Analysis of Port Labour Systems and Port Labour Reforms in Ghana

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Purpose- The purpose of this study is to examine the Port labour system in Ghana after reforms, based on existing concepts and 'best practice' to identify or develop ideas for improvement and also to determine which concepts or system works in practice considering the setting of Ghana's ports in particular.

Design/Methodology/Approach- First, based on reviewed literature, various concepts and systems employed by ports and the resultant strategies adopted by management and the labour force to stand for their interest are discussed. Then after, an appropriate concept is developed based on the social setting of Ghana is developed.


Practical Implications-

Originality/Value- this study proposes a new approach to enforcing the so called 'best practices' by suggesting a customization to meet the peculiar situation of Dockers in a particular setting. It proposes a deviation from blanket implementation of systems that have worked in, say, developed economies to developing or under developed economies or ports without due consideration for the government interventions that made the system work in the developed economies.

Keywords (six)-Port labour reforms, Port labour systems, Landlord port, Unions, Globalisation

The organization of port labour and the associated dock labour systems vary considerably throughout the world. The key issues that often appear in labour reform processes relate to the definition of dock work, the legal status of the dock worker, the functioning of labour pools, practical arrangements at the work floor and the categorization and qualification of dock workers. This thesis should provide a critical evaluation of a dock labour scheme in a chosen region/country/port and port reform that might be linked to it.


In Ghana, Port reforms in the two ports of Tema and Takoradi and the associated reform of labour were initiated by way of policy choice which involved reforms in other sectors of the economy. In the wake of increasing cost of goods and a widening Balance of Trade deficit, coupled with the inefficiencies of the state owned ports which lacked modern equipment and sound management, the government of Ghana launched the Ghana trade and investment gateway (GHATIG) project in 1998 to stimulate the economy.

The landlord port system which has become the standard being promoted by international development partners like the Worldbank and UNCTAD to the chagrin of port labour unions (Turnbull and Wass, 2007) was adopted for Ghana's ports. This system calls for changes in the way the port works. It involves transfer of operations to the private sector which will invest in efficient systems that may call for re-training of personnel, re-designation of jobs and sometimes job losses to some employees. In terms of dealing with labour unions, the port reform in Ghana has been published as a success story by the Worldbank in module 7 of the second edition of its Port Reform Toolkit (Worldbank, 2007, pp 322).

Years down the line, the Maritime and Dockworkers Union (MDU), which represents the port labour in Ghana, finds itself weakened by way of losing it members. In 2002, the MDU together with five other stevedoring companies formed the Ghana Dock Labour Company (GDLC), an employment agency. The union had a stake of 20% shares in the enterprise to provide a pool from which the stevedoring companies and other off-dock terminals could hire labour. This made the union also an employer of casual labour. This appeared to be a respite for the redundant members affected by the reform. However, (Britwum, 2010) identified that the MDU "does not have the required majority on the company board to effectively defend its members. MDU in this instance serves as an employer with concerns for productivity and workers' conduct. The defence of workers' right to decent income and working conditions has taken a back seat".

In view of the foregoing, with particular reference to the extent to which the landlord system of port management is being established as 'best practice', this research, using Ghana as a case study, finds out the results of the introduction of 'best practice' and the impact on port labour. This research draws on the extensive amount of research done in this area which identifies competition as result of Globalisation for increased private sector involvement in port and its resultant labour issues. Based on this some existing concepts will be tested to determine what works and what does not work in reality as evidenced by the Ghana context.

Background to Reform

The harbinger for reforms at the Ghana Ports and Harbours Authority (GPHA) was not directly related to pressure from port users or the port authority even though many stakeholders were hoping for reforms to revive the once vibrant ports which were then bedevilled with poor cargo handling technology, corrupt practices, surplus labour and cumbersome customs procedures that breed thievery much to the irritation of port users. Much to the relief of such optimist, the government in 1998 initiated the Ghana Trade and Investment Gateway Project known in short as GHATIG.

