Ictsi's Global Expansion: a Risky Proposition?
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ICTSI’S GLOBAL EXPANSION: A RISKY PROPOSITION? October 2017 | 1 | EXECUTIVE SUMMARY Philippine-based International Container of these violations are in breach of domestic Terminal Services Inc. (ICTSI) is one of the fastest law in the countries where ICTSI operates and growing and most profitable terminal operators contravene international conventions. They also in the world. Established in 1987, ICTSI has contravene ICTSI’s own internal policies, calling ambitiously expanded its global operations and into question ICTSI’s ability to effectively manage now operates 29 container terminals globally. The their global network and ensure the same ITF, and unions in ICTSI terminals, have observed standards across all terminals. an emerging pattern of labour rights violations across the ICTSI network. These violations include: The ITF is committed to: standing with unions paying poverty wages; a failure to respect the in ICTSI terminals to bring an end to labour right to freedom of association; poor safety violations across the company’s global business; standards; and illegal outsourcing of labour. Many and ensuring decent working conditions for ICTSI OPERATIONS Port of Tuxpan Port of Manzanillo Puerto Cortes Port of Buenaventura Port of Guayaquil Port of Port of Matadi Suape Port of Buenos Aires | 2 | all dock workers. Just as the ITF has stood with The ITF has stood in solidarity workers in Indonesia and Madagascar in their campaigns to ensure that ICTSI respects national with dock workers at ICTSI labour laws and international labour conventions. terminals in Indonesia and Despite the ongoing risk of volatility at these terminals, and the impacts on multiple port Madagascar who have been stakeholders (including government officials and fighting for better wages and major global brands), the company has failed to act to resolve these disputes. conditions. Wherever ICTSI intends to expand, the ITF will The protracted disputes in Madagascar and be there, working side by side Indonesia are not a new or isolated phenomenon. ICTSI has a history of unresolved labour disputes with local unions to ensure stretching back to the first years of their global decent working conditions for expansion. In 2000, ongoing disputes at the Port of Rosario, Argentina, ultimately resulted in ICTSI all dock workers. terminating their concession agreement. Paddy Crumlin - President of ITF Port of Gdynia Port of Rijeka Port of Port of Yantai Batumi Philippines Port of Basra Port of Manilla Port of Karachi Port of Subic Port of General Santos Port of Davao City Port of Tagum City Port of Mindanano Port of Batangas Port of Laguna Port of Toamasina Indonesia Port of Jakarta Port of Makassar Port of Melbourne | 3 | The repeated failure of ICTSI to resolve industrial jobs and industrial relations practices in their disputes in a timely manner, should stand as a ports. Together, we are committed to ensuring warning to investors, lenders and governments that ICTSI does not extend its pattern of labour regarding the company’s future expansion. violations into new terminals. ICTSI’s failure to engage with unions to ensure decent work, and to enforce a culture of safety If ICTSI fails to address the pattern of labour that meets global standards, across its network violations emerging in their network and does is of grave concern to ITF affiliated unions in not commit to working with the ITF to ensuring countries targeted for ICTSI expansion. These the rights and dignity of all workers in its current unions have expressed concerns about the and future terminals, then there is a risk that the company’s potential expansion into their ports. disputes in Madagascar and Indonesia will be They do not want to see the practices observed in replicated. This will increase volatility, political current ICTSI terminals extended into their ports. and economic risk across their network, and should be of significant concern to governments, The ITF, and our union affiliates, are committed investors and financiers supporting ICTSI’s to supporting port operators who provide good expansion. Emerging patterns in the ICTSI network Paying poverty wages • Failure to recognise Endangering workers • Underpayment of unions as the with unacceptable safety wages below regional or legitimate organisation standards national statutory wages. representing workers. • Cases of employees • Underpayment of • Punitive actions working at heights wages below union against union without fall protection or agreements. members including: safety equipment. • Standard wages set refusal of overtime; • Poor maintenance of below the living wage. sackings; cancellation equipment approaching • Excessive overtime of promotions; and negligence. in