NEWSLETTER
JULY 2007

A general members meeting was held during the month to hear an address by our Congressman updating the Chamber on issues surrounding the history  as to how the Minimum Wage Bill came into being. The Congressman advised that now the Bill is in force American Samoa will not receive any special treatment. It is therefore most important that the Chamber has significant input into the report on the state of our economy post the initial wage hike which is to be prepared by the Department of Labor and due out no later than eight months time. A critical point now is to try and have the annual escalator clause in the Bill removed as it would be a most damaging factor for most companies and adversely affect our economy during the next few years if it were to remain and wages gradually moved upwards annually to be eventually in line with the top rate on the mainland.

The Chamber has provided input and it was represented at a workshop conducted by a University of Hawaii task force as part of a Labor Survey to identify the numbers of suitably qualified people available for hiring by companies considering the establishment  of a new business in the Territory. The first run of results should be ready by sometime in September.

The Chamber met with the Governor during the month and the status of the present range of projects under consideration was amongst the matters discussed. There are still some issues to be resolved with some of the major projects and it would seem that progress is very slow in agreeing on the contractual arrangements for the fibre optic cable and this in turn is holding up the signing of the MOU for the Call Center. It is to be hoped that the issues affecting the fibre optic cable contract do not prevent the project progressing early in the new year as was originally intended. Tax reform which impacts on the decisions of the companies proposing to develop the new water bottling plant and the marina should in part be resolved assuming the Fono passes a Bill to be tabled in the next session commencing early August, and it to be hoped that the Chamber’s recommendations will be included and adopted in this Bill.

The Department of Commerce is working on the establishment of a new corporate entity involving the public and the private sector to advance the development of our economy and to encourage new investment. The organization seems to mirror the one that the Chamber is in the process of registering and consequently a name change to the Private Economic Advisory Council of American Samoa (PEACAS) has been adopted by the Chamber’s Board. An interim board of Directors has been established and documentation for submission to the various statutory authorities is almost complete so that PEACAS can commence with it’s main business to promote all forms of economic development within the Territory.

The Senate President has called for the Governor to seek a full or limited waiver for the Territory under the federal cabotage law that would allow foreign airline operators to service the U.S. – Pago Pago route. Whilst the matter seems to be making some progress our Congressman is not optimistic that it will receive positive consideration in Washington. Time will tell.

It is disappointing to see the continuing rise in the CPI index particularly in the food and transportation groups which seem to be most affected by continual price rises for raw materials, shipping charges and rising oil prices. It is unlikely that there will be any relief  for these sectors in the foreseeable future. The food group continues to come under pressure as the Department of Health  cracks down on Chinese made products, as whilst these products are invariably cheap many of them do not comply with approved hygiene standards and they should be treated with caution by the general public.

David Robinson
President