This document has been made available in electronic format by the International Co-operative Alliance (ICA)
March, 1998
(Source: ICA Review, Vol. 91 No. 1, 1998, pp. 18-24)

Co-operative Contribution to Rebuilding a Community:
The Case of Co-op Kobe
by Akira Kurimoto*

Introduction --------------- This paper considers how co-operatives can contribute to the rebuilding of communities in the light of the ICA's 7th Principle "Concern for Community", which deals with the need for associations to meet members' needs through enterprises. In this way, they are primarily concerned with membership but can also work towards the development of the communities in which they operate. This means they have some common goals and interaction with other civic organisations and local governments while, at the same time, operating some business activities as a part of the local economy. They should nourish the supportive relationship with communities through daily contact as this could help both to deal with the situation in the case of an emergency. Such an emergency occurred when the Great Earthquake hit the Kobe area in January 1995 and this event has shown the deep-rooted ties established between the co-op and the community.

The enormous experiences of Co-op Kobe have been collected and published in a booklet entitled "Co-operative Spirit: Energy for Tomorrow", which contains testimonies by individual members/employees concerning the Great Earthquake, and which has attracted great interest from co-operators and researchers across the country. The co-operative institutes in Kobe, Kyoto, Nagoya and Tokyo have undertaken an extensive study of the experiences in order to learn from them. They are interested in a wide range of subjects, such as possible changes in consumer behaviour after the quake, the reform of the co-op's management structure, differences in the activities of members, and so on.

In continuation I wish to describe the contribution made by the co-operative movement in the rebuilding of communities after the Kobe earthquake and to summarise the findings of research undertaken after the event.

Earthquake Hits Co-op ---------------------------- On January 17 1995, the destructive power of an unprecedented major earthquake struck the Kobe region and brought countless tragedies to its population. More than 6,000 residents were killed while 416,000 families lost their homes and had to be accommodated in temporary shelters which were set up in public premises, schools and parks. All the necessary facilities (water, electricity, gas, etc.) were severely damaged and it was several months before they were re-instated. The transport systems were paralysed by the destruction of roads, railways and ports, causing serious traffic jams and hampering rescue operations. The telephone lines were congested for several days making transmission of information from hand to hand the only means of communication.

Being located in the most heavily damaged area, Co-op Kobe suffered losses totalling 50 billion yen. Numerous buildings collapsed, including 17 stores. The five-storey head office building, equipped with the centralized computer system, was burnt to the ground. Some of the damaged buildings have already been restored, while others are still makeshift. Head office operations continue to be scattered throughout a number of offices. Eleven employees died during the quake and a large number of personnel lost family members and homes. Thus, Co-op Kobe experienced unprecedented financial and human losses which could have been a fatal blow to its existence.

Resumed Operations ------------------------- Co-op Kobe took action immediately after the catastrophe. The Board and Management made the decision to decentralization of procedures to allow for local initiatives, and they urged the work-force to resume operations to serve the residents as soon as possible. Even though many of the managers and staff members were disaster victims themselves, they managed to reach stores and joint buying depots on foot or by bicycle in order to supply food and basic commodities. Where stores were damaged and there was danger of collapse, the products were taken outside and temporary stalls were set up. The available products were sold at the round figure price as cash registers could not be used. In some mini co-ops (convenience stores), the part-time workers living nearby opened the stores by themselves in order to supply goods. By January 21, 146 out of 155 stores were operating. It was widely commented that such a quick response by the Co-op helped contribute to the stabilization of the disaster-struck area as consumers, mostly members, were patient enough to queue for a long time and to share the scarce products. This showed great confidence in the Co-op.

Co-op employees also started delivering merchandise to the co-op's HAN groups in the disaster area. Firstly they verified if members were safe and living in the same place. Although the available items were limited to the urgent necessities, the delivery of products and the personal contact were appreciated by members. Due to their knowledge of the area and to driving in smaller vehicles they were also effective in delivering the products to the temporary shelters.

