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StarKist's departure could leave $200m hole in local economy

Aerial view of Starkist canning plant in American Samoa
Source: Undercurrent News

Pago Pago, AMERICAN SAMOA — If tuna canner StarKist & Co departs American Samoa for a location with cheaper labor costs as the company has previously warned, the impact on the US territory's economy would be substantial.

The damages could reduce the gross domestic product of the 55,000-resident territory by some $200 million, according to a report from the territory's Department of Commerce.

The report, presented at a recent meeting of the Western Pacific Fisheries Management Council, indicates that a closure of StarKist's cannery, the island's largest employer, would result in the loss of 4,000 direct and indirect jobs, one-fourth of its labor force.

The cannery is responsible for 80% of American Samoa's exports and 24% of its imports. It "effectively" subsidizes the territory's shipping costs by 40% and its fuel imports by around 30%, the report states.

The cannery employs over 2,000, Scott Meece, StarKist's general counsel said at a San Francisco, California, court hearing in September. Meece was arguing that if the court imposed the $100m fine that prosecutors had sought it would cause the company to make difficult decisions of layoffs and a possible relocation of the American Samoa cannery to Thailand.

"These employees have had this hanging over their heads for a long time. I've meant the majority of them. Great people and they're worried about what is going to happen to their jobs," he said.

Judge Edward Chen www.undercurrentnews.com/2019/09/11/starkist-fined-for-price-fixing-cons...">https://www.undercurrentnews.com/2019/09/11/starkist-fined-for-price-fix...">handed down the $100m fine that the company feared but so far StarKist, which is owned by South Korea's Dongwon Enterprise, has not announced any changes for the American Samoa facility. 

In addition to higher labor costs, the American Samoa cannery is forced to pay its workers the US federal minimum wage, the facility also suffers from an uncertain supply of tuna.

And the US National Marine Fisheries Service (NMFS) www.undercurrentnews.com/2019/10/09/american-samoas-governor-warns-tuna-...">https://www.undercurrentnews.com/2019/10/09/american-samoas-governor-war...">announced at the beginning of this month that the Pacific tuna purse seine fishery in the "Effort Limit Area for Purse Seine" (ELAPS) will close as of Oct. 9.

www.undercurrentnews.com/2019/10/24/starkists-departure-would-leave-a-20...">https://www.undercurrentnews.com/2019/10/24/starkists-departure-would-le..." target="_blank">Read more at Undercurrent News