman from American Samoa 

thanking Chairman Rahall for ‘‘moving quickly to hold a hearing on this important 

piece of legislation, which I introduced to create jobs and rebuild our economy’’, the 

reality is that the requested processor subsidy program is designed to benefit the 

Island’s one remaining, foreign-owned, tuna processor and its factory workforce, 80% 

of who are not citizens of American Samoa. 

Of concern is that the legislation includes no incentives for tuna processing companies on the Island to diversify, change their mode of operation or become competitive. To the contrary, the bill’s processor subsidy is only provided to companies that 

process whole tuna delivered directly to American Samoa. In other words, the bill 

actually prevents innovation by requiring that subsidy recipients continue to operate in a manner proven to be unsuccessful in today’s global economy. What’s equally 

concerning is that the subsidy level is increased annually by an amount equal to 

the percentage increase in the federal minimum wage in Samoa. In sum, the sole 

tuna processor currently operating in American Samoa is guaranteed increased subsidy payments (as the minimum wage increases to U.S. federal minimum wage levels) without having to make any changes to become more efficient or competitive. 

The competitive advantage provided to the American Samoa-based tuna processor 

through this new subsidy program is so great that it could force Bumble Bee, and 

most likely Chicken of the Sea, to downsize or even close our domestic U.S. operations. More than 1,000 U.S. processing jobs in those canneries could be lost, along 

with an equal number of jobs in related support industries—all of whom currently 

adhere to (or exceed) U.S. minimum wage requirements. As a private U.S. company, 

we simply cannot compete against an American Samoa producer who pays no import duties, receives significant federal subsidies and does not absorb the cost of federal minimum wage requirements. 

Passage of H.R. 3583 would also have damaging international trade ramifications. The direct payment of incentives by the United States to process tuna in 

American Samoa would be viewed by our international competitors as a ‘‘specific 

subsidy’’ actionable under the General Agreement on Trade and Tariffs (‘‘GATT’’). 

This would invite the imposition of countervailing duties by our customer countries 

on all U.S. tuna exports (not just those from the subsidized company), because of 

its distortion of international trade. As mentioned previously, tuna is a very competitive international market that is sensitive to any force that distorts the market. 

47 

We risk damaging our entire domestic industry by subsidizing one Korean owned 

company. 

The reality is that for the tuna industry in American Samoa to survive, it must 

adapt its business processes like the rest of the U.S. tuna processing and fishing 

sectors have been forced to do. While this may result in the loss of cannery jobs, 

it won’t necessarily affect American Samoan jobs since about 80% of the tuna industry work force is not from American Samoa. Furthermore, it does not need to result 

in any less production from the canneries (in terms of cases of tuna produced) if 

new operating strategies are adopted. By adapting to changing global business dynamics, the American Samoa tuna industry can regain its competitive cost position 

and can retain high levels of employment. Asking the U.S. taxpayer to provide annual subsidies in excess of $25 million is not the answer. 

A further concern is that none of the monies being requested in this subsidy provide for the long-term growth or development of the American Samoa economy. 

Clearly the location of American Samoa in the south Pacific Ocean makes economic 

development difficult and the long-term ability to remain competitive against low 

cost foreign tuna processors is questionable. Accordingly, support for American 

Samoa should be to improve education and offer incentives for the development of 

new, more sophisticated growth industries that create new jobs and improve the 

quality of life of American Samoans. Guam provides a great example of how an island nation can prosper by working to win government contracts, expand tourism 

and develop local industry. Without a focus on new industry development, American 

Samoa will not have an economy capable of supporting its population a generation 

from now. 

Lastly, I would like to direct a comment to the people of American Samoa. As an 

organization and as part of the global tuna industry, Bumble Bee shares a strong 

affinity and deep concern for the islands and the people of American Samoa in the 

aftermath of the recent tragedy. We operate in many remote global locations and 

can appreciate the great losses suffered by so many and the challenges that they 

will face as they rebuild. As a demonstration of our support for the people of the 

islands, our Company and employees have made a donation of $100,000 in cash and 

food to assist in the rebuilding effort. 

In closing, it is our expectation that ASPIRE will not receive support from this 

sub-committee. The bill: 

• Would only benefit one, foreign owned tuna processor in American Samoa 

• Includes a $25 to $40 million price tag that is not justified nor supported 

• Includes an escalation cause that will allow the subsidy to increase annually 

• Includes no provision for performance improvement by the American Samoa 

tuna processor and actually provides a disincentive for process and cost improvement 

• Provides significant benefits to foreign workers who are not from American 

Samoa 

• Does nothing to improve education or health care and provides no incentive to 

develop new industry or new jobs 

• Potentially destroys domestic tuna processing operations in California, Georgia 

and Puerto Rico 

• Would have damaging international trade ramifications 

• Sets a dangerous precedent that U.S. tax payers should be responsible for bailing out uncompetitive business operators 

Based on my more than 20 years of experience in the tuna industry, I believe 

American Samoa can remain a major player in the global tuna industry so long as 

it is willing to change. Creating a new $25 to $40 million fisheries subsidy program 

for one Korean-owned company in American Samoa to retain non-competitive business practices—to the detriment of all the other U.S. companies involved in the tuna 

business—is not the answer. 

Along with my testimony, I submitted a document to the Subcommittee to provide 

additional information on the background of the tuna industry. It illustrates the 

global reach of the tuna industry and the importance of tuna to the U.S. market. 

Thank you, Madame Chairwoman, for inviting me here today to share my views 

with the Subcommittee. I trust I have demonstrated the detrimental effects 

H.R. 3583 would have on the U.S. tuna processing industry and why Members of 

this Subcommittee should not support it. Rather we encourage you to seek more effective ways to support and diversify the economy of American Samoa and I would 

be pleased to assist you in that endeavor. 

48 

Ms. BORDALLO. And now I would like to call on Mr. Joe Hamby, 

Managing Director of the Tri Marine Global Tuna Supply Company. 

STATEMENT OF JOE HAMBY, MANAGING DIRECTOR, 

TRI MARINE GLOBAL TUNA SUPPLY 

Mr. HAMBY. Good afternoon. Thank you, Madam Chair, Chairperson, Ranking Member, and members of the Committee. Thank 

you for inviting me to testify today. 

This legislation provides an excellent opportunity for Congress to 

define public policy regarding the U.S. tuna industry and, should 

Congress choose to support it, to save American Samoa’s privatesector economy, as well as to increase the relevance of the United 

States in the global tuna industry, particularly in regard to issues 

of sustainability and resource management. 

My name is Joe Hamby. I am from San Pedro, California. San 

Pedro was the tuna capital of the world in the 1950s and 1960s, 

but times have changed. All those canneries have closed, and the 

business has moved from there. They moved because the costs of 

production in San Pedro was higher than competing sources of 

canned tuna supplying. First it was Puerto Rico, then American 

Samoa; now it is Thailand. There is no mystery. It is cheaper to 

buy imported canned tuna or import tuna loins and can it in the 

United States than to produce it in American Samoa. 

When I was a kid growing up in San Pedro and people lost their 

cannery jobs, people like my father, there was anxiety, but there 

was also hope that they could find jobs in other industries. That 

is not the case in American Samoa. Samoa is part of a hugely diversified Southern California economy. American Samoa has only 

2 main resources: a deepwater harbor and canneries located not far 

from productive fishing grounds. There is talk about diversifying 

the territory’s economy, but, without the resources, it is going to be 

difficult. 

The company I work for is one of the largest tuna supply companies in the world. And, as the person in charge of our global tuna 

supply business, I have the opportunity to study and understand 

comparative delivered costs of tuna products produced all over the 

world for every major tuna market. 

I am a Stanford MBA, and I love quantitative analysis almost as 

much as watching Stanford beat USC in football. Our experience 

and our knowledge of the global tuna industry tells us that, without some action by Congress, action that changes the current tuna 

paradigm with respect to the U.S. market, the tuna industry in 

American Samoa will not survive. 

I don’t intend to talk about the minimum wage. It is obvious that 

the higher your labor costs relative to your competitors, the harder 

it is for you to compete, especially when your competitor enjoys advantages in packaging, utility, and other manufacturing costs. 

Something has to level the playing field. Historically, duty and 

raw material supply advantages have helped to keep the American 

Samoa tuna processing industry competitive. However, there is no 

significant duty on cooked and cleaned tuna loins. Chicken of the 

Sea will replace the production from its closed plants in American 

49 

Samoa with production from a more automated plant in Georgia 

that uses loins instead of whole round tuna. 

If it is cheaper to supply the U.S. market with canned tuna made 

from loins—and cheap is the target—then there is no need for the 

tuna processing plants in American Samoa. And there is no demand from those tuna processing plants for the U.S.-flag fishing 

boats that are based in American Samoa. 

I spend a lot of time traveling in the South Pacific, and I can tell 

you that there has been a major shift in the politics there. The attitudes of the parties to the Nauru Agreement countries have 

changed. They see tuna as one of their only available resources, 

and they are going to force a change in the current practice of selling access—I am talking about fishing access—for a small percentage of the value of the catch and allowing distant water fishing nations to send all the tuna to Bangkok for processing. 

Now is not the time to abandon American Samoa. Maintaining 

American Samoa as a large-scale tuna processing center makes the 

U.S. a major stakeholder in the changing tuna world and strengthens and enhances its role in the South Pacific. Without the tuna 

processing industry in American Samoa, the United States will 

likely lose its seat as a relevant party around the table that decides 

future tuna conservation policy. 

Tuna is a global industry driven by the economics of business. 

The economics, however, are determined by government policies. I 

urge to you provide U.S. public policy that will make it economical 

for the tuna industry to remain a leading and vital part of the 

American Samoan economy and providing the U.S. with a strong 

position for future advocacy in the international debate regarding 

tuna conservation and management. Adopting the ASPIRE legislation will do just that. 

Thank you for the opportunity to talk about this important matter. 

[The prepared statement of Mr. Hamby follows:] 

Statement of Joe Hamby, Managing Director, Global Tuna Supply, 

Tri Marine International 

Thank you Chairwoman Bordallo, Ranking Member Brown, and Members of the 

Subcommittee for inviting me to discuss the American Samoa Protection of Industry, Resources, and Employment (‘‘ASPIRE’’) Act. And thank you Congressman 

Faleomavaega for the timely introduction of this legislation. It provides an excellent 

opportunity for Congress to define public policy regarding the U.S. tuna industry 

and, should Congress choose to support it, to save American Samoa’s private sector 

economy as well as increase the relevance of the United States in the global tuna 

industry, particularly in regard to issues of sustainability and resource management. 

The ASPIRE Act ensures that American Samoa will continue to be a large scale 

tuna processing center employing thousands of workers and a vibrant support base 

for U.S. flag tuna boats fishing in the world’s most abundant tuna fishing grounds— 

the tropical waters of the Western and Central Pacific Ocean. 

About Tri Marine 

Tri Marine is one of the largest tuna supply companies in the world handling 

about 600,000 tons of tuna annually, about 20% of the global trade in tuna for the 

canning industry. It is headquartered in Bellevue, Washington and has offices and 

operating companies in 14 countries around the world. It owns, operates, and/or contracts fishing boats and processing plants to serve the global tuna industry including the major brands of tuna in the U.S. 

I am a first generation American. My grandfather emigrated from the island of 

Brac in present day Croatia to this great country when my mom was a young girl. 

50 

He became a tuna fisherman in San Pedro, California where I was born and raised. 

In the 50’s and 60’s San Pedro was the tuna capital of the world with 14 canneries 

employing over 10,000 workers. While my grandfather would fish, my grandmother 

would clean tuna in the canneries working for the minimum wage. I was fortunate 

and received a good education, including a MBA from Sanford. Today, I am the 

Group Managing Director of Tri Marine’s Global Tuna Supply business. I have 

worked for Tri Marine for over 20 years. 

A large part of Tri Marine’s business is identifying optimum supply chain solutions for our customers. Everyone wants the low cost, but least risky source of supply. This requires that we understand the dynamics of costing each major source 

of production for every major market. It is this knowledge of the global tuna market 

upon which I am basing this testimony. 

Then and Now 

Today tuna is no longer packed in San Pedro. The industry left in search of lower 

cost sources of supply. What happened in San Pedro is also happening in American 

Samoa. Chicken of the Sea closed its tuna plant there because they believe that by 

doing so they could lower their cost of doing business. 

We know that tuna is a global business and if cost reduction to achieve international competitiveness is the goal, then I can understand why Chicken of the Sea 

made the decision to close their plant and send 2,000 workers home. This change 

in their business practice makes a lot of economic sense for them, but not necessarily for American Samoa. 

Frankly, I would not be surprised if StarKist followed their economic nose and 

also decided to leave American Samoa. While that would be tragic for American 

Samoa, unless Congress changes the playing field, that is what the numbers say 

will happen. 

