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HomeMy WebLinkAboutCOM 0258.024 1996-1998RECEIVED '` Time- .vb a zY,4cA -t- D°te' County Council An Open Letter to the County and State of Hawaii, its peoples, its businesses and its governments by Milo G. Clark, STRATEGIC DESIGN Summary: Economy and ecology are the same, mutually inclusive rather than mutually exclusive. A capitalism incapable of sharing equity and surplus with those who participate in its creation is as doomed as Soviet Communism. This open letter contains a test of attention span, a formula for community revitalization and economic renewal and a specific proposal related to both irradiation facility and eucalyptus plantations proposed within Hawaii County. As the business people involved in both projects have open and easy access to the politicians involved in providing publicly funded or supported subsidy and/or concessions for these two projects, the test of attention span is the reading and open- minded consideration of this Open Letter respectfully submitted. A formula for community revitalization and economic renewal as well as a specific proposal are at the end of the Open Letter. The long standing intimacy of business and government in Hawaii is a given factor which has largely determined the economic and political actualities of the island state and its individual island -counties. It was perceived threats to this intimacy which dr9ye>fi annexation and eventually statehood. This intimacy is how it has been. Optsnness'to other ways also opens other possibilities key to community revitalization and economic renewal. Those who vote in Hawaiian elections with rare exceptions constitute a cheering section for business. Local threats to these oligarchic actualities are usually short -termed and ineffective. Both politicians and the power people of business know that a loud enough bark will get folks back in line relatively soon. Whatever concessions may have been granted under duress can usually be reclaimed over time. If not, a threat or actuality of walking away serves the locals right. For the last hundred years, Hawaii has been defined by sugar and pineapple plantations, sugar and pineapple politics. The struggles with labor and harsh plantation actualities are finally resolved by taking sugar and pineapple employment from the islands. In parallel, numerous diversification schemes from the late 1890s to the 1990s have been designed to fail lest they becomes threats to sugar and pineapple dominance. While once there was a degree of aristocratic noblesse oblige among the missionary descendants of the former Big Five companies, as those companies have fallen to more savage capitalists with little or no Calvinism in their backgrounds the paternalistic gloves of the past are taken off. oto No. a rie No. -RES Rat. To, Ret. Nte�.'�• _2 4 1997 An Open Letter to Hawaii on Community Revitalization and Economic Renewal 2 Much as many hoped for a peace dividend after the end of the Cold War with the evil Soviet Empire, there has been hope on the islands that local interests and local needs may now be given some level of primacy—that abandoned plantation lands might actually be used for local benefit rather than new plantations again aimed at export markets. Two actions in process on the island and County of Hawaii tend to indicate that neither peace dividend nor local benefit yet drive either politics or business. As old habits and old beliefs die very hard, the old political/business intimacy remains dominant. I would name the approved $2,000,000 subsidy or grant to an irradiation facility as a project designed to fail. And I won't get into any debates about irradiation or nuclear issues. My conclusion is based on very simple, very direct, business and economic logics. Some of the factors are cited in Alan Decker McNarie's reasoned and calm article in "K au Landing" of June 1997. In short, as a consultant experienced in business and economic development, I couldn't write an honest business plan showing either a payout or a reasonable return on either public or private investment from an irradiation facility on Hawaii. I can see benefit to a few, mostly out of Hawaii, interests. A few farmers may find short term gain. I can point to some benefit for politicians from inspection tours whether the trips were paid for by public or private money. I can understand the allure of specious claims for new business opportunities and job formation. I can, however, identify some political benefit from the public investment. Smaller farmers struggling with export market actualities are desperate for any apparent way out of their predicaments. Smaller farmers also represent a small but influential constituency who may be tempted to challenge the long standing political and business domination of sugar and pineapple now being abandoned. Seduced by the fallacious logics of export markets into overextending themselves, the small farmers political loyalty may be won through public investment in an irradiation facility as a bailout. In an election as close as the last Hawaii County election, these may have been the swing votes. It may be eight or ten years before the outcome of the irradiation project will be clear. Meanwhile, a lot of politics and a lot of business will be done. The damage, when it comes, will fall on others then in government and on farmers still left in business, if any. The