Govt must take action on MPS’ failure to sign 20% container agreement – MDU, GPHA

The Maritime and Dockworkers’ Union (MDU) and the workers Ghana Ports and Habours Authority (GPHA), have launched a renewed campaign to demand the immediate implementation of the release of 20% of overall container business at the port to the GHPA, after a long wait on the partner company, MPS to honour their part of the concession agreement signed last year.

It would be recalled that, the Shareholders of Meridian Port Services which comprises GPHA and Meridian Port Holding (MPH) in November last year met with Meridian Port Services (MPS) in Dubai on the need to avert massive job cut and dwindling revenues of the GPHA, after the takeover by the MPS in June 2019.

The MPH which has 70% of the shareholding is composed of Bollore Logistics and APM Terminal whilst GPHA which is the Landlord has 30% shares in Meridian Port Services (MPS).

In a strongly worded letter to the Ministry of Transports dated October 9, 2020, the GPHA and MDU urged government to, as a matter of urgency, move to resolve the issue which, according to them, could lead to massive job losses.

Read the full statement below

MDU AND GPHA LOCAL UNIONS  CALL FOR URGENT GOVERNMENT ACTION FOR MERIDIAN PORT SERVICES(MPS) TO SIGN THE AGREEMENT FOR THE HANDLING OF   20% CONTAINERIZED CARGO BY GPHA
 
BACKGROUND

The Deed of Amendment signed in 2015 by GPHA and MPS under the Mahama Administration to develop and operate a container Terminal (Terminal 3) in the Port of Tema has been a subject of concern to GPHA, MDU, TUC(Ghana), GPHA Local Unions/workers and international organisations such as the International Transport Workers Federation(ITF) because the procurement of the concessionaire was not transparent and did not meet international competitive bidding standards. Key among the issues raised by the Inter-Ministerial Committee which was set up by the NPP government to review the agreement were the reduction of revenues for GPHA, possible loss of jobs of about 1,400 GPHA employees, violations of provisions in PNDCL 160 which grants GPHA the regulatory function of rate setting among others. The report of the Inter-Ministerial committee concluded that the Deed of Amendment was not in the interest of Ghana and GPHA. The MPS Terminal 3 contract lacked clarity in the area of Concession Term and significantly reduced revenues of  GPHA as compared to the Terminal 2 Contract which was signed in 2004 and the overall negative impact of the Terminal 3 on GPHA’s revenues  which would lead to massive  redundancy of workers at  GPHA.

The Secretary General of the Trades Union Congress, Ghana , Dr Yaw Baah described the MPS Terminal 3 agreement as being worse than the Power Distribution Services(PDS) agreement in his 2019 May Day speech.  
 
Concerns relating to the imminent revenue losses and likely job losses at the GPHA have resulted in protests against the Terminal 3 project of MPS by the MDU, TUC(Ghana), International Transport Workers Federation(ITF) and other Civil Society organisations.
 
In search for a solution to this problem, the President of the Republic of Ghana had a meeting with the owners of  Bollore Logistics and  APM Terminal who are the major  Shareholders of Meridian Port Holding(MPH) and constitute the majority Shareholders of Meridian Port Services(MPS) on Monday 27th June 2019 to request the MPH group to make the needed  sacrifice  to prevent the  job losses of  GPHA and to ensure the survival of GPHA  in their  quest to protect  the viability of the Terminal 3(T3) investment.
 
The President of the Republic of Ghana had a meeting with the MDU and GPHA Local Unions on 13th May 2019 and promised to use a tripartite approach to seek the redress of the concerns of Labour and GPHA which includes but not limited to reduced revenues of GPHA from the operations MPS Terminal 3 and the negative effect of  job losses of about 1,400 workers, the right of MPS to determine rates which violates PNDCL 160 that grants the regulatory function of rate setting  to GPHA among others. Based on the President’s instructions, the Minister of Transport requested for a formal meeting between the parties.
Though the tripartite arrangement to discuss the concerns of GPHA and the MDU did not function effectively as we expected because the representatives of MDU were not invited to some of the earlier meetings, however, the union representatives supported GPHA’s position in subsequent meetings.    
 
In the meeting of the review committee on 1st July 2019, GPHA summarised its position as follows:

1. GPHA stated that retention of about 20% of the container business of the Tema Port to be handled by GPHA would resolve 50% to 60% of their financial challenges.
 
2. GPHA was of the opinion that the investment of MPS would still be viable if GPHA handles 20% of the volumes of containerized cargo.
 