Import Duty 

Tuna is a global industry with fishing, processing and trade flows driven by economic results. Of course, the economics are a function of policies. Fishing access 

agreements and import duties play significant roles in determining where tuna is 

caught and processed for the world tuna markets. The European Union, for example, imposes a 24% duty on imports of canned tuna and tuna loins. Much of the 

processed tuna imports into the E.U. come from countries that have been granted 

duty exemptions under different programs and/or treaties. 

By comparison the U.S. duty is only 6 to12.5% for most of the canned tuna imports, and it is virtually zero on cooked and cleaned tuna loins. American Samoa 

competes not only with canned tuna, but also with tuna loins processed in countries 

where labor is much cheaper than the U.S. As long as there is negligible duty on 

cooked and cleaned tuna loins, this policy supports the export of the labor intensive 

part of the tuna canning process. 

Tuna canned in American Samoa is obviously not subject to import duty. This 

duty advantage is an important part of the economics of canning tuna in American 

Samoa. 

Access to Fishing Grounds 

Access to the Western and Central Pacific fishing grounds for the U.S. tuna purse 

seiner fleet is provided by the Multilateral Treaty on Fisheries between the U.S. and 

certain Pacific island countries. Without this treaty the U.S. tuna purse seiner fleet 

would have limited access to the Western and Central Pacific fishing grounds and 

it would probably be substantially smaller in number. In the recent past we have 

seen a rapid growth of the U.S. tuna purse seiner fleet operating under the Multilateral Treaty. In fact, in 2006 there were only 12 boats operating under that Treaty. In 2009 there are 39. This rapid growth of the U.S. fleet and its relevance to 

American Samoa is explained later in this testimony. What is important to notice 

right now is that the U.S. policy to maintain duty on canned tuna imports and to 

provide the Multilateral Treaty for fishing access for the U.S. fleet has had a substantial impact on the tuna industry and, in particular, on the canning tuna industry in American Samoa. 

Sustainability of the Tuna Resource 

There is growing concern regarding the sustainability of the world’s tuna resources. People often ask me if tuna is being overfished. They don’t know if they 

should feel good about eating tuna for its excellent nutritional value or avoid eating 

tuna because it may be being fished in an unsustainable manner. As you may know, 

tuna fishing in all oceans is managed by regional fisheries management organizations (RFMO’s). For the Western and Central Pacific, the U.S. is a signatory to the 

Convention on the Conservation and Management of Highly Migratory Fish Stocks. 

51 

This Convention ensures management of the tuna fishery in accordance with the 

1982 United Nations Convention on the Law of the Sea and the 1995 UN Fish 

Stocks Agreement. It establishes a Commission or RFMO for the Conservation and 

Management of Highly Migratory Fish Stocks in the Western and Central Pacific 

Ocean. The Convention Area includes the waters around American Samoa. 

As a Member of the Western and Central Pacific Fisheries Commission (WCPFC), 

the U.S. has the opportunity to participate in the management of the tuna fishery 

and to address and advocate the sustainability of the tuna resource. The relevance 

of the U.S. in the WCPFC was being threatened, however, by the decline in the U.S. 

flag purse seiner fleet. 

In its annual report to Congress on the Distant Water Tuna Fleet a.k.a. U.S. 

Purse Seine Fleet of March 2009 the U.S. Coast Guard reported that the fleet had 

declined from 39 vessels in 1998 to only 14 vessels in 2006. Of these 14 vessels only 

12 were fishing under the aforementioned Multilateral Treaty. 

This is confirmed by the U.S. 2007 annual report to the WCPFC which states: 

Resolution on the Reduction of Overcapacity (Res. 2005-02) 

In 1999, a total of 38 U.S. purse seine vessels were licensed to fish under 

the South Pacific Tuna Treaty. In 1999, the fleet total hold capacity was approximately 45,000 mt. The current (2006) 12-vessel fleet total hold capacity 

is approximately 15,500 mt. No new vessels entered the fleet from 1999 

through 2006. Most vessels leaving the Treaty have been sold and are no 

longer flagged by the United States. They are believed to be fishing in the 

eastern tropical Pacific Ocean. 

With the reduction in the size of its fleet, the U.S. was no longer one of the leading tuna fishing countries operating in the Western and Central Pacific. The U.S. 

was becoming less relevant and there was concern that we would lose the opportunity to powerfully influence debates and policy formation regarding fishery management issues. 

Increasing Aspirations of Pacific Island Countries 

During this time when the U.S. was becoming less important in this fishery, the 

countries that are Parties to the Nauru Agreement (PNA) were increasing their demand to participate more equitably in the economic benefits of the tuna industry. 

They argue that the tuna caught in their exclusive economic zones (EEZ’s) belongs 

to them and they are no longer going to be satisfied with receiving an access fee 

as their share in the value of the fishery. 

More than half of the tuna supply for the global canned tuna industry comes from 

the Western and Central Pacific and about 60% of this is caught in the EEZ’s of 

the PNA countries (Nauru, Palau, Federated States of Micronesia, Republic of Marshall Islands, Solomon Islands, Tuvalu, Kiribati and Papua New Guinea). They are 

an important subset of the Pacific Islands States that are parties to the Multilateral 

Treaty with the U.S. This treaty is currently under renegotiation. 

The PNA countries have changed their policy relating to fishing access. They are 

now focused on economic development, not access fees. They are using restricted access to negotiate commitments from fishing companies to develop their domestic 

fishing and fish processing industries. Essentially, they are saying, ‘‘If you want to 

fish in our waters, you must help develop our economies’’. Their governments are 

changing the model. This is a good example of how sovereign rights and the will 

of policy makers dictate the best business practice. 

The U.S. Multilateral Treaty in its current form does not restrict access to the 

boats fishing under it. This is contrary to the PNA’s new policy which limits the 

number of days each boat would be allowed to fish (Fishing Day Scheme). It is 

mainly for this reason that the U.S. purse seine fleet grew rapidly since 2006. Boats 

could enter the fishery and fish without limitation under the U.S. Treaty. 

Conflicts with PNA Countries 

Of the 25 boats that were added to the U.S. fleet during the past 3 years, 17 of 

them were built in Taiwan since 2002. Not one of these 17 boats has ever called 

at American Samoa even though all but one of them lists Pago Pago, American 

Samoa as their home port. These boats transship their catch to refrigerated carriers 

in ports near the fishing grounds. While this may optimize the economics of the fishing operation, it certainly does not help the American Samoa economy. Additionally, 

one may wonder whether the newly built, highly productive, boats which remain in 

the fishing grounds and transship all the time are putting undue pressure on the 

resource, complicating conservation efforts, not to mention frustrating the development aspirations of small island states. 

The PNA view is that the U.S. fleet is using fishing days that could otherwise 

be used by the PNA countries in negotiating for the development of their own econoVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6621 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
52 

mies. Due to this conflict with the PNA’s new policy, there is considerable risk that 

the Treaty may not be renewed in its current form. In a world of limited access, 

the PNA countries will prioritize fishing access to countries or fishing companies 

willing to support their economic development, including construction and operation 

of tuna processing facilities and may require that all or part of the catch be processed in these island based plants. The PNA do not care if the cost of processing 

tuna in their island based economies is more expensive than elsewhere. 

Direct Delivery of Tuna to American Samoa 

This is analogous to the situation now faced by American Samoa except that the 

U.S. government policy of supporting a large U.S. purse seiner fleet by providing 

a Treaty for fishing access does not help American Samoa unless the boats call at 

American Samoa. As it is, the U.S. fishing fleets have no incentive to unload at 

American Samoa. The cost of navigating from the fishing grounds all the way to 

Pago Pago and back again to the fishing grounds is a huge disincentive. The ASPIRE legislation fixes this. 

While Tri Marine is supportive of the proposed ASPIRE legislation, I would like 

to point out that we do not particularly favor the penalties provided in the Bill 

against those boats that do not directly deliver their catch to American Samoa. I 

believe that the incentive provided in the ASPIRE legislation is a sufficient stimulus 

for the vessels to call at American Samoa for unloading. There should be no need 

to penalize boat owners in order to motivate them. 

The boats that transship typically catch an additional 60% or more fish than the 

purse seiners that deliver their catch directly to Pago Pago. Boats that transship 

earn more revenue, have a lower cost of catch and use more fishing days than those 

that deliver their catch directly to American Samoa. 

As this legislation will reduce transshipment operations and increase the number 

of direct deliveries to American Samoa, there will be a reduction in fishing effort 

and catch by the U.S. purse seine fleet operating in the Western and Central Pacific. 

Multiplier Effect 

The boats delivering their catches to America Samoa will need locally provided 

stevedoring, repair, supplies, logistics, and other services. This is an important component of the economic stimulus being provided by this legislation. 

The change in the operating methodology from transshipping to direct delivery 

would resonate with the PNA and other Pacific island countries as they would see 

that the fish being caught by U.S. boats is being processed in American Samoa resulting in job creation for the people of American Samoa and other islanders living 

and working in American Samoa. 

This is a key element to the ASPIRE legislation. The processing of whole round 

tuna in American Samoa is labor intensive, and it is an integral part of the tuna 

canning process while it drives the majority of the economic benefits created by tuna 

processing. Importantly, there would be no need for the fishing boats to call American Samoa if the tuna processing plants there cannot handle whole round fish. 

Making American Samoa Competitive 

The ASPIRE legislation will make the canneries in American Samoa competitive 

with other major sources of canned tuna for the U.S. market. As American Samoa 

would be one of the low cost sources of supply for the U.S. market, we would expect 

that there will be substantial demand from U.S. buyers for all available processing 

capacity. In this regard we estimate that the existing installed capacity of the two 

tuna plants in American Samoa is approximately 1,000 tons per day, or 250,000 

tons per year. 

Currently, the tuna plant in American Samoa owned by Chicken of the Sea is idle. 

If the ASPIRE legislation is approved, we expect that that plant will soon be back 

in operation and it will resume purchasing fish from the U.S. purse seiner fleet calling at Pago Pago. The plant would make its production capacity available for the 

market, and it will be the U.S. market, not one company, and not just the America 

Samoa economy that will benefit from ASPIRE. 

I also believe that this realignment in the policy of the U.S. to support the American Samoan economy will have a positive effect on the renegotiation of the Multilateral Treaty. The U.S. fleet will need fewer fishing days and the PNA and other 

Treaty countries will see that the U.S. is sensitive to the need to support the island 

economies. Maintaining the Multilateral Treaty and a strong U.S. fleet will ensure 

that the U.S. will have an important voice in the management of the Western and 

Central Pacific fisheries. 

Tuna is a global industry and is driven by the economics of the business. The economics, however, are determined by government policies. I urge you to provide U.S. 

53 

public policy that will make it economical for the tuna industry to remain a leading 

and vital part of the American Samoan economy and providing the U.S. with a 

strong position for future advocacy in the international debate regarding tuna conservation and management. Adopting the ASPIRE legislation will do just that. 

Thank you for the opportunity to testify on this important topic. 

Ms. BORDALLO. I thank you, Mr. Hamby. 

And now I would like to recognize Mr. James Walsh, Legal Counsel of the South Pacific Tuna Corporation. 

STATEMENT OF JAMES P. WALSH, LEGAL COUNSEL, 

SOUTH PACIFIC TUNA CORPORATION 

Mr. WALSH. Thank you, Madam Chair, members of the Committee. 

I first must apologize that I am a former Senate staffer. I hope 

you will welcome me with kindness. I have been involved with the 

tuna industry and with ocean policy and fishery policy in this country since 1972 when I went to work for Senator Warren Magnuson. 

I am currently a lawyer, a business lawyer, and a litigator, and 

I have practiced law out in the Pacific for the last 10 years. And 

I have represented the tuna industry perhaps for 28 years. 

I only have a few points, so I will just offer my testimony for the 

record. And let me begin with the first point. 

First of all, the term ‘‘level playing field’’ is a cliche. It doesn’t 

apply in this case. There is a level playing field, and that is there 

are fishery resources in the Pacific, there are canning facilities at 

some location, and there is a canned tuna market. The players are 

on the field. This legislation changes the rules. Stanford wouldn’t 

have beaten USC if the rules had changed. 

The boats that I represent—14, plus seven additional; I represent 

the majority—they see no purpose in saying, ‘‘You must go to deliver your 300,000 tons of tuna to a plant that might only take 

100,000 tons of tuna, and it may already have contracts in place 

for 60,000 tons of tuna.’’ Imagine, if you would, the StarKist plant 

with 39 boats lined up in a row, waiting to offload. Imagine the monopolistic power of the processing facility who says, ‘‘You want to 

move up in the line? You might want to drop your price.’’ 

That is one of the big problems with this legislation, is that I can 

tell you, in my time looking at fishery policy, I have never seen 

anything so unusual as this proposal. 

