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CONGRESSMAN ENI F.H. FALEOMAVAEGA American Samoa U.S. House of Representatives Washington, D.C.

NEWS RELEASE March 27, 2001


Congressman Eni Faleomavaega recently testified in support of a 20% import duty on the purchase price for each ton of light tuna off-loaded in the U.S. Territory of American Samoa which entered the harbor aboard or was initially caught by a purse seiner vessel which is not registered in the United States.

Appearing before the House Ways and Means Committee in the U.S. Territory of American Samoa, Congressman Faleomavaega stated that he was not interested in arguing the legalities of the canneries’ tax exemptions.

"This is an issue that holds serious economic implications for our territory, and as such, deserves much broader attention and careful examination," Congressman Faleomavaega said. "For the record, I would like to note that H.J. Heinz purchased Star-Kist Samoa in 1963. Since 1973, Heinz has moved from a $700 million operation to a $15 billion corporate enterprise."

The Congressman also noted that since 1963, Heinz has consistently enjoyed special tax exemptions and territorial benefits.

"One of these benefits is exemption from the Nicholson Act. The Nicholson Act prohibits foreign vessels from landing or delivering fish on U.S. ports. American Samoa is exempted from this restriction because of its territorial status, and as such, foreign ships can land their catch directly on the cannery docks in American Samoa," the Congressman explained. "This allows the canneries to purchase 30% of its light meat tuna from foreign purse seiners."

"Another major exemption is that under the Headnote 3 (a) program, canned tuna processed in the territory can be exported duty-free to the U.S., if the processing meets the criterion of not more than 50 percent foreign component value. Canned tuna regardless of origin meets the requirements of this exemption. Needless to say, H.J. Heinz has benefited to the tune of millions," Congressman Faleomavaega said.

Congressman Faleomavaega also noted that for 38 years H.J. Heinz has consistently paid Samoan fish cleaners well below the U.S. minimum wage standard. Samoan workers earn $3.20 per hour. Heinz pays its Puerto Rican fish cleaners $6.00 to $7.00 per hour.

"While Samoan workers are earning $3.20 per hour, the H.J. Heinz Company continues to increase its bottom line," Congressman Faleomavaega said. "The company recently announced that its annual sales exceeded $9.4 billion. Star Kist, a subsidiary company of Heinz Corporation, continues to maintain its status as the number one brand canned tuna company in the U.S. In fact, Star Kist sales of tuna were approximately $1 billion for FY 2000."

In FY 1999, Star Kist Samoa and Chicken of the Sea/Samoa Packing exported a total of more than $446.5 million worth of canned tuna from American Samoa to the U.S. Since 1975, the canneries have exported nearly $6 billion worth of tuna from American Samoa.

"Both canneries continue to enjoy tax exempt status," Congressman Faleomavaega said. A Heinz company spokesman noted that "a tax exemption certificate incentifies a company to invest capital and protect that investment from unknown future costs."

In his testimony Congressman Faleomavaega asked, "Isn’t $6 billion worth of canned tuna exported from American Samoa in the U.S. a sufficient incentive for our corporate partners? Must Heinz Corporation continue to protect its investments and increase its profits at the expense of our local economy?"

The Congressman invited members of the House Ways and Means Committee to visit the villages of Amanave, Vatia, Tula, Aunu‘u and Onenoa. "Visit these villages at about two or three in the morning and see our Samoan women dressed in their white uniforms waiting to catch their one-hour long bus ride to the canneries. Then visit the canneries and again observe these same women cleaning fish and standing for some eight hours each day. After twenty years of service these women are rewarded for their efforts with a pension check of about $40.00 per month, compliments of Heinz/Star-Kist or Samoa Packing/Chicken of the Sea," Congressman Faleomavaega said.

"I also want to remind the members of this Committee that three years ago Heinz/Star-Kist was fined $250,000 by the U.S. Department of Labor for systematically paying Samoan workers lower salaries than non-Samoans doing similar work. In 1995, the Company was cited by the Occupational, Safety and Health Administration, another division of the U.S. Department of Labor, for 42 willful violations, 35 serious violations and 12 repeated violations of U.S. labor laws relative to providing safe, working conditions for the cannery workers," Congressman Faleomavaega said. "As a result of these violations Heinz/Star-Kist was fined and agreed to pay $1.8 million in penalties."

"The point here is that there needs to be a basic and fundamental shift now on ASG towards Heinz/Star-Kist and Thai Union/Samoa Packing. For some forty years now, the terms and conditions of these tax exemptions and incentives have been so one-sided in favor of these corporations that now even the existence of our own U.S. purse seining industry is seriously at risk."

"It is for this very reason why we are here today," Congressman Faleomavaega said. "Make no mistake about this one fundamental truth – without the fish caught by our purse seiners, these canneries cannot operate at their current rate of production. This given, why is it that our purse seiners are given lower preference for off-loading than foreign vessels right here in our own port? Why is it that foreign vessels are paid special bonuses by our canneries if there are delays in off-loading, but our own purse seiners get nothing? Why is it that our purse seiners are often paid as much as $50.00 per ton less than the prevailing prices paid by Bangkok processors?

"I believe one of the major reasons that prompted Governor Tauese and his administration to sponsor this legislation was because these foreign vessels and mother ships are not contributing one penny into our economy," Congressman Faleomavaega said.

Congressman Faleomavaega also predicted that the canneries will leave American Samoa in another 7 to 10 years, if not sooner. "Looking at the situation globally, countries like Mexico, Peru, Ecuador, Bolivia and Colombia, as part of the Andrean Agreement, are all pushing for duty free imports of canned tuna to the United States similar to the Caribbean Basin Initiative. The countries of Japan, Costa Rica, and Italy can now export yellow fin tuna to the United States. You can be sure that Star Kist and Chicken of the Sea care going to find ways to maximize their profits in other locations, and leaving American Samoa to do it will be a reality."

"Whether it is through this legislation or by way of negotiation, I honestly believe it is time for our elected leaders to demand a more equitable and fair level playing field from our corporate partners," Congressman Faleomavaega said. "If passage of this bill is the only way to get the attention of Heinz Corporation and Thai Union, then let’s pass the bill.

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