The physical distribution was the most serious problem to be solved. The central warehouse was slightly damaged but immediately resumed operations. Soon the other four premises on the outskirts of the city were added as depots to contain ordinary supplies as well as rescue products being sent from all over the country. These facilities worked around the clock to receive and dispatch products. The processing of orders between stores and suppliers had to be done manually as the computer system was down.

The co-op also supplied the basic items to be used by residents who were accommodated in the temporary housing built by the authorities. As most of these houses were located in a remote area without easy access to retail facilities, Co-op started to deliver products and opened some temporary mini-stores there. These operations have been greatly appreciated by residents and authorities, although they are yet to become economically viable.

Members & Voluntary Activities -------------------------------------- Before the earthquake members had been accustomed to taking part in the events organised by the Co-op members' relations officers, but, as Co-op Management decided to temporarily shelve such events, members themselves started to help each other. Groups that had been involved in social welfare activities on a continuing basis acted immediately to confirm the whereabouts of the elderly. In addition, many members went to assist the suffering people in the area. They raised rescue funds, prepared meals, visited temporary shelters, took care of children and so on. Such voluntary activities by individual members contributed significantly to aid victims. It has been said that a new quality of members' activities based on the individual initiatives was being created. At the same time, thousands of citizens, particularly youngsters, rushed to Kobe to help victims by sorting and delivering rescue supplies, nursing and counselling, cooking and cleaning, transporting furniture, collecting and disseminating information, etc.

Thus the unprecedented disaster awakened the voluntary spirit among Japanese citizens. Co-op Kobe has created a Volunteer Centre with 8 regional branches in order to encourage voluntary activities on a day to day basis. These centres continue to support such activities as nursing at welfare centres, regular visits to the elderly, assisting temporary house residents and so on. Co-op also contributed greatly to the "Tomoshibi Volunteer Promotion Foundation", which provides financial support to the voluntary activities.

Collaboration with Local Governments ---------------------------------------------- Furthermore, the tragic experience also helped to foster closer ties with various public and civil organizations. Immediately after the earthquake members from Co-op Kobe visited the emergency office of Kobe City to offer help, in accordance with the "Agreement on Securing Lifeline Supplies in Emergencies". This agreement had been established in 1980 with the aim of preventing panic which had been triggered by oil shocks in the 1970's. It had been reviewed every year since then and came into full effect 15 years later. The agreement defines a system by which co-op secures and supplies everyday necessities, upon request by authorities, in case of an emergency. Co-op supplied the municipal rescue centres and shelters with food, water and blankets. Bread produced by Co-op's food plant was transported by municipal helicopters.

Co-op also made a contribution by mobilizing its trucks to provide relief aid to all corners of the disaster-struck area. Those trucks even carried the dead bodies.

The local governments involved in the agreement before the earthquake were of the Kobe and Amagasaki cities, but this has now been expanded to include 11 cities and 3 towns. This is due to public recognition of the success in supplying daily essentials without delay at the time of the disaster. Such a move is spreading beyond Co-op Kobe and, to date, (Dec. 1997) 60 consumer co-ops have concluded similar agreements with 18 prefectures and 103 municipalities in other parts of the country.

Members' Surveys after Quake ------------------------------------- Co-op Kobe conducted several surveys to investigate the changes in members' lifestyles and their expectations of the Co-op. In June 1995 its Consumer Co-op Research Association (CCRA) conducted a membership survey on "Changing lifestyle and mutual help after the earthquake" to which 1,500 members responded. It shows the changes in consumers' lifestyles and in their value systems. More active members had more communication and help even before the earthquake and they naturally took part in voluntary activities more widely. As to the evaluation of the Co-op, nearly 30% of the respondents expressed high appreciation while 32% said they were unable to use its services due to various reasons, such as moving away from the area or lack of transport.

In September 1996 the CCRA conducted a second survey on "Rehabilitation from refugee life and building new communities". It analysed members' attitudes to community building and concluded that the Co-op should promote Han groups which would combine retail operations and community orientation, thus upgrading social welfare/business activities.