illogics of Hawaii -grown eucalyptus chips for Japanese paper mills are as evident as the smiles on corporate faces at a deal put over on the natives. Once again, I have no need of the emotional issues involved as I can rely on relatively cold and sharply obvious business and economic logics to explain my judgment. In short, without concessionary valuations of land and water, these tree plantations make neither business or economic sense for Hawaii. There is also no locally -focused social argument which can justify them. Even shorter, without the old climate of interlocking business and political interests, neither An Open Letter to Hawaii on Community Revitalization and Economic Renewal 3 project would stand a chance. No ordinary citizen of Hawaii County can easily gain audience with Governor Cayetano. Yet Japanese (or other) businessmen such as executives and lower level personnel from Marubeni and Oji Paper Company easily get appointments and access to the Governor and key state department heads. No ordinary citizen of Hawaii County can fly the Mayor and other Hawaii County and State officials to Japan or Illinois for good times and intimate conversation. Yet, Marubeni, Oji Paper Company and Isomedix can. No ordinary citizen of Hawaii County has the working capital and operating funds to mount and to sustain the campaigns designed to tap public funds and to gain concessionary leases. All an ordinary citizen can hope for is maybe two minutes at a hearing before a bored and inattentive governmental body already seduced by old beliefs, luxurious blandishments and bent to the will of persistent power brokers whose access is not so limited. The illusions of democracy are very thin in practice. I enjoyed, in a perverse way, the interchange on Hawaii -grown eucalyptus chips for Japanese paper between P. Rufo of Waimea and Mr. John Michael White, President, Hawaii Land Company which graced the pages of "West Hawaii Today" in January of this year. Mr. Rufo doesn't like eucalyptus plantations and does like bamboo plantations. Yet, from business, economic and social perspectives; monocropping is monocropping. The economic and practical differences between sugar cane and bamboo as grasses or eucalyptus and bamboo as agro-forestry products is marginal at best. Locally grown bamboo shoots don't need plantations. Locally grown bamboo poles don't need plantations, either. Plantation economics and plantation belief systems are independent of the commodity involved. By which I mean that the crop grown is immaterial to the plantation systems of exploitation. I say it is the beliefs more than anything else that drives that system. Until we can calmly and peacefully interact at those levels, test our beliefs against actualities relevant to Hawaii rather than North American continent or Japan, the future is likely to remain the past. Islands are very different than continents and those differences need to be understood and weighed in planning for community revitalization and economic renewal. The subtleties which accompany the manifest belief system driving Hawaii politics and business are wonderfully apparent in Mr. John Michael White's arrogant, overbearing and contemptuous assault on Mr. Rufo. Mr. Rufo's outrage is published as a letter to the editor. Mr. John Michael White is a given a VIEWPOINT column for his reply—a not too subtle and definitely unmistakable difference. Like most newspaper people who survive and enjoy continuing advertising support, the editors at "West Hawaii Today" understand how it works for them. Mr. John Michael White also understands quite well how entrenched power brokers operate in Hawaii. He understands that Capitol Chip didn't have a chance as long as sugar might feel threatened. He understands that the perfectly legal and very arcane accounting practices of An Open Letter to Hawaii on Community Revitalization and Economic Renewal 4 Hawaiian sugar (and pineapple) growers dutifully produced accounting losses partly as political leverage to maintain protection, market exclusions and tariffs costing American consumers billions annually in subsidies and over -priced sugar. The same accounting results were a constant sword of Damocles threatening local workers and their organizations. Mr. John Michael White is a power broker. His letter is an excellent example of barking loud to intimidate. With his perspective, he even puts the word "sustainable" in quotes when referring to the planned Hawaii -grown eucalyptus chips for Japanese paper schemes. I respect his implied honesty in this regard. There is absolutely nothing sustainable in a scheme monocropping eucalyptus on sharply undervalued land in Hawaii for chipping and then shipping across thousands of miles of ocean by fossil -fueled megatankers. He also does an outstanding job of whipping out the old saws about job creation and all those stuffs. These hoary arguments almost invariably scare enough people who vote back into line to tip delicate election balances. Hey, it works and works and works again. Those people who voted in recent elections to put lots of public money into new stadiums in San Francisco and Seattle were pushed by just about the same arguments. At least they are getting football and baseball teams to cheer them. In the world of international business, both Manibeni and Oji Paper Company of Japan are far up the ladders of ethical behavior compared to the parent