Analysis of the Role of Port Labour Systems and Reforms on the Competitiveness of

West African Ports

By Jonas Aryee
Email: jonas.aryee@rmu.edu.gh

Abstract
Purpose- The purpose of this paper is to critically discuss the role port labour systems can
play in the competitiveness of ports in the West African sub region and the implications of
the choice of system using Ghana as an example.

Design/Methodology/Approach- The study basically draws heavily on existing literature to

find answers to the questions posed. Finding answers to the research questions related to
identification of available port labour systems, transferability of practices from one port to the
other and benchmarking on the success of the systems lays the foundation for the objectives
of the study to be achieved. Based on reviewed literature, various concepts and systems
employed by ports and the resultant strategies adopted by management and the labour force
to stand for their interest are discussed.

Findings- This study reveals that ports undergo lifecycle, which in turn comes along with its
orientation either towards a social or market system. This depends on several identified
factors. Thus, in the present assessed situation in the sub region, any West African port
including Ghana’s ports and it society at large will be the losers in the long run in the face of
intensive competition to serve the vast Sahelian hinterlands if their reforms are social biased.

Practical Implications- This paper is aimed at preparing the ground for future research in
this area. The issues pointed out have far reaching consequences for the success or failure of
the reforms that are taking place in various ports in the West Africa sub region.

Originality/Value- Effort has been made to point out that seemingly peaceful reform could
turn disastrous in the long run if the roadmap and conditions to achieving the objective of the
port reform is not layout and made transparent to stakeholders so that labour unions and
investors can be proactive in knowing their role and adjusting to the future desired status of
the port.

Keywords- Port Reforms, Port labour systems, Landlord port, Dock Labour Unions,
Globalisation, Privatization

INTRODUCTION
In recent times ports in West African countries such as Ghana, Nigeria and Sierra Leone have
undergone reforms or are still in the process of upgrading facilities in order to remain
competitive. For many, the main consideration for a port to be competitive is to acquire
adequate modern facilities and develop good hinterland accessibility. While this is in order,
in recent times, the trend has been to adopt a new management model that offers
opportunities for increased efficiency in the port. Akin to the reforms in ports is the subject of
labour reforms which is crucial to the success of the reforms yet it has not been tackled
adequately in academic research. There are substantial evidences to show that labour system
can make or break a port’s competitive position.

Electronic copy available at: http://ssrn.com/abstract=2625137

The major aim for many reforms of port labour systems is to make ports competitive. In deed
amongst the possible motivations for reform as listed by Van Niekerk (2005) include: “the
need to improve productivity and efficiency; improve management capability; achieve
financial autonomy; redeem debt obligations; rationalize port structures and minimize
political intervention in decision-making; diminish the role of government in the operations
of ports to landlord functions only; become business-orientated to raise the competitiveness
of ports; deregulate the labour market and introduce performance-based contracts”. High
capital cost, rapid change in technology arising from globalization of maritime trade
impinges on governments to involve the private sector in port operations. The resultant effect
of labour reforms is particularly difficult for developing countries (Hill, 1996). This is due to
the role the ports play in reducing the unemployment problem.

Indeed, when it comes to reform of ports and port labour in developing countries the major
promoters are the Worldbank and its affiliates. Many of their publications on port reform
advocate for the operation of market forces in the port hence some degree of privatization is
desired. Perhaps, the most popular one is the Worldbank’s port reform tool kit which serves
as guideline and offers strategies to deal with issues arising out of reforms including the
delicate task of managing labour. Empirical cases suggest that there is no universal formula
for achieving a successful labour reform programme. Even ports with similar national
legislation and conditions have fared differently in terms of success. Different factors have
defined the success or failure of port reforms around the world. The quality and size of labour
force required or desired can vary under different port management systems and may depend
on the underlying objectives of the reform.

The triggers for reform may also emanate from varied sources or a combination of sources
including competition, governments or stakeholders of the port. The ideal time and situation
for reform in port as proposed by the Worldbank is when all three forces of competition,
political push and community pressure are present simultaneously. Usually, the need for
reforms is borne out of inefficiencies, inflexible and outdated labour regimes, management
systems and collective bargaining agreements.

The way a port functions and how it organizes its labour can be a crucial determinant of its
performance or competitiveness. In addition, the status of dockworkers and the manner in
which work-floor arrangements are organized can affect their productivity and the
profitability of port companies that use them. This is evidenced in the study by Burton and
Turnbull (2002) on three European ports namely Antwerp, Le Havre and London. In view of
the foregoing, with particular reference to the extent to which the landlord system of port
management is being established as ‘best practice’, this paper sets the tone for a critical
evaluation port labour scheme in West Africa.