GHATIG was a comprehensive programme that sought to create a conducive environment for economic growth and development led by the private sector. During its implementation, many state owned enterprises were privatised. This is a classic example of an economy-wide reforms that encompassed ten (10) sectors of the economy important for trade facilitation namely; Ministry of Finance, Ministry of Trade and Industry, Ministry of Works and Housing, Ministry of Interior, Ministry of Roads and Transport (now separated into Ministry of Roads & Highways and Ministry of Transport), Ministry of Communication, Bank of Ghana, Ghana Civil Aviation, Ghana Immigration Service, and Customs Excise and Preventive Service.

The Ghana Ports and Harbours Authority (GPHA), which is under the Ministry of Transport was by no means one of the important institutions that was key to achieving the objective of the economic reform. GPHA is a state corporation established by law in 1986, mandated to plan, build, manage, maintain and operate seaports in Ghana. It owns Ghana's two port of Tema and Takoradi. Within the context of the GHATIG, the government approved a policy to further improve the port through reduced cost of operations and shortened turnaround time for vessels (Worldbank, 2007). Chief amongst the objectives of the project was to attract foreign direct investment (FDI) and to convert GPHA into a landlord port authority where the private sector can invest in the port and participate in it operation. This was to enable GPHA to play it role in achieving the target of the gateway project.

Reforms at Ghana Ports & Harbours Authority

GPHA before its transition towards landlord model of Port management had been the main employer of port labour. The reform, in which port operations was privatised was not undertaken without the challenge of dealing with labour issues. Ceding of port operations to private stevedoring companies in 2001/2002 resulted in loss of jobs. This was achieved through both mandatory and voluntary retirement packages offered to those willing to leave at a cost to government. However, the problem of job losses seemed to have been made bearable by the fact that GPHA still remained as one of the stevedoring companies operating at the port. Competing with the licenced stevedoring companies, they control 25% of the market share and so maintained some staff while the private stevedoring companies employed some of the redundant Dockers as permanent staff even after they had received their redundancy packages (Gyebi-Donkor, 2007). Therefore, GPHA acted as regulator and player at the same time.

At the operational level, members of the Ghana Association of Stevedoring Companies (GASC) the common body for the private stevedoring companies together with GPHA maintain permanent employees to operate their equipment; however, they engage casuals from the Ghana Dock labour Company. Their conditions of work are highly precarious, with low, irregular earnings, dependent on the availability of work. The employment rate in 2007 as quoted by Gyebi-Garbrah (2007), the Public Relation Officer of GPHA stood at;

GPHA - 48%

Carl Tiedemann Stevedoring Company /Safebond Company limited - 26%

Ghana Association of Stevedoring Companies (GASCO) - 18%

Off-Dock Terminal Operators - 8%

The reform in this case, proved the suggestion by Marges (1999) that for a peaceful introduction of reforms it is a pre-requisite to involve the unions from the early stages to secure their collaboration. The Maritime and Dockworkers' Union (MDU) the umbrella body of dockworkers were adequately represented as members of the organisational restructuring and labour rationalisation working team of the GHATIG project implementation committee. "The avoidance of any autocratic approach and the consultative, persuasive, and participative style adopted by the government in promoting the port reform process resulted in a very positive atmosphere among the port community for the implementation of the port component of the GHATIG Project" (Worldbank, 2007).The sensitive nature of the ports as national assets and major source of revenue to the nation generated passionate debates whenever change in any area of its operations is proposed. In this regard, the reforms at the two ports were undertaken with utmost caution and tact.

At the operational level, members of the Ghana Association of Stevedoring Companies (GASC) the common body for the private stevedoring companies together with GPHA maintain permanent employees to operate their equipment; however, they engage casuals from the Ghana Dock labour Company. Their conditions of work are highly precarious, with low, irregular earnings, dependent on the availability of work. The employment rate in 2007 as quoted by Gyebi-Garbrah (2007), the Public Relation Officer of GPHA stood at;

GPHA - 48%

Carl Tiedemann Stevedoring Company /Safebond Company limited - 26%

Ghana Association of Stevedoring Companies (GASCO) - 18%

Off-Dock Terminal Operators - 8%

1.1.2 Current Status of Port Reforms and Labour

Nine (9) years after the port reform in Ghana which was welcomed by all and hailed to be successful, the reality has begun to don on the labour union as well as the indigenous operators who now have to face the might of the Global players.

