Strikes end at Piraeus Port Authority following concession agreement

The commercial port of Piraeus resumed its normal operations in mid-November 2009, after three years of intermittent strike action by workers. The strikes were triggered by an agreement involving the Container Terminal of Piraeus Port Authority (PPA) and the Chinese multinational group COSCO, with the trade unions being strongly opposed to the port’s privatisation. In the end, a concession agreement was signed, granting COSCO control over PPA operations.

Background

About the company

Piraeus Port – situated to the southwest of Athens – is the country’s largest port and one of the biggest in the Mediterranean area, with its history dating back to 1924. The port drives the growth of international trade, as well as the local and national economy. Piraeus Port is engaged in multiple activities related to the commercial port, the passenger port, ship service, along with the development and operation of land areas.

Piraeus Port Authority SA (Οργανισμός Λιμένος Πειραιώς AE, PPA) currently employs 1,600 people – comprising 1,200 employees and 400 dockworkers – while serving more than 24,000 ships each year.

In this context, PPA’s Container Terminal, which until recently belonged to the Greek state, is a leading player given that it operates in the competitive transshipment market and in the Greek import and export markets. At the same time, it is the most important and largest container terminal through which the largest proportion of import and export trade passes. The Container Terminal has two piers, – Pier I and Pier II – with a total length of 2.8 kilometres and a storage area of 626,000 square metres.

Interstate agreement rejected

In 2006, the former government led by the conservative party New Democracy (Nea Dimokratia, ND) confirmed its approval of the liberalisation of port services, in an effort to enhance competitiveness and attract investments. To this end, the government initially promoted an interstate agreement with the Chinese multinational COSCO Group – a group of entities engaged primarily in shipping and ship provision operations, comprising almost 1,000 enterprises and employing more than 80,000 people all over the world. However, the agreement was not accepted by the European Commission, which demanded an open international tender. Following this decision, an attempt was made to concede to private investors both Pier I and II of the Container Terminal. However, only Pier II was conceded.

Piraeus Port loses high ranking

During this period, industrial relations at the port deteriorated and group strikes were launched (GR0701029I, GR0603019I, GR0505102F, GR031010N). In 2005, Piraeus Port was downgraded, according to various publications, from the 47th place in the global container handling ranking to the 120th place. At the same time, it lost its transshipment business and was limited at the end of 2006 to 400,000–500,000 containers, down from 1.6 million containers handled in 2004. As a result, it was demoted to the category of a ‘regional port’.

Provisions of PPA-COSCO agreement

In November 2008, a concession agreement was signed with COSCO with respect to the Container Terminal. Subsequently, in March 2009, Law 3755/2009 was promulgated – under the heading of ‘Sanction of the Concession Agreement of Pier II and III port facilities of the Container Terminal of Piraeus Port Authority (PPA) SA and regulation of relevant issues’.

• 3755 (Government Gazette Issue A52, 30 March 2009) stipulates the following:

• COSCO will formally undertake PPA operations as of 1 October 2009. The company will assume the management of Pier II of PPA for 35 years and will be obliged to construct Pier III;

• COSCO will co-manage with PPA until March 2010;

• the Chinese Group has assumed the obligation to pay PPA an advance of €50 million. As of its installation at the pier, the group will also assume the staff’s payroll, along with a percentage (15%) of the realised turnover.

Strong opposition by trade unions

The Federation of Port Workers of Greece (Ομοσπονδία Υπαλλήλων Λιμανιών Ελλάδας, OMYLE) and the Association of Dockworkers of PPA (Ένωση Λιμενεργατών ΟΛΠ) reacted against the decision on the port’s privatisation, claiming that ‘Piraeus Port is profitable, with investment potential and self-sustained development’. As a result, they organised major strikes over a three-year period – from November 2006 to November 2009. The trade unions asserted that:

‘the Concession Agreement and the provisions on tax exemption are nothing but a colonialist regime, which will have devastating effects on the national economy, sustainability and prospects of PPA SA and especially on the employees and their labour relations.’

In the same spirit, the Greek General Confederation of Labour (Γενική Συνομοσπονδία Εργατών Ελλάδας, GSEE) expressed ‘its unequivocal reaction against the disposal of ports’ and upheld ‘the struggle of OMYLE and the trade unions in the ports’.

It is worth noting that, in July 2007, the Labour Institute of GSEE (Ινστιτούτο Εργασίας ΓΣΕΕ, ΙΝΕ/GSΕΕ) published a survey entitled ‘Competitiveness and prospects of development of Piraeus’ and Thessaloniki’s container terminals’ (Enimerosi Journal, Issue 141, July–August 2007, INE/GSEE-ADEDY). The survey analysed the prospects of development of both the Piraeus and Thessaloniki container terminals, highlighting that ‘maintaining the public character of commercial ports is an option registered in most cases on an international scale’. The report also added:

‘if the investment plans are completed and advantage is taken of the high profitability of both port authorities – and provided that the organisation and management systems of Container Terminals are improved and their human resources are properly utilised – the terminals may continue to grow, with improvements in their competitiveness, playing an even greater role in development and employment.’

Overview of developments

Today, Piraeus port seems to have resumed normal operations following the suspension of strikes lasting more than three years by OMYLE and the Association of Dockworkers of PPA.

This latest situation has been preceded by a number of key developments, including the following:

• a letter being issued by the European Commission, following accusations from the trade unions and questions by members of the European Parliament, asking for clarifications about the tax and other privileges set out in Law 3755/2009 and the agreement with the Chinese multinational company;

• the recourse by producers to the courts for an injunction against all persons responsible for keeping the port closed – the producers concerned were the Central Union of Piraeus Chambers, the Hellenic Confederation of Greek Trade, and the Chambers of Commerce and Industry of Athens and Piraeus;

• the ruling of the Single-Member Piraeus Court of First Instance, which stated that the strike was illegal and abusive. In response to this ruling, GSEE stated that ‘it condemns any attempts at penalising union action and at having Courts involved in union and social struggles’. The Confederation of Public Servants (Ανώτατη Διοίκηση Ενώσεων Δημοσίων Υπαλλήλων, ADEDY) added that it ‘also opposed any recourse to judicial or authoritarian measures to deal with the struggles’;

• negotiations being launched by the new Managing Director of PPA, Georgios Anomeritis, with the newly-elected government led by the Panhellenic Socialist Movement (PASOK), along with COSCO and the dockworkers.

In this context, the business community are counting their losses while, according to the first estimates of PPA’s financial services, its losses are in the region of €15 million; moreover, if adding the cargoes ‘lost’ at the ports of Turkey, Italy and Malta, this amount almost doubles. On the other hand, the dockworkers are hoping that the new management of PPA, with whom they are in contact in order to ensure the smooth operation of the Container Terminal, will soon honour their commitments.

Commentary

The mitigation of the conflict that arose a considerable number of years ago at PPA, has, in principle, restored order at Piraeus Port. This is particularly attributed to the guarantees provided by the new government to secure jobs and create favourable terms of voluntary retirement for the workers. Nevertheless, questions are being raised regarding the cost of this voluntary retirement and its effect on social security funds. In addition, questions are being asked about the ‘monopoly’ status resulting from this ‘reform’ – for example, as regards the tariff policies to be established – and the ways that this can be prevented by the state. At the same time, there are queries over the terms of competition – for instance, regarding what will happen to the piers that are not being controlled by COSCO. Ultimately, however, ensuring employment and workers’ rights – which the government promised to protect in its effort to end the strike activity – is set to be the central goal.

Elena Kousta, Labour Institute of Greek General Confederation of Labour (INE/GSEE)