One could argue that it is in the national interest that we create 

processing facilities from tuna caught in our waters. These are not 

tuna caught in our waters. This is tuna caught in foreign waters 

pursuant to a treaty, sitting side by side, foreign flag, long line and 

purse seiner vessels, who are just as efficient as we are. They 

didn’t used to be, but they are now. 

So what has happened is the fleet has gone, from the time I have 

seen it, from 139 vessels to 11 or 12, back to 39. And it is because 

we provided for the ability to compete in the world market, accepting the level playing field we all have to face, but making sure that 

we can play by rules that we work by. 

The social engineering that is tried here is certainly, because of 

the circumstances of American Samoa, heartfelt and deserving. It 

is a wonderful place. But the fact is that my clients would be peVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6602 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
54 

nalized if they didn’t go there. You would be taxing Peter to pay 

Paul, even though they are in the same game. 

We urge you not to pass this legislation. I suggest that there 

must be another way. It seems to me that, drawing on my experience as a former deputy administrator of NOAA, I would look at 

this as a territorial policy issue, not as a commercial policy issue, 

not as a foreign policy issue, but as a territorial policy issue. 

And it seems to me there have to be ways to help American 

Samoa deal with their problems without asking, forcing a large 

number of vessels to go to a fixed market which may go away tomorrow and you still have to pay the fees. There is no club here 

to keep StarKist there; they could leave tomorrow. And my clients 

would have to break all their contracts for delivering tuna at other 

locations and would then hope that they could deliver. 

As a litigating lawyer—and I currently am handling some major 

legislation on the West Coast involving the ground fish fishery— 

I look at this litigation from the litigators’ standpoint. And it seems 

to me that this is filled with the kinds of things that you could 

bring to a Federal judge. 

The basic fundamental rule of American legislation is, basically, 

all you need is a rational basis to regulate economically. This 

seems—and most legislation involving fisheries doesn’t, but this 

legislation is one of those where I would have a very good argument before a Federal judge to say, ‘‘There is no rational basis why 

the boat owners, who doesn’t catch fish in the United States, who 

don’t deliver this port, who have no contract, should be penalized 

with a fee and a tax.’’ 

Thank you very much for your time. 

[The prepared statement of Mr. Walsh follows:] 

Statement of James P. Walsh, Davis Wright Tremaine LLP, 

on behalf of South Pacific Tuna Corporation 

Chairwoman Madeleine Bordallo, Ranking Member Henry Brown, and Members 

of the Subcommittee: 

My name is James P. Walsh and I am a partner in the law firm of Davis Wright 

Tremaine LLP, in its San Francisco, California Office. I am appearing today on behalf of the South Pacific Tuna Corporation (SPTC), based in San Diego, California, 

which manages a fleet of 14 U.S.-flag tuna purse seine vessels that operate in the 

Pacific Ocean pursuant to licenses issued under the South Pacific Tuna Treaty (the 

‘‘Treaty’’), representing 36% of the entire U.S. fleet operating under the Treaty. Our 

firm has assisted SPTC since its formation in 2007. SPTC appreciates the opportunity to appear today and express its views on H.R. 3583, the American Samoa 

Protection of Industry, Resources, and Employment Act, or ASPIRE. In addition, I 

have been authorized by Tradition Mariner LLC of Tampa, Florida, which operates 

5 U.S. flag vessels under the Treaty, to state that they are in support of SPTC’s 

testimony. 

The provisions of the proposed bill, if enacted in present form, would have a direct 

and profound effect on the SPTC fleet by increasing the cost of operations, without 

any concomitant benefit to the fleet, thereby making the fleet’s tuna harvests less 

competitive in the world market. In essence, H.R. 3583 attempts to legislate markets rather than letting cost, price and efficiency be the guide to where fish harvests 

are landed. At the same time, the bill lacks any real forward-looking incentive for 

landing the SPTC fleet’s catches in American Samoa. The meager ‘‘landing’’ subsidy 

($100 per metric ton for SPTC vessels) provided for in the bill is not an attractive 

incentive for SPTC vessels, given the cost of ‘‘direct delivery’’ of tuna catches to 

American Samoa from distant fishing grounds where the vessels fish. The ocean 

area covered by the Treaty exceeds 10 million square miles and SPTC vessels operate in ocean areas far from American Samoa. Legislation such as H.R. 3583 also 

cannot provide any guarantee that SPTC vessels would realize the proposed subsidy 

because the price paid to our vessels would likely be discounted by the processor. 

55 

Moreover, the processing capacity currently operating on American Samoa is quite 

limited. SPTC has no marketing agreement with the processing company still operating there, so our vessels—unlike other U.S.-flag and Korean-flag vessels—have no 

market in American Samoa. 

In my testimony today, I will (1) provide some general background about the 

Treaty and the SPTC fleet, including where the fleet currently lands its fish catches; 

(2) place the proposed legislation in the context of the ever-changing and highly 

competitive business of catching and landing tuna in the Pacific Ocean; and (3) address the specifics of the bill and indicate the reasons why SPTC must oppose the 

legislation. In summary, H.R. 3583 is misguided public policy. The bill lacks an understanding of fundamental market economics, the global nature of the tuna fishery, 

and the competitive realities in which U.S. companies and vessels must operate. The 

bill was written in a manner that unfairly favors one processor and one segment 

of the U.S. fleet over their competitors. 

The South Pacific Tuna Treaty 

A license issued pursuant to the South Pacific Tuna Treaty is the essential ticket 

to the SPTC’s fleet operations in the Pacific Ocean. Without it, U.S. tuna vessels 

would probably not operate at all in the region. Entered into first in 1988, the Treaty has just been renewed for the third time. The parties to the Treaty are: Australia, 

the Cook Islands, the Federated States of Micronesia, Fiji, Kiribati, Nauru, New 

Zealand, the Marshall Islands, Niue, Palau, Papua New Guinea, Samoa, Solomon 

Islands, Tonga, Tuvalu, the United States, and Vanuatu. The Treaty will continue 

in force until June 1, 2013, unless renewed again. 

According to a 2008 NOAA Report, the U.S. purse seine fishery in the region accounted for 79% of the total U.S. catch of highly migratory species in 2007. The estimated value of this catch in 2008 was in excess of $200 million. For the Subcommittee’s reference, attached as Exhibit 1 is a chart (Figure 1) showing the geographic 

distribution of the U.S. purse seine effort in 2007. It should be noted that the prime 

fishing grounds of the U.S. fleet are thousands of miles distant from American 

Samoa. Furthermore, it should also be understood that the SPTC fleet is not eligible 

to fish in U.S. navigable waters or the U.S. Exclusive Economic Zone (EEZ), including around American Samoa. Fishing by the fleet may only occur in the waters open 

to tuna purse seining under the Treaty or in waters of the high seas, outside the 

200-mile EEZ of any nation. 

The Treaty includes an obligation by the United States to provide $18 million annually to the Pacific Island nations that subscribed to its terms, through an Economic Assistance Program. In addition, the U.S. industry provides other payments 

to these nations, based on licensing arrangements and the price of fish caught, that 

total approximately $5.7 million. For this year, each of the 14 vessels in SPTC’s fleet 

paid a Treaty license fee to the Pacific Island nations of $130,000. Each vessel is 

also obligated to comply with strict conservation and management measures, monitoring requirements (including observers on vessels), regular fishing data reporting, 

and full-time vessel monitoring using a satellite-based system. In addition, each vessel is subject to U.S. licensing and ocean resource management regulations. The 

treaty area in question is a major source of tuna that is used for the world canned 

tuna market. Access to the fishing grounds in the Treaty area is essential to the 

U.S. tuna industry, in particular to the SPTC fleet. 

General Background on the SPTC Fleet 

As noted by other witnesses, the United States Government, the Pacific Island 

Treaty nations, and the U.S. tuna industry became quite concerned when the number of U.S. flag tuna purse seine vessels operating under the Treaty began to decline 

earlier in this decade. Competition with foreign-flag fleets is intense and the U.S. 

fleet, which had started out in 1988 with 50 Treaty licenses available and in use, 

dwindled to as few as 11 vessels in 2005. As in many other industries competing 

in the global market, U.S. vessels had to figure out a way to reduce operating costs 

in order to remain competitive and the SPTC fleet is trying to do that. 

Each vessel in SPTC’s fleet is documented under 46 U.S.C. §§ 12103 and 12111 

(registry) of the Vessel Documentation Act and not under § 12113, which provides 

for fishery endorsements that are general licenses to fish in U.S. waters. Consequently, all of the tuna purse seine vessels in the SPTC fleet are owned by American companies in which U.S. citizens own 51% of the interests. The remainder of 

the equity investment is provided by foreign investors. 

Today, the overall U.S. fleet operating under the Treaty consists of 39 vessels, but 

by agreement cannot exceed 40. The Treaty nations have been discussing further 

limitations on fishing opportunities through something called the ‘‘Vessel Day 

Scheme’’, which would allocate a limited number of days for fishing under the TreaVerDate Nov 24 2008 14:13 Mar 16, 2010 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6621 L:\DOCS\53252.TXT Hresour1 PsN: KATHY
56 

ty to licensed vessels. Obviously, the existing Treaty system is subject to change, 

with potential new limits on fishing opportunities that will bring new competitive 

challenges. 

Over the last several years, as part of the international cooperation fostered by 

the Treaty, the U.S. fleet has been developing business networks in the Pacific Island Treaty nations, including the following ports and nations: Majuro, Republic of 

the Marshall Islands; Rabual, Papua New Guinea; Kiribati; Pohnpei, Federated 

States of Micronesia, Palau; Honiara, Solomon Islands; Vanuatu; and Papeete, Tahiti. The transshipping arrangements in these countries have been essential to the 

overall success of the Treaty. 

The Impact of H.R. 3583, ASPIRE, on the SPTC Fleet 

SPTC has great sympathy for the current plight of those who live on American 

Samoa because of the recent tsunami. For many years, representatives of the U.S. 

tuna fleet have had close personal bonds with the people of American Samoa and 

its Congressional leaders. We would like to do more to help. However, given the 

powerful economic forces of the world economy, with more changes on the horizon, 

SPTC has no choice but to strongly oppose H.R. 3583. 

The difficulties facing the tuna canneries on American Samoa also appear to stem 

from economic forces affecting their ability to compete in the world market, including a high minimum wage requirement relative to other global processing locations. 

The Findings section of the bill focuses on the shore-side processing component of 

the industry and admits that the U.S. tuna fleet no longer directly delivers to American Samoa. What the Findings fail to recognize is that using a U.S. tuna purse 

seine vessel as a transport for its own catch over long distances just to deliver to 

American Samoa makes no economic sense. Fishing time is at a premium and using 

SPTC’s vessels for both fishing and transport would take the vessel off the fishing 

grounds for long periods of unproductive time. SPTC estimates that the cost (lost 

fishing time and fuel) of making a single vessel delivery to American Samoa under 

the bill would be prohibitive and make SPTC vessels non-competitive in the world 

market. 

Despite the economic realities in the tuna business, H.R. 3583 proposes a system 

of fees, taxes, and subsidies to either lure (or force) the U.S. tuna fleet operating 

under the Treaty to deliver their catches to American Samoa. First, in Section 3, 

each of SPTC’s fleet would have to pay a new $250,000 fee to the United States Government for the benefit of economic development in American Samoa. This annual 

fee is nearly double the license fee currently being paid under the Treaty. The fee 

would be waived if a vessel makes not less than three deliveries per year to shoreside processors in American Samoa. This fee would be applied regardless of whether 

the SPTC’s fleet had any nexus to, or did business in, American Samoa. Second, the 

SPTC’s fleet would be subject to a punitive tax of 6.25 percent per metric ton of fish 

delivered if a vessel ‘‘delivers tuna to another vessel or other location for the purposes of transshipment.’’ The proposed language in the bill amending 48 U.S.C. 

§ 1469d(d) with respect to the 6.25 percent fee is confusing because the words ‘‘ad 

valorem’’ are not included. But the intent appears to be a tax on the value of a metric ton, not the weight. All of SPTC’s vessels currently make such transshipment 

deliveries. Finally, if the SPTC’s fleet decides to deliver to shore-side processors in 

American Samoa, the fixed $250,000 fee and the ad valorem tax of 6.25 percent per 

metric ton would be waived and, for each ton so delivered, a subsidy of $100 per 

metric ton would be paid. 

Our conclusion is that a main purpose of the fees and taxes in H.R. 3583 is simply to generate a fund to offset the cost of providing a subsidy to the only processing 

plant still operating in American Samoa. Further evidence for this conclusion is the 

fact that the longline fleet based in Hawaii is also subject to the bill’s system of fees 

and taxes. That fleet has never delivered to American Samoa and probably never 

will, regardless of any incentives for ‘‘direct delivery.’’ 

