Strikes, go-slows and nepotism: Why our ports must change

They are a blight on our international reputation and place an economic ­burden on the country. They do this by virtue of a special legis­lative privilege which no other ­industry receives.

Union workers gather at the Port of Brisbane after a federal court injunction decision to award sacked employees back to work. Pic Jono Searle.

Despite some misgivings within the federal government, Treasurer Jim Chalmers recently wrote to Opposition Leader Peter Dutton to invite him to the Jobs and Skills Summit.

What a shame that Dutton rejected the invitation out of hand, labelling the event as a “stunt with the unions” and adding “we’re not going to support stunts”.

If an invitation to the event was extended to me, I would accept – better to be in the tent, and making arguments, than throwing rocks from outside.

The government released an issues paper this week in advance of next month’s summit, with key questions for parties to consider. The document is a good one. Of note, it says our “enterprise bargaining system should be a key enabler of both productivity growth and secure, well-paid work” but points to the decline of bargaining and asks participants at the summit to consider how it could be revitalised.

Revitalisation of bargaining, though, is not what many industries need. Some employers have bargained themselves into commercial straight-jackets but a lack of competition allows them to pass the costs onto the rest of us.

Take for instance our costly and inefficient ports. They are a blight on our international reputation and place an economic ­burden on the country. They do this by virtue of a special legis­lative privilege which no other ­industry receives.

In February, the Australian Competition & Consumer Commission made a submission to the Productivity Commission’s inquiry into long-term productivity of our maritime logistics system. The ACCC monitors prices, costs and profits of container stevedores at international container ports in Adelaide, Brisbane, Fremantle, Melbourne and Sydney. It found that Australian container ports are performing poorly compared to overseas ports.

The submission cited a recent study by the World Bank and IHS Markit which ranked Melbourne and Sydney in the bottom 15 per cent and 10 per cent, respectively, of the 351 global ports in the study.

The ACCC states that the ­“systemic industrial relations issues across the entire container freight supply chain have played a pivotal role in inhibiting productivity and efficiency gains at Australian ports”.

The commission also found that in recent years, restrictive work practices and industrial actions have escalated.

Anecdotally, those who depend on the sector report that service delay, interruption, and loss of valuable product does not just occur as a result of official strikes, and work bans. There are inexplicable go-slows, mysteriously coincidental waves of absenteeism, and bewildering accidents and incidents. Farmers and business owners say they are too frightened to complain, as their products will be targeted and they simply cannot afford the loss.

In the maritime sector, enterprise agreements go beyond their natural remit and contain provisions that limit the employer’s right to manage, automate, ­reduce labour costs and control recruitment.

For example, I examined an agreement between Hutchison Ports Australia and the Maritime Union of Australia, made last year. It applies to the Sydney international container terminals and the Brisbane container terminals. Clause 10 of the document deals with recruitment and promotion. It states that vacancies must be filled by people within the business, where trained and suitable people are available.

Any appointments made must be made on the basis that 40 per cent of these appointments must come from family and friends of employees covered by the agreement, 30 per cent from the union and 30 per cent can come from the company.

Given the importance of the global freight trade to the Australian economy, the ACCC wants to see the development of a framework of performance measures for assessing port performance and benchmarking our ports internationally.

The ACCC recommends repealing a legislative exemption from competition and cartel provisions in competition law, which has been granted to registered international shipping lines. The exemption means that “shipping lines can reach agreements with each other about the freight rates to be charged, and the quantity or kind of cargo to be carried, on trade routes” and “no other in­dustry benefits from such a broad legislated exemption from Australia’s competition laws”.

This recommendation has been made again and again, and is always ignored.

In 2015, the Competition Policy Review (the Harper Review) recommended that this exemption be repealed. Before that, there was a 2005 recommendation of the Productivity Commission to repeal it and to instead use the ACCC’s authorisation process for the selective approval of shipping agreements on the basis of their net public benefit, as occurs for all other industries. Peak industry body Shipping Australia has its own differing opinions on the issue.

At the summit, there will be plenty of examples put up of sectors with stagnant wages and poor conditions. For these industries, which are mostly female dominated, bargaining is probably not the answer; government may have to be more creative and courageous.

Importantly, where bargaining has been used as a method of creative destruction by militant unions, the government should act. If there is no appetite to take on the unions directly, then competition law can be amended. No industry should be exempt from competition and cartel provisions. A broad brush approach will sweep the industry clean.