Front Line Embodying Co-op's Core Value ---------------------------------------------------- From the aforementioned experiences we should learn some lessons. The first, and most important one, being that front line, i.e. store managers and employees, should embody the Co-op's core values. For instance, the Rokko Island is on reclaimed land which is connected to the mainland by a single bridge. The earthquake had isolated this island by seriously damaging the bridge and port facilities. There existed a real risk of panic due to lack of water and food. The community leaders requested the Co-op and Daiei supermarkets to supply goods in co-ordination rather than by opening stores to the public, which might cause panic and sacrifice the weaker population. The responses of the store managers were in clear contrast: Co-op followed the request whereas Daiei opened stores in order to take advantage of the situation. The Co-op manager even ignored the Management's instruction to open the store because he felt it to be an impossible solution to such an extraordinary situation. This act was greatly appreciated by the residents although he may have lost business opportunities to the competitor.

Later the management endorsed his decision and praised his judgement. Such local initiative was made possible by these managers thinking independently and using their better knowledge of the local situation. Co-op now feels that the front line is living up to its core values.

Importance of Community Ties ------------------------------------- Co-op contributed to the swift stabilization of the citizens' lives, preventing panic and exorbitant pricing which might have occurred under such circumstances. Such a contribution was possible because Co-op Kobe has made a long standing effort to put down roots and win confidence in the communities. "Co-op in the devastated area" was a headline often used in the media and consumers were quoted as saying "Co-op was ours, so it would never cheat us" or "We don't need to buy up as Co-op secures a supply of products".

Co-op Kobe was established in 1921 and has grown to be the largest primary co-op in the world. To date it has 1,280,000 members, which accounts for two-thirds of households in the prefecture. In the most heavily struck area of Kobe, Co-op serves the majority of households. This means Co-op has a vital role to play in the sustainable development of communities. Because of this, Co-op has made every effort to place its roots in communities, through maintaining policy dialogues and partnership with local governments and promoting collaboration with other civic oganisations in the fields of culture, welfare and environmental protection.

Being the largest retailer in the prefecture, it has been keen to procure locally-grown produce and maintain symbiotic relationships with small retailers. Such day-to-day efforts have contributed to cultivating the trust in the co-op.

Risk Management --------------------- As mentioned earlier, when the local office was destroyed, so was the Co-op's centralized computer. Most of the data of operations was lost and this caused great difficulty for the resumption of operations. Under such circumstances it was fortunate that a central warehouse had been receiving back-up data of debtors/creditors accounts every day for 10 years. This was because Co-op had taken lessons from the paralysis of bank-on-line systems which had occurred during a fire in Tokyo at that time. Through such data it was able to resume operations fairly soon. However, the data bases giving information on members, accounts of joint purchase operations and other important information were lost forever. It took two months to return to ordinary data processing operations.

Taking this as a serious lesson, Co-op Kobe has installed a new computer system in a shock-proof building located on solid ground and has started to deliver back-up data to a depot 80 kilometers away. It is planning to establish a dual system in Kobe and Yokohama whereby the surviving computer will take over the operation through satellite communication should either of them ever be down.

Creative Reconstruction ----------------------------- In order to build on the important lessons gained from the experience, Co-op Kobe formulated a medium-term plan (1997 to 2001) in October 1995. Its theme can be summarised as "Creative Reconstruction: Building New Community, New Lifestyle and New Co-op", and is an expression of Co-op Kobe's resolve to enter the 21st century. Recovery from the earthquake does not mean a return to the past. Co-op has promised to use those lessons to build a new co-op widely supported by members and firmly rooted in the community. That is what "Creative Reconstruction" means.

Under the adverse circumstances and financial setbacks facing many consumer co-ops in Japan, Co-op Kobe is acquiring a new quality of management, based on members and communities. This is why Co-op Kobe is seen as a role model for the co-operative movement in the 21st century. Nowadays it seems that "Creative Reconstruction" has great significance not only for Co-op Kobe but also for all co-ops, since it shows some important points which can be learnt from the Japanese movement's renewal.

---------------------------- * Mr. Kurimoto is the Manager of the International Department of JCCU and Executive Director of the Japan Society for Co-operative Studies in Tokyo.