PROBLEMS ARISING FROM REFORMS

The sensitive nature of ports as national assets and major source of revenue to the nation
generates passionate debate whenever change in any area of its operations is proposed. For a
moment, one will hail the ports reform in Ghana to be successful. For sure, it is successful
considering the fact that port reform is a continual process and those operational and social
issues may crop up every now and then; however, the ability of those problems to be resolved
in the framework of an established institution will determine it long term success. As the ILO
(1999) postulates “Successful and lasting reforms are achieved when the consequences and
implications of these reforms have been fully discussed and agreed with the social partners
well in advance”. The Worldbank and UNCTAD respectively assert that any dialogue must

Electronic copy available at: http://ssrn.com/abstract=2625137

be geared towards promoting competition and that any successful port reform must aim at
responding to the market and satisfying client’s needs. (Worldbank, 2001, module 1;
UNCTAD, 1995, pp. 11)

A study on the organisation of labour and port labour system will not be meaningful without
considering the larger framework under which labour operates. Many port reforms that have
taken place or are taking place has resulted or is geared towards the adoption of the landlord
port management system which has gained prominence in modern ports around the world. It
seemed quite unavoidable for Ghana to think of any other system in the wave of constant
changes in the port and shipping industry that require huge capital requirements to adapt.
This system calls for changes in the way the port works. It involves transfer of operations to
the private sector which will invest in efficient systems that may call for re-training of
personnel, re-designation of jobs and almost always, job losses to some employees.

The port system in Ghana cannot be said to fit the definition of a ‘complete’ landlord system
because the port authority still remains active in port operations. After almost ten years of
private participation in port operations there is a seeming reluctance of the port authority to
totally cede all operations to the private sector. Therefore, there exists a combination of tool
and landlord port models in one port. Perhaps, the decision is strategic or due to uncertainty
regarding the competitiveness of the port (if left in the hands of private concerns). However,
recent discourse among dock labour/indigenous port operators and the port authority raises
questions as to the capacity and provisions made for social dialogue between the parties. It
appears that a market oriented system will be the ultimate option for most ports in the long
run as against social considerations. However, the problem is to determine at what point in
the evolution of ports must competitiveness and profitability outweigh social considerations
in order not to create ‘shocks’ in the economy?

OBJECTIVE AND RELATED QUESTIONS

The objective of the research is to:
1. Identify concepts that work and those that do not work in the West African context
2. Identify similar cases for benchmarking and develop ideas for improvement of ports
in West Africa

Related questions that constantly seek attention on the subject matter include:
1. What available port labour systems or concepts work in practice?
2. Can successful practices in one port work in another port?
3. Will the economic status of the sub region make null any attempt to use the case of
developed economies as a benchmark?

METHODOLOGY
The methodology used in this study is the inductive approach. It sticks to facts revealed by
available data as could be gathered within the constraints of this study. In keeping with the
character of the deductive approach, this study avoids making unfounded generalisations as
the subject under consideration is understudied. Moreover, different ports have varied forms
of labour systems that have evolved from their history, the attitudes of the interests involved
and so on, and so despite the comparisons that are made in the study between other systems
elsewhere, it was safe to stick to the facts and draw conclusions in that regard.

Specific country information on Ghana used as example, are generated from reports and
records by international organizations such as the World Bank and the International Labour
Organization (ILO) who supported the Ghana government in relation to the port reforms at
GPHA as well as recent events as reported by some stakeholders and the media. To answer
the research questions, conceptual frameworks backing ports approach to reforms as well as
empirical findings from other parts of the world cited in existing relevant academic literature
are reviewed in order to draw meaningful conclusions.

REVIEW OF LITERATURE
This section decouples the main subjects of the study and defines terms in their right
perspective. Thereafter a link is made to give the total picture. Then, various existing systems
connected to the terms are also compared to bring out areas that have similarities and
divergence in relation to Ghana. Also of importance is the review of existing conceptual
framework developed as the ideal of modern dock labour reforms. It is needful as the study
progresses to define certain conceptual terms that are important to the study. These are Port
labour, Port reforms, landlord port, Port Management Models and framework for organizing
port labour.