company of Prudential Timber which has been fined millions for its marketing practices in its core businesses. Whoever ordered the spraying of Hamakua areas simply can't give a damn about people. The trustees of the Bishop Estate who cut a deal with Prudential Timber are beyond access by any popular means and about as completely out of touch with local actualities as possible. Very sad that the legacy of this beautiful woman is used against rather than for intra -island benefits other than money and power for the few. Even Kam School is now awash in conflicts with the Trustees which I am sure I don't "understand". What I do understand is that the Trustees are stonewalling the people who are concerned, who need open access to them. That nearly all Japanese businesses based on wood in any form import their woods rather than use domestic supplies is well-known and thoroughly documented even if unpublished in local media. That these Japanese companies are importers of old growth woods from North America, from rain forests in Central and South America, from primal forests from Southeast Asia and Pacific Islands is ignored. Damn the locals, get it down as fast as possible. Bringing raw materials into Japan as cheaply as possible for processing, adding value at home, is smart business. Good strategy. One which Hawaiian politicians may well want to adopt. The business actuality underlying these practices is to grow feed stock, biomass, on cheap lands with cheap labor. The biomass itself has to be very, very low cost to offset the expense of An Open Letter to Hawaii on Community Revitalization and Economic Renewal 5 preparation and transportation to wherever the manufacturing is done. Value is then added to the processed biomass. Economic surplus is generated and retained by the manufacturer, marketer, distributor, wholesaler and retailer in sequence. Back where the biomass was grown, the only very marginal benefits are some low wage grunt jobs and minor annoyances of taxation usually quite completely offset by concessions and inducements. And, yes, Japanese paper from Hawaiian pulp will be shipped back for sale in Costco or Walmart or Walgreens or Long's. Mr. John Michael White is very candid in his rebuttal of Mr. Rufo about local political actualities. Political stability with little direct or overt demand for kick -backs, bribes or possibility of expropriation makes Hawaii ideal even if it may be a little bit more costly than Ecuador, Mexico, Indonesia, The Philippines or Myanmar. The Hawaiian politicians are a thoroughly understood factor, quite honest as politicians go and totally under control when push comes to shove. Just like it has always been here. I wonder if Mr. John Michael White knows that he is mouthing nearly the exact words with which the "great" European empires were once justified? The various early joint venture companies and partnerships like the East India Company were organized to take raw materials from India, for example, to Liverpool to make cloth. Armed force was used to prevent the Indians from manufacturing cloth at home. Ship the cloth back to India for sale at prices which further impoverish the people enslaved on the cotton plantations. Get filthy rich and put down the natives for their sloth and poverty, their diseases and otherness. In the industrial cesspools of Liverpool and myriad other ravished communities create the conditions which Charles Dickens wrote about in his novels. There were endless numbers of people in those mills on whom one may also look down and treat as inefficient machines tolerated only until automation can be invented to sack them altogether. By the way, are readers familiar with the automated technologies used to harvest plantation trees, load them with little or no human intervention onto trucks to run to automated chipping mills after which automated loaders blow them into the holds of the megatankers running them to Japan? The catalogs of forestry machinery companies are instructive reading. I really have no desire to get into a sniffing match with Mr. John Michael White. He has the muscle, the money and the politicians in his corner. All I have is a keyboard and a lot of experience with similar situations. He does an excellent job of representing the interests paying him, I assume quite well. As a skilled power broker, he is an uncompromising advocate and skilled manipulator of the key elements governing his business. He would be classified as an American success, a hero of an increasingly savage capitalism. I have no doubt that Horatio Alger and Rudyard Kipling would find roles in their novels into which he fits admirably. He knows how things have worked in Hawaii and, at least in the County of Hawaii, continue to work. With the return of Hong Kong to a very different China than the British severed it from during An Open Letter to Hawaii on Community Revitalization and Economic Renewal 6 the opium wars of the 1800s, the British Empire is down to a few hundred thousand people scattered on mostly Caribbean islands. Direct imperial control proved too expensive in the long run. Besides, governments are mostly out of the empire business these days. The joint venture, limited liability company with which old time adventurers organized their imperial plunderings has evolved into the corporate form prevailing today. That corporations have exceeded most governments in sway, extent and increasingly