11 May 2005

The Web

Of port reform, union finances and burden sharing

If there is one thing the Secretary General of the General Workers’ Union keeps repeating is the need for everybody in this country to shoulder the burden of reform.
Tony Zarb says the GWU could not be party to the social pact because in its final draft workers were going to shoulder the brunt of reforms.
And with Government intent on reforming port practices the union leader has a tough cookie in front of him as he tries to fight for the survival of the GWU’s cash cow, the Cargo Handling Company.
Zarb is convinced Government wants to terminate the cargo handling contract with his union’s company to attack the GWU’s commercial base.

In an interview with this newspaper last week, Minister Censu Galea stated it was not Government’s intention to attack the GWU’s commercial base by reforming the cargo handling operations in the port. He added that the Cargo Handling Company could also compete for the tender. You seem to disagree with these statements. Why?
We have documents in our hands showing that a number of meetings have already taken place between a company interested to compete for the tender and the Malta Maritime Authority. Why has the Authority never met with us?
This leads me to think that things may already be arranged before the tender is issued.
Secondly, a lot of criticism has been levelled towards the Cargo Handling Company because of its monopoly but the tender will clearly be asking for one operator. The monopoly will be retained, whoever wins the tender.

The Minister said the Authority would be granted more power to take action or even terminate the contract if conditions are breached, something, which he claimed was lacking in the current scenario…
Those things already exist in Cargo Handling’s contract. These are all excuses. If Minister Censu Galea had no intention of hitting out at the GWU he would have allowed the task force set up last year between the MMA and Cargo Handling to discuss ways and means of improving the port operation, to continue functioning instead of stopping it abruptly.

But doesn’t Government have a right to reform cargo handling operations in the port?
Reforming cargo handling alone will not solve the problems in the port. The GWU is not against reforming port operations. We were involved in every reform that occurred in the port and each time we took great care not to leave any victims behind.
This time around port reform can create victims. We are not against port reform, far from it. The last time reforms were instituted in the port, in the early nineties, the GWU managed to group together various categories of port workers and convinced them to work on a 24 hour basis seven days a week.
Many people blame Cargo Handling Company and licensed port workers for the high port charges. This is not the case because if there are two groups of workers in our port who are bound by Government-issued tariffs, these are Cargo Handling Company and port workers. These two entities cannot charge higher than Government’s official tariffs.

So are industrialists exaggerating when they complain of high port charges?
When they say a container costs more to transport from the port to the industrial estate rather than transporting the container from Holland to Malta, we must keep in mind that there are other container charges apart from expenses owed to Cargo Handling Company.
Ever since the MMA was set up, it introduced a Lm10 charge on every container that passes through the port. A container bill also includes Lm20 indicated as ‘other charges’. These do not pertain to Cargo Handling.
I do not exclude a reform of tariffs charged by Cargo Handling but things have to be put in there proper perspective because Cargo Handling employs a lot of people.

If Cargo Handling loses the tender competition, with what right do you expect the other company to take on board your employees?
Like what happened in various instances we expected to be given the right of first refusal but Government did not want to listen.
Government’s decision to go ahead as planned can threaten the livelihood of Cargo Handling’s employees. If the GWU loses the contract these workers will end up unemployed.
We are asking Government to include a clause in the tender obliging the tender winner to take on Cargo Handling’s employees.
What if the new contractor has no intention of taking on your employees or insists he can work with his own people?
In that eventuality Government cannot expect workers to stay quiet as if nothing has happened. Workers will react.
Apart from dealing with Government as a company, the GWU also has the obligation to defend its members’ rights. Whenever Government chose to sell out its share in various entities, as a union we always insisted the employees be taken up by the new company. Since it is Government’s decision that is threatening the livelihood of our employees, the union now cannot act differently.
Government has to shoulder responsibility for its actions.

Government can simply tell you that Cargo Handling is your company and hence it is your problem not his.
It is a company that is giving Government a service. If Government stops taking the service from this company its function ceases to exist.
What can a cargo handling company do if it no longer is involved in cargo handling operations.

But it is still your responsibility. That is what happens in the private sector.
Be careful. Cargo Handling would lose its function because of Government’s action. Let’s say Government sells Air Malta to a foreign shareholder. Will it not ask the new company to take on all existing employees?

Air Malta is a Government-owned company. Cargo Handling belongs to the GWU, the situation is different.
Come on. Government would have brought about the company’s downfall. If it were up to us we would continue operating.
But the GWU has reason to doubt the genuineness of Government’s intentions. More than a year ago the same Government had called on us to form a task force with the Malta Maritime Authority to discuss improvements to the contract before it expires. Last year Government just disbanded the task force because it decided to opt for a tendering process. Had we continued with discussions we would have started seeing port reforms being implemented sooner rather than later.

