Dr Rupert Tipples
29th November 2006
Primary products have been New Zealand’s main export items for more than 150 years and the risk that transport systems may fail, or be disrupted by forces beyond our control, is ever present.
History has shown how damaging a supply-chain failure can be. The port stoppages of 1890, 1913 and 1951 were major events in our post-colonial history.
While aviation and telecommunications have brought New Zealand closer to our major export markets, the fact remains that Europe is a long way off and we are utterly dependent on ocean-going transport to maintain the flow of goods.
In each of the major port strikes the government of the day won, with strong support from the farming community. From the late 1970s major regulatory changes occurred to make ports more flexible and competitive. Though there have been further changes to both port ownership structures and the way labour is organised, the ports are still a fertile ground for unrest.
One of the main reasons for this is that the port owners globally are pursuing a strategy which aims to employ workforces that are fully utilised, low-cost and available on a just-in-time basis. In the words of one researcher (Green), they want to employ only atomized workers…who are isolated from each other, compete with each other for work and can be called to the docks on short notice at the employers discretion to load or unload a ship that is still en route.
History is repeating itself. The increasing casualisation of labour over the past decade means that port workers are once again facing many familiar problems, including insecurity of employment and intensified hours of work. Adding to the volatility of these arrangements, is the emergence of supply chain management (SCM) concepts as a guiding model for international trade. In response to increasing demands with respect to quality, food safety, and choice, SCM aims to add value to the products as they pass through each step of the chain.
The technical innovations that have promoted productivity have also led to great interdependence between employer and employee groups. But there has been little research on how the movement to a more managed supply chain has impacted on participants’ HR polices and employment relations. There has also been a failure to consider the employment relations implications of policies such as outsourcing, casualisation, work intensification and their impact on employer-union dynamics.
At the same time, technology is allowing workers with similar disputes and issues to organise themselves globally. For example, when a privatised port employer in Liverpool dismissed strongly unionised workers, the affected workers used the internet to organise an international day of action affecting 105 ports in 27 countries.
These events show that there is a need for New Zealand to review its vulnerabilities to evolving supply chain issues. Just as food industry operators have to identify a series of critical control points for food safety, our primary industries must identify where the real hot spots lie in our long international supply chains, and to plan for greater resilience to employment relationship problems.
To understand these vulnerabilities, it will be necessary to look beyond the potential for direct confrontations within the supply chain. Our most recent disruptions have occurred through the actions of outside parties, which are very much harder to anticipate and control. Examples include the 2001 action by MAF veterinarians, resulting in 9000 meat workers being stood down for a week; the 2002 negotiation of a collective employment agreement for Customs officers; and last year’s dispute involving Quarantine Service staff which affected biosecurity. (The latter had a less direct linkage, but if an exotic disease were to occur during such a dispute the impact across the agricultural sector would be huge).
Based on a recent case study of the apple industry, it would seem that New Zealand’s major supply chain threats relate to the highly unionised ports in Europe, parts of the supply chain which rely on third-parties (such as border authorities) and sites where the relationship between unions are poor.
A recent dispute at UK supermarket chain ASDA highlighted the employment relations ‘hotspot’ that distribution centres have become. ASDA was pursuing the anti-union line of its parent company, Wal-Mart, and trying to prevent unionisation of its distribution centres. The GMB (Britain’s General Union) called its 25,000 ASDA members out on strike and crippled the company’s fresh produce sales. ASDA became so desperate for fresh produce that they were even purchasing product from their competitors. Eventually ASDA recognised the union and avoided further strikes. While the recent Progressive Enterprises dispute was not about union recognition, it also illustrated the vulnerability of supply chains to distribution centre disputes.
Primary sector managers, therefore, should carry out a thorough risk identification process. Where high risks are identified they have to decide whether to avoid the problem, by going around it, perhaps by a less convenient route with possible side effects, or whether they can afford to wait for it to be resolved, or whether to confront it.
Direct confrontation was clearly the dominant strategy for New Zealand through 1980s and 1990s but for our trade with Continental Europe this is probably going to be less feasible. It seems likely that more co-operative solutions will have to be found.
Fresh produce supply chain managers need to review their supply chains to identify their employment relations critical control points, where their supply pathways could be interrupted. Then they need to prepare their contingency plans if any such dispute arises – forewarned is forearmed.
Dr Rupert Tipples is Senior Lecturer in Employment Relations, Agriculture and Life Sciences Division, Lincoln University. This article is based on a paper co-authored by Dr Sandra Martin.