Smoking Gun on Australian Waterfront
Reith's plan to bust MUA

“Industrial action would give stevedores the option of dismissing their employees and rehiring new people under different arrangements”

A confidential Australian Government Cabinet paper written on 7 July 1997 by the Minister for Industrial Relations, Peter Reith, and the then Minister for Transport and Regional Development, John Sharp, is reproduced in full below.

The document was tabled by the Australian Labour Party during a televised session of Parliament last week (4 June). It provides the clearest evidence yet of a Government conspiracy to break the MUA and open the Australian waterfront to non-union labour, and outlines the Government view of the willingness or otherwise of Patrick Stevedores and P&O to participate in this project.

Mr. Sharp stepped down as Transport Minister last autumn when his travel allowance was investigated, and last week said he would retire at the next election.

Australian Prime Minister John Howard commented "I make no apology at all for the activist strategy we followed because that strategy was designed to boost the productivity of the Australian waterfront."

CABINET-IN-CONFIDENCE

Waterfront Strategy -
Supplementary Paper for Cabinet Consideration

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 states that conservative estimates of economic benefit arising from waterfront reform would amount to $1.24Bn annually and 4,350 additional jobs. These estimates do not include the significant benefit that would accrue from establishing Australia’s reputation as a reliable supplier.

Strategies

• 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 may 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 unions’ monopoly supply of labour. The only prospective 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 do 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 Government. They are being driven by economic imperatives.

In accordance with the study’s recommendations, 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 business 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 assist 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, e.g. 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 launches, 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 (e.g. 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 actions

• planning for the activist approach;
• the adoption of the approach which subsumes other related policy issues (e.g. 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 CEO’s 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

7 July 1997