Journal o f Philippine Development P_S Number Nineteen, Volume XI, No. 1, 1984 THE IMPACT OF THE CAGAYAN DE ORO PORT DEVELOPMENT PROJECT ON SKILLED AND UNSKI LLED PORT LABOR EMPLOYMENT BedaS. Tumampos I. INTRODUCTION It is generally accepted that tranportation is a very important factor in the process of development and that the absence of trans- port facilities significantly slows down the realization of the growth potential of a certain area. In most countries, sea transport exists primarily for enhancing international trade. In the Philippines, owing to its geography, sea transport is not only for foreign trade, but is also a crucial part of the domestic trade network. Sea ports, therefore, are an integral part of the country's total transport system. For that reason, port development is a major component of the over- all transport development program in the Philippines. This paper will focus on the employment impacts of a development project for one of the Philippines' most important ports, Cagayan de Oro. I I. BACKGROUND Cagayan de Oro's port is considered the most important port along the Northern coast of Mindanao. Located in Macajalar Bay near the mouth of the Ca_gayanRiver, it is the largestpublic port in Northern Mindanao, principally servingthe city of Cagayan de Oro and the provinces of Misamis Oriental and Bukidnon. The port caters to both foreign and domesticvessels.For outward shipment, the maindomesticcargoescarry agriculturaland wood basedproducts, and for inward movement, consumer goods, fertilizers and general cargo imports of machinery, and exports of timber and sugar are carried. The development of the agricultural industriesin Bukidnon lunior Statistician, Philippine Ports Authority, Cagayan de OroCity. 133
Transcript
Journal o f Philippine Development P_SNumber Nineteen, Volume XI, No. 1, 1984
THE IMPACT OF THE CAGAYAN DE ORO PORTDEVELOPMENT PROJECT ON SKILLED AND UNSKI LLED
PORT LABOR EMPLOYMENT
BedaS. Tumampos
I. INTRODUCTION
It is generally accepted that tranportation is a very importantfactor in the process of development and that the absence of trans-port facilities significantly slows down the realization of the growthpotential of a certain area. In most countries, sea transport existsprimarily for enhancing international trade. In the Philippines,owing to its geography, sea transport is not only for foreign trade,but is also a crucial part of the domestic trade network. Sea ports,therefore, are an integral part of the country's total transport system.For that reason, port development is a major component of the over-all transport development program in the Philippines. This paper willfocus on the employment impacts of a development project for oneof the Philippines' most important ports, Cagayan de Oro.
I I. BACKGROUND
Cagayan de Oro's port is considered the most important portalong the Northern coast of Mindanao. Located in Macajalar Baynear the mouth of the Ca_gayanRiver, it is the largestpublic port inNorthern Mindanao, principally servingthe city of Cagayan de Oroand the provinces of Misamis Oriental and Bukidnon. The portcaters to both foreign and domesticvessels.For outward shipment,the main domesticcargoescarry agriculturalandwood basedproducts,and for inward movement, consumer goods, fertilizers and generalcargo imports of machinery, and exports of timber and sugar arecarried. The development of the agricultural industriesin Bukidnon
lunior Statistician, Philippine Ports Authority, Cagayan de Oro City.
133
134 JOURNAL OF PHILIPPINE DEVELOPMENT
and the industrialization of Misamis Oriental have generated moretraffic in the port. Although the sugar industry in Bukidnon is nearerDavao port than Cagayan de Oro, the Bukidnon Sugar Corporationships its products for export through Cagayan de Oro because ofthe road network.
III. PROJECT DESCRIPTION
At the time the Cagayan de Oro port development project wasproposed in 1972, the existing port facilities consisted of a 315-meter by 12-meter reinforced concrete wharf with a total port areaof 12,400 square meters. Of this total area, 2,950 square meters wereleased for private buildings. The project was designed to improveport facilities so that growth in traffic could be accommodated.