The only currently operating tuna processing plant on American Samoa is owned 

by the StarKist Seafoods, a wholly-owned subsidiary of Dong Won, a Korean company. That company’s capacity for processing round light meat tuna is estimated at 

around 100,000 tons per year. It would be the only market for deliveries of tuna 

under H.R. 3583. The current yearly harvesting capacity of the entire U.S. fleet operating under the Treaty is approximately 300,000 tons per year. Thus, this stark 

mismatch between the market for accepting deliveries (or demand for raw fish) and 

the mandated direct deliveries (or the supply of raw fish) created by the bill makes 

the entire theory of the legislation irrational. Moreover, there is no requirement that 

the Starkist plant should remain open or that the mandated fees and taxes should 

expire if the plant closes. Finally, the only plant in town would surely be able to 

57 

dictate price to those vessels that must make ‘‘direct delivery’’ in order to avoid the 

fees and taxes of H.R. 3583. 

Therefore, because of inadequate capacity for processing and the possibility of no 

processing capacity, H.R. 3583 would serve only to pressure all, or a substantial 

part, of the U.S. fleet to land their catches at American Samoa simply for transshipment to a processing plant located somewhere else in the world. Moreover, the 

bill would also provide monopolistic pricing power to the only processing plant on 

American Samoa relative to those who must make direct deliveries, assuming any 

capacity is available. 

SPTC does not believe that the measures in H.R. 3583 can effectively (and artificially) create a shore-side processing industry in American Samoa. If there is no 

such industry in American Samoa, or if bill is unexpectedly successful but only at 

maintaining a limited capacity, H.R. 3583 is written in such a way that the SPTC 

fleet would still be hit with punitive fees. Our client’s business simply cannot withstand these kinds of government-ordered fees and remain competitive. Moreover, 

the subsidy of $100 that would apply to SPTC’s vessels is so low as to be a meaningless carrot in light of the cost of using a purse seine vessel as a transport and the 

associated loss of fishing time. Therefore, SPTC believes that the bill, as written, 

would not achieve its objectives and would punish important segments of the U.S. 

tuna fleet. 

We believe there is a host of other legal problems with the proposal, in particular 

the possible treatment of the program by other countries under international trade 

laws. For example, would the subsidies for direct delivery of fish be grounds for 

anti-dumping measures by other countries? Anti-dumping laws allow for other nations to impose trade restrictions or duties to offset government subsidies to a particular industry. We have not investigated these issues in detail but suggest that 

they should be examined before any action is taken on H.R. 3583. 

Finally, while this Subcommittee is properly concerned about policies toward the 

Territory of American Samoa, it must be kept in mind that the purpose of the South 

Pacific Tuna Treaty is to benefit the United States as a nation, including all of its 

interests, particularly its foreign policy interests with respect to the Pacific Island 

nations that are party to the Treaty. Enacting H.R. 3583 for the purpose of helping 

American Samoa would quite likely result in the transfer and reflagging of the U.S. 

fleet, thereby undercutting an essential commitment of the United States in the 

Treaty to provide payment of vessel permit fees to the Pacific Island nations. 

In conclusion, we urge the sponsor of the bill to look to other ways to assist American Samoa that would not be so deeply harmful to the U.S. tuna fleet. 

I would now be pleased to try to any questions the Subcommittee may have. 

Ms. BORDALLO. I thank you, Mr. Walsh, for your testimony before the Committee. 

And now I would like to recognize Ms. Diana Furchtgott-Roth, 

Senior Fellow and Director, Center for Employment Policy, Hudson 

Institute. 

STATEMENT OF DIANA FURCHTGOTT-ROTH, SENIOR FELLOW 

AND DIRECTOR, CENTER FOR EMPLOYMENT POLICY, 

HUDSON INSTITUTE 

Ms. FURCHTGOTT-ROTH. Thank you very much. I would like permission to submit my written testimony for the record and just 

summarize it. 

And, before I start, I just wanted to clarify for the record, Mr. 

Faleomavaega said that I was a naı ́ve think-tank economist. I want 

to say for the record, I am a senior fellow at the Hudson Institute. 

From 2003 to 2005, I was chief economist at the U.S. Department 

of Labor. From 2001 to 2003, I served as chief of staff of the Council of Economic Advisors at the White House. I have also served as 

Deputy Executive Secretary of the Domestic Policy Council under 

President George H.W. Bush and an economist on the Council of 

Economic Advisors of President Ronald Reagan. 

58 

I would like to say that ASPIRE has very good intentions, but 

there is a simpler way to fix the problem: Allow American Samoa 

to set its own minimum wage. 

The island is having economic problems because our government 

has doubled, or more than doubled, wages in a 2-year period, beginning in 2007. If Congress passed a law that said that my salary 

was doubled as a senior fellow at the Hudson Institute, I can assure you I would not have my job tomorrow. Hudson Institute 

would not pay twice my wage level. 

And that is what is happening to workers in American Samoa. 

Chicken of the Sea closed. StarKist is perhaps thinking of leaving. 

Other workers are also affected. 

In 2007, the American Samoa Governor, Governor Tulafono, who 

was testifying here before, stated that increasing the minimum 

wage would kill the economy. And Mr. Faleomavaega said that it 

would devastate the local tuna industry. 

Last May, I spoke to Representative Vaito’a Hans A. Langkilde 

of the Ma’oputasi District 10, which represents the villages of 

Leloaloa, Satala, and Atu’u, whose district is home to both StarKist 

and Chicken of the Sea until Chicken of the Sea left. 

Mr. Langkilde told me, ‘‘Over the past 50 years, the industry provided massive job opportunities for unskilled labor. The 2007 law 

that increased the minimum wage was the beginning of the end for 

the tuna industry and the cause of massive job losses for our already fragile economy. The only way to resolve the trend toward 

total economic disaster is for Congress, at its soonest opportunity, 

to reverse its position and either exempt American Samoa from the 

American minimum wage or to allow it to set its own minimum 

wage.’’ 

ASPIRE does not solve this problem. It encourages only certain 

tuna processes and shippers without the development of any other 

industry. U.S. Government funding doesn’t provide any certainty 

because another Congress could just withdraw it. It costs $25 million at a time when we have deficits here. 

There are plenty of countries with low wage rates that have built 

up their economies to be very successful, such as Hong Kong, 

China, Singapore, to name just a few. If these countries had had 

the U.S. minimum wage imposed on them, they would probably not 

be in the successful position that they are now. 

American Samoa needs to move beyond tuna canning and a oneindustry economy and explore other industries. You asked for concrete suggestions, and, Madam Chairman, I have a concrete suggestion for you. 

One idea is to develop community colleges in American Samoa to 

train nurses and other health care workers to work in the United 

States. The education in the health care sector is the only one in 

the United States that has been creating jobs month after month 

here in the United States during the recession. Many hospitals 

have a shortage of the nurses and health care workers. American 

Samoa could become the educational hub of the region, with community colleges to train nurse and other health care workers. 

If Congress could facilitate immigration from American Samoa 

for these graduates of the community colleges into the United 

States to be placed in jobs, this might be a real possibility for an 

59 

educational opportunity, to help American Samoa develop its educational industry as a substitute or a parallel with the tuna canning industry. 

Thank you very much for allowing me to appear before you 

today. 

[The prepared statement of Ms. Furchtgott-Roth follows:] 

Statement of Diana Furchtgott-Roth, Senior Fellow, Hudson Institute 

Chairman, Members of the Committee, I am honored to be invited to testify before 

your Committee today on the subject of The American Samoa Protection of Industry, 

Resources, and Employment Act, known as the ASPIRE Act, H.R. 3583. Currently 

I am a senior fellow at the Hudson Institute. From February 2003 until April 2005 

I was chief economist at the U.S. Department of Labor. From 2001 until 2003 I 

served at the Council of Economic Advisers as chief of staff and special adviser. Previously, I was a resident fellow at the American Enterprise Institute. I have served 

as Deputy Executive Secretary of the Domestic Policy Council under President 

George H.W. Bush and an economist on the Council of Economic Advisers under 

President Ronald Reagan. 

We think that our economy here in the United States is in poor shape, but American Samoa’s economy is doing even worse. In 2005, the latest data available, before 

the increase in minimum wage, the unemployment rate stood at 30 percent, according to the Department of Interior’s Office of Insular Affairs. The ASPIRE Act clearly 

identifies the cause of the problem. In Section 2 (a) (4), the bill states: 

‘‘Due to low-wage labor rates of 0.60 cents and less per hour for tuna cannery 

workers in competing countries, increased transportation and energy costs, decreased volumes of direct-delivered fish to American Samoa, recent Federal minimum wage policy changes that have resulted in mandatory annual wage increases, 

heavy foreign competition for United States market share in the tuna industry, and 

a number of other issues, one of American Samoa’s tuna canneries has announced 

that it will shut down by September 2009. This closure will result in job loss for 

nearly 40 percent of the territory’s private sector employees, as well as increased 

energy, shipping, and food costs for the remaining businesses and public entities because the canneries help subsidize the costs of these industries.’’ 

In response, the ASPIRE Act seeks to pay tuna shippers and processors in Amer- ican Samoa amounts ranging from $100 to $200 per metric ton in order to persuade 

the canneries to stay open and shippers to continue to use the island. 

This is the wrong approach. It does not address the fundamental issue—that Congress has priced American Samoan labor too high to be globally competitive. It is 

a poor use of funds, at the time when the United States has one of the largest deficits in history. It makes American Samoa dependent on federal grants for the existence of its economy, and future Congresses could easily cut back on the grants. 

Rather than the ASPIRE Act, Congress should exempt American Samoa from the 

U.S. minimum wage and allow it to set its own wages to attract businesses. 

Over two years ago, in January 2007, the House of Representatives initially ex- empted American Samoa from the increase in the hourly minimum wage to $7.25, 

but then the bill was changed. 

In 2007 the legislation originally did not include American Samoa, perhaps because Del Monte, at the time the parent company of StarKist, was headquartered 

in Speaker Nancy Pelosi’s district. Until then, the Labor Department had set wage 

rates in American Samoa every two years, following an extensive study on economic 

conditions on the island. But before final passage, Congress included American 

Samoa. 

There should have been general rejoicing in American Samoa on hearing that everyone would get a raise. But not so. American Samoa Governor Togiola Tulafono 

stated that increasing the minimum wage ‘‘would kill the economy’’ and Congressional Samoan Delegate Eni F.H. Faleomavaega said that it would devastate the 

local tuna industry. 

A quick look at American Samoan local wage rates in 2007 tells us why the increase in the minimum wage was so damaging. Back then, the hourly minimum 

wage for fish canning and processing was $3.76. The minimum wage for government 

employees, who undoubtedly have an easier job than tuna canners, was $3.41. Shipping had the highest minimum wage, at $4.59. Garment manufacturers had the lowest, at $3.18 an hour. 

Fans of minimum wage increases say the increases have no effect on the economy 

or on jobs, but American Samoans are smarter. In 2007 they knew that industries 

would go elsewhere if they had to pay $7.35 an hour. With higher unemployment 

60 

in American Samoa, the U.S. taxpayer would be called upon to come to the rescue. 

It did not make sense, and it still does not make sense. 

Fast forward to 2009. There is no better illustration of the consequences of wellintentioned policy-making than recent events in American Samoa. In May, Chicken 

of the Sea, the tuna company, announced that it would close its canning plant in 

American Samoa in September. 

Chicken of the Sea laid off more than 2,000 employees—12 percent of total employment, almost half of all cannery workers. The 2,700 workers at StarKist, the 

other American Samoa tuna canning company and Chicken of the Sea’s rival, are 

probably concerned that their jobs are the next to go. 

American Samoa lost not only the 2,000 jobs at the Chicken of the Sea canning 

plant, but also secondary jobs from the ripple effect of loss of income—stores and 

eateries that cater to cannery workers, shops that mend fishing nets, shipyards, and 

buses that transport workers. 

American Samoa’s loss is Georgia’s gain. Chicken of the Sea will move to Lyons, Georgia, (2007 population 4,480) employing 200 people in a new $20 million plant 

on a more capital-intensive production line. 

Last May I spoke to Representative Vaito’a Hans A. Langkilde of the Ma’oputasi 

District #10, representing the villages of Leloaloa, Satala and Atu’u, whose district 

is home to both StarKist and Chicken of the Sea. 

Mr. Lankilde told me, ‘‘Over the past 50 years the industry provided massive job 

opportunities for unskilled labor. The 2007 law that increased the minimum wage 

was the beginning of the end for the tuna industry and the cause of massive job 

losses for our already fragile economy. The only way to resolve the trend towards 

total economic disaster is for Congress at its soonest opportunity to reverse its position.’’ 