How commercially important is Cargo Handling Company for the GWU?
It represents substantial income for the GWU. Government will not only be attacking the GWU by putting some of its members in a difficult situation but it will also be attacking the union’s funding. We know what happened when Thatcher had attacked the finances of Britain’s trade unions. The same seems to be happening here. This is being done on purpose, we did not need this controversy.
Government knows that the GWU was always responsible in its dealings. In 1990 there was a Nationalist Government when we partook in port reforms.
Which company or entity has not raised its tariffs since 1990? Cargo Handling did not raise its tariffs even though the contract allowed the company to raise tariffs in line with the cost of living increase.
Just imagine a private company doing the same job and refraining from hiking up tariffs. Charges will go up not down with this reform.

The Minister wants a reduction in expenses of around 25 per cent.
That is what he is saying but he also has to tell us from where he is going to make those cost savings.

Industrialists have been for ages complaining of high charges. Isn’t our port too expensive?
What do they expect to utilise the port for free. Industrialists are forgetting one thing. Way back in the sixties the GWU had agreed with the then Nationalist Government to convince port workers to be paid for two ships from every three that were serviced.
Nobody mentions these actions, which helped industry in no small way. The GWU was responsible enough to reduce costs for industrialists in the past.

The Prime Minister has often stated that discussions at the MCESD on the social pact began taking a turn for the worse when Government announced its intention to institute port reform. What is your reaction?
I deny this altogether. We do not mix up issues. The social pact was one issue and port reform was a totally distinct issue. The Prime Minister is either fixated or else he is lying. He may also be talking in such a way because it suits his cause to condition public opinion against the GWU.
I can assure you that in this building (the GWU HQ) there was never a meeting during which we discussed the possibility of rejecting the social pact because of the cargo handling controversy.
On the social pact the GWU wanted an agreement to be reached. We went to the meetings with one principle in mind: everybody should shoulder part of the burden.
The end result, however, was that employees were going to shoulder the lion’s share of the burden.

At Air Malta last year the GWU and other unions reached an agreement with Government on a number of measures to help boost the airline’s competitiveness. It was in many ways a company social pact. Is the agreement reached at Air Malta achievable on a national scale?
Yes, as long as we keep in mind the principle that everybody should shoulder part of the burden. At Air Malta all categories of employees, the management and the company directors shouldered their part of the burden.
But on a national level things have not been made easier. Government has acted unilaterally and stopped public holidays falling on a weekend from being added on to employees’ leave entitlement. If Government decides to re-open negotiations on a social pact it will have to withdraw the public holidays measure otherwise employees will not start on equal footing with employers.

Realistically, will the social pact ever come into being since no discussions have been held after it fell through in January?
We want to continue negotiations but the principle of burden sharing is of paramount importance to us.
Government had committed itself not to raise income tax and VAT. What burdens were you expecting Government to shoulder?
It wasn’t enough. Government has consistently increased fees and tariffs between one budget and another contributing to an increase in the cost of living.
Government didn’t want to have the constituted bodies and unions scrutinise public expenditure. There was no balance in the final package.
Competitiveness need not increase solely by trimming employees’ work conditions.
When we had tried to bring over a factory that wanted to produce electric vans, the reason they never came was because of excessive bureaucracy. For them wages were not an issue so much so that they eventually opened shop in Germany.
Why is the GWU contrary to linking wage increases to productivity?
We were against the proposal as put down in the social pact because at the end of the three year agreement, employees would not have benefited from any wage increase.
Apart from that, wage increases were linked to the GDP. This was a gimmick since everybody knows that the GDP over the next three years will not increase on the same lines as outlined in the social pact.

What is your biggest problem with Lawrence Gonzi’s government?
Government is not delivering on its promises and that is creating problems. Before the last election and referendum we warned political parties not to promise what they cannot deliver. But there is also a growing arrogant trait among ministers.

On pension reform the GWU is ready to accept a nominal increase in national insurance contributions but is against increasing the retirement age to 65. How do you explain this?
We are proposing an increase in national insurance that will be reviewed after three years and increases will be progressive depending on the person’s wage packet. Low income earners will see a nominal increase of one per cent while those who earn Lm9,000 and over will see their NI contribution increase by five per cent.
As for the retirement age we believe it should be set at 61 with the possibility for people to choose to continue working until 65.

What is your position on private pensions?
We agree they should be on a voluntary basis. Making them compulsory is problematic. Let us assume somebody is paying into a private pension and suddenly loses his job and spends two years on the dole unable to pay his private pension premiums. What will happen to him?

Malta is now part of ERMII. What is the GWU’s position?
We did not take any position on the issue but we have to be careful of what can happen in the next two years. I believe Government has already made a mistake by not taking an x-ray of prices as they are today. My fear is that over the next two years retailers may increase prices indiscriminately.

Tony Zarb was interviewed by Kurt Sansone

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