PORT LABOUR
Labour generally refers to employees in any enterprise. Port labour on the other hand is quite
difficult to define unless it is put in a framework of a certain jurisdiction or country
concerned. With Port labour, the interest is in the dock labour or personnel charged with the
core duty of working vessels and the handling of cargo and not the administrative staff or
support staff. Therefore the term port labour and dock labour are often used interchangeable
in this study. It may have a vague definition in countries without legislation concerning dock
labour. Also, certain countries which have legislation might not have a definite or explicit
definition for it. Nonetheless, some countries which have succeeded in defining it, either do
so broadly by including not just the stevedores but also workers in warehouses and industries
in the port cluster which require similar skills e.g. Belgium. Others also have a narrow
definition, which considers only stevedores as dock labour (Notteboom, 2010).

Port labour systems refer to the way labour is organized in the port to achieve a certain goal.
It determines practical arrangement on the work floor, labour pools and qualifications
required for such work. They are necessitated by a need for improvement in performance of
the port or general economic reforms as a result of improving competitiveness due to
Globalization. This is more conceptual and may be designed to achieve competitiveness of
port and its affiliate companies as prevailed in Australia and Taiwan (Chu, 2007) or as part of
measures to stimulate the economy in general as in the case of Ghana. The reforms may be
initiated by governments as a policy option as happened in New Zealand and Taiwan or by a
port company in the case of Australia (Chu, 2007). It can also be done at the behest of Port
authority (Turnbull, 2000) or even as a result of pressure from a section of stakeholders.

The success of any enterprise-the port being no exception- is hugely reliant on its human
resource or human capital despite the growing application of technology. However, it is also
known to be the most difficult resource to manage especially in enterprises where constant
work is not guaranteed as used to be the case in the port sector. It is now possible to fairly
estimate the arrival of ships but technological advancement requires that the labour force is
also highly skilled. The flexibility, productivity, quality and cost efficiency of dock workers
contribute to the competitiveness of port-related and logistics companies and the wider
economy (Notteboom, 2010).
PORT REFORM
Port reforms are not synonymous to labour reforms but they always end up affecting labour
in a minor or major scale. It has become a precondition for wider port restructuring (World
bank, 2001) and is demanded by Shipping lines, Global terminal operators and other port
companies who invest in port infrastructure(Turnbull and Wass, 2007). The worldbank port
reform tool (2000) just like many other studies identifies competition especially for ports
serving the same hinterland as the main reason for many port reform programmes. Reforms,
it stated could be triggered by competition, political push or community pressure.

On the other hand, Pallis’ (2006), study of Greek ports suggests that reforms become
necessary when the port changes its management model. Within the increasingly popular
landlord system of port administration where privatization of port operations is required,
there is a power play between port companies and port labour which results in the way the
port functions. Power in the hands of management can lower conditions of service as they
cite international competition as incentive to lower cost.

Port reforms are meant to bring improvements and make a port competitive. However, not all
reforms provide the expected results. The tension is always between labour and port
operators. The ability of a port to address this tension is determines the success of the port. A
classic example of a failed reform is the case of the UK ports as a result of the introduction of
the National Dock Labour Board (NDLB) in 1947 which was supposed to replace a rather
poor practice. The NDLB guaranteed dockers minimum wages for a guaranteed number of
working hours even when jobs are not available and a job for life. This rather hurt port
employers as cost rose and productivity was low. Employers of port labour usually complain
of high labour cost which forms a greater part of their fixed cost as a result of labour
regulation making them uncompetitive. On the other hand, Dockers will usually fight for
secured jobs with guaranteed salaries even if there is no work available to do. Depending on
who has the power, the interests of these two groups form the varied port labour schemes in
use around the world.

PORT MANAGEMENT MODEL

The change in the model of port management can be the trigger for port labour reforms as
stated by Pallis’ (2006). A port may operate in a manner where it provides infrastructure and
superstructure as well as all cargo handling services. In this case is referred to as a Service
Port. Here, labour is directly employed by the port authority and so have little problems
regarding job security and conditions of service. An alternative model referred to as the tool
port model requires the port authority to provide the infrastructure and superstructure and let
the private sector perform the cargo handling services. The Landlord port model requires
private participation in port operations in terms of providing the superstructure and the cargo
handling services. Here, the port authority may provide the infrastructure or permit greenfield
developments by the private sector under the some public-private sector arrangement such as
Build Operate and Transfer (BOT) and so on. The landlord model is one in which port labour
is affected most. This is due to the tendency of the operators to reduce their cost of operation
while increasing productivity and efficiency. This action is mainly informed by the need to
compete within and/or without the port. The fact that competition brings about a lot of
uncertainty, complexity and dynamism in port makes labour relation volatile and loyalties
undermined.
The paradigm shift towards increased containerization and it increased use of high
technology cargo handling methods provides a huge challenge for governments, Municipal
Authorities or administrations who own ports; especially, for those in developing countries
like Ghana who are torn between providing jobs for the masses and making their ports fit in
the global supply chain. Many countries are striving to make their ports competitive but are
constantly mesmerized by the fast changing technology and other innovations which
sometimes require huge capital outlays especially for the containerized trade which is rapidly
growing. This has prompted a wave of arrangements involving the private sector. The
approach taken towards the involvement of the private and the public sector in port
ownership and operation varies from country to country and from region to region (Hoffman,
2001).