naked applications of direct power is the subject of books and articles too numerous to cite here. Visit your local Waldenbooks, Borders or Barnes and Noble mega -bookstore to see shelf after shelf of them. The ways of empire and now savage capitalism converge on dehumanizing the others who are elsewhere in the world. Angry outrage bounces off these modern-day swashbucklers like water dribbled on a hot skillet. There has to be some way short of armed rebellion, recalls of errant politicians or other conflict mechanisms to get into a reasonable dialogue on a somewhat open basis with both business and government. How would one get access to a Governor Cayetano or a Mayor Yamashiro so easily available to Marubeni, Oji, Isomedix or to Mr. John Michael White, president of Hawaii Land Company? Would a Governor Cayetano or a Mayor Yamashiro give me hours and hours of time, travel thousands of miles to converse? On Lanai, tiny Lanai, the sharp clash of rock hard positions approaches a kind of near -psychotic chaos with no benefit to anyone but the key adversaries. OHA money supplies endless legal wranglings leading to what? No middle ground is available or taken if presented. No outcome is possible other than chaotic destruction. Is destruction the only way to get business and government to listen to other possibilities for Hawaii and to hear if they listen? Must Hawaii County come to similar conflicts? Will local interests be allowed subsidies to experiment with projects not designed to fail? Will politicians seek initiatives to create opportunities in tune with domestic rather than export markets? Darned if I know. I do, however, have some positive suggestions to introduce. My promised formula for community revitalization and economic renewal is simple and direct. Plans, proposals, projects and success can be easily tested for fit and congruence. Local resources converted by local people primarily for local use in ways which promote community and create economic surplus for reinvestment in the community. Neither irradiation facility nor Hawaii -grown eucalyptus chips for Japanese paper fit. However, as the probability remains strong that both irradiation facility and Hawaii -grown eucalyptus chips for Japanese paper will receive public funding and concessionary support from the Hawaii County Council, I have a proposal. An Open Letter to Hawaii on Community Revitalization and Economic Renewal 7 I propose formation of a cooperative or similar community-based organization to develop projects not designed to fail which will meet the tests of the formula given above. I propose that this organization be given a line of funding of $2,000.000, the same as the irradiation facility. $200,000 of this fund would be allocated to designing projects to succeed. The balance would be committed to the capital and operating funds needed to make these projects self-supporting according to plan. I propose that the same concessionary lease terms granted to the Hawaii - grown eucalyptus chips for Japanese paper schemes be granted to the community organization. Initially, I propose that one percent of the land proposed for the eucalyptus plantations (250 acres) be granted along with sufficient guaranteed water rights to support agricultural uses. Milo G. Clark, m.b.a. STRATEGIC DESIGN, a consultancy in community revitalization and economic renewal 1153 Delaware Street Berkeley CA 94702-1619 USA 510 526-5512, 526-4887 fax milogic@aol.com Milo Clark is a Harvard Business School graduate who worked in executive, management and consulting roles before focusing on issues of community revitalization and economic renewal especially in rural areas. He has lived, farmed, owned small business and worked in community development in Hawaii. An Open Letter To the county and State of Hawaii, its peoples, it businesses and its governments. By Milo G. Clark, STRATEGIC DESIGN Comment and proposal for community revitalization and economic renewal in contrast to proposed irradiation facility and Hawaii -grown eucalyptus chips for Japanese paper schemes. 1,000 word version Premise: Economy and ecology are the same, mutually inclusive rather than mutually exclusive. A capitalism incapable of sharing equity and surplus with those who help create it is doomed. Message: The domination of Hawaii through i ndmacy of business and government continues undaunted by the demise of pineapple and sugar monocropping for export. Also, diversification schemes from the 1890s to the 1990s were designed to fail lest their success threaten those dominant interests. Many in Hawaii hoped for a kind of peace dividend as sugar and pine moved off. Maybe, at last, local interests and local needs might succeed. Abandoned plantations might actually be used for local benefit rather than new plantations. Two actions in Hawaii County suggest otherwise. A $2,000,000 grant for an irradiation facility is another project doomed to fail. I won't debate irradiation or nuclear issues. With experience in both business and community development, I couldn't write an honest business plan showing either payout or reasonable return. A few farmers may show short term gain and be tricked into overexpansion. Politicians get some inspection tours. Some votes may fall to specious claims for new business opportunities and job formation. But it may be eight to ten years before the outcome will be clear. Meanwhile, a lot of politics and