Furthermore, with the United States facing a deficit, it does not make sense to 

spend taxpayers’ money subsidizing tuna production in American Samoa. The approximate cost of more than $25 million per year could be more usefully spent elsewhere. 

A grant given by one Congress could easily be withdrawn by the next. Hence, the 

ASPIRE Act would not provide permanent security either for the tuna industry or 

for the island, because it could vanish in the future. 

Besides, the grant just helps the tuna industry. The goal should be for American 

Samoa to diversify its economy. Other types of companies, such as call centers or 

community colleges to train nurses, could conceivably locate in American Samoa and 

help the economy. These companies will not choose American Samoa if its wage levels are artificially high. Rather, they will choose some other location. 

Rather than having to accept direction from a government thousands of miles 

away where they have no voting representation, residents of American Samoa 

should be given the power to decide on their own minimum wage. It makes no sense 

for Congress to insist on a minimum wage that is far above the competitive wage 

in the area, and drive business away from the local economy. 

Thank you for allowing me to testify today. I will be glad to answer any questions. 

Ms. BORDALLO. I thank you, Ms. Diana Furchtgott-Roth, for your 

testimony. 

And now for our final witness on the second panel, Mr. Renato 

Curto, President of Cape Fisheries. 

STATEMENT OF RENATO CURTO, PRESIDENT, 

CAPE FISHERIES, LLC 

Mr. CURTO. Madam Chair, members of the Subcommittee, I had 

to change ‘‘good afternoon’’ to ‘‘good evening,’’ so good evening. And 

thank you very much for allowing me to appear before you today 

to present my testimony in connection with this hearing of 

H.R. 3583, ASPIRE. 

My name is Renato Curto, and I am testifying in my capacity as 

President of Cape Fisheries Holdings, LLC, owner and operator of 

a fleet of eight large United States flag tuna purse seiner vessels 

based in American Samoa. 

I support ASPIRE because it offers a concrete and meaningful 

way to guarantee the survival of that same tuna industry that has 

61 

provided for many years for the livelihood of thousands of families 

in American Samoa. 

I also support ASPIRE as I consider it a means for the United 

States of America to continue to participate and to maintain its 

leadership role in those international fora which deal with matters 

so important as the protection of the environment, the conservation 

of a well-balanced marine ecosystem, and the sustainability of the 

fishing resources. 

American Samoa is the base for our fleet. Almost everything the 

boats need is sourced there. Besides our office, we have a warehouse where we store supplies, spares, and other necessities for our 

vessels. We purchase in American Samoa everything that is available there, from fuel to lubes, to salt, provisions, parts, et cetera. 

We use local mechanics to assist our own team of port engineers, 

and the local shops take care of the repairs that are needed. To unload the vessels, we need local stevedores. Our people and our 

crews use the local establishments, including bars and restaurants. 

In sum, it is not just what the vessels do for themselves, but 

there are a lot of induced benefits to the local economy for the simple fact that we are there. If we leave, all those additional benefits 

will be lost for American Samoa. 

The presence of Chicken of the Sea and StarKist in American 

Samoa has been the main reason for the United States tuna fleet 

to be based in Pago Pago. It would probably make no economic 

sense for United States boats to cull American Samoa if they did 

not have the opportunity of delivering their catches directly to the 

canneries there. If no canneries will remain in American Samoa, 

we will probably change our operation and become Taiwanese style, 

and we will establish our base somewhere else in the South Pacific, 

closer to the fishing grounds. 

Our method of operation is much different from the method used 

by other fleets operating in the western and central Pacific Ocean, 

mainly Taiwanese, Chinese, and Korean. Those vessels remain on 

the fishing grounds for as long as a full year, sometimes more. And 

as soon as the vessels are full, they transship their catches regularly on refrigerated carriers utilizing ports that are close to where 

they are fishing, thus maximizing their fishing efficiency and their 

volumes of catches. 

While the information on the catches landing in American Samoa 

by the American Samoa-based fleet is readily available to anyone, 

we do not have information on the actual volume of catches of 

these other fleets. But based on some numbers that we have been 

able to access unofficially, we estimate that their average catch is 

close to double the average catch of the American Samoa-based 

fleets. 

I personally believe, as an American, in the right of Americans 

to conduct their business in any way that is legally permitted to 

do. The incentive that the H.R. 3583 is considering is not to help 

the canneries or the fleet; it is to help American Samoa. 

There is undeniable evidence that the vessels based in American 

Samoa are burdened with additional operating costs and are, in 

general, less productive than the foreign-based fleets operating in 

the same general area. The difference, again, is operating style. To 

mitigate the higher costs of operating out of American Samoa, the 

62 

vessels need the grants proposed in H.R. 3583. And I am thankful 

to Congressman Faleomavaega for proposing that. 

The grants will not cause an increase in catch. On the contrary, 

they will produce less catch, while they would be better managed 

and more controllable. The vessels cannot continue to operate in 

American Samoa if the canneries are gone. The canneries need to 

receive grants in order to be able to compete with the cheaper products coming from overseas. And they also need vessels to deliver 

fish to them on a regular basis. Two canneries, of course, is better 

than one, because the vessels always need options. We hope that 

someone will take over the cannery left vacant by Chicken of the 

Sea. 

By the way, if there are no canneries, there will no longer be the 

large container vessels that bring the cans back to the United 

States from Pago Pago and go back to Pago Pago empty and, therefore, have a chance to bring to American Samoa all the things that 

they need at a very reasonable cost. Everything in American 

Samoa will become more expensive, and it would be tragic for that 

to happen while most of the island population would be unemployed. 

I do support ASPIRE, but I would like to work with Congress to 

see if an amendment to the tax bill can be made to eliminate the 

fees and penalties. We believe in the freedom of the entrepreneurs 

to choose how they operate. If everybody gets a fair chance to make 

use of these grants and there are no penalties for those who choose 

to operate away from American Samoa, there is no reason why any 

American would not want to support the great people of American 

Samoa. 

ASPIRE is the right step in the right direction. 

Ms. BORDALLO. Excuse me—— 

Mr. CURTO. I don’t know if American Samoa should diversify its 

economy by attracting other activities. I only know the tuna business. And I know that, within our tuna industry, we have a concrete chance to make a difference by saving jobs that have just 

been lost and creating new ones. I am talking about thousands. 

[The prepared statement of Mr. Curto follows:] 

Statement of Renato Curto, President, Cape Fisheries Holdings, LLC 

Chairwoman Bordallo, Ranking Member Brown, Members of the Subcommittee on 

Insular Affairs, Oceans and Wildlife, good afternoon, and thank you for allowing me 

to appear before you today to present my testimony in connection with this Hearing 

on the American Samoa Protection of Industry, Resources and Employment Act, 

H.R. 3583 (ASPIRE). 

My name is Renato Curto and I am testifying in my capacity as President of Cape 

Fisheries Holdings LLC, owner and operator of a fleet of 8 large U.S.-flag purse 

seine tuna vessels based in American Samoa (F/V Cape Breton, F/V Cape Cod, 

F/V Cape Elizabeth, F/V Cape Ferrat, F/V Cape Finisterre, F/V Cape Hatteras, 

F/V Cape May, and F/V Cape San Lucas). I am the majority owner of our fleet. 

I support ASPIRE because it offers a concrete and meaningful way to guarantee 

the survival of that same tuna industry that has provided for many years for the 

livelihood of thousands of families in American Samoa. I also support ASPIRE as 

I consider it a means for the United States of America to continue to participate 

and to maintain its leadership role in those international fora which deal with matters so important as the protection of the environment, the conservation of a well 

balanced marine eco-system and the sustainability of the fishing resources. 

63 

Background 

I was born and raised in Rome, Italy in 1944. After graduating at the University 

of Rome in Economics and Commerce and after serving the Italian army for 18 

months, I worked in Arthur Andersen for 3 years before I was contacted by a major 

Italian Tuna manufacturer and brand. My journey in the Tuna World started in 

1973, when I left my country and moved to Mexico to manage a tuna fishing joint 

venture for my employer. 

In 1979, from Mexico, I moved to San Pedro, California, to help start a tuna trading company, named Tri Marine International Inc. Tri Marine is today one of the 

largest tuna trading companies in the world. In addition to being President of Cape 

Fisheries Holdings, I am now the majority shareholder and Chairman of the Tri Marine Group of Companies. 

The establishment of our company in San Pedro was an easy choice: together with 

San Diego, it was, at the time, the center of the U.S. Tuna Industry. We thought 

it would be a good idea to be in the proximity of the major tuna processors and 

brands in order to better cater to their needs. 

I became a U.S. resident in 1980. In 1985 I was offered the opportunity to acquire 

Tri Marine together with my partners in a management buyout. This was a major 

step in my life. I was finally embracing my ‘‘American Dream’’, which culminated 

in the year 2001 when I proudly became a U.S. citizen, and I was finally in a position to fulfill my aspiration of also being a U.S. boat owner. In May of that year 

we concluded the purchase of a tuna fleet of 8 vessels. 

During my 36 years of active work in the tuna industry, I directly participated 

in the ownership and management of companies operating in different areas, from 

fishing, to trading, to processing, to marketing, including a joint venture ownership 

in 1996 of the only remaining cannery in the Continental U.S., (Pan Pacific Fisheries ) based in Terminal Island, California. A year later, in joint venture with the 

same partners, we acquired one of the three main U.S. brands of tuna: Chicken of 

the Sea. The two companies were merged one year later. In 2001 we sold our interest to the current owners, Thai Union. 

I believe I can say that I have been able to acquire a fair knowledge of the U.S. 

tuna business. 

Use of American Samoa as a Tuna Fishing Base 

The presence of Chicken of the Sea and Star Kist in American Samoa has been 

the main reason for the U.S. tuna fleet to be based in Pago Pago. It would probably 

not make economic sense for the U.S. boats to call at American Samoa if they did 

not have the opportunity of delivering their catches directly to the canneries there. 

The closure, on September 30th, of the Chicken of the Sea plant, has been reason 

for serious concern for all the boats based in American Samoa. The recent devastation caused by the tsunami has further demonstrated how difficult it is for the U.S. 

boats to operate efficiently if they do not have the possibility of a prompt unloading 

of their catch. 

Besides the need to have good sales options for our fish, we have a number of 

logistical reasons for wanting to stay in American Samoa: 

For one, we believe in the right of our crews to take a break after each fishing 

trip, to allow our U.S. fishing masters and captains to fly home and visit their families before starting a new trip. 

We also have the need to take care of repairs and maintenance work to be done 

on our vessels. We need a place where we can consolidate the shipment of supplies, 

spare parts, fishing gears, electronic and mechanical equipment, and other materials that may be needed on board. 

By using Samoa as a base, we also allow our fleet managers and our team of 

Samoa-based engineers and technicians, to go onboard our vessels, discuss any potential issues with the captains, deck bosses and chief engineer, make sure that the 

crews are fine and nobody got injured, and then undertake to properly outfit and 

supply the vessel for the next trip. 

There is undeniable evidence that the vessels based in American Samoa are burdened with additional operating cost and are in general less productive than the foreign-based fleets operating in the same area: but the difference, again, is operating 

style. 

Alternative Operating Method—Transshipment 

Our method of operation is much different from the method used by other fleets 

operating in the Western and Central Pacific Ocean (mainly Taiwanese, Chinese 

and Korean). Those vessels remain on the fishing grounds for as long as a full year 

(sometimes even more). As soon as their vessels are full, they transship their 

catches regularly on refrigerated carriers, utilizing ports that are close to where 

64 

they are fishing, thus maximizing their fishing efficiency and their annual volume 

of catches. 

While the information on the catches landed in Samoa by the Samoa-based fleets 

is readily available to anyone, we do not have information of the actual volume of 

catches of these other fleets, but, based on some numbers we have been able to access unofficially, we estimate that their average catch is close to double the average 

catch of the Samoa-based fleets. 

I personally believe, as an American, in the right of Americans to conduct their 

businesses in any way that is legally permitted. 

Why We Need ASPIRE To Be Enacted 

For the reasons explained above, I am here today to request your support for the 

proposed ASPIRE legislation, H.R.3583. 

At the same time, I would welcome the opportunity to work with Congress in 

order to find ways to eliminate the fees and penalties that the current text of the 

ASPIRE legislation is contemplating. I do not believe it is necessary to punish boat 

owners for choosing not to go to American Samoa to unload. I believe that the U.S. 

boat owners should be free to decide where to go fishing, where to unload their 

catches, and in which markets to sell their fish. 