The United Nations Development Programme-International Bankfor Reconstruction and Development (UNDP-IBRD) feasibility studyin 1972 recommended three extensions of 160 meters to be carriedout in the period up to 1982.1 Although the phase 1 port expansionwas proposed in 1972, it did not start until 1976. The _52.8million project, which was supported by a loan from the WorldBank, was completed in 1979. It provided a temporary respitefrom queuing at the port which had become persistent duringthe 1970's. Phase I included a rehabilitation of the existing port,an extension of the marginal wharf by 160 meters, and constructionof two transit sheds covering an area of 4,800 square meters, anadministration office, a fire station, amenity blocks, and openstorage areas of 15,200 square meters. This expansion increasedthe total port area from 1.24 to 7.14 hectares. The queuing has not,however, been eliminated and the continuing growth of traffic nowrequires further expansion.
An economic appraisal of additional port improvement work,conducted in 1979 concluded that three multipurpose extensionswould be needed by 1990; These extensions are economicallyjustified, principally because escalating queuing costs would bereduced. The first two extensions could be set up by 1984 and the
third by 1990. However, while in strict economic terms the con-struction of three berths should be phased,financial cost effectiveness
1. Philippine Ports Feasibility (PPA) Studies: 1972. Volume II, "Cagayan de Oro,"undertaken by Sir William Halcrow and Partners.
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dictates that they be built in one operation. 2 Thus, the expansionwhich is to start very soon comprises the following:
1. Extension of the quay with a total of 415 meters and a draft of10.5 meters.
2. Reclamation of 10 hectares as back-up area.3. Construction of a 5,000 square-meter open transit shed and a
5,500 square-meter container freight station (CFS) shed.4. Establishment of a control gate parking area complex.5. Completion of a 500 meter long access road.
The total investment for the civil works including supervision andtaxes would come to _237.50 million (at 1979 prices).
IV. SCOPE OF THE STUDY
This study is' limited to the impact of Cagayan de Oro Phase Iport development project on skilled/unskilled labor employment inthe port. The study looks into the increase�decrease of labor employ-ment, the change in the proportion of skilled and unskilled labor, andthe change in labor income before and after port expansion. Itfocuses not only on labor employment inside the port area but alsoon employment outside the port area in port-related activities.
Port development may take on the form of new investments toincrease the physical capacity of the port, and new rules or systematicways of operation which will make it possible to maximize thephysical capacity of existing facilities. For this study, port develop-ment was taken to mean an increase in the physical capacity of theport.
Forklift operators, winchmen, foremen, gang bosses (capataz),checkers, truck drivers, and custodians are considered skilled workerswhile laborers, porters and sweepersare considered unskilled workers.A gang consists of a group of men, usually 12, including the gangboss(capataz) which is responsible for the discharging�loading activities ofa vessel.
2. Philippine Ports Feasibility Studies and Design Project; 1979. Volume II, "Cagayande Oro," undertaken by the Philippine Ports Authority (PPA), the National Economic andDevelopment Authority (N EDA) and Renardet-Sautl-lc¢/Hoff and Overgaard.
136 JOURNAL OF PHILIPPINE DEVELOPMENT
V. CONCEPTUA L FRAMEWORK
Improved port facilities should result in smoother port trafficfor both cargo and passengervessels.Since vesselscould be berthedproperly, movement of cargoes can be made faster and more ef-ficient because there would then be enough space for the movementof cargo handling equipment. Faster turnaround time would generatemore traffic and trade volume. This means more skilled workers
would be needed to operate modern cargo handling equipment. Be-cause of their skills, it is expected that their income will increase. Onthe other hand, unskilled workers will decreasedue tO the use of themachines, but there is the possibility that their income will increasebecause of their opportunities to indulge in small businessesin theport.
Primary data were gathered "from the port laborers through aquestionnaire developed for that purpose. Unstructured interviewswere conducted with the management of the arrastre operators andshipping lines. The research utilized data available from the arrastreand stevedoring operators, shipping lines, and Philippine PortsAuthority.