The issue regarding competitiveness amongst ports and the management of human resource
on docks often generate some passionate reactions from stakeholders in the port industry.
Various studies (Chu, 2007; Burton and Turnbull, 2002) have shown that the reaction of
stakeholders in developed economies is by no means different from that of under-developed
economies. The paradox is that, increased use of any one of either technology or manual
labour results in problems. Increased technology affects labour and causes social problems
while the use of labour intensive systems is costly and ineffective making the port
uncompetitive.

CONCEPTUAL FRAMEWORK ON DOCK LABOUR

Historically, ports were areas of bustling activities and port cities became important
commercial and social centers. Cargo handled was mainly break-bulk which required the use
of many people to load and unload the vessels. Workers in the port were carefree as work was
almost always available as vessels spent weeks and months in port being unloaded and/or
loaded. Ports in those days served captive hinterlands and so faced little or no competition.
They were a major source of employment to people of all trades. Governments and city
authorities who own the ports have held them dear and been reluctant to let go off them. In
this wise, prior to the 1960s decasualizing dock labour was seen as an ingenious idea.

However, at the onset of containerization, it was no more necessary to have large numbers of
people working at the port. Many cargoes which used to be carried or handled as break-bulk
were unitized and mechanized ways of handling were introduced. Ports which were slow to
adjust labour to the market requirement created tension between dock workers and the port
operators. As a matter of evolution, the requirements for port operations have changed and so
port labour must adjust. Former world ports such as the UK ports especially London, which
failed to satisfy the market requirement at the opportune time have now grown into obscurity.
Many other nations now grapple with the critical decision to privatize or not to private port
operations. The former, which is a market oriented approach, will put them on the part to
satisfy market requirements but hurt conditions of dock workers and other social ambitions of
governments. The latter has the potential to make a port uncompetitive compared to its
competitors which in the long run affect the conditions of dock workers and threaten the
employment of the very people being protected by the social approach.

Despite the two extremes presented, in practice, many ports try to find a balance depending
on a myriad of factors amongst which are the location of the port, the reason for its
establishment, the length of period of existence, competitors, purpose for which it was built,
etc. For instance the ‘new’ ports that have sprung up in the Mediterranean such as Giaro
Tauro and Salalah amongst others have been set up to attract transshipment cargo going to
Northern Europe. They have a real market oriented approach and no history or evolution of
dock labour practices to serve as bottlenecks in this regard. Therefore, they may not have the
problem of choosing between any of the approaches. Ports which serve a local captive market
and are in no competition with any other may not have the urge or incentive to be market
oriented. Those competing at either a regional or global level will have to devise a system
that attracts important customers to their port. In fact, a port can exist solely in responds to
market requirement but not for social reasons. That is the reason why newly built port
facilities will usually opt for greater mechanization than to entangle themselves with the
complexities of issues regarding dock labour. To be fair, the general framework of how port
labour should be organized proposed by Notteboom (2010) will be a good starting point. It
presents a general outlook of the situation the market presents and the responds by ports.

Figure 1. Framework for the organization of Port Labour

Internal Organisation

Minimise
Market requirements
-shipping lines
-Terminal Operators
-Logistics Companies
-Shippers
External Organisation
Indirect Cost of Labour
-‘Hidden cost’ with impact on competitive
position of port, such as
-Strikes
-Traffic Loss
-Absenteeism
-Inactivity due to accidents, sickness …
Direct cost port labour
-Cost per hour / per ton handled
-Overhead cost pool

Maximise
Optimise
Performance port labour
-Labour productivity (also function of innovation in cargo handling and
logistics)
-Labour flexibility in terms of working time, labour quantity and functional
characteristics
-Cargo handling value per docker (creation value-added)

Legal conditions Social conditions

-e.g. Law on port labour pool -Labour conditions
-Legislation on working hours- -Training-HRM relations
Legislation on safety, etc. (motivation, commitment,
governance model)

Source: Theo Notteboom (2010)

The framework is quite flexible and can be manipulated to achieve those motivations.
Fulfilling market requirement and becoming competitive and profitable is important but Van
Niekerk (2005) reiterates the fact that ports are also strategic assets that fulfill a socio-
economic function and so that aspect must be considered. It is difficult to determine the
success of a port reform programme unless the underlying motivation is known.