The Samoa-based vessels and canneries need an incentive in order to continue to 

operate there, and I believe that this incentive (in the form of a grant) should be 

made available to each and every one of the U.S.-flag tuna purse seiners operating 

in the Western Pacific under the South Pacific Tuna Treaty, and it should also be 

made available to each and every U.S. citizen who decides to own and/or operate 

a tuna cannery in American Samoa. This incentive is not for Star Kist. The proposed ASPIRE Act provides for the grants to be available to anyone. For example, 

Chicken of the Sea could come back to Pago Pago if the ASPIRE legislation is adopted, and Bumble Bee could very well establish their own canning operation in American Samoa if they see that it is a convenient location and there is enough economic 

incentive to do so. Our hope is that, in any event, someone would come up and take 

over the Chicken of the Sea Cannery: we all need more than one buyer for our tuna. 

Chicken of the Sea closed their factory in Pago Pago and moved to Georgia, for 

valid business reasons that are consistent with what I am saying. In their new facility they will put in cans tuna loins that they can source from around the world at 

the cheapest available prices. Bumble Bee has been doing the same thing for many 

years already at their plant in Santa Fe Springs, California. It was their choice and 

their prerogative, not their obligation. 

While Star Kist’s situation may not be much different from that of Chicken of the 

Sea, for the time being, they are still in American Samoa processing raw tuna, although they have apparently downsized their workforce. Star Kist deserves a chance 

to survive in American Samoa and to be competitive with the canneries that 

produce and export cheap tuna to the U.S. We, as boat owners based in American 

Samoa welcome the decision of Star Kist to remain there, and we hope that the proposed ASPIRE legislation will be a sufficient incentive for Chicken of the Sea, Bumble Bee and/or others, to use American Samoa as their production headquarters, 

processing mainly raw tuna caught by U.S. flag purse seiners. 

ASPIRE is the right step in the right direction. I don’t know if American Samoa 

should diversify its economy by attracting other activities like tourism or high tech 

businesses or call centers, as I have heard for the past several months. I only know 

the tuna business and I know that, within our tuna industry, we have a concrete 

chance to make a difference by saving jobs that have just been lost and by creating 

new ones. I am talking about thousands of jobs, not hundreds. 

If Star Kist were to decide to also abandon their canning operation in American 

Samoa, we would probably be forced to change our style of operation and do what 

most of the other fleets do: transship frequently, increase our volume and be competitive. Or, perhaps, we would sell our fleet to foreign interests. If the other 

Samoa-based boats think like me, the unfortunate result would be for American 

Samoa that their tuna industry, which has been providing thousands of jobs for the 

over half a century, will completely disappear. With it, a lot of other businesses, 

suppliers of goods and services to the tuna vessels and the carriers calling at Pago 

Pago, may be forced out of business, thus putting virtually all of the population of 

American Samoa out of a job. 

And the large container ships which transport Star Kist and Chicken of the Sea 

canned tuna to the continental United States will no longer be available, on their 

empty return trips, to bring back to Samoa much of what the Island needs. The cost 

of fuel in American Samoa will most likely increase a lot due to the much reduced 

volume that will be required after the departure of the canneries and the fleet. The 

same would happen with a lot of other necessities for the Island that may be priced 

65 

on volume usage. The cost of living would dramatically increase for all the citizens 

of American Samoa while, at the same time, there would be the highest unemployment ever. 

In summary, there is a symbiotic relationship between the boats based in American Samoa and American Samoa itself. Boats need American Samoa as much as 

the American Samoa economy needs the boats. The boats need services and supplies. More importantly, they need a market for their fish. If there are no canneries, 

or no buyers for their catch, the boats will lose the market for their fish. We cannot 

allow that to happen. And we cannot allow the American Samoa people to remain 

without a job. 

I urge you consider the ASPIRE legislation as a means to accomplish the goal of 

keeping the tuna industry in American Samoa. 

Thank you for your patience and for your allowing me to testify in support of this 

legislation. 

Ms. BORDALLO. Thank you. Thank you very much, Mr. Curto. 

Mr. CURTO. I apologize for being longer. 

Ms. BORDALLO. That is all right. I do want to remind the witnesses that your full written statement will be entered into the 

record. 

Mr. CURTO. Thanks. 

Ms. BORDALLO. So we are just trying to hold on to time. We have 

lost a few more Members again because there are votes. But because we only vote in the Committee of the Whole, we still have 

the territories present here. 

So I would like now to thank all of you, and we will recognize 

the members of the Subcommittee for any questions they may wish 

to ask. And we will begin with the author of the bill, Mr. 

Faleomavaega. 

Mr. FALEOMAVAEGA. Thank you, Madam Chair. 

And I do want to thank the members of the panel, representing 

their various interests as far as the U.S. tuna industry is concerned. Quite obvious, Madam Chair, we have quite diverse opinions, in terms of the issue. 

And I would just say, with all the respect that I have in Mr. 

Binotto; Mr. Lischewski, whom I have known and respect his opinion as one of our great leaders and experts as far as the tuna industry is concerned. And, Mr. Renato, good to see you, as well. 

Ms. Roth, I did not mean to suggest that you are not an economist. I was only saying you are being naı ́ve in terms of how American Samoa ended up where we are, as far as the minimum wage 

has been. And I don’t know how else to say that, for 50 years, I 

just think that our people have not been given the fair treatment, 

as far as proper wages. And here, again, it is an economic issue. 

And our friendly canneries have always been competing and cutting each other’s throats in every way possible. And so it is true 

with the fishing fleet. So my problem is, how can I possibly bring 

our friendly tuna processors and our friendly tuna fleet to work together so that we can all mutually benefit? 

And the problem that I wanted to share with you, StarKist is the 

only remaining cannery that I have left in the territory. And I 

would like to ask Mr. Binotto, do you see that you will also be 

doing the same thing that Chicken of the Sea and Bumble Bee is 

going to be doing, if there is no playing field given to your problems, just in terms of the price and the wages and the higher costs 

of living? 

66 

And, by the way, the minimum-wage issue is another issue in 

itself, but I just want to say: The wages are down, but the cost of 

living continues to go up. And my constituents are very concerned 

about that. But that is a different issue. 

But I would just like to ask Mr. Binotto quickly, do you actually 

think that you are going to follow what Chicken of the Sea and 

Bumble Bee is doing now if nothing gets done to help our tuna industry in American Samoa? 

Mr. BINOTTO. Good Congressman, as you probably know, 

StarKist was sold last October 6th, actually a year ago from now, 

a year and a little bit. 

I can assure you right now, despite—well, we are a private company, not to share the financials that we have, but Del Monte 

didn’t sell StarKist Seafood because they made a lot of money. 

Profitable companies don’t get sold. That is just a fact. 

And so, as you know, when I came onboard on October 6th and 

took a look at the financial situation of the StarKist business, it 

was really apparent that the company is having a very difficult 

time competing against low-wage countries and against those processors who have made, I believe—and it is not a criticism of what 

Bumble Bee and Chicken of the Sea have done—they made a logical choice, a logical economic choice, and that was to bring third 

manufacturing process onto the United States. But they do that by 

employing low-wage countries to do all the labor to process the fish. 

We can do the same. It is not a secret. That is what the whole 

testimony was about today. I don’t want to do that. We have been 

there for 50 years. The American Samoa people have built the 

brand and business. They are as largely responsible for the success 

of StarKist tuna as the management team is. 

And I think, when you came to us with the bill that you sponsored, it offered us a solution, an opportunity. It wasn’t picking out 

StarKist; it doesn’t pick out just StarKist. It is saying, if you want 

to stay in American Samoa, we have an option for you to help you 

lower your costs so that you can compete not only against the domestic groups who made a very good, wise decision, but also 

against the low-wage countries that produce tuna much lower than 

we can. 

I didn’t come here to tell you the day that I was going to resign 

from American Samoa. That was not the purpose of this testimony. 

I don’t want to do that. I want to come here to see if there is a 

way that we can stay. 

But I can tell you personally, if you were to take a look at the 

financial statements that we have and the financial statements 

that we had last year, time is of dire—we are in dire straights 

right now. We need something to compete against low-wage countries. 

I hope that helps answer the question. 

Mr. FALEOMAVAEGA. I appreciate that. 

I will wait for the second round. Thank you, Madam Chair. 

Ms. BORDALLO. I thank the gentleman from American Samoa. 

We will have a second round. 

I would like to recognize the gentlelady from Virgin Islands, Ms. 

Christensen. 

67 

Mrs. CHRISTENSEN. Thank you. I am going to ask just one question, and then I will yield to the gentleman from American Samoa, 

if he would like. 

I would also like to ask Mr. Binotto: Several of the people who 

have testified have made reference to the increase in the minimum 

wage in American Samoa. And I would like you to tell me how big 

a factor that is in the whole picture of all of the things that are 

going on. 

Is the increase in the minimum wage a major factor that you 

think would cause your company to have to move? 

Mr. BINOTTO. It would be silly to say it wasn’t. The big issue is 

the gap. It is the gap between what we pay American Samoans and 

the wage that is being paid to those in lower-wage countries, 

which—— 

Mrs. CHRISTENSEN. But it is not specifically because we have 

raised the minimum wage in American Samoa, is it? 

Mr. BINOTTO. The higher wages that we have in American 

Samoa is obviously a huge challenge for us to be profitable. It is 

without question. 

Mrs. CHRISTENSEN. Sure, I understand that 70 cents an hour 

compared to $5 an hour is a huge gap. But I did not think that 

the small increase that we have imposed on American Samoa had 

created the problem. 

Mr. BINOTTO. Let me give you a quick number. I am an old CPA, 

so one number rolls through my head. 

Next year, the next wage increase, we will go up to approxi- mately to $5.60 an hour. And you will understand, I hope, why I 

explained the gap. We are competing against countries that are 

being paid 50 to 60 cents. Every one of us testified to that number. 

If you were to take the 2,000 employees we basically have in American Samoa times 2,080 hours, times that gap, it is not a magical 

number; it comes up to $23 million. 

So I think you can quantify it very easily, to those who don’t believe or understand the significance of it, it is important. Because 

let me state one last fact to it. Selling tuna in the United States— 

the reason why two competitors are here is because they know it 

is an extremely competitive business. I don’t have an issue with 

them testifying to what they are saying, but I do want you all to 

understand: It is an extremely competitive situation. 

We don’t make $2 a case on chunk light halves. On some of the 

businesses that we have, the margins are razor thin. Pennies then 

become extremely important. So, yes, higher wages, the example I 

just gave you which sites the $23 million, I think you can start to 

understand how important it is, especially when this company was 

sold last year and it lost money. Just a fact. Those records are public. 

Mrs. CHRISTENSEN. I would like to yield the rest of my time to 

the gentleman from American Samoa. 

Mr. FALEOMAVAEGA. I thank the gentlelady for yielding. 

I just want to say to Mr. Sawyer, I have always held Chicken of 

the Sea with the highest regard. And, over the years, I thought we 

had a good working relationship. 

But I want to note for the record, Madam Chair, that at no time 

did any of the Chicken of the Sea officials ever tell me that they 

68 

were very concerned about these issues and that there were any 

plans about leaving. They only told me the day that they leaving. 

And I just went to say that I was very disappointed and saddened by the fact that I had hoped and thought that there would 

be some consultations or give us a warning bell or something to say 

that we have some serious problems here. You just stood up and 

left and just said goodbye. And I just want to say that there were 

no consultations with my office about your prior plans to leave at 

any time. And I just want to say that. 

To my good friend, Mr. Lischewski, I have the utmost respect for 

you as a dear friend. And you know the industry as well as anyone 

here, with Mr. Binotto and others. And you know we had discussions about this issue. 

And I wanted to ask you, what would be your suggestion in helping the tuna industry in American Samoa? I have no intention of 

wanting to hurt the workers in Puerto Rico or California or even 

in Georgia. My only intent is just try to figure how can we help 

the tuna industry. 

Your suggestion about a grant to education and all this other 

stuff is nice and good, but I am looking at the reality. We have 

been dealing with this industry for 50 years, and we have the expertise, we have the ability to grind out or produce some $40 billion 

worth of canned tuna that has been exported to the United States. 

I think that speaks well with the ability of the Samoan people to 

work diligently. 

But I would like to ask your suggestions, how can we improve 

this bill? 

Mr. LISCHEWSKI. Congressman, I don’t know, in our opinion, if 

there is a way to improve the bill. I think you know that I am on 

record, and I would probably disagree with Mr. Binotto, that I believe it is up to the companies themselves to ensure that they are 

competitive. 

We have never counted on the U.S. Government in a free-enterprise system to subsidize our business or make us competitive. We 

also used to have—— 

Mr. FALEOMAVAEGA. Well, let me just—you are saying—— 

Ms. BORDALLO. Let the witness finish. 

Mr. LISCHEWSKI. We also, at a time, had 1,500 jobs in Puerto 

Rico. We had a lot of jobs in Hawaii. And based on the reality of 

the competitive environment we dealt with, we were forced to reduce those jobs. We have moved our loining offshore, as you have 

mentioned, but we have retained U.S. processing operations. 