In 2003, private stevedoring companies where given licenses to operate in Ghana's ports. Since the container trade form 70% of the trade they were obliged to invest in modern container handling equipment which they complied with. However, in 2007, the only dedicated modern container terminal developed by GPHA was handed over to Meridian Port Services, a private consortium made up of the Bollore group and Maersk partnered GPHA in a concession agreement to operate and manage exclusively for twenty (20) years. This arrangement effectively gave 50% of container operations to the consortium. Of the other 50% GPHA had 25% as a stevedoring company leaving the rest for the average of six (6) private stevedoring companies licenced annually to operate in the port.

This drew protest from the stevedoring companies since it threatened their ability to survive and also threatened the combined jobs total of about 700 permanent employees of the Ghana Association of Stevedoring Companies, umbrella body for the private stevedoring companies and about 3750 to 4000 pool of casual workers employed by the GDLC where members of GDLC hold the 80% shares with 20 belonging to the MDU. (Otal, 2007)

The real situation was revealed when MPS a year, insisted that GPHA enforced a clause the concession agreement giving them exclusive right to handle all vessels with 50 containers and above arriving at the port irrespective of where it berths in the port. This meant that the over six (6) members of GASC would be limited to vessels arriving with containers less than 50 which rarely happens and on the remaining ten (10) berths since the two on quay to were operated exclusively by MPS (Otal, 2008)

Problem Statement

Ghana's port reforms resulted in the adoption of the landlord port management system popular in the hanseatic states and other parts of the world. It seems quite unavoidable for Ghana to think of any other system in the wave of constant changes in the port and shipping industry. This coupled with the government's inability to investment leaves port authorities with no option than to turn to the private sector to invest in their ports. For many ports around the world the story is the same.

However, this increasingly popular system creates trade-offs with regard to the interest of port labour and that of the private port companies that invest in the port. In some cases the upper hand in the resulting power play ends up with labour or vice versa. Sometimes a middle ground is attained and all parties are satisfied.

In the case of Ghana, the dock labour union despite its strong presence and involvement in the reform process, finds itself in a complex web of conflict of interest. The situation as mentioned before is the case of the labour union being an employer of casual labour but is unable to serve their interest because it is a minority stakeholder in the labour pool company.

This situation has arisen several years after the reform had been implemented.

The study explores the problem in the context of existing concepts for remedies and recommendations.

1.3 Objectives

The objective of the research is to:

Analyze the port labour system in Ghana's ports

Identify concepts that work and those that do not work in the Ghanaian context

Identify similar cases and come up with a refined concept and/or develop ideas for improvement

1.4 Research Questions

Related questions that constantly seek attention on the subject matter include:

What available port labour systems or concepts work in practice?

Can successful practices in one port work in another port?

What critical factors result in different productivity levels for ports with similar labour systems?

Will the economic status of Ghana as a developing country make null any attempt to use the case of developed economies as a benchmark?

Why does GPHA continue to be an operator and regulator at the same time upon adopting the landlord system of port management.

Literature Review

Labour generally refers to employees in any enterprise. Port labour on the other hand is quite difficult to define unless it is put in a framework of a certain jurisdiction or country concerned. With Port labour, the interest is in the dock labour or personnel charged with the core duty of working vessels and the handling of cargo and not the administrative staff or support staff. Therefore the term port labour and dock labour are often used interchangeable in this study.

It may have a vague definition in countries without legislation concerning dock labour. Also, certain countries which have legislation might not have a definite definition for it. Nonetheless, some countries which have succeeded in defining it either do so broadly by including not just the stevedores but also workers in warehouses and industries around the port which require similar skills e.g. Belgium. Others also have a narrow definition, which considers only stevedores as dock labour (Notteboom, 2010).

