MANPOWER & TRAINING Labour

Tension builds for Brazils port sector, as unions see private terminals without organised labour grow. Bob Moser reports
A NEAR MONTH-LONG work stoppage at one of Brazils busiest ports, labour unrest elsewhere and a national coalescence of union leaders have made the last year in Brazilian port management a nerve-wracking one. Analysts and industry bellwethers see tension building in the sector, as private terminals outside the public sphere grow by avoiding organised labour and capitalising on bottlenecks at overwhelmed public ports. Little training by unions in the latest skills dock workers need only aggravates the problem. With Brazils government opening more ports to private management over the next two years, the nations maritime workforce may face demands to change. Whether unions embrace that will play a big role in determining how Brazilian ports and terminals develop in the near future. RETROGRADE WORKFORCE It isnt definitive whether terminals at public ports are at a permanent disadvantage in Brazil when competing private terminals have labour flexiblity. Benefits exist for both approaches, but each side seems to agree that Brazils ports law of 1993 is too vague for todays labour challenges, says Wilen Manteli, president of the Brazilian Association of Port Terminals (ABTP), a non-profit representing more than 100 private terminals or those leased in public ports. I think a lean, well-trained pool of temporary workers, paid based on market demand, can be the solution for public ports. Conversely, many private terminals outside public ports are facing strong pressure, even legal suits, to hire unionised labour, despite the federal constitution and port law ensuring their freedom to hire independently, says Mr Manteli.

Sign of the times

OFF COLOUR: a near month-long strike of unionised labour at Itajai is the exception rather than the norm

Robert Grantham Port Consultant

I dont think (unions) will be an obstacle in the future ... theyre tamer, and know their survival depends on cooperation c

If we dont solve Brazils (port) labour issue, all terminals public or private will suffer the ongoing effects of ports with modern equipment but a retrograde workforce. Unions could make headway with port management and revitalise their workforce by conceding to staff cuts, before the problem becomes so prominent government steps in. Theres an estimated excess of 26,000 port labourers, according to ABTP, many of which are eligible to retire based on age or health issues. We have a labour excess at the ports, and worse, an aging workforce thats unprepared to operate with the newest methods of cargo storage and handling, Mr Manteli says. Some terminals can operate with their own staff, but end up having to also pay unionised staff (with limited work). Its a bottleneck that must be resolved by government, employers and workers, with retirement required of those eligible, or relocation assigned to other activities. Private terminals outside ports could eventually face skilled labour shortages because of Brazils record-low unemployment nationwide, but the migration of redundant labourers at public ports to private terminals wont happen naturally, because the demand lies in new technical jobs, which few veteran workers are retraining for, Mr Manteli says. LOST OPPORTUNITY Topping labour squabble headlines last year was APM Terminals, the dominant terminal operator at the Port of Itaja (Brazils no. 2 for container traffic), which had a contract with tally clerks expire in early 2011. Negotiations dragged on for months with little progress. Able to employ freely, APM began hiring union workers on the companys monthly salary

Wilen Manteli Brazilian Association of Port Terminals

If we dont solve Brazils (port) labour issue, all terminals public or private will suffer the ongoing effects of ports with modern equipment but a retrograde workforce c
basis, instead of casual work the union had long enjoyed. Itaja tally clerks began a 23-day strike in October, nearly shutting down the public port and driving container traffic across the way to a competing private terminal. A deal was eventually struck, with APMT firing the salaried workers it had hired and the union taking a pay cut. But APMT lost the chance to completely change labour relations at that port, because if tally clerks had agreed to (salaried) employment it would have been a historic moment for the rest of Brazil, says Robert Grantham, former commercial director of the Port of Itaja, now an industry consultant in southern Brazil. It couldve been especially key in