contravention of differential treatment • Casual workers given domestic legislation and of union and non-union no or insufficient safety international standards. members. equipment. • Workers standing under Discrimination against Outsourcing suspended loads. unions and their responsibility for • Failures to properly members working conditions manage access into and • Denial of workers’ • Illegal out-sourcing of within terminals. rights to freedom workers in contravention of association and of domestic law Unless ICTSI commits to collective bargaining. and international reaching agreements with • Refusing to negotiate conventions the ITF and with local unions with workers and • Use of out-sourced to provide decent work for all their representatives workers to undercut workers at ICTSI terminals, regarding wages and wages and conditions. ICTSI’s expansion will working conditions. become an increasingly risky proposition. | 4 | CONTENTS EXECUTIVE SUMMARY 2 INTRODUCTION 6 PAYING POVERTY WAGES ACROSS ITS NETWORK 8 Jakarta, Indonesia: illegal rates of overtime to earn a living wage 9 Jakarta, Indonesia: illegal non-payment of overtime 11 Makassar, Indonesia: wages reduced below a living wage 12 Toamasina, Madagascar: casual workers struggling to survive 14 OUT-SOURCING RESPONSIBILITY FOR WORKING CONDITIONS? 15 Toamasina, Madagascar: out-sourced workers struggle to survive 17 Jakarta, Indonesia: illegal use of out-sourced labour 18 ILO VIOLATIONS: DISCRIMINATION AGAINST UNIONS AND THEIR MEMBERS 19 Toamasina, Madagascar: workers intimidated and dismissed for joining their union 20 Toamasina, Madagascar: dismissed workers missing meals and struggling to survive 21 Makassar, Indonesia: punitive action against union members during bargaining 22 Batumi, Georgia: unfair dismissal of union members participating in industrial action 22 ENDANGERING WORKERS WITH UNACCEPTABLE SAFETY STANDARDS 23 Poor maintenance of equipment approaching negligence 25 Working at heights without fall protection 26 Failure to properly manage access into and within terminal 26 Failure to provide workers with suitable safety equipment 27 Personnel working under suspended loads 28 ICTSI’S GLOBAL EXPANSION: A RISKY PROPOSITION? 29 PORT OF TANJUNG PRIOK, INDONESIA 29 Management refusing to negotiate with Indonesian workers 29 Indonesian Minister drawn into union struggle by Australian activists 29 PORT OF TOAMASINA, MADAGASCAR 30 Government of Madagascar drawn into fight 30 Global brands stand with workers 31 CONCLUSION 33 END NOTES 34 | 5 | Not only were we concerned for the dock workers themselves, we were also concerned that action against legitimate union activity would deter investor confidence in Madagascar as a future sourcing market. Ethical Trading Initiative INTRODUCTION International Container Terminal Services Inc. with the local union has led to ongoing (ICTSI) is a Philippine based container terminal industrial action, the targeting of the Indonesian operator, which operates 29 container terminals Infrastructure Minister by Australian unionists globally. Established in 1987, it has engaged and labour activists, and solidarity actions by ITF in an ambitious international and domestic affiliates globally. expansion program since 1994, doubling the number of terminals in its networks since 2011. These protracted industrial disputes are not an ICTSI’s portfolio is concentrated in medium-sized isolated phenomenon. ICTSI has repeatedly failed facilities with total annual throughputs ranging to resolve labour issues with unions in its terminals from 50,000 to 2,500,000 twenty-foot equivalent from the first years of its global expansion. In units (TEUs). Growth has been targeted in ports 2000, ICTSI terminated its concession agreement that areprivatised from government control, with at the Port of Rosario, following an ongoing a focus on emerging markets. dispute that led to a loss in confidence in the terminal by port users, and a 50 per cent The company has a history of moving into reduction in volume through the port.2 countries that are some of “the worst countries in the world to work in”, in which workers are The ITF, and our union affiliates, are committed to routinely exposed to labour rights violations with supporting port operators who provide good jobs no guarantee of rights.1 and industrial relations practices in their ports. ITF affiliate unions in countries targeted for ICTSI The ITF, and our union affiliates, have observed an expansion have expressed concerns about the emerging pattern of labour violations in the ICTSI company’s potential expansion into their ports. network: a failure to respect the right to freedom They do not want to see the practices observed in of association; poor safety standards; and illegal current ICTSI terminals extended into their ports. outsourcing of labour.