The Legacy of the Hungry Mile
Waterfront Reform at the Watershed:
An Assessment of Recent Government Waterfront Policy Initiatives
On Tuesday 24 July 1989, Ford Australia unveiled its
long awaited new locally built sports car, the Capri.
Company officials predicted that this car alone could
add $400 million to our export earnings. Coming hard
on the heels of our $17 billion current account deficit
for the year 1988-89, this was pleasant news indeed.
There was a proviso, however, attached to the $400
million export earning prediction. The company's President,
Mr Bill Dix, warned that the Capri's future depended
on it being a quality product delivered on time to
international markets. 'Customers will not wait patiently
while we suffer unnecessary industrial disputes,' Mr
Dix said. He could have been speaking for any one of
Australia's export producers.
On the very day these words were uttered, the Melbourne
wharves, the wharves these cars must cross to gain
access to international markets, were embroiled in
an industrial dispute. This time the union out on strike
was not the WWF, but one of the other 23 unions involved
in the Australian Waterfront, the AWU.
The main characteristics of this strike will be distressingly
familiar to those acquainted with the waterfront. Military
strategists of the 1950s were misguided in applying
the domino effect to the fall of Asian Governments,
but the principle certainly applies to industrial relations
on the Australian waterfront. The Port of Melbourne
stopped for four days, holding up eight international
ships at a cost of more than $1 million because of
a bit of a dust-up between two waterfront employees.
The million dollar dispute began from nothing more
than a seaman's clumsiness in the docking of a vessel.
The seamen's task was to throw a heaving line to the
linesman in preparation to tying up the vessel. Heaving
lines are small pieces of rope, about half an inch
in diameter with a quoit on one end---the sort of thing
you and I would throw to one another in a swimming
pool. They are used to guide the heavy ropes with which
the vessel is tied up.
Unfortunately, the seaman's aim in throwing the heaving
line was awry and it hit the linesman on the head.
The linesman, I believe, reacted by yelling abuse at
the seaman. Words led to words, and an argument ensued.
Meanwhile, docking of the vessel was completed.
Once the vessel had docked, the gangplank was swung
over the side and the seaman went to disembark. This
seaman has been described to me as something approaching
Popeye incarnate. The sight of this burly chap walking
down the gangplank understandably filled the PMA linesman
with trepidation. Apparently, acting on the policy
that attack is the best form of defence, the linesman
grabbed an aluminium baseball bat that just happened
to be lying nearby and set to the seaman in no uncertain
manner, breaking his arm in four places. Disciplinary
action, invoked by the PMA on the linesman, resulted
in a strike by the AWU. This strike caused the Port
of Melbourne to grind to a complete halt. This is despite
the fact the AWU cover linesmen's duties at only some
of the Melbourne wharves, where they are involved in
such significant tasks as lowering the ramps on Roro
vessels. With the AWU out on strike would anyone else
complete these tasks? No, the territorial instincts
of our unionists are strong.
Ironically, there was one exception to the cessation
of work in the Port of Melbourne. Tasmanian vessels
were eventually exempted from the strike. It's hard
to believe; it was from actions on a Tasmanian vessel
that the strike arose. One would imagine international
vessels would be exempted and Tasmanian vessels singled
out. But logic is a scarce commodity on the Australian
The WWF have been quoting figures demonstrating the
decline in the number of waterfront industrial disputes.
This decline was almost inevitable. In a country which
has a level of industrial disputation twenty times
higher than Japan, fifty times higher than West Germany,
two and a half times higher than the UK, and twice
as high as the US, the Australian stevedoring industry
has the worst industrial record of any Australian industry,
except coal. When you are astride Mount Everest, there
is only one possible direction to walk: downwards.
What the Melbourne example and the Day of Outrage strike
in NSW show, however, is that strikes over trivial
issues are still occurring. Often these strikes are
of a wild-cat nature, which adds to the unpredictability
of Australian shipments. Like an 'all in' brawl on
a football field, there is also a tendency for unions
not directly involved in a dispute to strike in sympathy.
Some people appointed to high and responsible positions
of waterfront administration speak in reverend terms,
with something approaching religious awe, of the 'culture
of the Australian Waterfront'. What the Melbourne example
starkly points out, is the need to entirely overturn
this culture. It is a culture characterised by rampant
industrial disputation, inflated wage levels, overmanning,
ridiculously restrictive work practices and appallingly
low levels of productivity.
One waterside worker said recently on the television
program '60 Minutes' that getting a job on the wharves
was like winning Tattslotto It is not hard to fathom
why. Last year, unskilled waterside workers at permanent
ports earned on average just on $40,000 per annum.
