Consequences of the PPC labor strike

The Panama Ports Company (PPC) strike finally ended after thirteen days. During that period transshipment in the Port of Balboa was affected, causing ships to be rerouted to other terminals in nearby countries. The losses caused by this strike reached millions of dollars and the country’s image was tarnished.

Edgar Pineda, spokesperson for Hutchison Ports PPC (Panama Ports Company), said that the most important thing about the strike was “how Panama’s security was jeopardized as a transshipment country … “the ships we lost went to other ports in competing countries because the shipping companies lost confidence.”

The strike was called by the Panama Industrial Union of Transport Waterways and Similar Workers of Panama and the Industrial Union of Port and Similar Workers of Panama (Sindicato Industrial de Trabajadores de Transporte por Vías Acuáticas y Afines de Panamá y el Sindicato Industrial de Trabajadores Portuarios y Similares de Panamá), because they wanted to negotiate the collective agreement for the period 2019-2022 that has not been discussed due to a document presented by Hutchison Ports PPC before the Supreme Court by the company to clarify a sentence given by it.

PPC reported that despite the stoppage and delays, they continued to provide services to customers during that period.

The agreement reached on July 29 includes a technical meeting on the second and last Tuesday of every month with the purpose of reviewing operational compliance and industrial safety.

Almost immediately 95 percent of the employees went back to their posts and work resumed straight away.

PPC and its subcontractors, Serviestiba S.A. and Portuarios y Asociados promised not to retaliate against the workers and even offered productivity bonuses.

The Ministry of Labor was a mediator between PPC and the unions until, finally, both parties decided to reach a compromise. However, the damage was done

Pineda said that “Panama is a privileged country with regards to maritime issues … Panama has the stability that the hubs require, but when there is instability, there is distrust and customers leave.”

This is the second strike in over a year that had taken place in the terminals of Balboa and Cristobal administered by PPC.

Last time it happened was the result of a series of “unfair” dismissals carried out by the company.

Consequences of the strike
The Panama Canal Administrator, Jorge Luis Quijano said that what has really been impacted by this strike is the port activity, not the Panama Canal. However, he stressed that the only ones that benefit from this situation are the ports of nearby countries.

For its part, the Panama Chamber of Shipping, in a press release, said that “Panama cannot continue to risk its competitive advantage with labor strikes and we ask the new Logistics Cabinet for this issue to be a priority, so the government and the private sector can find a mechanism to resolve labor disputes without the workers having to resort to a paralyzation of services offered by the country.”

The Chamber of Commerce and Industry of Panama (CCIAP) also requested the National Assembly for a “law that excludes strike alternatives for areas such as the operation of the Panama Canal. This legislation should be extended to other areas with direct impact on the tranquility required for the normal performance of our economy, especially in fundamental commercial and logistics activities such as seaports, free trade areas and air terminals, among others.”

The CCIAP also highlighted the importance of legal security as a key condition for the arrival of new labor-generating investments. The Chamber reiterated the need to keep these activities apart, considering them strategically vital for the country. “Putting this at risk is putting Panama’s future at risk.”
Source: The Bulletin Panama