It is also difficult to find a right balance between seeking profit and competitiveness on one
hand and fulfilling the social function on the other hand. It seems quite natural for a port in
effective competition to lean more towards satisfying the market in the best way possible by
privatizing its terminal by way of concessions to attract the best operators who can deliver as
the market requires. According to Van Niekerk (2005), a different story unfolds when the
ports are not competitive and competition has to be created by regulation as is the case in
many developing countries. Among the reasons for the uncompetitive nature of ports in
developing countries are: reliance on captive national market which does not generate much
volumes of trade which make them unattractive to the major shipping lines. Those who have
the opportunity to serve contestable hinterlands also have poor hinterland networks; there is
an imbalance of trade as containers that come in as import are exported empty; another
disadvantage is that they are not situated on major trade routes.

ANALYSIS
DEFINITION AND LEGAL STATUS OF THE DOCK WORKER
Currently, Ghana has no legal instrument concerning dock work in particular. Dock labour is
treated as any other working group in the economy. Indeed, the Maritime and Dockworkers
Union operates under the bargaining agreement of the nationwide umbrella of workers
unions, the Trade Unions Congress (TUC) of Ghana. As a result, dock labour has remained a
casual occupation with it attendant economic and social effects. Elsewhere in the world, some
ports have had or still have legislation on dock labour in place. These legislations, in certain
cases gave a clear cut definition of dock work and dock labour and stipulate certain
conditions regarding entry, qualification, conditions of service etc. They may also contain a
clause that guarantees wages or frequent jobs for the dockers. A typical example of
legislation that protects dock work is the ‘Major Law’ of Belgium which reserves dock work
for only registered dockers. It efficiently eliminates to a large extent oversupply of dock
labour and offers guaranteed wages to dockers. A similar system was operated by Britain
through their erstwhile National Labour Board in 1947. Other western countries like
Germany, France and the Netherlands have had variance of the same system seeking to
intervene by decasualizing dock labour at certain periods, especially at the advent of
containerisation.

However, in Ghana, any menial job in the port that requires the use of casual labour like
cleaners, carriers and sometimes technical skills like machine operators, drivers (various
categories) etc. and whose services will have to be used, disposed of and rehired as and when
needed in the port is termed dock work and dock labour respectively. Also there exist no
explicit law concerning who the port operators can employ, however, the port implicitly does
not recognize and encourage any form of casual labour, except those from GDLC. GDLC is
therefore the sole supplier of casual labour in the port. The stevedoring companies being
stakeholders of GDLC are obliged to hire labour from GDLC. This notwithstanding, it is
acceptable for some of the stakeholders to maintain a mini labour pool of dockers who they
refer to as their permanent workers for strategic reasons.

In the absence of any legislation on port labour any person employed by the port employers is
employed under the general labour conditions as stipulated in the Ghana labour law, 2003
Act 651. In Ghana, it would have been less problematic for a decasualization system to run
due to the low minimum wage level. Employers opine that it is no problem except that other
legal commitments such as collective agreements, termination of labour contracts, conflict
resolution, and other regulations governing formal sector employment are the stumbling
blocks to permanent employment (Gockel and Vormawor, 2004). A report by Gockel and
Vormawor (Ibid, pp15) for the Friedrich Ebert Stiftung foundation on trade union in Ghana,
confirms that employers are happy with the flexibility and resilience exhibited by the casual
workers that is lacking in the rules and regulation in the labour law which is an offspring of
the colonial era. The tension identified here is between labour laws which are at odds with
market lead growth since they were made for a social oriented system. For labour, the law
does not provide a good income but it sure preserves their jobs as long as they are employed
irrespective of their productivity. On the other hand, employers face a high fixed cost in their
operations preferring to replace manual labour with technology where possible. Ghana
therefore has been branded a “high-cost, low-wage economy with reduced international
competitiveness” (ibid, pp.16). Generally, casual labour is prevalent in Ghana and is on the
increase as a result of the aforementioned reason; even in the public sector, people have been
made redundant only to be rehired as casuals to reduce cost of the public service. The port
industry was identified together with construction as one of the prominent sectors with
increased casualization due to seasonal variation in the job requirements.

