Wednesday, January 31, 2018

Container Terminal Operator Launches New 25 Year PNG Port Management Project

Plans Continue Despite Massive Union Opposition to Company Practices
Shipping News Feature
PAPUA NEW GUINEA – As expected South Pacific International Container Terminal (SPICT), a subsidiary of global operator International Container Terminal Services Inc. (ICTSI), has commenced container handling operations at the Lae Tidal Basin (LTB) despite protests from unions which saw demonstrations in November last year calling on the Minister of Transport, Wesley Nukundj to cancel the 25 year contract they say will cost 1,000 jobs at the ports of Lae and Motukea.

Under the concession agreement, SPICT will begin the transition by immediately rolling out the terminal’s new operating system, Navis N4. PPICT will install both a completely new Terminal Operating System (TOS) and mobile harbour cranes (MHCs) to supplement the existing quayside equipment. Christian Gonzalez, ICTSI head of Asia Pacific, commented:

“We know the next few weeks will be a difficult transition, particularly given the quick adoption of N4 to the working environment. Team SPICT is extremely excited and committed, however, to face the challenges of delivering such an upgrade to the way the terminal is managed. With the support of the local port users and our international shipping partners, we believe that the benefits of automating processes and information flow will accrue to each and every one of the ports users very quickly.

”We anticipate further benefits from delivering the MHCs to the site and look forward to seeing a continuous improvement in operations at SPICT from the deployment of the TOS to achieving the first MHC move in the near term.”

As part of its operational ramp up, SPICT says it will spend most of the coming months rolling out the system’s modules and orienting port users at Lae while handling all international cargo at the LTB and the dedicated second berth in Lae old wharf. The company says it expects that a full and stable suite of modules will be operational and ready in time for the arrival of SPICT’s MHCs in April. ICTSI South Pacific’s investment in IT systems and infrastructure is expected to exceed 3M Kina ($930,000) this year.

The Philippine headquartered operation is certainly no favourite of the dock workers unions. The International Transport Workers Federation (ITF) has been having verbal battles with the company over its global employment practices for a considerable time. Just a month or so ago the ITF issued a scathing report on what it considers sharp practices in the flagship Melbourne Terminal citing the victimisation of workers. In October last year the ITF issued two reports specifically targeting ICTSI procedures and practices. The first ‘ICTSI’s global expansion: a risky proposition?’ details alleged violations of national and international laws across the world including paying poverty wages; a failure to respect the right to freedom of association; poor safety standards; and illegal outsourcing of labour.

The second report refers specifically to developments in Papua New Guinea and outlines concerns over landowning communities, which raised the cash to develop the shipping terminals originally and apparently have between a 40-50% stake in each of the existing terminals and also supply existing labour. The unions fear that these interests will be brushed aside and the standards of living for those workers that are kept on will fall dramatically.

Furthermore these groups were allegedly excluded from tendering for the port services despite running things for three generations. ICTSI says it signed a Memorandum of Agreement with impacted landowners with AHI Investments Ltd. (AHI) and Labu Holdings Ltd. (LABU), last November, as a necessary first step towards moving the joint ICTSI-community project in Lae. It says this establishes a collaborative framework with each company promised a 15% stake in SPICT as detailed in the Terminal Operating Agreement signed with PNG Ports.

Enrique K. Razon, Chair & President of ICTSI, has detailed recently how the African countries can provide rich pickings for port operators, with terminal handling charges often netting $250 per TEU compared to the $45 - $50 at Chinese ports. Such statements ensure that unions view ICTSI as primarily concerned with boosting profits by maintaining high rates whilst cutting overheads severely and thus produce such animosity.