We believe American Samoa can continue to be extremely competitive without the benefit of subsidies if they were to move to a 

loining strategy. It is clearly a far lesser employment number than 

what you have today, but it retains an industry, it retains the canmaking industry, it retains the shipping industry, it retains the infrastructure of American Samoa. 

But giving an advantage, to the extent that you are talking 

about, the amount of dollars, gives our competitor, as Don mentioned, in an extremely competitive environment, an unfair competitive cost advantage which we just cannot survive. 

69 

Mr. FALEOMAVAEGA. Well, I just wanted to say, Chris, that you are currently getting an $18 million subsidy to help our fishing 

fleet to fish in the South Pacific island nations. 

Now, that is perfectly OK to get a subsidy to do fishing, but it 

is not OK to get some kind of assistance to help the only tuna cannery left that we have that produces whole tuna and not just loins 

in the way that Chicken of the Sea and your company currently operates? 

Mr. LISCHEWSKI. Again, I think you would have to speak with 

the State Department on the U.S. tuna treaty in the South Pacific. 

I would not characterize it as a subsidy. I would characterize it as 

U.S. Foreign policy in the South Pacific. It enables the entire U.S. 

tuna fleet—and that means any U.S. individual that wants to get 

in the tuna fishing fleet today that can get one of the limited licenses we have—gives them multilateral access to the fish grounds 

of 17 island nations. 

The State Department has maintained that treaty for some time. 

And, again, I do believe they would consider it foreign trade—I 

mean, not foreign trade, but foreign policy rather than a subsidy. 

Ms. BORDALLO. I thank the gentleman from American Samoa. 

I would like to give an opportunity now to the gentleman from 

CNMI, Mr. Sablan. 

Mr. SABLAN. I wasn’t going to ask any questions, I was going to 

be nice, until Ms. Roth testified. 

Truly, Ms. Roth, I don’t know what planet you came from that 

lower wages make everyone successful. 

But I will go to a—I come from a low-wage district. So, Mr. 

Walsh, if I may ask—and this is probably related to the question 

Eni just asked of Mr.—I will call you Chris. You testified that the 

U.S. Government should not subsidize the tuna processors. And I 

can’t say you got this in the Senate, because, you know, I used to 

work there too. But yet the U.S. Government pays over $450,000 

annually to secure fishing rights for its U.S. tuna fishing boats 

while each boat pays $75,000. 

So, again, is it OK to subsidize your boats but not the processors, 

if I may? 

Mr. WALSH. The question was intended for me and not for my 

colleague here. 

Mr. SABLAN. Mr. Walsh, yes. 

Mr. WALSH. I think the answer to the question is just exactly as 

Mr. Lischewski has answered it. When the U.S. tuna fleet had to 

depart the Eastern Tropical Pacific, there simply was not enough 

tuna available in U.S. waters to support the fleet. So we had to 

have an access agreement. 

And it was very clear that, if we compared the licenses that had 

to be paid by other countries, Japan and Korea, it was very unlikely that our boats could compete. It is also true, quite frankly, 

that the islanders would prefer to deal with U.S. vessels, they 

would prefer to deal with the U.S. Government. And so, as a consequence—— 

Mr. SABLAN. Mr. Walsh, I only have 5 minutes. 

Mr. WALSH. As a consequence, the State Department said there is a foreign policy reason for paying $18 million. And that has been 

the case ever since the treaty was signed. 

70 

Mr. SABLAN. OK. So it is OK to subsidize the boat but not the 

processors. That must be the answer. 

I was really was going to be nice until Ms. Roth testified. I am 

not talking to—you don’t have to answer that, Ms. Roth. 

Ms. FURCHTGOTT-ROTH. It is OK. I can answer any question you 

like. 

Mr. SABLAN. Mr. Sawyer, Chicken of the Sea, we understand 

that you do not support the economic development—the proposal in 

ASPIRE. So what do we do with the people of American Samoa? 

Do we just walk away from them? Leave them no jobs and probably 

put them on food stamps and Medicaid for every Samoan who lives 

in American Samoa? What do we do with them? 

Mr. SAWYER. Well, I think that we need to diversify—— 

Mr. SABLAN. They are Americans that go to work so that you and 

I can sit here and discuss, argue over this economic issue. What do 

we do with these people? 

Mr. SAWYER. Re-educate them—— 

Mr. SABLAN. Oh, really? 

Mr. SAWYER. When you specialize the economy, you need to diversify. 

Mr. SABLAN. Right. Like having nursing home training there, 

like Ms. Roth suggested. Take people from the East Coast, send 

them there for nursing education, and then send them back after 

they get their degrees. 

What do we do with them, truly, in the present reality? 

Mr. SAWYER. I don’t have a solution. I don’t have a recommendation. 

Mr. SABLAN. So we leave them alone. Thank you. 

Ms. FURCHTGOTT-ROTH. Oh, I wasn’t suggesting sending them 

from the East Coast. 

Mr. SABLAN. It is my time. 

Ms. FURCHTGOTT-ROTH. I was suggesting sending them from surrounding areas. 

Mr. SABLAN. It is my time, please. 

Chris, you said that you pay some of your workers as much as 

$13 an hour. I would like to know some more about your workforce. 

How many workers get paid $13 an hour? What do they do exactly? 

And where are they; are they outside the United States or in the 

United States? 

Mr. LISCHEWSKI. In the United States. We have 220 workers in 

our canning operation in Santa Fe Springs, California. The average 

hourly wage is $13.75. They are engaged in the canning of tuna. 

Mr. SABLAN. And you still make money? 

Mr. LISCHEWSKI. Yes, we do. 

Mr. SABLAN. And you were paying your workers less in American 

Samoa. 

Mr. LISCHEWSKI. Bumble Bee has never been in American 

Samoa. 

Mr. SABLAN. All right. But, so, the canneries in American Samoa 

pay their workers less, and they are losing money also. 

Mr. LISCHEWSKI. I can’t speak for that. 

Mr. SABLAN. All right. How much do you pay the workers who 

clean and process the fish into loins? 

71 

Mr. LISCHEWSKI. We don’t have any operations involved in the 

cleaning of loins. We buy fish and the finished loins. 

Mr. SABLAN. The finished loins. So those fish are—— 

Mr. LISCHEWSKI. I will tell you, to your question, while we are 

not involved and these are not our employees, the factory we operate in Fiji pays around $2.80 an hour, and the factory in Trinidad 

around $3.15 an hour. But, again, those are not our employees. 

Mr. SABLAN. I understand that. So the finished product has no 

one, in your opinion, that process anything before they get to California, got paid $13.25 an hour. Probably no American citizen. 

Mr. LISCHEWSKI. I am not aware of anyone getting paid that rate 

to process round tuna. 

Mr. SABLAN. All right. Thank you. 

Madam Chair, thank you very much. 

Ms. BORDALLO. I thank the gentleman from CNMI. 

I have a few questions, and then we will end up with the author 

of the bill again, Mr. Faleomavaega. I am sure he has more questions. 

All right. For Mr. Binotto, StarKist, what guarantees do we have 

that, even if this bill were to pass, that you wouldn’t pull your operations out of American Samoa once the next minimum-wage increase kicks in? 

Mr. BINOTTO. Madam Chair, one of the things I can tell you 

about—let me give you just a little bit of background and then I 

will answer your question specifically. 

Historically, American Samoa, StarKist American Samoa, used to 

employ approximately anywhere from 2,400 to 2,600 employees annually—or at any one given time, excuse me. And, in the last several months, actually in the last 18 months, we have taken that 

employee count down from 2,500 people to less than 1,700, which 

it is today. 

I will look you straight in the eye and I will assure you of one 

thing for sure. If ASPIRE was to get passed, we believe we would 

have an opportunity to bring it back to the historical levels. And 

if ASPIRE was to get passed, it would provide us at least the ability to go—as it is written today, it would give us the ability to go 

forward and stay into American Samoa through the foreseeable future. 

Ms. BORDALLO. And if the next minimum-wage increase kicks in, 

would your company still—— 

Mr. BINOTTO. The way ASPIRE is written right now, it does have 

a wage escalation clause, which basically keeps the gap from us to 

the low-wage countries. That is why the importance of that clause 

is in there. 

Ms. BORDALLO. All right. 

Mr. BINOTTO. As long as that clause is in there, I can assure you 

we will stay in American Samoa through the foreseeable future. 

Ms. BORDALLO. OK. The next question is, would you support a 

provision in the legislation that would require a minimum time 

commitment for any company which receives the subsidy? 

Mr. BINOTTO. Absolutely. 

Ms. BORDALLO. OK. 

And then I have a question for Bumble Bee, Mr. Lischewski. One 

of the issues addressed in your testimony is that tuna processors 

72 

like Bumble Bee will not receive any of the proposed subsidies unless they operate in American Samoa. I heard that in your testimony. 

Then why not simply open a plant in American Samoa? 

Mr. LISCHEWSKI. I think the cost of opening a plant entails a 

very high cost of capital. Bumble Bee has made significant capital 

investments over the last 10 years to establish a processing network which includes the factories in Puerto Rico and California. 

Forcing us to pick up and move and build a new factory because 

of a government subsidy program we think is not part of the U.S. 

system. 

Ms. BORDALLO. Mr. Sawyer, to follow up on a question that Mr. 

Faleomavaega asked, can you expound on your statement that you 

attempted, over the years, to work with the U.S. Federal Government to address the issues with operating in American Samoa but 

were ultimately unsuccessful? Did you make specific proposals, and 

can you recall what they were and what the responses were? 

Mr. SAWYER. I, personally, was not involved in any of the discussions. In fact, I have never met the Governor that was here earlier 

or the congressman. And we have had a number of leadership 

changes. 

However, my understanding is that our leadership team has diligently worked through both a American Samoa team as well as a 

U.S. Government. I do not have any recollection of what the details 

were related to those programs because I was not intimately involved with it. 

Ms. BORDALLO. All right. 

Then for Mr. Walsh, the ASPIRE legislation appears to be built 

on the premise that, if you charge the boats that don’t currently 

deliver to American Samoa, they will change their behavior and encourage greater deliveries. Your testimony contends this won’t be 

the case. Would you please expand on this point? 

Mr. WALSH. Well, I think—let me make one point. I think all the 

boat representatives here today said that the additional fee and the 

taxes seem not to be sensible. The question then would be whether 

there would be sufficient enticement through the subsidy—and, for 

my clients, it would be $100 a ton—to offset the issue of simply 

turning these fishing boats into transport vessels and cold storage 

facilities. 

We just simply do not believe that that number, given the reality 

of the business of having to deliver, is going to come anywhere 

close to taking care of the extra cost of taking fishing vessels away 

from what they should be doing, which is fishing, and instead taking them into transport vessels. 

I provided a map with my testimony, and it is a very stark indication of where the tuna fishing grounds are for the fleets. And 

they are a fair distance away from American Samoa. And they run 

all the way across, 10 degrees north, 10 degrees south. And that 

is where the good fishing is. 

And they need to get their boats empty so they can go back to 

do what they are supposed to do, which is fishing. And this whole 

legislation would simply say, ‘‘We are going to make you into a 

transport vessels, and you may or may not break even with a subsidy.’’ 

73 

Ms. BORDALLO. Thank you very much. 

I will now refer to the author of the bill, Mr. Faleomavaega. 

Mr. FALEOMAVAEGA. Thank you, Madam Chair. 

I just want to make an observation. Ms. Roth, you had made a 

statement about a simple way to fix this is to allow American 

Samoa to set up their own minimum wages. 

Well, I just want to share with you an experience. These are my 

Republican friends who have come up and complained to me and 

said, ‘‘Eni, why should American Samoa be treated differently from 

us?’’ If my district has got 19 percent unemployment—so why 

should American Samoa be treated with smaller wages than what 

our national government provides for both States as well as territories? 

Ms. FURCHTGOTT-ROTH. Well, your Republican friends are wrong. 

Here, the U.S. Congress, our government, is putting American 

Samoa and its workers out of business. As I said before, if Congress said my salary should be doubled, had to be doubled, I would 

be fired tomorrow. 

And if you just look at the example of teenagers in the United 

States, when the minimum wage here went up to $7.25, unemployment hit 26 percent among American teenagers—— 

Mr. FALEOMAVAEGA. Reclaiming my time, Ms. Roth. And I see 

where you are driving at, but here is my concern. We went through 

the system under the auspices of the Department of Labor, and 

they came up with recommendations: 2-cents-an-hour increase in 

wages, 3-cents-an-hour increase in wages. 

What can you possibly do with an increase in wages at 24 cents 

a day when the cost of living continues to go up? This is what my 

constituents complain to me about; the wages just are not commensurate with the cost of living. This has been the problem with us 

for all these years. And I just wanted to note that. 

