Port Hedland tugboat deal unravels as BHP pushes contractors to reduce costs

Friday, August 24, 2018

There are fears BHP will not renew its tugboat contract with Teekay.Port Hedland tugboat workers may give up some of the concessions they won just four months ago, amid fears tugboat operator Teekay may not have its contract to operate in the nation’s biggest iron ore port renewed by BHP Billiton later this year.
Nanjing Night Net

Despite striking a new four-year workplace agreement in November, Teekay and the tugboat unions are back in negotiations over workplace conditions in a bid to help the company retain its contract beyond its expiry around September.

Teekay has written to unions informing them of an urgent need to reduce costs ahead of the expiry, with sources suggesting the tugboat operator may be the latest contractor to feel the force of BHP’s drive to reduce contracting costs.

BHP has recently invited Teekay and rival tugboat operators to tender for the contract, and sources have suggested BHP has given an outline of the terms under which it would ideally like to award the next contract.

There is a belief that BHP will favour bidders whose workforce is employed on an “even time roster”; such as where workers are rostered on for four weeks, then have four weeks off.

The tugboat workers were living under such an “even time” roster prior to November’s workplace deal, which gave them an extra four weeks of annual leave.

BHP has been pushing its entire contractor base for savings over the past three years in a bid to offset the impact of falling commodity prices, and has shown a willingness to change contractors in pursuit of savings and better results, as seen by the installation of mining contractor HSE on Queensland coal mines in place of Thiess and Leightons.

BHP sent a clear message to Teekay and the tug workers in December when it introduced a second tugboat contractor, Rivtow, to run four tugs at Port Hedland.

Teekay declined to comment on the sudden resumption of negotiations with the tugboat unions, while BHP confirmed Teekay’s contract would expire later this year.

“BHP Billiton has contracted Teekay Marine to provide towage services in the Port Hedland Port for more than ten years. BHP Billiton’s contract with Teekay will expire this year, and in anticipation of this, a competitive tender process is currently being conducted. Teekay Marine was invited to tender as part of this process,” said a spokesman for BHP.

BHP would not comment publicly on whether it had indicated the workplace terms it would like to see under the next contract.

Port Hedland is the epicentre of Australia’s iron ore export industry, and the tugboats are crucial to the operation of the port because the ships carrying the iron ore to Asia cannot enter or leave port without the assistance of tugs.

Australian Maritime Officers Union spokesman Robert Coombs, who represents one of the three classes of workers on the tugs, said tug workers may be willing to give up the extra annual leave if Teekay were successful in the tender.

“The best conditions are not worth anything if you don’t have a workplace,” he said.

“If Teekay wins the contract we may have to consider a variation [to the workplace deal struck in November].”

The Australian Institute of Marine and Power Engineers, which represents a different class of tug workers, has indicated it is willing to negotiate with Teekay, and would potentially be willing to part with the extra annual leave entitlements won last year.

“We stand prepared to engage in discussions aimed at retaining your current business case in Port Hedland,” the union said in a letter to Teekay this week.

This story Administrator ready to work first appeared on Nanjing Night Net.