VII. METHODS OF ANALYSIS
This study used the before-after method of analyzing the availabledata. The data from 1976 to 1978 were considered the before datawhile those for 1979-81 were the after expansiondata. The followinghypotheseswere tested:
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I
1. Port development is expected to lead to an increasednumber ofskilled workers in the port.
2. Port development is expected to increase the income of portlaborers.
3. Port development is expected to lead a decreasein the numberof unskilled workers.
Due to the use of more machines in cargohandling, skilled laboris expected to rise while unskilled labor is expected to drop. Sinceskilled labor demandshigher pay, an increasein the income of portlaborers isexpected.
VIII. PRESENTATION AND ANALYSIS OF FINDINGS
According to Philippine Ports Authority (PPA) policy, thereshould only be one integrated arrastre/stevedore operator for everypublic national port coming under the jurisdiction and control ofthe PPA. In compliance with this, 12 arrastre and stevedoringoperators in the public port of Cagayan de Ore were integrated in1976 and named the Gold City Integrated Port Services, Inc. (IN-PORT). This is the only arrastre and stevedoring company that isallowed to operate inside the port of Cagayan de Ore. However,some small arrastres (usually called labor contractors) operateoutside the port area.
Some shipping companies, especially those with containervessels, employ skilled and unskilled worker in their warehousesand container yards outside the port area. The arrastresoutside theport are hired by the shipping lines, shippers and INPORT duringtimes when their laborers could not handle the workload, whichoften happenswhen there are severalvesselsin port at once.
Tables 1-3 show labor employment inside the port area. Asshown in the tables, there is a declining trend in almost all positionsfor both skilled and unskilled labor from 1976 to 1981. Skilled
labor dropped by 8 percent after the completion of the port expan-sion. Unskilled labor dropped by 20 percent. Total labor employ-ment dropped by 17 percent. The decline in the number of forkliftoperators and gang bossesis due to the containerization of cargoesand to other improvements in cargo handling efficiency. Tables4-5 provide data on average labor employment in the port areaduring the three years before and after wharf expansion. It will benoted in Table 4 that only gate checkersaccount for a largeincrease.
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TABLE 1LABOR EMPLOYMENT INSIDE THE PORT AREA OF CAGAYAN DE ORO
(Number)
Before port expansion After port expansionPosition
The decrease in the number employed for vessel checker, out-
going checker and cargo custodian is due to the the presence of twoI
transit sheds covering an area of 4,800 square meters and open istorage areas with a total area of 15,200 square meters which areused by the shipping companies for their cargoes instead of main-taining their warehouses. Prior to the port expansion, some shippingcompanies maintained warehouses inside the port. These companies
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availed themselves of the servicesof the arrastre operating inside theport. At the time the completed port expansion was turned overto the Philippine Ports Authority for management and supervision,the lease contracts of the private buildings expired. The contractswere not renewed. The companies are now making use of the newstorage facilities inside the port. Furthermore, some shipping lineswhich used to maintain their warehouses outside closed their ware-
houses and are now also using the new storage facilities. There is nowalso a systematic method of withdrawing cargoes through one waytraffic with strict control at the exit gate. This means that lesspeopleare now needed to man the storage areas.
As can be seen in Table 5, total crop tonnage handled at the portof Cagayan de Oro has continued to increase. During the period1976-81, the average annual increase i_, tonnage was 9.54 percent.The first container vesselsstarted to call in December of 1978 just atthe time when the contractor had turned over the completed ex-tensions of the wharf although rehabilitation of the old quay wasstill going on. Container vessels have increased rapidly since then,leaping from 64,188 tons in 1979 to 198,815 tons in 1981. For ageneral cargo vessel, the arrastre and stevedoring operator employson the average 2 gangsof 12 men each to discharge and load cargo.Each group has an average labor productivity of 12 tons per grossgang hour. In a container vessel only one gang of 10 men is needed.Containerization, which is the present trend, is responsible for thedecrease in the demand for port labor, particularly the unskilledworkers inside the port.