Their average working week was a fraction more than
thirty hours. At some ports waterside workers on special
agreement awards, take home more than $60,000 a year.
Waterside worker wages have increased more than 650%
in real terms since 1965.
The WWF empire was built on the ethos of the downtrodden
Australian worker. In the case of waterside workers,
that ethos is now a myth. Amongst employed Australians,
wharfies are aristocrats. Once safe Labor dockside
seats, such as the Port of Melbourne, are now becoming
marginal. This is, in part, because the worries of
the 1980s waterside workers are the worries of upper
middle class Australians---high mortgage rates, sales
tax on luxury items, high marginal tax rates and so
Contrast this with the plight of farmers, the generators
of nearly 50% of this country's export earnings and
major users of our ports. They struggle on average
pretax incomes of $20,000 a year. The prices of all
farm products have decreased in real terms since 1965.
The prices of lamb and wheat have gone up only by about
half the rate of inflation. Real farm incomes have
halved over this period. These figures tell a story.
Our agriculture industries, unlike our transport industries,
must compete on international markets. The decline
in agricultural prosperity mirrors the worsening state
of the Australian economy.
Yet the gravity of our economic situation has not
made a significant impression on the waterfront industry.
Still we are shackled with such overmanning that stevedoring
employers say that four out of ten waterside workers
are not needed. Still we are shackled with work practices
that produce astonishingly low levels of productivity,
so low in fact that an independent study by the ISC
estimated that a 60% improvement was possible.
The stevedoring unions are not the only ones to blame.
Stevedoring management played a large part in permitting
unproductive work practices to develop. They showed
little concern as work practices were introduced. As
the Minister for Transport stated recently, rather
than have their ships tied up, these foreign-owned
stevedoring companies caved in to every whim of unionised
labour. Explicit instructions to this effect were issued
at the advent of containerisation, and have implicitly
continued ever since.
Stevedoring management, in their defence, have received
little help from the Arbitration and Conciliation Commission
in controlling the excesses of union power. The ISC
has said that decisions of the Arbitration Commission
in some areas of the waterfront have been unsatisfactory.
On countless occasions the Arbitration Commission has
opted to maintain short term industrial peace at the
expense of waterfront productivity.
A blind eye has been turned on illegal demarcation
practices and workers involved in dismissal offences.
Workers found drunk on the job, for instance, have
been reinstated by the Commission upon threat of strike
action. Absenteeism is at very high levels but is ignored.
Such practices discriminate against the good worker.
Good workers are disadvantaged because they are asked
to perform work that others should have done. This
is damaging to morale and motivation. But I don't want
to dwell on the negative. It is now time to redress
the years of inefficiency, to prescribe remedies, to
set down solutions to our problems.
When it comes to positive solutions, a good place
to start is the recent ISC Report into the waterfront.
This report was the culmination of a two and a half
year inquiry into the waterfront. I happened to be
one of the small band of ISC supporters.
Correctly, the ISC chose not to directly address waterfront
work practices, nor the high level of industrial disputes.
Rather these were viewed as mere symptoms of underlying
structural problems, namely the concentrated industry
structures in the maritime, towage and stevedoring
areas and a monopsonistic supplier of waterfront labour,
If these basic structural deficiencies were not enough,
stevedoring employers and waterfront unions have over
the years implemented industry-wide arrangements that
have engendered a cost plus environment and reduced
their exposure to risk. The various forms of labour
pooling found in our ports in particular, have reduced
pressure to contain costs and limited incentive to
keep down workforce numbers.
I will not attempt to describe labour pooling arrangements
in detail. As great a body as the IAC, bristling with
highly trained, university educated staff, observed:
'It is virtually impossible to convey a digestible
and accurate picture of the precise arrangements under
which stevedoring labour is employed.'
One feature of these arrangements, however, is that
the cost of idle waterfront labour time is spread across
all employers in the port. This results in a tendency
for each company to keep the workforce at higher than
required levels. Management of sick leave is also less
effective because, again, the cost is spread industry
These arrangements, which weaken competition provide
little incentive for efficiency, were a key target
of the ISC inquiry. Their complete abolition was recommended,
with labour pooling being replaced by enterprise employment.
The ISC was quite clear about what enterprise employment
entailed. Under enterprise employment, individual employers
would have the right and responsibility to recruit,
train, develop, deploy and discipline their employees.
