A Japanese Joint Venture in the Pacific

Foreign bodies in tinned tuna

Kate Barclay

• Publisher: Routledge
• Year: 2008
• ISBN:
  9781134078431
• Edition: 1
• Topic: Business
• Subtopic: Business Development
• Index: Business

The Japanese, and other Asians, are increasingly taking over some of the roles previously played by Europeans in the Pacific islands, which is giving rise to interesting new economic relationships, and interesting new interactions between nationalities. This book considers the role of the Japanese in the Solomon Islands, focusing in particular on a

1
Introduction

Foreign bodies in economic development

The social processes relevant to Solomon Taiyo include political and economic change in Japan and Pacific Island countries, involving gender relations, ethnic relations, and social strata relations, and the history, economics, and politics of the international tuna processing industry. Solomon Taiyo as a social phenomenon was generated in ‘travels’ (Clifford 1997:21–27) between the central business district in Tokyo, remote islands in Okinawa, the villages and reefs of Solomon Islands, and Sainsbury’s supermarkets in the United Kingdom (UK), tracing over earlier paths left by European and Japanese colonialism. As a case study, Solomon Taiyo therefore provides a window through which to examine the intricately complex nature of contemporary economic phenomena.

The land area of Solomon Islands is about 27,500 square kilometers but the area of water inside the exclusive economic zone (EEZ) is more than 100,000 square kilometers. Several varieties of tuna frequent these waters, including skip-jack (or bonito, scientific name katsuwonus pelamis). Skipjack migrate between the double line of islands, feeding on baitfish from the passages, lagoons, and reefs. In the early 1970s the British Protectorate of Solomon Islands was preparing for Independence and the skipjack resource was seen as having good potential to become part of a decolonized capitalist economy. At the same time, Japanese distant water fisheries, which had been restricted to waters around Japan in the years following World War II, had reestablished themselves in fishing grounds in the southwestern Pacific and were seeking joint ventures for local bases.

After 18 months of negotiation and fishing surveys Solomon Taiyo Ltd came into being in 1973 as a skipjack fishing, processing, and marketing joint venture between the biggest fishing company in the world, Taiyo-Gyogyo-Kabushiki Kaisha (renamed Maruha Corporation in 1993), and the Solomon Islands government. For most of the next three decades Solomon Taiyo was the biggest private sector employer in Solomon Islands, and became the only substantial employment opportunity for women without tertiary education. The company was a major source of revenue through duties, utility levies and employee taxes, and a major earner of foreign exchange. Most families in Solomon Islands had one or more of their members working for Solomon Taiyo at some stage. One of the company’s products, Solomon Blue (flake tuna canned in oil) has been a staple of the Solomon Islands diet since the 1970s, when it replaced imported

Map 1.1 Western Pacific Ocean.

tinned mackerel as the convenience food of choice. It has been a popular food for so long in Solomon Islands it has become an icon – a food overseas Solomon Islanders crave as a taste of home.

In late 1998 Solomon Islands attracted column space in world newspapers because of ‘ethnic tension’ on Guadalcanal; violence by groups of young men native to Guadalcanal against settlers from nearby Malaita, and retaliatory violence by groups of young Malaitan men. Tensions remained high until May 2000 when, following the coup in Fiji, there was a coup in Solomon Islands. The Solomon Islands state, always weak, was virtually ineffectual from then until 2003, when the Regional Assistance Mission to Solomon Islands (RAMSI) led by Australia reestablished order and has since then been working with the Solomon Islands government to rebuild government and public services.

Solomon Taiyo came to an end in 2000 when the Japanese partner Maruha withdrew. Maruha withdrew partly because the social and political upheaval in Solomon Islands made the business environment impossible, but also because Solomon Taiyo ceased to be viable for Maruha because of changes within Maruha and changes to the buying strategy of the main customer, Sainsbury’s in the United Kingdom (UK). In 2001 a wholly Solomon Islands government-owned entity called Soltai Fishing and Processing emerged to take Solomon Taiyo’s place.

Solomon Islands has struggled to create a functioning capitalist economy that provides access to a cash income for Solomon Islanders, so Solomon Taiyo was hugely important in the national economy. The company was an object of envy for many Pacific Island country governments because the large fishing fleet and shore base provided thousands of jobs for locals and a training ground for industrial fishing and related production processes. On the other hand, Solomon Taiyo also attracted much criticism.