3. The MPS found the proposal of   GPHA which summarises  all the demands into the handling of 20% Containerised cargo volumes as being reasonable because MPS had the initial fear that GPHA and MDU would  seek a comprehensive  review of the Deed of Amendment  covering the Terminal 3.  
 
On the basis of the positon of the union for GPHA to handle 20% of the volumes of Containerised Cargo, the MDU and GPHA Local Unions in Tema and Takoradi with the support of TUC, engaged in a campaign to demand 20% of the volumes of containerised cargo to GPHA. The campaign compelled the Shareholders of MPS comprising the majority shareholders of Bollore Logistics and APM Terminal and GPHA as the minority shareholder to meet in Dubai to take a decision.
 
DUBAI AGREEMENT

The meeting of Shareholders took a decision on the 12th November 2019 in Dubai to grant the 20% containerized cargo to GPHA. The Shareholders agreed that the operational details of the decision taken in Dubai should be discussed in Ghana. The Dubai Agreement set ending of November 2019 up to early December 2019 as the period within which the agreement that would give effect to the handling of 20% containerised cargo by GPHA should be signed.
 
 
DEADLINE FAILURES AND  ACTIONS

It would be helpful to catalogue some of the efforts made by the MDU and GPHA Local Unions to ensure that the Dubai Agreement is supported by a corresponding review of the Deed of Amendment (DoD) to support the implementation of the decision to grant the handling of 20% Containerised cargo to GPHA.

MPS Shareholders have proposed the implementation of the Dubai Agreement in four(4) years on a staggered formula of 20% for the first two years to be reduced to fifteen percent (15 %) and ten percent(10%)for the third and fourth years whilst GPHA, MDU, TUC  and GPHA local  unions hold the position that the handling of 20% Container business by  GPHA should run through the exclusivity period of ten(10) years because after the exclusivity period of ten(10), the container handling business would be opened up for competition. It amounts to hypocrisy for the World Bank to invest in a project that promotes monopoly and resorts to the use of protectionism to prevent competition.

The MDU has taken actions to raise the need for immediate steps by government to compel the shareholders to sign an agreement to give meaning to the Dubai Agreement that grants the handling of 20% containerised cargo to GPHA. We provide below, some of the correspondence on the concerns of the union on the delay in the signing of an agreement to support the Dubai Agreement:

1. On the 13th February 2020, the Unions and MDU wrote to the Ministry of Transport (MoT) with the caption “COMPLAINT OF MARITIME AND DOCKWORKERS’ UNION AND LOCAL UNIONS OF GPHA ON THE DELAY IN THE IMPLEMENTATION OF THE DECISION OF MPS SHAREHOLDERS TO GRANT THE TWENTY PERCENT (20%) CONTAINER BUSINESS TO GPHA’
 
On the 13th March 2020, MDU wrote to the Board Chairman – GPHA with the caption ‘REQUEST FOR MEETING OF THE TRIPARTITE COMMITTEE ON THE REVIEW OF THE MPS TERMINAL 3 AGREEMENT’
 
All these prompt actions and other engagements did not yield any positive result.
 
Concerns in Operationalising the Dubai Decision without a supporting agreement

Currently, based on the advice of the Ministry of Transport that GPHA should operationalise the 20% handling of containerised cargo, GPHA is working on vessels with shallow draughts  that berth at Terminal 2 whilst  vessels with deeper draughts berth at MPS Terminal 3. The fact that GPHA has started implementing the handling of the 20% container cargo does not change the position of MPS that the Dubai Decision should be on  a staggered basis for four(4) years. Some operational challenges of Terminal 2 such as the presence of a Crane belonging to MPS which is blocking some space in Terminal 2 is  preventing GPHA from working on two vessels at the same time . A recent reconciliation on volumes of container cargo that had been handled by GPHA indicated that GPHA had worked on 13% containerised cargo with a shortfall of 7%. An agreement on the 20% handling of containerised cargo would spell out how to deal with shortfalls and excess cargo handled by the parties. The absence of an agreement to clearly define how to address shortfalls and excess cargo handled by the parties would not be in the interest of GPHA.    
 
