Struck out: Spain's port labour is in an uncompetitive position. Credit: Armando G Alonso
COMMENT: In mid-March, Spain’s Parliament rejected voting into law the port labour reforms that are necessary to meet European Commission requirements. In effect, Spain, for the time being at least, remains out of step with the majority of EU countries.
The reforms were backed by Spain’s ruling Popular Party, a minority government, which is dependent on opposition support for implementation of its key policies. The vote for the liberalisation of the country’s port industry eventually ended up with 175 votes against, 142 in favour and 33 abstentions. On hearing the result, unions cancelled the strikes planned for the immediate future.
Effectively, this leaves Spain’s port labour arrangements in a non-competitive position compared with other European countries and an even worse position compared with other regions which offer competition to Spain in the transhipment sector – Tangier in North Africa for example. In this respect, the unions may have won a victory over the vote – and they do have strong political influence, particularly with coastal politicians – but it remains to be seen if they will win the battle. For instance, APM Terminals new automated container terminal in Tangier, now under development, is a strong candidate to see large volumes transferred to it from Spain. High port labour costs and transhipment are a ‘mix’ that worldwide experience shows has a limited lifetime for very large volume transhipment movements.
The attitude of Spain’s dockworker unions to the reforms, which effectively aim to make the sector more efficient and therefore competitive overall, is reminiscent of past port union attitudes around the world – Italy, the UK and Australia for example - when confronted with large scale reforms, i.e. to ‘dig in’ and say the reforms are not necessary. The simple truth, however, is that they are essential for a myriad reasons – to exploit the advantages of new technology, to adapt working procedures compatible with the introduction of new ship types and generally to achieve the efficiencies and economies that are vital in today’s world to remain competitive.
It is not for no reason that the vast majority of EU countries have adopted the EU standards relating to port labour. Equally, where there has been resistance to change in the port sector by countries outside the UK – Australia for example – reforms have eventually been introduced. It is summed up by one simple word ‘Progress.’
Clearly, this is not the end of the story for port labour reform in Spain.
There has already been a meeting between the interested parties and the ‘mediator’ following the announcement of the results of the vote in Parliament.
In the background, there are also rumours that after the failure of the Royal Decree that Spain’s President Rajoy is considering the possibility of early elections in November of this year. The hope here is clearly that these will unlock the political deadlock that has been the root cause of lack of decisive action in Spain generally for some time now.
Looking to the longer term, it is a safe bet that reform will eventually come – just as it has elsewhere. In the meantime, however, it looks like Spain will continue to have to endure the pain of daily fines from the European Commission for non-implementation of the liberal reforms and that the country’s importers and exporters will have to continue to operate with a higher cost supply chain.