The way a port organises it labour can be crucial determinant of its performance or competitiveness. This is evidenced in the study by Burton and Turnbull (2002) on three European ports namely Antwerp, Le Havre and London. It shows that certain work floor arrangements and even the status of dockworkers can affect their productivity and the profitability of port companies that use them.

The issue regarding competitiveness amongst ports and the management of human resource on docks often generate some passionate reactions from stakeholders in the port industry. Various studies (Chu, 2007; Burton and Turnbull, 2002; more examples) have shown that the reaction of stakeholders in developed economies is by no means different from that of under-developed economies.

Employers of port labour in both worlds usually complain of high labour cost which forms a greater part of their fixed cost as a result of labour regulation making them uncompetitive. On the other hand, Port labour will usually fight for secured jobs with guaranteed salaries even if there is no work available to do. Depending on who has the power, the interests of these two groups form the extreme forms of varied port labour systems in use around the world.

Port labour systems refer to the way labour is organised in the port to achieve a certain goal. It determines practical arrangement on the work floor, labour pools and qualifications required for such work. They are necessitated by a need for improvement in performance of the port or general economic reforms as a result of improving competitiveness due to Globalisation. This is more conceptual and may be designed to achieve competitiveness of port and its affiliate companies as prevailed in Australia and Taiwan or as part of measures to stimulate the economy in general as in the case of Ghana. The reforms may be initiated by governments as a policy option as happened in New Zealand, and Taiwan or by a port company in the case of Australia (Chu, 2007). It can also be done at the behest of Port authorities (Turnbull, 2000) or even pressure from port users or the workforce.

Port reforms are not synonymous to labour reforms but they always end up affecting labour in on a minor or major scale. It has become a precondition for wider port restructuring (World bank, 2001) and is demanded by Shipping lines, Global terminal operators and other port companies who invest in port infrastructure(Turnbull and Wass, 2007).

In a survey by Napier university of the top 100 container ports, port labour reforms was considered by 47% of respondents as critical, very important or important in attracting private sector investment into ports. This excludes those who have already undergone reform. (Baird, 2002)

Within the increasingly popular landlord system of port administration where privatization of port operations is required, there is a power play between port companies and port labour which results in the way the port functions. Power in the hands of management can lower conditions of service citing international competition as incentive to lower cost. However, this is different for every industry, country and firm. For some, labor and capital are mobile and so they can be utilized to the advantage of management. For others, the structure as well as associated power of organized labour prevails. In transportation, it's more difficult to move capital investment and relocate to lower cost economies. It is characterized by sunk cost, immobility of infrastructure capital and strategic location of many organized and often militant employee groups.

Strategies to get around- introduction of technology and intermodal transport/value added logistics for example general cargo is progressively being containerized to reduce cost and at the same time increased labor productivity. Door to door services are also being offered by different modes all to increase profitability.

Port companies want flexibility in labor market via deregulation of employment schemes and introduction of new work practices.

World Bank (2000) Port Reform Toolkit, Washington DC: World Bank

The World Bank Port Reform tool kit was created to serve as guidelines for countries and private entities alike undertaking port reforms. One of the most critical issues identified during reforms is the issue of what to do with the labour. Module 7 of the tool kit is dedicated to labor and related social issues.

The tool just like many other studies ( ) identifies competition especially for ports serving the same hinterland as the main reason for many port reform programmes. Reforms, it stated could be triggered by competition, political push or community pressure. The ideal situation it proposed is when all three forces are present simultaneously. Usually it's borne out of inefficiencies, inflexibility and outdated labour regimes, management and collective bargaining agreements. This is confirmed by the situation of Ghana in the late 1990's. Shippers and members of the port community complained of 'rot' in the port and yearned for a change. Around the same time the port authority gained interest in the transit trade worked to expand their hinterland to the three landlocked countries of West Africa namely, Burkina Faso, Mali and Niger. Meanwhile some Ghanaians where using the Port of Lome for their imports. These two coupled with the governments programme to make Ghana the gateway to West Africa made the reform quite peaceful.

