The Kobe Earthquake - Creative Reconstruction of Co-op Kobe (1997)

----------------------------------------------------------------------
This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
----------------------------------------------------------------------
Dec., 1997
(Source: ICA Review, Vol.90 No.4, 1997, pp.99-102)


The Kobe Earthquake - Creative Reconstruction of Co-op Kobe
by Shigenori Takemoto* 
**************************************************


I would like to discuss what kind of roles co-ops in Japan should play
in reconstructing civil society and community giving, as an example,
the course that Co-op Kobe has taken since the great earthquake.

At 5:46 a.m. on  17 January 1995, the destructive power of an
unprecedented major earthquake struck our region and brought tragedy
to its people. At present, restoration of roads and other transportation
systems is under way, and the industrial infrastructure and everyday life
of the residents are being rebuilt. Still, sorrow and pain remain in many
people's lives, including elderly citizens who lost their homes. We must
not forget that there are numerous problems that need to be resolved in the
effort to help people continue living without losing hope.

Supported by encouragement and aid from friends across Japan and
throughout the world, Co-op Kobe was able to take immediate action
as an organization rooted in the community. Even though many of the
executives and staff members of Co-op Kobe were disaster victims
themselves, they rushed to stores on foot or by bicycle in order to provide
suffering residents with food and commodities. We took the products from
the damaged stores to set up temporary stalls immediately after the
earthquake. Co-op Kobe also mobilized its trucks, which ordinarily deliver
merchandise to HAN groups, to provide relief aid to all corners of the
disaster-struck area.

Immediately following the earthquake, a large number of employees from
co-ops around Japan rushed to our rescue and played a vital role in assisting
disaster victims. Newspapers have highlighted the important function that
co-ops played in the aid effort, emphasizing the social significance of
co-ops.

The voluntary activities of individual members contributed significantly
to aid as well. Groups that had been involved in social welfare activities
on a continuing basis acted immediately to locate elderly residents. In
addition, many members went to the assistance of  people in the area.

Such multifarious coordinated activities of co-ops during the disaster
enormously enhanced their social reputation.

As for damage from the earthquake, Co-op Kobe suffered considerably,
to a total cost of 50 billion yen. Numerous facilities collapsed, including
the head office building. These facilities have already been restored,
although some are still makeshift. Above are photographs of our head
office building, including one of our temporary facilities. 

The next photograph featured in this presentation is a facility we would
like to introduce with pride, Co-op Living Center KONAN. It is a home
improvement center with sales floor of approximately 8,300 square meters,
of which 1,700 square meters has been used for  nursing care goods and
related facilities. Japan is expected to see a rapid rise in number of its
elderly. Co-op must take action to deal with such social change.

Co-op Living Center not only has a spacious nursing care sales floor but
functions as a core for "normalizing the lifestyles of the elderly and
handicapped" in the community as well. Action is being taken to coordinate
efforts with various social welfare organizations. It also handles day-care
services of the nursing home "Co-operative Garden" which Co-op Kobe
helped establish. In addition, the administrative office of the  "Volunteer
Promotion Foundation", to which Co-op Kobe has also contributed much
of its funds, is located in the same building. We are convinced that we were
able to realize our belief that "the co-operative movement can bring welfare
to the community through various coordinated efforts," which we learned
in the disaster.

Furthermore, the tragic experience also helped foster closer ties with various
public and civil organizations. One example is the "Agreement on Securing
Lifeline Supplies in Emergencies". This agreement defines a system under
which co-ops secure everyday necessities and supplies at the  request of the 
authorities in case of an emergency. Local  governments involved in the
agreement  before the earthquake. were Kobe and one other city. However,
the agreement has now  been expanded to embrace  11 cities and 3 towns.
We believe this was brought about by recognition of our success in rapidly 
supplying daily essentials at the time of the disaster. Adoption of similar
agreements is spreading beyond Co-op Kobe to other parts of the country.

Another example of closer co-operation is the campaign that solicited
signatures from individuals demanding a "Nationwide Security System
for Natural Disasters." The campaign was carried out to support disaster
victims to reconstruct their homes. In this drive to create a new personal
compensation system for disaster victims, we were able to collect signatures
from approximately 24 million people around Japan. Co-op Kobe alone gathered 
signatures from 3.56 million people. The move was organized in
co-operation with local governments, bar associations and trade unions,
among others. We believe that the effort demonstrated the effectiveness of
"supporting the livelihoods of citizens through new collaborations with
organizations in the community." 

Amid the activities of our co-op members and restoration of our offices and
facilities, Co-op Kobe was still able to turn a profit for the 1995 fiscal year,
which was the year following the great earthquake. After having 15 billion
yen in losses for the 1994 fiscal year, the year when the earthquake struck,
this was a great joy, since we had not anticipated such an early business
recovery. We are deeply indebted to the efforts of our co-op members and
employees.

To build on the important lessons gained from the experience, we began
developing  medium and long-range plans for the 21st century in October
1995. This project was aimed at building into our organization the great
achievements made by each individual involved in the co-operative
movement, collaborative efforts in the community, and the potential for
substantial power through co-operation crossing regional boundaries.
We were committed to building on our experience and moving from
there into the future.

We have shared the experiences described by co-op members and
employees with professors and other experts, and ultimately developed
a report by the Co-op Kobe Long-term Vision Planning Committee.

Entitled "For a New Leap into the 21st Century," the report defines the
direction that Co-op Kobe should take in the next decade.

This "New Medium-term Plan" is an application of the long-term plan
and 4 year basis. "Creative Reconstruction" and "Building New
Community, New Lifestyles and New Co-op" are main themes that
the members and employees of Co-op Kobe have addressed since the
earthquake. They have become leitmotif in the "New Medium-term Plan"
as an expression of our resolve to ensure Co-op Kobe's ability to open
new avenues by the 21st century.

Recovery from the earthquake does not mean a return to what the co-op
was in the past. We have pledged to utilize the lessons learned from the
earthquake to build a new co-op rooted in the community with dynamic
vigour and a spirit of co-operation. That is what we mean by "Creative
Reconstruction" . We will wage an all-out drive towards "Creative
Reconstruction" by mobilizing the strength of Co-op Kobe's 1.3 million
members and 15,000 employees.

In fact, co-ops in Japan are facing various management problems.
Regardless of size, the number of co-ops falling into insolvency is
increasing. This can be attributed in part to the socio-economic environment
and intensifying competition with the distribution industry. It is a problem
based on rapid growth with  which the co-operative movement developed
over the past 30 years and, more specifically, a qualitative problem of the
management. In addition co-ops have not been able to respond adequately
to the changing lifestyles, values and needs of consumers. 

We must resolve such problems through solidarity among co-ops
nationwide. Otherwise, there will be little chance for the movement's
growth in the 21st century. This is a great task.

It is under such circumstances that Co-op Kobe is expected to display
vigour despite the devastating damage caused by the Great Earthquake.

We will make strenuous efforts to achieve "Creative Reconstruction"
towards Co-op Kobe's 80th anniversary in 2001. We earnestly hope
you visit us then and see for yourselves how Co-op Kobe has completed
the recovery process and witness the Japanese movement's renewal.

-------------------
*   Mr. Takemoto is President of the Japanese Consumers' Co-operative
     Union (JCCU), Chairman of the Board of Co-op Kobe, Chairman of
     COMO Japan and Vice-Chairman of Japan Joint Committee of
     Co-operatives.