The ISC called for an end to port pools and inter-company
transfers, an end to the quarterly reallocation of
labour, an end to industry wide levies that more than
double wage costs, an end to panel amalgams of WWF
and AEWL representatives controlling industry recruitment
and an end to similarly structured industry disciplinary
But the ISC didn't stop with just a recommendation
to introduce enterprise employment. It also recognised
that a large part of the waterfront problems was caused
by irresponsible use of monopoly union power. On page
133, the commissioners noted:
'Union monopolies weaken competition within the
labour market. For example under present arrangements
all waterside workers must be members of the Waterside
Workers Federation. In recent years this monopoly has
been used to maintain high wages by preventing entry
into the market of any labour that might be prepared
to accept conditions different to those enjoyed by
the WWF. The frontiers of this monopoly have been extended
by enrolling clerks and maintenance workers on the
On page 125 they wrote:
'Abuses of monopoly union power should be dealt with
in a manner similar to abuses of corporate power.'
They went on to decry:
'Counterbalances to union monopoly power available
through legislation are weak. For example the Trade
Practices Act 1974 excludes the jurisdiction of the
Trade Practices Commission from a substantial area
of activity relating to remuneration, conditions of
employment, hours of work or working conditions of
employees ... bans clauses inserted in awards under
the Conciliation and Arbitration Act of 1904 have not
been very effective'.
Rather than attempt to overturn eighty years of increasingly
constricting Australian industrial law---the warranted
course of action in our view, but one which would have
entailed an overstepping of their terms of reference
the ISC chose instead to limit waterfront union power
through other mechanisms. There is more than one way
to skin a cat. On page 127 the ISC stated: 'The Commission
has focussed its attention on developing an industry
plan that reduces the extent of monopoly power and
encourages the responsible exercise of power.
The ISC recommended removal of WWF coverage in small
ports, inland container depots and bulk terminals.
They recommended increased use of certified agreements,
noting that terms included therein could be inconsistent
with general national wage principles. They recommended
the stripping back of industry awards. They recommended
that appropriate stand down clauses be inserted in
waterfront awards and advocated that the legislated
industry-wide involvement of the WWF in dispute settlement
One set of ISC recommendations of least importance
is the much vaunted workforce rejuvenation proposals.
Under the ISC's plan 3,000 aging, disabled waterside
workers would be retired and 1,000 new waterside workers,
under age 30, recruited.
What a retirement these 3,000 waterside workers will
enjoy! A golden road to the grave, to be envied by
all but the most senior of Australia's executives.
For instance, a 55 year old waterside worker with 30
years experience will receive 247 weeks pay, plus superannuation,
plus long service leave, plus unused sick leave. Compare
this to a similarly placed worker in a wide range of
industries covered by the Arbitration Commission's
TCR arrangements, who would receive 13 weeks pay. The
wharfie would receive 1,900% more than the normal Australian
The strategy of the ISC in bringing about waterfront
reform is clear. It was to provide extraordinarily
large redundancy payments to wharfies, in return for
their agreement on fundamental restructuring of the
industry. It was a bribe. The WWF was being paid to
forego some areas of coverage, to give up some degree
of power, in the interest of a more efficiently operating
This careful balancing of interests was destroyed
by the Ministerial Statement of 1 June. Wharfies are
still to receive enormous, government and shipper funded,
redundancy payments. Some will walk from the docks
with more than $200,000. But the government failed
to sanction key ISC recommendations aimed at controlling
union power. It withdrew significantly from the ISC's
recommendations in a number of important areas including:
1. Bulk Terminal Coverage:
The ISC recommended that the WWF should relinquish
its coverage of bulk loading and un-loading operations
within three years. The Ministerial Statement failed
to endorse this clear recommendation. Quite the opposite
in fact. The statement sanctioned continued WWF involvement
in these areas, with the meek rider that this involvement
should be 'in accordance with efficient operational
requirements'. The ISC recommendation was aimed squarely
at the grains industry, the only major bulk operation
still using significant numbers of stevedoring workers.
2. Container Depot Coverage:
The ISC recommended that the WWF retain coverage
of the waterfront depots, with inland depots to be
covered on an enterprise basis by either the National
Union of Workers (NUW) or the Transport Workers Union
(TWU). It recommended that there should be no restriction
on competition between depots. The Minister for Transport,
while endorsing the second of these recommendations,
referred the coverage matter to the ACTU. Since when,
might we ask, has the ACTU superseded the ISC and the
Department of Industrial Relations as the official
source of Government advice on industrial relations?
The edict of the ACTU might be to provide coverage
of all depots to the WWF.
