Business fear unions could cripple T&T economy

Stakeholders in the construction and manufacturing sectors and the business community are worried about trade unions’ threat to shut down the country. 

On July 28—two days after 19 trade union leaders had met with Prime Minister Kamla Persad-Bissessar over their wage demands—Ancel Roget, president-general of the Oilfield Workers’ Trade Union (OWTU), said the shutdown will come “like a thief in the night.” 

“Absolutely no progress will come without the prerequisite sacrifice and so, having exercised all of our approaches to have this matter resolved and attempting to meet with the Prime Minister herself…we are faced with no other choice but to exercise the only weapon that the worker has which is to withdraw his or her labour,” Roget said at a press conference at the Communication Workers Union, Henry Street, Port-of-Spain. 

Persad-Bissessar told the unions they should return to the negotiating table and start over from zero with their various employers. The vexing point for the unions is the five per cent “guideline” that Finance Minister Winston Dookeran has proposed. 

“I have no hesitation in saying that I had indicated that the five per cent guideline with the PSA would have been an adequate part of the compensation package,” Dookeran said on July 28 at a post-Cabinet press briefing.

Calling the threat “irresponsible” and “distressing,” key figures in the business community say this threat, if it is executed, would severely cripple T&T. 

Among the workers affected by the unions’ wage demands are those at the Port of Port-of-Spain. Rahendra Seemungal, president of the T&T Hauliers Association, said last Friday: “If the port shuts down its operations, it would affect 80 per cent of my membership, which depend on cargo in and out of the port.” 

Seemungal said his membership, who include Paramount Transport and Trading Company Ltd, Gopaul and Company Ltd and Direct Transportation and Equipment Rentals Ltd, would incur increased costs, especially on stored containers as there is no exemptions in the event of a strike or shut down. 

“This extra cost would be passed onto consumers as we would have to find ways and means to recover our losses,” he said. Seemungal said a loss in productivity could lead to unemployment. He said that hauliers move about 1,300 shipments a day in and out of the port and cannot afford to miss any sailings, which is a heightened possibility if the port shuts down.

Seemungal is calling on both sides—the Government and unions—to be reasonable, stating that they should be aware of the global economic situation and consider the long-term effects of increased wages. 

Ricardo Gonzales, senior superintendent at the Port of Port-of-Spain, said a national shut down would greatly affect the port because its average monthly income from imports is $777,462. The port’s average daily income from imports is $25,915.40. Its estimated monthly income from exports are $176,400 while its daily income is about $5,880, according to figures that Gonzales supplied to the Business Guardian. 

Pointing to external markets, he said T&T imports from 22 countries, is a transshipment port for goods going to 48 countries and exports to 32 countries.Energy impact

Jeremy Matouk, co-director at National Canners Ltd, said the thought of a national shutdown is very worrisome, as it would cost his company thousands of dollars to run generators if operations at the T&T Electricity Commission (T&TEC) are disrupted. 

T&TEC employees, who are represented by the OWTU, have been protesting since May over outstanding wage issues. The OWTU’s Roget said in May that the collective agreement between the union and the utility expired on December 1, 2008. 

He said even though the union submitted its proposal to the management of T&TEC that same year, a new agreement is yet to be worked out. Last Friday, Matouk said: “This action would be very disruptive and would cause great distress to businesses. 

“The Government seems to be a little insensitive, while the unions are still living in the past. “In order to correct this situation, a lot more public education on the state of the economy and the country need to be published, so people can act more responsibly and make more informed decisions.

Dalit said if any action is taken in the public sector, it can affect services from T&TEC, Petrotrin and National Petroleum (NP). Kenneth Dalit said any industrial action by employees at key service providers like NP and T&TEC would cause long lines at gas stations, gridlock traffic and reduce productivity.

“Every business and commercial entity would suffer at the loss of electricity,” Dalit said.
 

Manufacturing sector

Dalit said the unions which want more than five per cent increase in wages need to consider that a shutdown could affect the ability of the local market to compete globally. 

The economic survey of Latin America and the Caribbean 2010 Report stated that commerce was one of the hardest hit and it had contracted by 12.7 per cent as sluggish domestic demand reflected in weaker demand for imports, which caused a drop in wholesale and retails activity. 

The T&T Chamber’s Dalit said the manufacturing sector could suffer further decline in wholesale and retail prices if it is deemed unreliable and unable to meet its orders. 

He said a national shutdown could lead to market and production losses. “This would open doors for other foreign companies to enter the market and take over the market share that would further weaken the competitiveness of the manufacturing companies, internally and externally, which is already viewed as low.” 

In the 2010-2011 Global Competitiveness Index released by the World Economic Forum, T&T ranked 84 out of 139 countries surveyed. The potential for major unemployment is real as the slow economy was causing some companies to retrench workers, Dalit said. 

Dalit said those who are clamouring for the five per cent wage cap to be removed are among the highest paid in T&T. Employees at Petrotrin, NP and T&TEC are at the forefront for more money when they have provisions, such as indexed cost of living allowance of about $1,500 a month, in their contract which has cushioned them from inflation, he said. 

He pointed out that the employees the protesting unions represent do not amount to more than 10,000 because the Public Services Association (33,000 workers) and the Water and Sewerage Authority (5,000 workers) have already settled at five per cent.

Construction industry

Mervyn Chin, president of the T&T Contractors Association (TTCA), said a shutdown would have a domino effect as the entire country depends on key resources, such as transport, electricity and major services provided by public servants. 

“This action would further impact on an already struggling construction sector. The sector has been on a standstill since 2010—no one is building houses—which resulted in loss of employment and closure of some businesses.” 

Chin, who said the Government was vague in how it would revive the construction, is concerned that a national shutdown would affect investors’ confidence. He said most developed countries were cutting its spending while unions in T&T want more. 

“We seem to be going backwards. We must start in the end in mind. How can we get labour to work in a stable environment?” Chin questioned. Chin said that Trinidad Cement Ltd, which is in the process of debt restructuring after recording a 2010 $80.3 million after-tax loss—its worst ever performance in 11 years—cannot afford a shutdown. 

He said the steel industry lowered its prices to survive, but a shutdown could lead to a price hike, which would affect downstream markets. “More than 90 per cent of the steel industry is exported, so those major markets are likely to suffer.” 

Dalit agrees that the collective bargaining ought to take place at the workplace. In his view, the unions are trying to politicise the issue and cripple the country. “It’s unfortunate because the people who would be affected the worse are the very workers the unions are protecting,” Dalit said. 

Even though he believed that the unions would not be successful, Dalit joined businesses in calling on unions to rethink their position and understand the repercussions of their actions on the economy.

The Central Bank reported in June that:
• Gross domestic product (GDP) growth in the first quarter of 2010 was 2.3 per cent
• The construction sector is struggling
• The manufacturing sector is operating below capacity
• Consumer demand is still low and the distribution sector is still to pick up after a decline of some 14.2 per cent in 2009
• The unemployment rate has increased to 5.1 per cent
• High liquidity in the market with consumer demand for credit from the banks is declining (4.5 per cent over the last year)

Reproduced from the GUARDIAN MEDIA.