When container operation;s started, shipping companies withcontainer vesselshad to put up their own container yards and ware-houses outside the port area since storage facilities inside the portcould not accommodate several containers. Companies also are notallowed to strip and stuff containers inside the port. These companiesemploy skilled workers for their forklifts and trucks. They h:ireunskilled laborers from arrastres operating outside the port on contractbasis. Table 6 shows the port labor employment outside the portarea. As can be seen there, the drop in labor employment insidethe port is offset by the rise of labor employment outside the port.As mentioned earlier, containerization is responsible for thedrop in labor employment inside the port but this decline is offsetby the demand for skilled as well as unskilled port labor outside theport. Putting the two together, total port labor employment has in-
TABLE 5.CARGO THROUGHPUT AT THE PORT OF CAGAYAN DE ORO IN METRIC TONS
TOTAL PORT LABOR EMPLOYMENT, PORT OF CAGAYAN DE ORO(Number)
Before port expansion After port expansionPosition
1976 1977 1978 1979 1980 1981
Skilled labor 238 287 287 324 330 329
Unskilled labor 739 801 743 810 972 1,092
TOTAL 1,022 1,088 1,030 1,134 1,302 1,421
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A t-test of correlated samples was used to test the hypothesisthat port development leads to an increase in the income of portworkers. In the computation, the average income of port workersfrom 1976 to 1978 was considered the before-expansion incomewhile the average.from 1979 to 1981 was regardedas the after-expansion income. It was assumedthat 10 percent of the averageincome after the expansion was due to wage increasesto meetinflation. Thus, 10 percent was deducted from the average incomeafter port expansion. From the 354 respondents, very few indicatedincome other than their wages. The t-test reveals that there is asignificant difference between the before and after expansion incomeof port workers.
A survey of 309 workers inside the port wasconducted. Most ofthe skilled workers are in the agegroup 30-39 while 44 percent ofthe unskilled workers are in age group 20-29. In the samesurvey, 26port workers or 8 percent were promoted from unskilled to skilledpositions after the completion of the port development. Laborerswith high educational qualifications were made checkers, foremenand gang bosses.There were three respondents who said they weredemoted. It should be noted here that 28 percent of skilled workershad completed high school or more. Among unskilled laborers, thatnumber was8 percent.
Among the discontented group were the sweepers. Althoughthey have had little increase in wages,the area assignedto them forcleaning had increased. Furthermore, the management has beenstrictly imposing cleanliness in the port. Although both skilled andunskilled port workers expressedvaried degreesof discontentmentwith their wages,they felt that they havebenefited from the improve-ment of the port in terms of safety, cleanlinessand spaciousareastomove around. For the unskilled, manual labor hasbeen lessened.Thecarrying of heavy sacks, bundles or boxes on workers' backs fromand to a vessel was a common scene before 1979. With the im-
proved facilities, however, most cargoesare now prearranged in apallet for a forklift. The laborers' taskshavebeen reduced to hooking/unhooking, transferring cargoes from and to a pallet, and arrangingthesecargoesin the storageareasor inside the vessel.
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IX. SUMMARYAND CONCLUSIONS
The _52.8 million port development project of Cagayan de Orois an integral component for the sustainedgrowth of Cagayan deOroand the development of its hinterlands,aswell asNorthern Mindanao.The completion of the project easedcongestion in the port, makingmovement of cargoes faster. The improved port facilities haveattracted bigger vesselsto call, with more cargoes to dischargeandload. A coconut processingindustry has diverted its shipments toCagayan de Oro becauseof the containers that can assuresafety ofits cargoes.
A new development which may be attributed to the port ex-pansion is containerized cargo handling. Less workers are nowneeded in the discharging/loading of containers but more workersare necessaryin the stripping and stuffing of thesecontainers.
The improved port facilities brought about increased cargotraffic which led to increasedlabor employment in the whole portfor both skilled and unskilled workers. Employment inside the portarea declined for both skilled and unskilled workers. Overall, theproportion of skilled laborers has increased. Containerized cargohandling has also had some identifiable impacts. Less workers arenow needed for the dischargingand loading of containers, but moreworkers are neededfor the stripping and stuffing of containers.