3. Small Ports:
The ISC recommended that existing cross-subsidisation
of smaller ports be removed, but labour arrangements
be made more efficient, either through increased use
of casual labour or through the establishment of integrated
port workforces, with workers covered under Port Authority
Awards. The Minister endorsed the elimination of crosssubsidies
to smaller ports, but failed to clearly approve the
swift implementation of more flexible labour arrangements.
Coverage matters were again referred to the ACTU. Cross-subsidies
of stevedoring labour in small ports can amount to
more than $50.00 per hour. Small ports are net exporters
and are, therefore, extremely important to the Australian
economy. Agriculture is a particularly heavy user of
stevedoring labour in these ports. To eliminate cross-subsidies
without, at the same time, introducing efficient and
flexible labour arrangements, will hurt agricultural
4. Dispute Settlement:
The ISC recommended that the current industry-wide
arrangements involving the Federal Ports Coordinating
Committee, The Port Coordinating Committees and Port
Conciliators be abolished. Under the ISC recommendations,
dispute settlement in the stevedoring industry would
follow the same path as other industries. The ISC also
recommended that stand down clauses, that could be
put into effect within 24 hours, be inserted into Waterfront
Awards. The Minister failed to endorse any of these
5. Enterprise Employment:
The ISC recommended the introduction of enterprise
employment in the five major ports (Brisbane, Sydney,
Melbourne, Adelaide and Fremantle) within two years,
and all ports within three years. The Ministerial statement
only required the introduction of enterprise employment
in the four major ports (Brisbane, Sydney, Melbourne
and Fremantle) within three years with a 'commitment'
to enterprise employment in the intermediate and smaller
ports, but no time frame. The ISC viewed the complete
introduction of enterprise employment as absolutely
critical to waterfront reform.
These are examples of the Minister for Transport withdrawing
from the ISC's recommendations. In other instances
the Minister replaced clear directions from the ISC
with foggy, hesitant statements. Where this has occurred,
we can expect a further whittling away of the ISC's
package during the negotiation of the in-principle
agreement. There was one significant area where the
Government added to the ISC Report. The Minister said
that provided a satisfactory in-principle agreement
is reached, the industry's portion of the redundancy
payments would be funded by a statutory levy. That
is, 50% of these redundancy payments will be directly
met by waterfront users---the importers and exporters
of Australia. No doubt, a portion of these $200,000
payments will be made from the pockets of those 25%
of Australian farmers with an income less than $3,000.
For their pain, shippers received scant recognition
in the Minister's statement. One might imagine that
since shippers are coughing up the cash, they would
at the very least be given right of veto over the in-principle
agreement. But no, shippers have received no guernsey
in the process. Instead, the Government has assigned
to the architects and custodians of our waterfront
problems the sole responsibility for fixing them up.
A laudable example of Christian faith and hope, perhaps,
but not a strategy designed to fill shippers with optimism.
Six months ago, there was danger to those of us who
recognise the importance of transport reform of becoming
over excited. The IAC had just released its final report
into coastal shipping with the remarkable recommendation
that Cabotage be abolished. This, they estimated, would
save the Australian economy half a billion dollars
per year or $98,000 for every seaman employed.
Six months ago, the Prime Minister seemed to endorse
the IAC sentiments when he said in a Business Council
of Australia address that if it was good enough for
Australia's mining and farming industries to face international
competition, the same should also apply to coastal
And, six months ago, on every occasion we ran into
Ted Butcher, encouragement would be forthcoming about
the final ISC Waterfront Report. But since then, micro-economic
reform of the maritime and waterfront sectors seems
to have run off the rails. A beam of light was presented
by the IAC and ISC Reports. This has been dimmed to
a flicker by the Ministerial Statement.
To their credit, the stevedoring companies have shown
more resolve to institute reform than they have in
the past. I expect, however, that this resolve will
dissipate over the three months set aside for negotiations.
I was concerned to read in the 'Canberra Times' recently
that it is expected that the in-principle negotiations
would reach a successful conclusion before the three
month period expired. This will be done with minimal
shipper involvement. The process now in train is going
down the same path as past failed efforts on waterfront
reform. There is a sense of deja vu, a revisiting
of the Woodward and Kirby Inquiries, when many of our
current waterfront problems were conceived. It's a
return to th Cosy Club, those salubrious surrounds
in which the AEWL and WWF ordered lavish banquets at
shippers' expense. At the expense of all Australians.
Australia is in grave danger of falling into the Argentinian
abyss, the black hole of economic adversity. If we
are to avoid this fate there must be a resolve to address
issues of micro economic reform, especially in the
transport sector in a firm way, overriding resistance
from sectional interests. It is only through such action
that the underlying productivity of the Australian
economy will increase and the living standards of all
Australians sustainably improve.