Acrimonious correspondence flew between high levels of officialdom and the Solomon Taiyo Board of Directors during the last months of former Prime Minister Solomon Mamaloni’s administration in 1997. The correspondence surrounded a ‘lightning visit’ to the Noro base on 20 and 21 June of that year by Mamaloni and various officials, including people from the Ministry of Labour, the Solomon Islands National Union of Workers, and the Investment Corporation of Solomon Islands.¹ The trigger for the visit was alleged adverse media reports about Solomon Islands from an unspecified European source quoting increasing complaints of ‘foreign bodies’ in Solomon Taiyo tinned tuna exported to the United Kingdom. Mamaloni wrote that defective products from Solomon Taiyo were damaging the reputation of ‘Solomon Islands as a member of GATT and WTO’.² He linked the quality control problems to what he called ‘seeming unchecked and nonprocedural recruitment’, specifically, the recruitment of supervisors from Fiji and the Philippines since the appointment of the most recent Cannery Manager, a Japanese man married to a Fijian woman. Mamaloni seemed to believe a Fijian supervisor had been improperly recruited through the Cannery Manager’s wife. He thought this Fijian had possibly caused the perceived quality control problem in the seaming process intentionally, to sabotage Solomon Taiyo’s cannery so that Fiji’s Pafco cannery might benefit.³

It could be said that Mamaloni was more concerned about foreign bodies in the workforce than in tins of tuna. Much of the correspondence regarding the lightning visit was about recruitment and promotion of Solomon Islanders and benefits to the Solomon Islands economy, rather than quality control. Mamaloni started by claiming that the localization plan in Solomon Taiyo’s Corporate Plan 1996–2000 was ‘not positive or realistic enough’. Mamaloni felt the country’s tuna resources were likely to be depleted and when that happened ‘Solomon Islanders will be the first to be made redundant’. He asserted that many Solomon Islanders had worked for Solomon Taiyo for 15 or 20 years without reaching the level of senior management, and that there were too many expatriates at senior management level. Mamaloni estimated that expatriate employees were paid between SB$10,000 and SB$43,000⁴ per month, whereas none of the Solomon Island employees received anything like this amount, regardless of their qualifications. He wrote that the lack of nationalization of the workforce indicated Solomon Taiyo must have ‘hidden agendas’. ‘Obviously, STL [Solomon Taiyo Ltd] has failed in its training programs as manifested by the sudden increase in recruiting Filipinos and Fijians. How many Solomon Islanders are working in Fiji, Philippines or, for that matter, Tokyo?’ The conclusion to this letter was particularly strident. Mamaloni suggested the Solomon Islands Government should review its ‘generous’ policies towards Solomon Taiyo because ‘the country’s natural resources are being exported overseas through dubious means’. He had heard that one part of operations was now owned by ‘another foreign company’ and that Solomon Taiyo was constructing a repairs slipway in Indone-sia. He wanted to be formally informed about these developments. ‘If the information is authentic, it certainly gives the government some idea of the volume of funds which are generated from our fisheries resources and which STL is exporting.’ He called for a ‘full-scale investigation’ of Solomon Taiyo because ‘more than SB$20,000,000 is exported annually [by Solomon Taiyo] in terms of expatriate salaries and what else?’

In his response to Mamaloni the then Chair of the Solomon Taiyo Board of Directors, J.D. Tausinga, provided copies of the Complaints Summary regarding Solomon Taiyo products from Sainsbury’s supermarket chain in the UK.⁵ These figures showed that the absolute numbers of complaints regarding Solomon Taiyo products had been 488, 443, 417, 508 and 477 respectively for the years 1992/1993 through 1996/1997. During the same period, however, the annual number of Solomon Taiyo tins sold through Sainsbury’s had increased from 18,000,000 to over 28,000,000 so the rate of complaint had actually decreased substantially. In any case, the Chair wrote, the numbers of complaints received by Sainsbury’s regarding Solomon Taiyo products were ‘well within Sainsbury’s acceptable limits’ of 50 per million. He wrote that all buyers of Solomon Taiyo products sent Quality Assurance experts to Noro each year and each year they approved the cannery. Tausinga then responded to the other concerns raised by Mamaloni. He stated that the Fijian supervisor had been appointed in 1992 to replace an inadequately experienced Solomon Islander Seaming Section supervisor who had caused an entire shipment of cans to be recalled. Tausinga wrote that it was company policy to recruit from other countries until there were enough local supervisors with requisite experience and qualifications, and he had no reason to believe any expatriate employees wished to sabotage the Solomon Islands tuna industry. He pointed out that all expatriates were recruited through the Board, which had balanced Solomon Islander and Japanese membership.

The correspondence over ‘foreign bodies’ in Solomon Taiyo is one of the minutiae of economic life in which social relationships are visible, even when discussion is ostensibly about technical issues such as quality control. Mamaloni’s letter exuded economic nationalism. A strong discourse of ‘us and them’ along lines of nationality was manifest in the letter, and the same preoccupation was imputed to all individuals and organizations mentioned. Solomon Taiyo’s corporate reputation was seen as having an impact on the identity of Solomon Islands as a state in the international system. Employees were seen as having loyalties linked to their nationality; employees identified as ‘foreign’ were seen as an avenue through which Solomon Islands as a nation might be exploited.