RECENT UNIONS’ ACTIONS

On the 15th June 2020, the Unions of GPHA led by MDU stopped all vessel movement in the Port of Tema until their demands are met by the Government.
The demands were  :

1. Immediate release of all Reefer containers to GPHA

2. Signing of an agreement to support the Dubai Decision of GPHA handling 20%  containerized cargo
 
The action of the MDU which started from 15th June 2020 , ended on the 19th of June 2020 when our demands were met half way with a cabinet decision on the issues we raised during our picketing. On the instruction of H.E. the President of the Republic of Ghana on the handling of Reefer Containers by GPHA as originally existed, a letter to give effect to the instructions of the President has normalised the situation and GPHA is handling the Reefer Containers.  We are grateful for the immediate actions of government on this matter.
 
The Minister of Transport, Hon. Kwaku Ofori Asiamah stated a deadline of 15th July 2020 for the signing of the agreement on the implementation of the handling of 20% containerised cargo by GPHA   in a correspondence with the MDU.  
 
The deadline never materialized and Several engagements with the sector Minister to resolve the signing of the 20% containerized cargo agreement have not been fruitful. The last engagement with the sector minister was on the 29th September 2020 at the Ministry of Transport(MoT). The delay in the implementation of the agreement to support the decision taken in Dubai is creating apprehension among  GPHA workers. The leadership of the unions have come under intense pressure from our members because we are unable to provide definite information to our members on timelines for the signing of the agreement thus creating mistrust between us and our members. We are unable to provide the same reasons given to us by the Hon. Minister of Transport to our members and it is time to act with dispatch in signing the agreement on the 20% handling of container business by GPHA.  

As far as the unions and workers of GPHA are concerned, MPS has not shown any indication of its readiness to sign the agreement to support the demand of government, TUC, MDU and GPHA for the handling of 20% containerised cargo by GPHA to cover the exclusivity period of ten (10) years.  

We have had enough unfulfilled promises to convince us that if we do not take actions on our concerns, MPS would never sign the agreement to support the Dubai Decision and posterity would blame us for our inaction.
We expect the TUC(Ghana) , International Transport Workers Federation(ITF) and MDU Leadership to  take collective actions to achieve the demands of the workers.
 
CONCLUSION

The maritime industry is a strategic industry and the operations of GPHA creates enormous benefits such as providing avenues for sustainable revenues to government, employment opportunities, creating opportunities for training and internship for young people and contributing to the security of the nation.

The MPS Terminal 3 project was constructed at a cost of about US$1.1 billion with a tax waiver of US$ 835 million indicating that the project was funded more by Ghanaian tax payers than foreign investors.  

The benefits derived from the operations of GPHA cannot be provided by a private sector operator and we expect the TUC(Ghana) and our international affiliate the International Transport Workers Federation(ITF) to marshal their local and international links to support the campaign that would mount local and international pressure on the majority shareholders of MPS to sign the agreement to give effect to the handling of 20% containerised cargo by GPHA.

We note that since IFC provided some funding for the project, we propose that TUC and our international affiliate, the International Transport Workers Federation(ITF) should use the complaint mechanism of the World Bank to lodge a complaint with the World Bank on how the MPS Terminal 3 project violates national laws, the monopoly created in the handling of container business by MPS through the exclusivity clause for ten(10) years, the lack of transparency in the competitive bidding process, the negative effects of the project on job losses of GPHA employees among other issues if MPS Shareholders continue to hold on to their position not to sign the agreement which would grant GPHA the right to handle 20% container business. We expect TUC(Ghana) and our international affiliate the International Transport Workers Federation(ITF) to act with dispatch on this issue.  
 
The Maritime and Dockworkers’ Union(MDU) commends H.E. Nana Addo Dankwa Akufo-Addo and cabinet for taking immediate action to reverse the handling of Reefer Containers by MPS though that was not part of the MPS agreement. The decision of the President on the handling of Reefer Containers back to  GPHA has brought some business to the Reefer Container Terminal of GPHA which became a grave yard in the period when MPS took over the Reefer Container business from GPHA.

However, we are deeply troubled about the long delay in getting the majority Shareholders of MPS which are Bollore and APM Terminal to support the decision taken by the Shareholder in Dubai on the 12th of November 2019 for GPHA to handle 20% Container business to cover the exclusivity period of ten(10) years.

Government’s delay in taking action on this matter is creating anxiety and apprehension among GPHA workers and the entire members of the MDU. We call on ITF to use its international leverage to mount pressure on Bollore and APM Terminal to support our demand .

We respectfully request H.E. Nana Addo Dankwa Akufo-Addo to take urgent and immediate action on this issue in the interest of industrial peace in the maritime industry.

We strongly need the support of ITF and TUC (Ghana) in this struggle.