18 www.portstrategy.com

June 2012

Labour MANPOWER & TRAINING

places like Itaja, where you have terminals in public ports working opposite private terminals not obliged to use union labour. More recently, 100-plus leaders from maritime labour groups met in March to decide whether to cripple Brazils port system with a national strike. The groups decided against it but have shown signs of gelling, passing a charter last year calling on unions within strategic regions to pursue collecting bargaining together. ANTI-PRIVATISATION Brazils ports law of 1993 opened the door to privatisation of port operations, and leasing of terminals for private use. But it also set rules for concessions to always pass through a bidding process and required hiring unionised labor, something more and more terminals are being built outside public ports to avoid, says Eduardo Lirio Guterra, president of the National Federation of Port Workers, or FNP. More than $20bn in new investment could flow into Brazils public ports in the coming years, via concessions expected for terminals with contracts expiring this year. Mr Guterra doesnt see the efficiency in Brazilian ports being improved by privatising administration, from the point of view of dock workers. Further concessions in 2013 may even draw retaliation from labour forces. We have stressed we are against privatisation of port management or the opening of capital for terminal companies, said Mr Guterra, in an April interview with Brazilian media. Criticisms exist (of full privatisation), including from the World Bank, regarding the difficulty to execute planning for the port sector of a country when decision-

LOOK-OUT: Portonave workers cautiously eye unionised labour across the river at Itajai

making power lies with businesses and not the government. Mr Guterra agrees its necessary to expand and improve Brazilian ports, and streamline the cargo release process. But respect for the rights of port workers is also important, and he argues politicians call for infrastructure improvements but show little interest in how progress affects Brazilians working in the trenches. MEETING OF MINDS Despite the challenges, Mr Grantham says labour relations for Brazilian terminal operators are improving overall. With Itaja an exception, strikes are rarely seen though at Brazilian ports today, with labour leaders better tuned to the fact they

may be losing leverage with the onset of new machinery and technology. Terminals within the ports could face the obvious problems, Mr Grantham says. But I dont think (unions) will be an obstacle in the future. I think theyre tamer, and know their survival PS depends on cooperation.

Want More?
Felicity Landon wrote Keeping the best for the April 2012 edition Read the full article at: www.portstrategy.com/features

Cautious optimism greets ambitious tender plan

INDUSTRY GROUPS REPRESENTING the private sector in Brazils ports say theyre excited with the governments plan to enable new private investment in nearly 100 terminals nationwide, but seem wary of advanced standards being slapped on ports and labour unprepared for it. A new National Plan for Port Policy, or PNLP, has been in the works for almost a year and now requires just the approval of Brazilian President Dilma Rousseff to be set in motion. The plan would call for concessionary tenders to be put out for 98 terminals around the country, which have been privately managed since 1993 or earlier and have contracts expiring this year. The terminals in transition account for 32% of Brazilian cargo, and the government wants to mandate new investment and expansion on incoming managers to spur long overdue development at key ports. All 36 public ports are near their saturation point for cargo, with some surpassing it already. Government standards on how private management would have to develop ports and terminals under their care are expected by June. At least $20bn in new investment, primarily for the aging terminals with expiring contracts, is expected to come from development mandates for concession winners. Creative managers that have the technical experience to boost terminal production, and will be eager to invest to that end, will be a welcome change for Brazil, says Sergio Salomo, president of the Brazilian Association of Public-Use Container Terminals, or Abratec. New private management could also quickly eliminate the role of political parties in trying to procure or delay funding for ports based on labour union support, something that has entrenched itself in Brazilian infrastructure for decades, he says. Some in Brazils private port sector say theyre concerned new federal guidelines may establish excessive requirements for investment or environmental efficiency that winning auction bidders cant meet. Rules will need to be clear about how contracts could be cancelled for management that fail to hit growth benchmarks on time, in order to reduce investor risk before an auction. Which ports and terminals are put up for auction will likely be decided by President Rousseff, who steered a similar airport auction plan last year. Leading candidates include the new port of Manaus, which the government says has investor interest, followed by new ports in Espirito Santo and southern Bahia state. Another favoured site is the Port of Imbituba, in Santa Catarina state, privately managed with an expiring contract in the heart of one of Brazils busiest agricultural export zones.

June 2012

www.portstrategy.com 19

Credit: Portonave