GHANA DOCK LABOUR COMPANY

Ghana Dock Labour Company (GDLC) Limited is a duly registered Limited Liability legal
entity under the Ghana Company's Act 179 to provide employment for casualised dock
labour. The employees are members of the MDU. The stevedoring companies in the port,
together with the MDU came together to pool resources to form one labour pool from which
all of them will call to make request for labour at will. The stevedoring companies are
therefore the basic owners and clients as well. According to Britwum (2010), its membership
has declined from 4800 as of 2006, to 3000 by the third quarter of 2008 as the Meridian Port
Services (MPS) started its highly mechanized operations in 2007.

In contrast, labour schemes in most part of the western world were established by legislation
and well regulated by the government. The British dock labour scheme which reserved dock
work for registered dock workers was established by the government by way of legislation in
1947. Albeit the failure of the British Dock Labour scheme many western countries have and
seem to be doing well with regulated dock labour. Belgium, in 1972 passed the ‘Major Law’
which in essence reserved dock work to only authorized dockworkers who were employed
under a pool managed by employers’ associations of the relevant ports. The French had a
similar legislation in 1947 which was administered by local bodies called Bureaux Centrale
de la Main-d’Oeuvre (BCMO). Germany’s dock work association,
“Gesamthafenbetreibsverein” (GHB) was established by law in 1950 with the same objective
as the aforementioned however this law was not mandatory for German ports. The dock work
associations were jointly operated by port employers and the trade unions. The Netherlands’
system was not based on law but on trade union agreements. They had a labour pool
administered by mainly port companies known as the Samenwerkende Haven Bedrijven
(SHB) (Notteboom 2010; Dempster, 2010).

The GDLC appears similar to the systems above except that the GDLC is not established by
statute just like the SHB and while it is jointly owned by the labour union and the stevedoring
companies, the union is under represented by virtue of its minority stake in the company.
Also the labour scheme as run by the GDLC does not offer permanent employment with
guaranteed wages as in the case of decasualized systems of Belgium and Germany, and to
some extent France. It is not funded by government just as the GHB and SHB of Germany
and the Netherlands respectively but a premium is placed on the wages of each man hired by
the port employers which is used to run the pool.

THE GHANA CASE

The ultimate aim of the Ghana Ports Harbours Authority (GPHA) is to be a landlord port
authority. The reform at GPHA in general which included the labour union, proved the
suggestion by Marges (1999) that for a peaceful introduction of reforms it is a pre-requisite to
involve the unions from the early stages to secure their collaboration. It is said of the reform
that “the avoidance of any autocratic approach and the consultative, persuasive, and
participative style adopted by the government in promoting the port reform process resulted
in a very positive atmosphere among the port community for the implementation of the port
component of the GHATIG Project” (Worldbank, 2007). Hence, there were few agitations by
the labour union.

Chu (2007) confirms this as he concludes in his study of reforms in Australia, Taiwan and
New Zealand, that the degree of militancy of the unions depends on the identity of the
initiator of the privatisation programme, the manner and how tactical the programme was
pursued. The relative peace enjoyed from the inception of the reform programme in Ghana
can be partly attributed to this assertion. However, the intermittent protest by the
MDU/GDLC in recent times as a result of increased privatisation suggests that in this case,
peace had been enjoyed probably due to the time lag between the transformation to the
landlord model and the introduction of radical private involvement especially at the entrance
of the global players. Another reason can be attributed to the fact that reforms were not
peculiar to the port sector only but rife in the country due to many structural adjustment
programme being pursued by the government in different sectors of the economy thus
minimising the labour outcry.

There are several incentives for the government of Ghana not to be very keen on pursuing the
agenda of a holistic landlord system in practice. The reasons, provided on a general basis
with respect to governments in Sub Saharan Africa (SSA) but also very true of Ghana, are
captured in the Worldbank (2006) Africa Transport Sector Report as follows:
1. Ports generate hard currency revenues which governments feel they must tightly control
2. Ports often play a sensitive strategic role in the transport networks of many SSA
countries, with a single port often handling most of a countries import and export; and
here again governments see private participation as diminishing their control
3. Ports have enjoyed strong growth in container traffic volumes (over 9% annually in SSA
during the 90s) regardless of whether efficiency of operations has improved
4. With the strong growth in container traffic and often relieved of the responsibility of
servicing debt for needed investment, state managed ports sometimes show positive, if
misleading, profit performance

