January 13, 2016

Alcoa moves to end illegal industrial action


ASP Ship Management and Alcoa took decisive action today to end protracted illegal industrial action by the Maritime Union of Australia (MUA) at the Port of Portland. This involved replacing MUA seafarers on the MV Portland who had refused to sail the vessel to Singapore for delivery to its new owners.
 
“Alcoa has been extremely tolerant and given the MUA and its members every opportunity to stop their illegal industrial action,” said Alcoa of Australia Managing Director Michael Parker.
 
“Instead, the MUA has held our ship hostage for two months; disrupting the lives of other crew members, disrupting operations at the Port of Portland, and threatening the Portland community with the loss of cruise ship visits.
 
“The MUA acted as if it was above the law, defying Fair Work Commission and Federal Court rulings; leaving the ship managers with no option but to replace the MUA crew – with the full support of Alcoa.”
 
The MV Portland has been stranded in Portland since 14 November 2015, despite orders from the Fair Work Commission on 17 and 21 November for the industrial action to stop, and despite orders from the Federal Court on 8 December restraining four of the crew members from engaging in industrial action.
 
“This has gone on long enough. Before Christmas I gave my personal assurance to the MUA leadership that provided the MV Portland departs for Singapore, Alcoa would meet with the MUA in the new year to discuss shipping alumina from Western Australia to Portland, including the use of Australian crew, once the current 12 month temporary shipping licence has expired. Despite this, the illegal industrial action continued.
 
“On 1 January Alcoa agreed to allow the ship to move to anchor, rather than sail to Singapore, so that a cruise ship could visit Portland. The MUA had waited to the eleventh hour to move the ship, placing unnecessary stress on the Port, Portland businesses and the local community.
 
“With another cruise ship due in the Port, plus shipments of raw materials to the Portland smelter due to arrive soon, Alcoa was not prepared to tolerate this situation any longer.
 
“The MV Portland has been sold and must be delivered to Singapore this month. Replacing the MUA members of the crew was the only option left in order for Alcoa to meet its contractual obligations.”
 
BACKGROUND
The MV Portland is owned by Alcoa Portland Aluminium Pty Ltd which holds a contract with ASP Ship Management Pty Ltd (ASP) to operate the vessel. The crew of the MV Portland are employees of ASP Ship Management.
 
With the price of aluminium at levels not seen since the global financial crisis, the global aluminium industry, and in particular aluminium smelters, are under considerable pressure, with many running at a loss.
 
In Australia, Alcoa’s focus is on reducing operating costs and improving productivity to help all our facilities remain internationally competitive, both now and into the future.  Alcoa Inc announced on 2 November 2015 it would idle three smelters in the United States, and on Thursday 7 January 2016 that another smelter in the US will be closed (information about these closures is available on the Alcoa Inc website at www.alcoa.com).
 
One of the many cost saving measures being taken at Portland Aluminium smelter is to sell the 27 year old MV Portland in an attempt to help protect approximately 700 direct jobs and many more indirect jobs associated with the smelter.
 
The savings to the smelter are not insignificant – more than $6 million per year.
 
The MV Portland is near the end of its operating life and is scheduled for a statutory dry-dock in mid-January 2017. The cost to keep it operational is expected to be in the $millions.
 
Alcoa chose to sell the vessel and replace it with a more cost efficient method of delivery of alumina from Western Australia to the Portland Aluminium smelter.
 
The MV Portland is crewed by ASP. There are approximately 40 people in the total crew pool, with 19 on the vessel at any one time, including seven MUA members. Alcoa has been advised that two of the MUA crew members live in Portland.
 
 
TIMELINE OF EVENTS

  • In June 2015 Alcoa issued a Request for Quotation (RFQ) for 12 months shipping services (foreign or Australian flag) to approximately 15 shipping companies, including the only company with Australian flag ships that Alcoa believes had the capability to deliver the service. That company did not respond to the RFQ.
  • Alcoa subsequently applied for and was granted (on 22 October) a Temporary Licence under the Coastal Trading Act 2012 (Cth) for 17 voyages using a foreign flag vessel to transport alumina from WA to Portland up to October 2016. Alcoa was not advised of any objections to the licence application.
  • The MV Portland arrived in Portland on 11 November 2015 and, after discharging its load of alumina, was to sail to Singapore on 14 November to be sold. The MUA members of the crew refused to sail. ASP lodged an application with the Fair Work Commission for an order that the industrial action stop.
  • On Tuesday 17 November the Fair Work Commission ordered that the industrial action stop. The MUA appealed that decision and on Saturday 21 November the Full Bench of the Fair Work Commission dismissed the appeal and ordered that the industrial action stop. ASP then directed the ship to sail, but was told a crew member was sick. ASP was unable to secure a MUA seafarer to make up the minimum safe manning needed in order to sail, and the vessel remained in Portland. Alcoa understands the engineers and officers on board have not participated in the industrial action.
  • ASP initiated proceedings in the Federal Court seeking an injunction against the MUA and several of its members. The Federal Court on Tuesday 8 December gave orders restraining four of the crew from engaging in industrial action. This order would have enabled ASP to achieve the minimum safe manning needed in order to sail. However, MUA members of the crew have continued to refuse to sail. Alcoa understand attempts to have other MUA seafarers replace them have also failed.
  • The MUA initiated action in the Federal Court challenging the validity of Alcoa’s Temporary Licence. On Thursday 17 December the full bench of the Federal Court determined that Alcoa’s Temporary Coastal Licence was valid.
     
    ENDS
     
    Media contact: Brian Doy on 0404 800 690 or brian.doy@alcoa.com.au