The tool kit emphasizes the need to deal with the possible adverse human and social effect that may result from the implementation of reforms. It draws on experiences from implementation of such programmes and recommends ways of handling issues such as dismissal, redeployment, retrenchment, severance packages

Notteboom, T., (2010). "Dock labour and port-related employment in the European port system. Key factors to port competitiveness and reform". ESPO 2010 Conference, Helsinki, Finland, 27-28 May 2010

It further identifies the employment effect on the economy a whole. Here the multiplier effect is emphasized.

Most importantly the issue of competitiveness was tackled. It analyzed the implications of technology in ship type and cargo handling facilities, commodity mix (increased containerization) and integration of terminal networks in total logistics. It identified labor unions as being powerful groups who can determine the position of a port in terms of competition. Thus their performance and attitude counts in this regard.

The legal status of port labour is also identified to vary from casual to permanent with strict restriction to the use of only registered port labour in certain jurisdictions.

Finally, it identifies legal status of port labour, labour pools, work schedules and career planning as critical issues during labour reforms. It provides case studies to support the mentioned factors.

Pallis, A.A. (2006), Port Governance in Greece in: Brooks M.R.and Cullinane K. (Eds.), Devolution, Port Governance and Performance, Research in Transportation Economics, No 17, Elsevier: London, pp. 491-508

Pallis' study of Greek ports suggests that reforms become necessary when the port changes its management model. For instance, the Landlord port model requires private participation in port operations. This is an area where port labour is affected most. The fact that competition brings about a lot uncertainty, complexity and dynamism in port which makes labour relation volatile and loyalties undermined.

The success of any enterprise is hugely reliant on its human resource or human capital despite the growing application of technology. Labour can be a source of competitive advantage for any enterprise. However, it is known to be the most difficult resource to manage especially in enterprises where constant work is not guaranteed.

Many countries are striving to make their ports competitive but are constantly mesmerized by the fast changing technology and other innovations which sometimes require huge capital to acquire especially for the containerized trade which is growing. This has prompted a wave of arrangements involving the private sector.

Conceptual framework on dock labour by notteboom

Up to now, the report focused on overall employment effects of ports. In the remaining sections, we discuss one segment of direct employment in ports, i.e. dock labour. While the dock labour force typically represents a modest portion of total direct jobs in quite a number of ports1, it is a key production factors of port terminals. The flexibility, productivity, quality and cost efficiency of dock workers contribute to the competitiveness of port-related and logistics companies and the wider economy.

Figure 3.1. Framework for the organisation of port labour

Source: own compilation

Figure 3.1 presents a conceptual framework on dock labour. This theoretical framework is based on a market-driven approach. Shipping companies, cargo handling and logistics companies, transport operators and shippers impose certain logistics requirements on ports and terminals based on the characteristics and the needs of the supply chains. Port terminals have to meet these market requirements if they want to bind cargo in a sustainable way and stimulate economic growth within the port and the immediate hinterland. Broadly speaking the requirements of the market players come down to a maximization of the performance of dock workers (with an optimization of the direct costs of port work as a prerequisite) and a minimization of the indirect costs of port labour. This internal organization of dock work takes place within a wider setting of legal and social conditions.

Market requirements -Shipping lines-Terminal operators-Logistics companies-ShippersLegal conditions-e.g. Law on port labour pool-Legislation on working hours-Legislation on safety, etc..Social conditions-Labour conditions -Training-HRM relations (motivation, commitment, governance model)Direct costs port labour-Cost per hour/per ton handled-Overhead costs poolPerformance port labour-Labour productivity (also function of innovation in cargo handling and logistics)-Labour flexibility in terms of working time, labour quantity and functional characteristics-Cargo handling value per docker (creation value-added)Indirects

costsport labour-'Hiddencosts' withimpact on competitiveposition port, suchas: -Trafficlossdue to shortagesgangs -Strikes-Absenteeism-Inactivitydue to accidents, sickness, ..maximizeoptimizeminimizeInternal organizationExternal organization

Competition in the European port industry and the technical conditions of cargo handling bring about resemblances among ports. The general nature of the dock work and of labour relations are similar and port labour is crucial to the competitiveness of seaports. But, the organization of port labour and the associated dock labour systems vary considerably throughout Europe as will be discussed later in this report. In other words, ports across Europe are different in the way the elements in the conceptual framework are combined in a comprehensive port labour system. The following sections zoom in on each of the elements of the conceptual framework.