Using Ghana as an example, point 1 and 2 are applicable. It is quite interesting for this study
because it clearly shows a picture the study has not touched on till now. Even though the port
authority owns two ports, most of the issues discussed before are prominent in the port of
Tema. The reason is that Tema handles about 80% of the country’s import/export trade and is
therefore more attractive to investors. It has a dedicated maritime container terminal jointly
owned by a consortium made up of GPHA, Maersk and the Bollore group and about seven
(7) off-dock terminals. It has nine (9) private stevedoring companies operating in the port.
There is relatively less action in the port of Takoradi especially with regards to container
operations. The port of Takoradi has private indigenous operators but has yet to see the
entrance and influence of the global players.

Point 3 is an indication of increased growth of trade in the SSA region. It also indicates that
most ports in the SSA region serve mostly captive hinterlands which are their home country
with the exception of few ports who serve landlocked countries. Ghana ports, being part of
the Abidjan-Cotonou range that serves the Sahelian countries of Mali, Burkina Faso and
Niger can however attribute their growth increase to the transit trade as well as increased
national trade.
Even though the result of privatisation has shown increased efficiency and productivity in the
port via privatization of port operations, there is no intensive competition amongst the
indigenous private stevedores. They have consistently resisted moves by GPHA (representing
government) to introduce a free market system where they compete for customers in favour
of a quota system that guarantees some work for all the stevedoring companies. The status
quo is a disincentive for efficiency and productivity. On the other hand, a free market system
will increase the plight of port labour since the operator will be forced to cut cost and invest
in more sophisticated equipment. Moreover, some operators might go out of the market if
they cannot compete, further reducing the labour requirement. This comes in conflict with the
labour standards and other social objectives (Harambides, 1995).

COMPETITION
The two ports in Ghana are relatively small compared to the ports mentioned in the cases
related to this study. However, they are growing in terms of volumes of cargo; there is active
competition from neighbouring ports in the West Africa sub region; there exist a potential
traffic growth as well. Inter port competition is currently active with other international ports
and is being encouraged within the country by granting both ports autonomy to operate as
separate entities under the same port authority.

Since terminal operation is a non-contestable market considering the huge sunk cost
involved, the introduction of intra port competition is a little dicey in Ghana’s port. This may
be the case in many West African countries also. It is required that a critical mass can be
assured to justify investment in container terminals. Critical mass can be defined as the
minimum size or amount of resources required to start a venture. For a deep sea terminal,
there is a consensus of one million TEUs with at least two large deep sea container operators
as customers (Wiegmans, B. W., Konings, R. and Priemus H., 2009). Using the port of Tema
as an example, the port has reported a study growth in container throughput from 140, 260 in
1997 culminating in a figure of about 590,147 TEUs in 2010 (GPHA website).

Figure 2: Container Traffic for Port of Tema, 1997-2010

Source: GPHA website

 This is quite impressive considering the economic situation and the obstacles to trade in the
region. However, it suggests that the port cannot accommodate more than one terminal
operator if the operator must get a good return on investment. The minimum efficiency scale
(MES) compared to market demand is relatively high which calls for just one operator in the
port to exploit the economies of scale in the industry. If many players enter the market, the
margins will fall and operators will have to save on cost; and here labour will be the most
affected. As Van Niekerk asserts, this will be in contrast to the fact that ports are social tools
to create employment. Considering the market size, it makes economic sense that the GPHA
did not transfer a public monopoly to a private monopoly by participating in the consortium
in order to protect public welfare. This, in addition to regulation can effectively increase
social conditions. For instance in South Africa, firms who were given concessions was
required to guarantee employment for the effected dock workers for a minimum of three
years and must provide wages not less than what they already received. Though socially
laudable, this has the tendency to raise the cost of the operators defeating the purpose of the
reform.

