Two trade unions representing employees of Transnet-run ports have opposed the selection of a strategic equity partner to help develop Durban’s container terminal.
Transnet on Monday announced the Philippine company International Container Terminal Services Inc (ICTSI) as the preferred bidder for a 25-year joint venture with Transnet Port Terminals to develop and upgrade Durban Container Terminal Pier 2.
ICTSI is listed on the Philippine Stock Exchange and has a market cap of $8bn (about R144bn). It has been operating for more than 35 years and describes itself as “a leading global developer, manager and operator of origin and destination ports”. It operates numerous terminals in Africa, Europe, the Middle East, the Americas and Asia.
However, the United National Transport Union (Untu) and the South African Transport and Allied Workers Union (Satawu) accused Transnet of bringing in the company before concluding consultations. They also accused ICTSI of violating human rights where it operates, a charge the company denies.
“This shows the disrespect that Transnet management has shown to labour and their disregard [for] engaging in a meaningful consultation process … The consultative stakeholder engagements have not been concluded, but Transnet executive management and board, supported by the government, decided to go ahead and sell a substantial portion of a national asset to a multinational company from the Philippines. This is a cause for concern for labour, as ICTSI has a track record of undermining and violating human rights, and even more so when it comes to labour rights,” the unions said in a joint statement.
Transnet group spokesperson Ayanda Shezi denied shutting out the unions, adding that consultations with labour began in 2021. She said the affected Pier 2 staff would be seconded to a special-purpose vehicle formed with the strategic equity partner.
“Consultations with unions commenced in August 2021. A joint task team was formed including Satawu and Untu at the level of their general secretaries and full-time shop stewards. A transaction adviser was appointed independently advising labour, and all information was shared throughout the process. Transnet believes the partnership will help the organisation to improve the performance and throughput at the terminal, therefore benefiting the country’s export capacity.”
Shezi said the partnership was going to bolster Pier 2’s capacity from 2-million TEUs (twenty-foot containers) to 2.8-million TEUs.
“The partnership with ICTSI will support Transnet’s plans to improve efficiencies within our largest container terminal and is part of efforts to reposition the Port of Durban as a regional container hub port to, inter alia, improve marine connectivity,” she said.
ICTSI will make an upfront cash payment but Transnet has declined to disclose the amounts involved.
Responding to queries from Business Times, ICTSI said it was wrong for the unions to suggest it had a poor human rights record.
“This is a highly regulated industry where human rights and labour rights are quite rightly upheld and ICTSI is a member of the UN Global Compact and supports the UN SDGs [sustainable development goals].”
The operator said it had a track record of “operating successfully in difficult environments”. In Africa it operates terminals in Nigeria, the Democratic Republic of Congo and Madagascar, and is ranked the eighth-largest container terminal operator in the world, according to TEU volumes. It is also upgrading terminals in Manila, Poland and Papua New Guinea and says it has a good working relationship with all its stakeholders.
“ICTSI is continuously upgrading and investing in its terminals; whether it is to upgrade the port infrastructure and handle larger vessel sizes to building surrounding roads, improving technology and bringing in more energy-efficient equipment.”
The company said in ports where it operated it had expanded the capacity of the terminals, invested in technology and people, and improved supply chain processes.
The joint venture partnership is to help reposition the terminal for best practice performance, ensuring growth in volume throughput
— ICTSI
Asked how it plans to beef up the Durban container terminal, ICTSI said: “It is too early to get into specific details as the agreement has yet to be finalised, but as the Transnet announcement mentions, the joint venture partnership is to help reposition the terminal for best practice performance, ensuring growth in volume throughput.”
Last week the Transnet National Ports Authority (TNPA) put operations at Richards Bay port on hold, citing environmental concerns specifically related to poor dust suppression and further concerns around the disposal of waste cargo and pollution of water resources from cargo stockpiles.
The TNPA, which subsequently lifted the suspension, said the condition stated in the stop certificate was for the terminal operator to clean and dispose of any identified waste. The terminal operator was also required to submit a rehabilitation plan to the port authority for its approval.
“As part of the TNPA’s terminal oversight role, routine monthly inspections are conducted in all terminal operator and port user facilities. The TNPA also engages terminal operators and port users on a regular basis to highlight areas of concerns identified by the port authority in their respective facilities,” it said.
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