Research Methodology

This research applies the Case study methodology using

A combination of primary and secondary information. Empirical data or information will be collected from the Port Authority by consulting people in key position with specific knowledge.

This will be complimented by the reports and records by international organizations such as the World Bank and the International Labour Organization who support the port in relation to the subject under consideration.

In addition, concepts and empirical findings from existing relevant literature will be reviewed in order to draw meaningful conclusions.


Making a case for Dockers

Competition amongst ports as a result of globalization is proposed as one of the reasons for labour reform and it subsequent effect on their security of employment, job losses and poor conditions of service. However, considering the fact that ports situated in different geographical locations of the world and even so in different economies (in terms of wealth of nations) may not be comparable, it is precarious to parade a certain 'formula' as best practice. Obviously, the case of Ghana shows that one formula does not fit all. Ghana's system looks similar to that of Belgium but dockers in Belgium are guaranteed a least a percentage of their remuneration even when they are no jobs available but the same cannot be said of the docker in Ghana. Even if the government wants to do it cannot afford to do so due to the economic situation.

Making a case for Employers

Maritime and Dockworkers Union (MDU), 1985= 31,085/ 1998 29,012

S o u r c e: 1 9 8 5 f i g u r e s a re f r o m A r t h i a b a h a n d M b i a h , 1 9 9 5 , a n d 1 9 9 8 f i g u r e s a r e f r o m t h e S e c re t a r y - G e n e r a l 's R e p o r t o n A c t i v i t ie s

o f t h e T U C ( G h a n a ) fo r t h e T h i r d a nd F o u r t h Q u a r t e rs o f 1 9 9 8, p r es e n t e d t o t h e E x e c u t iv e B o a r d , D e c . 1 9 9 8 .

Ar t h i a b a , P.; Mb iah, H.: H a l f a c e n tu r y o f to i l a n d p ro g r e s s : T h e h i s t o ry o f t h e T r a d e s U n i o n C o n g r e s s o f

G h a n a ( A c c r a , F r ie d r i c h E b e r t F o u n d a ti o n ) , 1 9 9 5 .

Conclusions and Recommendations

The study will then probe the existing port labour system in Ghana to illicit similarities and variances and possibly come out with views for improvement using the 'best practices' as benchmark. The other issue to address is that even though employers all over the world may have their own way with a landlord system the same cannot be said for employees. Employees in developed economies may benefit from some amount of guaranteed earnings under certain arrangements but those in developing countries do not enjoy such privileges.

The studies reveal that, for Ghana and many other developing countries, the port play an important role in the economy. Usually, they are under government control and must fulfill the function of providing employment for the people. This prevents port authorities or government from absolutely divorcing themselves from operational activities creating a quasi-landlord at the even when they proclaim to operate under a landlord system. Ghana, etc reveals cases in point.

For developing countries with fewer and /or smaller ports the issue of port labour employment is not limited to the reform alone but also the structure of the market/ number of private companies in operation at the port which determines where power lies as well as the concession agreements made with the investors.

Labour issues as result of port reform may not end after reform but continue years after the reform as increased privatation is introduced unless an arrangement is made to ensure that docker receive a guaranteed pay

1. identify the one ingredient for the success of these systems

2. determine if there are external factors outside the systems that account for the success or failure of a port labour system

1. Which port labour systems have worked best to the success of their ports?

2. Is there truly a 'best practice'? or they are made to belief by the leading players spreading the formular of their own success

3. Doesn't the attitude and actions of the pple involved, their history, the vision or the manner in which it is handled play a key role in whether the system works or not?

Summarize the expected results of your research

The research is expected to be able to

identify the system being used by Ghanaian ports

reveal the evolution of the system

identify the benefit or otherwise the present system has had for the port as against the other stages through the evolution by benchmarking

identify areas that require improvement as well as areas where it has superiority to other systems by benchmarking it against best practices elsewhere