CONCLUSIONS
The points below satisfactorily answers the research questions posed.
 Port labour systems are either market oriented or social oriented. In practice, there are several
variations that combine both of them in varied degrees to provide welfare for the populace as
well as fulfill the commercial objective of the operators. For ports that find themselves in
contestable markets and run the risk of even losing their captive markets to competitors, they
are more likely to be biased towards the market oriented approach and limit the achievement
of social objectives. These ports are more likely to introduce deregulation, commercialization
and radical labour reform which cause some degree of tension. For ports that are not in
contestable markets, the need for reform may be limited to increased efficiency by
modernizing operations and improving internal processes. This exercise may not affect labour
that much. It appears from the forgoing that, even the ‘so called’ social approach is only a
mild form of a market oriented system. Any port in that circumstance cannot remain or
sustain the practice in the long run. It remains so, due to the lesser degree of competition
faced. It is just a phase in the evolution of port. It is only a matter of time, until it faces real
competition. The port of Tema until 2009 was basically serving Ghana alone. Though it was
seen by many as another inefficient public entity it could still have done better if it had been
modernized and internal process improved. Public ports per se are not to be seen as
inefficient as the case of Singapore proved until recently (Notteboom and Winkelmans,
2001). Now that Tema Port is competing with ports in the West Africa sub region for the
hinterland cargo Burkina Faso, Mali and Niger, a much more commercial approach is
favorable lest it loses even part of its captive market which is reported to be under threat from
the port of Lome.

 In a quest to find out if successful practices could be duplicated, European cases studied
courtesy Notteboom’s (2010) report for the European Seaport Organization (ESPO) showed
similarities as well as varied forms of practices. Even for ports within the same country
following the same legislation as in the case of Belgium, the actual implementation slightly
differ. Among the common features identified is the motivation for port and port labour
reforms. Here, competition amongst ports as a result of globalization is proposed as one of
the major reasons for reform. Also common amongst the northern European ports was the
need to decasualize and provide guaranteed wages and employment at a certain stage of the
evolution of the ports. This practice was and is still prevalent in some ports in northern
Europe. However, the results of the similar systems have been different. The study observed
 that, the attitude and actions of the people involved, their history, the vision of the port or the
manner in which the reform is handled plays a key role in whether the system works or not.
In short. reform is a gradual process which evolves in tandem with the country’s economic
situation as evidenced by those systems that work in northern Europe

 Benchmarking reforms in developing countries with developed countries appears quite

laudable. First of all, it is not the countries per se that is important when it comes to
comparing but the ports in question. The situation of the port with respect to competition, the
kind of cargo it handles, the hinterland it serves, or its role in the country’s trade, etc might be
similar to other ports irrespective of which countries they are situated in. To add to that, a
study of the evolution of the now ‘world ports’ presents some useful lesson to compare with
since they have gone through similar situations before. For instance, the regional role of the
port of Tema in Ghana and its vision to grow into a world port makes it face the same
challenges that globalization presents to, say, the port of Antwerp. Even though they face the
same challenges, the degree varies and the responds also varies due to the aforementioned
factors of history, legislation, economy, etc. This degree of impact of globalization and the
local factors mentioned presents Tema with an opportunity to learn the positives of the port
of Antwerp for improvement. Some positive attribute may not be reasonable to implement in
the short term. For example, the size and throughput of the port of Tema will not permit the
concessioning of terminals to several private operators whereas an absolute ceding of all
terminal operations to one operator will also create a monopoly situation hurting public
welfare. In this wise, the port has rather concessioned part of the port and also opted for a
consortium which it participates in as well to safeguard public interest.

On a countrywide basis, though employers all over the world may have their own way with a
landlord system the same cannot be said for employees. Employees in developed economies
may benefit from some amount of guaranteed earnings or social welfare or certain
arrangements but those in developing countries do not enjoy or cannot afford such privileges.
Many of the decasualisation systems practiced in northern Europe were introduced before the
advent of containerisation. Bulk handling required much more labour and so the practise was
justified then. However, it proves problematic for employers in the era of containerisation as
they have to bear cost for no work done. Casualising port labour is not the real problem in
Ghana since it is prevalent in many sectors of the economy. The real problem is guaranteeing
the docker workers regular work that can fetch them incomes since they get no guaranteed
wages like their European counterparts when they don’t work.

Therefore, considering the fact that ports of different sizes, situated in different geographical
locations of the world and even so, in different economies (in terms of wealth of nations) may
or may not be comparable, it is almost precarious to parade a certain ‘formula’ as ‘best
practice’. However, positives gained from practices elsewhere must not be applied on a
blanket basis but customized to fit the peculiar situation of the port or the economy in which
it is situated.

 Labour issues as a result of port reform may not end after reform but continue years after the
reform as increased privatisation is introduced unless a proper arrangement which takes into
consideration the social development at every stage is agreed between the parties. No matter
how a country wants to avoid unemployment and encourage local investment, there is a
greater force in terms of global players. The problem arises when the port has not gone
through a systematic evolution like the pioneers of ‘best practice’ had. Going through a
radical evolution can destabilize the social harmony in the port.
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