Mr. Walsh, you had indicated that there needs to be some kind 

of a more comprehensive foreign policy about the whole tuna industry, and I agree with you. But I think, to Mr. Lischewski, about 

this idea that it is OK to subsidize our tuna fishing fleet with $18 

million, but it is not all right to put some kind of a subsidy for our 

processors. 

Now, in fairness, obviously, we have three of our main tuna processors here this afternoon having a totally different operation in 

terms of how this thing has now been done for the past 50 years. 

Where we are now, would you recommend that StarKist should 

also leave and be part of the trend that we are to take advantage 

of the cheaper labor out there for gutting and processing the fish, 

rather than in a U.S. territory like American Samoa? 

Mr. WALSH. I don’t think I can give you any recommendation 

with regard to the processing facilities. I really don’t. That is not 

my portfolio here today. 

I do know that in other places in this country in fisheries policy, 

for example in Alaska, because they had a very large pollock resource, Congress, led by the Representatives of Alaska, said that 

10 percent of all the pollock went to the native tribes in Alaska. 

Many of them had become multimillionaires as a result of it. It is 

considered a very wise public policy for the natives in that area. 

They have made great use of that. 

74 

And that is a good policy if you are dealing with your own fishery 

resource. But if you are not dealing with your own fishery resource, 

it is hard to say that people who catch fish overseas should pay a 

fee or a tax into a domestic program in the United States. 

Mr. FALEOMAVAEGA. All right. 

Mr. WALSH. If there is no $18 million, you know what is going 

to happen better than anyone, Congressman. You work out there 

all the time. I have practiced law in Yap and Guam. There won’t 

be any U.S. tuna fleet if there is no treaty like that. 

Mr. FALEOMAVAEGA. Well, I will say that there is absolutely no 

question about the changes coming about from the Pacific island 

nations that. The Nauru Agreement that is now pending, where 

they are going to want to control the pricing of the tuna, the fish 

days, requirements are now being discussed. 

Mr. Renato, thank you so much for coming. And I just wanted 

to ask you, did you think that your friends from the South Pacific 

Tuna Corporation, are they being truly disadvantaged with this offering in trying to bring our tuna fleet to help us revive the tuna 

industry in American Samoa? 

Mr. CURTO. Congressman, I think I said in my testimony that I 

believe that the only part of your proposed legislation I would like 

to work on is the issue of the fees and the penalties. 

The SPTC and our group, other boat owners that are not here 

today, belong to an association which is called the American Tunaboat Association; and we share the meeting rooms and we share 

the same common problems that we have. So it is not pleasant to 

consider in the same group to say, OK, you are going to pay for 

me to get the subsidy. 

So if the subsidies are eliminated, what I said is that I see no 

reason, without the subsidies and the fees, why any boat under 

U.S. flag would oppose this legislation. 

Mr. FALEOMAVAEGA. I am sorry. My time is up, Madam Chair. 

Thank you. 

Ms. BORDALLO. I thank the gentleman. 

And returning from voting we have Grace Napolitano, the 

gentlelady from California. You are recognized. 

Mrs. NAPOLITANO. Thank you, Madam Chair. I am sorry I 

missed, but then we had to run to the Floor and do our duty. 

I am not sure what I missed while I was gone. I am sure there 

is a lot of other testimony that was presented, and I think a lot 

of it has already been asked. 

One of the things that if the bill were to pass is, how do you believe—and this is for Mr. Lischewski—that would impact the jobs 

in my district, in your Santa Fe Springs cannery, and if you have 

any information about what it would do to Puerto Rico and the proposed plant in Georgia. 

Mr. LISCHEWSKI. Speaking for Puerto Rico, it would clearly put 

us in a very strong position to leave Puerto Rico. And Santa Fe 

Springs would be absolutely borderline. We would really have to 

look at whether it makes sense to stay in the U.S. at all or move 

all of our operations offshore. 

I can’t speak for Georgia. 

75 

Mrs. NAPOLITANO. You have two tuna canning facilities in the 

U.S., and both pay higher than minimum, California paying the 

higher $13 an hour. 

Both receive loins. And I may add, and I think I mentioned to 

you before, when I visited the plant, that I have a son who worked 

in the seafood industry, so I have a little more knowledge about the 

loin issue. Both canneries receive loins that have been processed 

overseas to produce the finished product. 

When did you first begin operating under this system? And is it 

cost competitive, and do you think this business model could succeed in American Samoa? 

Mr. LISCHEWSKI. Bumble Bee first started into loining probably 

about 15 or 16 years ago and converted to a 100 percent loining 

operation around 2001. We believe it is a very competitive cost 

model. We believe it allows us to be cost competitive with imports 

from Southeast Asia, as demonstrated by our own profitability and 

our market share, and we believe it is something that can be replicated in American Samoa. 

As you mentioned, we pay $13.75 an hour average wage in California and $7.75 in Puerto Rico; and again, those are all high-quality positions, very stable, year-round positions, and again it does 

give us a very competitive cost structure. 

Mrs. NAPOLITANO. But you have been able to restructure, or your 

infrastructure has been updated and upgraded and otherwise made 

more efficient. 

Mr. LISCHEWSKI. We continue to invest in high-speed technology, 

whether it is fillers, seamers, our whole labeling and packaging 

lines. So, you know, clearly we recognize that a solution for us in 

the global competitive environment that we operate in is not just 

to add jobs. We recognize that we live in a zero-inflation environment, so as labor rates go up, we need to offset that with increases 

in efficiency, and a lot of that is through capital spending in our 

facilities. 

Mrs. NAPOLITANO. And you have been able to compete and still 

stay in business even though there is a marked difference between 

your operation and others’ and the wages. 

Mr. LISCHEWSKI. Yes, we have been able to show regular increase 

in profitability from year to year. 

Mrs. NAPOLITANO. You also mention the need to understand the 

global nature of the canned tuna market. And are these factors, 

outside of the extremely low foreign hourly wages, that we should 

further understand? 

Mr. LISCHEWSKI. Again, I think a couple of things. 

You know, there are some trade factors that benefit American 

Samoa. Canneries from Thailand that we have talked about do 

benefit from significantly lower labor costs, but they also pay 12.5 

percent import duty on their canned products into the U.S., which 

we would argue would offset part of the wage discrepancy. Tuna 

loins carry a very low import duty, and that is why we are able 

to run that model. 

So, you know, there are trade factors that clearly have to be considered. Labor, by itself, is only about 10 percent of the product 

cost, so even when we talk about a 30 or 40 percent increase in 

76 

labor, again, the cost of our product is the fish and the cans; that 

is 65 to 70 percent of the product cost. 

That is clearly one of the factors we focus on. And then import 

duties from non-U.S. countries make up another major cost component. 

Mrs. NAPOLITANO. Thank you for your testimony. 

And, Madam Chair, that is all the questions I have. But I do 

pledge to my colleague to sit and work with him on finding another 

suitable way to be able to help his area and help their economy. 

That is not a problem. It is just I don’t want it at the expense of 

our U.S. jobs. 

Thank you. 

Ms. BORDALLO. I thank the gentlelady from California. 

And now I would like to recognize for final questioning, the author of the bill, Mr. Faleomavaega. 

Mr. FALEOMAVAEGA. And I sincerely want to assure my good 

friend, the gentlelady from California, that this was never my intention, to put her constituents out of work. 

The basis of what I am trying to figure out, and hopefully, that 

our friends from the tuna industry will be more constructive in 

their efforts in trying to see how we can best work this thing out 

to be helpful. 

Mr. Binotto, I know you have been characterized as the sole beneficiary of this proposed bill, if it passes, and I just wanted for you 

to elaborate. Is this really to the benefit only of StarKist? 

Because my whole effort was trying to, yes, to be helpful to you 

because of the cost factors but, at the same time, to invite other 

tuna canneries or processors also to participate in this effort—as 

well as our tuna fishing fleet to come and deliver whole fish to our 

canneries so that we can process and export it to the U.S., as we 

have done for all, how many, 50 years now. 

Would you care to comment on that? 

Mr. BINOTTO. Sure I would. 

I have read the bill several times, Congressman. I don’t recall 

anywhere in that bill that it stipulates the benefits were only allotted to StarKist Seafood. 

The intent of the bill is very simple. It is to entice the boats to 

come back into the harbor, deliver fish direct to the processor, for 

the processors to take it and be able to process that fish so that 

it levels the economic playing field of us being able to process fish 

into loins at a similar cost of what is being done overseas by lowwage countries. That is as simple as it gets. 

So, as far as it being designated only to StarKist, I don’t think 

so. I think it is a matter of choice. There are other companies outside, there are companies that can make the same decision as we 

would to stay, to come to American Samoa and utilize the good island and its good resources that have both a U.S. license, U.S. 

boats, U.S. processors. 

To me, it just makes some sense that we should have the ability 

to lure back the resources that are being drug away from us right 

now and being exploited by low-wage countries. The fish that we 

need to produce, I can’t get. 

I would like to correct one statement that our good friend, Mr. 

Walsh, has stated with regards to us not being able to utilize all 

77 

the fish that would come into there. Let me be very specific about 

that; it is a misleading fact. 

There are 39 boats. And if those boats all fish in a transshipment 

method, it is, of course, being able to harvest 300,000 tons. 

Now, if those 39 boats were to utilize the direct delivery method, 

that tonnage decreases in half. You know that. I know that. Those 

are facts. 

We are not requesting all 39 boats to come in 100 percent of the 

time. We are only requesting them to come in three times. And, 

frankly, I can take all that tonnage tomorrow. 

So excuse me for the emotion. It is not slated for just StarKist 

Seafood. 

Mr. FALEOMAVAEGA. Is it also one of the problems, Mr. Binotto, 

in our tuna fishing activities that, in actuality, we produce—I 

mean, we process about 120,000 tons; but then the 180,000 tons 

that are being caught by our fishing fleet are sold to foreign countries? 

Mr. BINOTTO. Exactly right. 

Mr. FALEOMAVAEGA. Am I correct on this? I just wanted to make 

sure we are clear on the record. 

Mr. BINOTTO. You are 100 percent correct. 

Mr. FALEOMAVAEGA. Mr. Walsh, I don’t mean to pick on you. 

Mr. WALSH. That is all right. I was a Senate staffer. It is quite 

all right. 

Mr. FALEOMAVAEGA. And God bless you for that. 

I just wanted to say that—a little bit of history—as I recall, one 

of the reasons why our tuna fishing fleet had some very serious 

problems was because of this belief that because tuna was a highly 

migratory fish, they can fish anywhere they want to go. 

Well, lo and behold, they came to the zones of Latin American 

countries and they took possession of our fishing boats. And they 

got away from the eastern Pacific; then they went to the south Pacific and what happened? The Jeanette Diana was confiscated by 

the Solomon Islands, and then the whole world was up, where Secretary Shultz had to say, We have to do something about this. 

And this is how we got the tuna fishing treaty to help get the 

Pacific Island nations to work with us, allowing us to do the fishing 

grounds. 

Now, our foreign policy is something that is a very good question. 

What really is the U.S. foreign policy toward the whole fishing industry? If we can make protective actions on our corn, our dairy 

products and our subsidies, can we also possibly do the same for 

the tuna? 

Mr. Walsh. 

Mr. WALSH. Well, there are a lot of questions there. And you and 

I probably should talk about this some time later on, because I can 

tell you about the fact that the U.S. tuna policy was put into the 

Magnuson-Stevens Act. I put it in the bill in order to exclude tuna; 

and then eventually, of course, we discovered that the rest of the 

world did not support us. 

And it led to seizures. But the seizures began before then because they began in Peru; and thank God for John Negroponte, 

who got some of our boats out. So that goes even farther back. 

But we should talk about this. 

78 

Mr. FALEOMAVAEGA. I know, because he was the one instrumental in doing the tuna treaty. 

Thank you, Madam Chair. I want to thank all the members of 

our panel for taking the time from their busy schedule to come and 

give their expert testimony to this Subcommittee. Thank you. 

Ms. BORDALLO. I thank the gentleman from American Samoa, 

the author of the bill. 

And I do appreciate the witnesses for their participation in the 

hearing today. You spent many hours here, and I do appreciate it; 

and I am sure the members of the Committee also appreciate your 

testimonies. And remember that your full written statement will be 

entered into the record. 

Members of the Subcommittee may have some additional questions for the witnesses, and we will ask you to respond to those in 

writing. The hearing record will be open for 10 days for any other 

information that witnesses or other interested parties would like to 

submit. 

And if there is no further business before the Subcommittee, the 

Chairwoman again thanks the members of the Subcommittee and 

our witnesses. And the Subcommittee now stands adjourned. 

[Whereupon, at 5:42 p.m., the Subcommittee was adjourned.] 

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