Interview with Captain Anwar Shah – former DG Ports
PAGE: WHAT IS THE REACTION OF THE TRADE AND INDUSTRY OVER GO SLOW POLICY IN CARGO HANDLING AS YOU STATED EARLIER?
CAPT ANWAR: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) is concerned at the “go-slow policy” adopted by the Karachi Dock Labour Board as reported in print media. This policy was adopted by the Labour Board’s workers at the Karachi Port from Dec26 to 30.
Going slow is an industrial action through which employees do perform their duties but with the intent to reduce efficiency or productivity.
It is usually applied as a pressure tactic for the acceptance of their demands.
FPCCI senior vice president Khalid Tawab urged all sides to amicably resolve their issues and stressed that the Labour Board should refrain from extreme measures and agitation as the country can ill-afford such disruption. The go-slow has resulted in serious congestion at the port with vessels having to wait for several days for want of berthing space, and cargoes piling up inside the port awaiting clearance, causing serious losses to trade and to the economy.
The backlog resulting from this disruption is still being felt at the Karachi Port. Let us explore the origins of the Karachi Dock Labour Board and to the issues related to the troubles.
PAGE: HOW WOULD YOU COMMENT ON THE MODERNIZATION OF SHIPPING CARGO WITH THE ARRIVAL OF CONTAINERIZED SHIPPING CARGO?
CAPT. ANWAR: With the advent of intermodal freight handling through containerized cargoes in the 1950s, the need for physically handling these cargoes subsided and cargos loaded into standardized containers dramatically reduced transport costs, supported the post-war boom in international trade and was a major element in globalization.
Containerization did away with the manual sorting of most cargo shipments within the port area and moved this activity to the off-dock warehousing.
As the economics of intermodal cargo handling became apparent to businesses the world over, it displaced many thousands of dock workers who formerly handled break bulk cargo.
Containerization also witnessed a swift reduction in congestion at ports, significantly shortening shipping times and was key for the reduction of cargo losses from damage and pilferage.
In response to the Dock Strike of 1945, the British Parliament introduced the “Dock Workers’ (Regulation of Employment) Scheme” in 1947. The scheme was administered by the National Dock Labour Board and was financed by a levy on the employers.
The Board was responsible for keeping a register of employers and workers, paying wages and attendance money, controlling the hiring of labour and was responsible for discipline.
The British National Dock Labour Scheme was abolished in 1989 by the Conservative government under Margaret Thatcher whose Employment Secretary, Norman Fowler, told MPs that the scheme had become “a total anachronism” and that it stood in the way of a modern and efficient ports industry.
With respect to dock labour, the Port of Karachi has remained stuck in the 1960s with the unnecessary burden of the Karachi Dock Labour Board. The Government of Pakistan promulgated the Dock Workers (Regulation of Employment) Act, 1974, to regulate the activities of dock workers and to improve their standards of living.
At present, there are about 2,800 workers registered with the Labour Board. The scheme introduced under this Act requires that a payment of cess be made to the Board for cargo handling at the Karachi Port. This cess is charged at the rate of Rs48 per metric ton for general cargo and at Rs800 per TEU for containerized cargo. In addition to this cess, gangs of dock workers are required to be hired in shifts for the length of the vessel’s stay at the port. The cumulative cost for containerized cargo comes to about Rs 1,300 per TEU. This cost is eventually transferred to the owner of the cargo who will naturally pass on the cost to the person next in the supply chain, thus increasing the overall cost of transportation for the economy.
The two container terminals currently fully operational at the port, KICT and PICT, handle a cumulative volume of about 1.9 million TEUs per annum. At Rs1,300 per TEU the Labour Board charge comes to approximately Rs2.47 billion per year. This number translates to about Rs882,000 per worker per year, given a total of about 2,800 workers registered with Labour Board at present.
It must be kept in mind that these numbers only relate to the two container terminals occupying seven berths at Karachi Port and not to the other shipping activities at the other 23 berths of the port. To sum up, approximately Rs882,000 is paid per worker per annum for doing no work at all, resulting in a straight line loss of approximately Rs2.47 billion to the economy.
With another container terminal coming into full operations by February at the KPT’s flagship project, the Pakistan Deep Water Container Port, this loss to the economy is set to increase exponentially. It is the need of the hour to direct government policy towards avoidance of this loss to the economy of Pakistan.
The mostly bulk cargo loading and discharge at the other non-containerized berths is also undertaken through mechanical rather than physical means, thus rendering the entire Labour Board scheme irrational and out of date.
PAGE: WHAT IS THE STATE OF AFFAIRS IN TERMS OF DOCK WORKERS AT PORT BIN QASIM AND KARACHI PORT?
CAPT. ANWAR SHAH: No charges related to dock workers are prevalent at the Port Bin Qasim situated at a distance of about 48 kms from the Karachi Port as it does not fall within the jurisdiction notified by the government for the imposition of a Labour Board charge.
Even liquid cargo including crude oil, molasses and petro products, handled at the Karachi Port are exempt from the Labour Board levies, given the logic that these are not physically handled and instead pumped through pipelines.
Similarly, in the case of containerized cargo, no physical handling is required with the container terminal operator managing all loading and discharge to and from the vessel by deploying cranes.
The aim of the game for container terminal operators is to keep costs down and to ensure a swift turnaround times for vessels. Dock workers physically handling cargoes cannot and does not factor into this equation. If this is the case, where the KDLB is paid for each container handled at the Karachi Port thus increasing overall costs.
It is time that the Government of Pakistan took a cue from the British Conservative government of 1989. It should rethink the Labour Board scheme has already proved to be an anachronism and which stands in the way of turning the Karachi Port into a modern and efficient port.
A compulsory payment for no work done cannot be justified on the grounds that it is backed by legislated. The legislation may have been relevant when it was formalized. However, times and methods have changed since then and so should the legislation. These unskilled workers need to be eased into skilled trades so that they can also contribute towards the uplift of the economy of Pakistan.
The Federal Minister of Ports and Shipping personally intervened to normalize the port operation, as reported in the print media.
It is food for thought for Ministry of Ports and Shipping to take a policy decision which may be a win-win situation for all stakeholders.
In 2006, some initiative was taken, but it was left half way, without resolving the issue. At KCCI, trade complains of high handling cost, thus, issue may be amicably resolved, so that extra burden on trade is minimized.