Our understanding of the social and cultural significance of phenomena like Solomon Taiyo is curtailed by the usual perspectives taken in studying such companies, for example, as sources of economic, social or environmental impacts, rather than holistically as integrated parts of contemporary societies. Anthropologists have often focused on the internal workings of small communities more than the connections between communities and wider social and political structures, or on artisanal and small-scale activities rather than large-scale industrial enterprises that are important realities for contemporary economies. Policy makers and business people have also usually lacked understanding of the social meanings of companies like Solomon Taiyo. ‘STL gives the impression of knowing a lot about the fishing business but not so much about people. Yet it is people that make the difference between a productive operation and one that lags behind its competitors’ (Hughes and Thaanum 1995:23). An understanding of ‘people’ makes the difference between a company that is seen as enabling locals to achieve their varied ends and therefore has goodwill, and a company that is resented as neocolonial and socially destructive.

Tausinga’s response systematically addressed the quality control and recruitment procedure concerns in Mamaloni’s letter, but seems to have missed the more important points contained in Mamaloni’s letter about the low status of Solomon Islands in the world system, the continuing lack of economic growth, and the persistence of non-Solomon Islanders filling leadership roles in the capitalist economy. Tausinga also seemed not to notice the nationalist identity politics being deployed. Mamaloni’s framing of complaints about Solomon Taiyo as being caused by the company’s foreigners adroitly deflected attention from his own government’s role in the condition of Solomon Taiyo. The Solomon Islands government had been the major shareholder in Solomon Taiyo since the 1980s so company direction was clearly a government responsibility. As the organization responsible for education policies and systems the government also bore much responsibility for the condition of the Solomon Islands workforce.

If we are to better understand processes of modernization and globalization we need methodologies for analyzing concrete examples of international business as it operates within and between societies. We need to further build bodies of knowledge that grasp the complexity of capitalism including its social, political, historical, and cultural as well as economic aspects. This book analyzes economic activity as mutually constitutive with the formation of identities. This might seem a strange combination, but many social commentators have wrestled with the homogenizing tendencies of globalization through capitalism and the social fragmentation caused by movements based on identity, commonly depicted as simultaneous and apparently contradictory centripetal and centrifugal forces. One example of this kind of work is Thomas Friedman’s The Lexus and the Olive Tree (1999). Friedman wrote that the two most important problems for contemporary international politics are the Lexus (as metonym for the economic skills necessary in a globalizing world) and the olive tree (as metonym for the sense of identity and community linked to territory that countries need for stability). ‘A country without a Lexus will never grow or go very far. A country without healthy olive trees will never be rooted or secure enough to open up fully to the world’ (Friedman 1999:36).

Approaches such as Friedman’s to the problems and opportunities posed by globalization are deficient in that they leave important questions unasked. Is self-rule in a territory to which people have affective ties the only way to guarantee a secure sense of self for a people? Why are secure identities for peoples considered a worthy aim only insofar as they are necessary for opening economies for the purpose of growth? But the main problem with formulations such as Friedman’s is that positing stable ethnic identity as a prerequisite for economic development does not go far enough in recognizing the complex causal interrelations between identities and economic activity. Who you are (perceived by self and others to be) affects what you have, what you want, and what you can get. On the basis of gender, social strata, ethnicity, and other identities, people are considered (and consider themselves) more or less suitable for certain kinds of work, and identities affect the value accorded that work. Even where equal opportunity is formally encouraged, the clustering of particular groups around particular types of work or particular remuneration levels shows the persistent influence of identity. Social identities mean some individuals struggle to recognize themselves and be recognized as legitimately belonging in positions of high status and authority, while others are accepted without question as belonging. At the macro scale, a country’s relative level of economic development not only affects the material opportunities of its citizens, it also affects national identity and, by extension, its citizens’ identities. In a world system dominated by capitalism, whether or not a country has the capacity to build a Lexus is not only a matter of economic growth, it is a matter of prestige, and therefore affects levels of self-esteem and security in national identity. The symbolism of the Lexus may thus be reformulated as metonym for the sense of identity and community linked to a country’s economic performance. Indeed, in a globalized world it is arguable that a Lexus is a more potent symbol for national identity than an olive tree.

The first part of this book sketches a methodology for the analysis of modernization and nationalism in the contemporary world political economy, and traces some of these issues through the histories of Japan, Solomon Islands, and Okinawa. Perhaps the best way to explain the approach to modernization taken in this book is to first eliminate some of the approaches that are not taken. I do not detail the inexorable process by which tradition is replaced by modernity. These questions are not asked: What stage along the path to modernity are these people? What modifications to a universally applicable model of modernization does this case study suggest? To borrow from Arjun Appadurai: ‘mine is not a teleological theory, with a recipe for how modernization will universally yield rationality, punctuality, democracy, the free...