Secret waterfront plan

Text of the Cabinet-in-confidence strategy paper, dated 7 July 1997.


Objectives

Increased economic growth and employment opportunities, through the
establishment of a reliable and cost effective waterfront.

Removal of MUA/ACTU control over the waterfront and therefore its use
as a political/industrial weapon.

To demonstrate the effectiveness of the Government's industrial relations
and transport reforms, which will have a flow on effect into other sectors
of industry. 

Benefits

A recent BTCE study ststes that conservative estimates of economic
benefit arising from waterfront reform would amount to $1.24Bn annually
and 4350 additional jobs. These estimates do not include the significant
benefit that would accrue from establishing Australia's reputation as a
reliable supplier. 

Strategies

An April 1997 study undertaken jointly by the Departments of Industrial
Relations and Transport concluded that there were two strategic options
open to the Government:

Evolutionary, whereby Government adopted an incrementalist approach
and allowed the processes of the Workplace Relations Act to work their
way through the system and, over time, the stevedoring industry would
reform itself.

Activist, under which the Government would take a more active role in
promoting change, in co-operation with the major stevedores. It canvassed
the prospect of industrial action that would give the stevedores the option
of dismissing their employees and rehiring new people under different
arrangements. A trigger mey come from a number of circumstances such
as the sale of ANL or another maritime issue, or from within the
stevedoring industry itself. 

The study recognised that the industry has deep seated problems and so
far has resisted even evolutionary change, although section 127 orders
have been used (once) to halt industrial action. There is still a MUA closed
shop on the waterfront.

The study concluded that the activist approach is the only strategy which
holds out the prospect of achieving the proposed objectives in this term of
Parliament and this view is endorsed. 

The Task Ahead

The activist approach places us in the hands of the two stevedores. There
are no signs that any substantial new stevedores will emerge to break the
union's monopoly supply of labour. The only prespective new operator,
OOCL (in Melbourne or Sydney), has done a deal with the MUA.

We have now consulted extensively with the two major stevedores. Patrick
favours the activist approach, while P&O does not.

P&O maintain that the Government should introduce more radical
legislation to deal with the problem, thereby relieving them of responsibility
to act. However, P&O concede that if Patrick were to gain substantial
savings, they would have no choice but to follow.

Patrick have now resolved to take a radical path to the reform of their
business, if necessary without the aid of the Government. They are being
driven by ecomonic imperatives.

In accordance with the study's recommmendations, a small team has been
assembled to continue the detailed planning necessary to counter the threat
of industrial action on the waterfront and in the maritime industries and to
further develop the planning of the strategy.

The Government's role will be to "set the scene", to facilitate changes that
the stevedore(s) and others wish to make and to give them the political and
regulatory tools to get their businesses working again as quickly as
possible, in the event of industrial action.

The group's tasks include the consideration of the issues identified in the
study, namely:

Close cooperation with waterfront industry employers to asist them to
develop and implement strategies for overcoming a strike and maintain the
flow of trade;

Identifying Government actions necessary to assist employers in the run
up to, and during the dispute (issues include: legal assistance, physical
security, access to pilots and tugs, visas, etc.);

Development of Government strategy and tactics including the disposal of
ANL and the implementation of other maritime reform issues;

Managing public and business opinion;

Co-ordination of political information and effort; Consultation with
business leaders to gain their support and confidence.

From the outset, the aim will be to keep trade flowing. On the first day of
an all out strike, most ports will be at a stand-still, although smaller vessels
will be able to berth without tugs and could load cargo using labour not
affected by the strike, eg AWU loading a bulk product.

It will be vital to get the main ports going as soon as possible and then to
establish a national pattern of growing movement on a daily basis until the
strike collapses or becomes irrelevant. Services which could stop a port
include pilot lauches, pilotage, tugs, lines launches, linehandlers,
stevedores, port control functions, Customs, Quarantine and transport
(road and rail) in and out of the port. Strikes by any one of these service
providers would halt port trade. Their replacement may include the
chartering of overseas tugs and the employment of foreign skilled labour.
This will involve immigration, professional certification, certification of
foreign tugs, accommodation and many other details.

Particular attention is being given to areas which provide essential services,
such as offshore oil and gas, and sea links to Tasmania and Western
Australia.

Some elements of the strategy (eg. chartering of overseas tugs or financial
support for stevedores) may involve significant public expenditure. The
capacity to authorise such expenditure needs to be sorted out before the
dispute, enabling the necessary action to be taken quickly and decisively.

Finally, the situation will need to be kept constantly under review, with
scope to alter the strategy if circumstances change. In particular, there will
need to be constant monitoring of the commitment of the key parties and
the actions of the MUA and its allies.

Once the strategy has been implemented and changes have taken place,
there should be continued dialogue and monitoring of improvements in the
productivity of stevedores, tugs and other port related services to ensure
that genuine advances are being achieved and maintained.

Recommendation.

It is recommended that Cabinet endorse the following action:

Planning for the activist approach;

The adoption of the approach which subsumes other related policy issues
(eg. ANL, etc) to the first priority, namely waterfront reform;

The formation of a Cabinet sub-committee of Messrs Reith, Sharp, Fahey
and Costello to authorise the necessary expenditures to achieve the
Government's waterfront reform objectives;

The Prime Minister meets with the CEOs of the major companies involved,
Messrs Hein (P&O) and Corrigan (Patrick's), to convey the Government's
intentions. 

Peter Reith
Minister for Industrial Relations 

John Sharp
Minister for Transport and Regional Development