By Pip Hunter
Members of the Maritime Union of Australia (MUA) and the Australian Maritime Officers' Union walked off the job on September 8 in protest at the federal government's moves to liquidate the Australian National Line (ANL). The MUA was concerned that cabinet, due to meet on September 12, would decide not to keep the government-owned shipping line operational and would sell ANL's 25% share of Australian Stevedores.
Last month, following a negative valuation by the merchant bank Salomon Bros and accountants Price Waterhouse, the government announced that it no longer intended to privatise ANL. The consultants' report urged the government to "trade down" or sell off many of ANL's contracts to other carriers, with the eventual aim of liquidating ANL.
According to MUA officials, the strike, which halted cargo movements in all Australian ports and is estimated to be costing employers more than $3 million a day, was launched only after extensive efforts failed to get the federal government to discuss a joint MUA-ACTU proposal to restructure ANL to ensure its continued viability.
Under the union's proposal, employees and unions would be able to gain equity in ANL in return for more major restructuring, including the possibility of ANL withdrawing from European and some Asian routes where it has registered losses. The government would also be asked to inject capital into the line.
MUA joint national secretary Tony Papaconstuntinos said that the union and the ACTU had put the plan to the government but neither it nor the new ANL board had responded. Federal transport minister Laurie Brereton sacked ANL's board of directors last month and appointed a four-person team (which includes former NSW premier Neville Wran, who is reportedly earning $150,000) to "downsize" ANL into a commercial operation within six months.
A few months ago, the old board had valued ANL at between $70 million and $115 million, a stark contrast to the negative $75 million figure of the government's consultants. The MUA described the consultants' valuation as "full of distortions" and said that it would pursue "an objective and proper valuation of ANL".
The new board has presented the government with two options for ANL's 25% shareholding in Australian Stevedores (AS): sell it for an estimated $28 million or take full control. MUA wants the government to exercise its right to increase ANL's 25% stake in AS to 100%. A decision has to be made either way, because the Sydney-based Jamison Equity Ltd, a 50% shareholder of AS, launched its bid two months ago.
The MUA had accused the government of preferring to sell its 25% share to Jamison, which has already secured agreement from the other major shareholder, Howard Smith Ltd, to acquire its 25% interest in AS for $28 million. And in fact, on September 9 Brereton worsened the dispute by announcing that the government would sell.
As the strike entered its second day, the Financial Review urged the government to use the opportunity to "push a harder deal on the reform of the shipping industry". While employers and the government acknowledge that the shipping industry has undergone massive restructuring during the 1980s and 1990s (under the shipping industry reform program, 1000 workers were retrenched and average crewing levels reduced by 42% between 1986 and 1994), they insist that Australian labour costs are still too high to be competitive.
According to a report released by the Bureau of Industry Economics, labour costs for Australian coastal ships are 40% higher than those for UK ships using British crews. Australian crews have good leave entitlements compared to foreign crews and, under the cabotage agreement, most of the coastal trade is reserved for Australian-flagged and crewed ships. These are important achievements of the waterside unions, which through their militancy over the last century, have managed to win some of the best work conditions in the world for their members.
"The union has worked painstakingly towards industry reforms in shipping since the early 1980s", said Papaconstuntinos. In the stevedoring sector, joint national secretary John Coombs said that major reforms have increased cargo handling output by up to 70%.
The Salomon and Waterhouse report and shipping consultants to ANL's new management say that, short of moving ANL offshore, there are few major cuts which remain to be made at ANL. A London-based consultant, quoted in the Financial Review, said that although world trade had been growing at a rate of 8-10%, container ship capacity had increased just as fast, keeping freight rates low. Overseas, ANL is considered efficient and the poor shape of the shipping industry, according to this consultant, is evident in the fact that there is a 15-20% oversupply of capacity on some routes.
The Prices Surveillance Authority's recent report on stevedoring costs and charges noted that increased trade in 1993 had produced improvements in profit margins. It concluded that future productivity gains would come only from the replacement of ageing capital equipment.
As Papaconstuntinos put it, "Federal government inaction is largely responsible for the hapless situation ANL is now in".
Employers are urging the government to use the current dispute to adopt the basic recommendations of the Shipping Industry Reform Authority, including the use of foreign crews on Australian ships, in an attempt to further deregulate the industry and drive down the wages and conditions of waterside workers.
"Other Australian workers have to compete against imports produced with cheap labour — and they do so by improving their work practices and improving productivity ... The aim of [the] exercise should not be to save ANL as a floating rort for Australian seamen", said the Financial Review, which doesn't compete with anyone.