a lot of business will be done. The 1logics of Hawaii -grown eucalyptus Chips for Japanese paper mills are as evident as the smiles on corporate faces at a deal put over on the natives. Once again, no emotional issues need be raised. I can rely on cold and sharply obvious business and economic logics. In short, without concessionary valuations of land and water, these tree plantations make no sense for Hawaii. No ordinary citizen of Hawaii County can gain easy audience with Governor Cayetano or Mayor Yamashiro. Yet executives and other business people from Marubeni and Oji Paper Company of Japan and Isomedix of Illinois and Prudential Timber of Massachusetts can. No ordinary citizen can fly politicians and bureaucrats to Japan or Illinois for good times and quiet conversation. Yet, these companies can. No ordinary citizen has the capital, funding or time to mount and to sustain campaigns designed to tap public funds and to gain concessionary leases. All an ordinary citizen can hope for is a minute or two before a bored and inattentive governmental body already seduced by old beliefs, luxurious blandishments and bent to the will of persistent power brokers whose access is not so limited. Open Letter on Irradiatio. .nd Eucalyptus Plantations - short ve m In the world of international business, both Marubeni and Oji Paper Company of Japan are far up the ladders of ethical behavior compared to the parent company of Prudential Timber which has been fined millions for the marketing practices of its core insurance businesses. The Trustees of the Bishop Estate who cut a deal with Prudential Tiber for Hamakua land are beyond any popular access and out of touch with local actualities. Very sad that the legacy of this beautiful woman is used now almost exclusively for money and power for a privileged few. Whoever ordered the spraying of Hamakua areas simply can't give a damn for people. That nearly all Japanese businesses who use wood import the wood rather than use domestic supplies is well-known even if under -reported. They are bringing in old growth woods from North America, from rainforests throughout the world, from primal forests in Southeast Asia and Pacific Islands. The business actualities underlying these practices are to get or to grow feed stock, biomass, on cheap lands with cheap labor. The biomass has to be very, very cheap to offset the expenses of preparation and transportation across oceans. Value is added at the point of manufacture. Economic surplus is generated and retained by the manufacturer, distributor, wholesaler and retailer in sequence. Back where the biomass is taken, the only very marginal residues are some low wage grunt jobs and minor annoyances of taxation or regulation quite completely offset by concessions and inducements. One of the inducements of Hawaii is relative political stability. Hawaiian politicians are understood and predictable. They are quite honest as politicians go and totally controllable when push comes to shove. There is little overt demand for kick -backs or bribes. Expropriation is unthinkable. labor has been flattened. Automated technologies will be used to harvest plantation trees, load them for chipping and blowing into the huge ships taking them to Japan. Angry outrage bounces off these modem -day swashbucklers like water dribbled on hot skillet. There has to be some way short of conflict to get into balanced dialogue on a somewhat open basis with both business and government. My formula for community revitaiizarion and economic renewal is simple and direct. Pians, proposals, projects and success can easily be tested for fit and congruence. Remember, please, that economy and ecology are the same. Remember also that a capitalism without capacity to share is doomed. The formula: "Local resources converted by local people primarily for local use in ways which promote community and create economic surplus for reinvestment in the community. Neither irradiation facility nor Hawaii -grown eucalyptus chips for Japanese paper fit. However, as the probability is that both irradiation facility and tree plantations will receive public funding and concessionary support from the Hawaii County Council, I have a proposal. Form a cooperative or similar community-based organization to develop projects to succeed and which will meet the tests of the formula above. Grant $2,000,000 of public funding, the same as Open Letter on Irradiation A Eucalyptus Plantations - short ver 3 the irradiation facility. $200,000 can be allocated to designing projects to succeed. The balance can be allocated to capital and operating funds to make these projects self-supporting. Grant one percent of the 25,000 acres proposed for tree plantations (250 acres) as a starter on the same concessionary terms. Include sufficient water rights to support agricultural uses. Give the creative and innovative people of Hawaii County a chance. Respectfully submitted, Milo G. Clark, m.b.a. STRATEGIC DESIGN, a consultancy in community revitalization and economic renewal 1153 Delaware Street Berkeley CA 94702-1619 USA 510 526-5512, 526-4887 fax milogic@aol.com Milo Clark is a Harvard Business School graduate who worked in executive, management and consulting roles before focusing on issues of community revitalization and economic renewal especially in rural areas. He has lived, farmed, owned small business and worked in community development in Hawaii.