San José, Costa Rica, since 1956

Loan promise ends port strike

From the print edition

By Isabella Cota Schwarz | Special to The Tico Times

For fruit producers in Costa Rica, eight days of paralysis at the country’s main shipping port felt like years.

After the Atlantic Port Workers Union called a general strike June 12, a week-long battle with the government ensued and left producers and exporters with burdening costs and losses.

Striking workers at the Atlantic Port Authority (Japdeva) claimed that an exclusivity clause in a contract signed with Dutch multinational company APM Terminals to develop the port would leave many unemployed. Union leaders urged the government to annul the clause.

A week later, after almost full paralysis at the docks at the Caribbean ports of Moín and Limón, and two brief riots in the streets of Limón, President Laura Chinchilla’s administration and the dock workers union reached an agreement and set the ports working again. 

Limon Strike 2

Police took control of the ports and restored order with temporary workers. Government and union negotiators reached a deal to end the strike late Tuesday. Courtesy of Public Security Ministry

Through a $70 million dollar loan, the parties agreed to modernize the docks and buy new equipment. The government promised to pay $40 million, while Japdeva will cover the remaining $30 million. The clause was left untouched.

On Wednesday Finance Minister Edgar Ayales confirmed the approval of the loan after a meeting with offcials from the Central American Bank for Economic Integration. Ayales said there will be two loans, one for dock modernization, and another to fully equip them.

Last August, the Chinchilla administration signed a nearly $1 billion contract with APM Terminals – the largest private concession in Costa Rican history – to renovate the Moín port terminal. 

The Public Works and Transport Ministry said the first part of the project would be finished by 2016. It would have a breakwater of almost 2.5 kilometers, 13 cranes and six docking berths large enough to serve Post-Panamax ships, which are capable of carrying up to 12,000 shipping containers.

Since the August announcement, however, progress has been bogged down by union protests and lawsuits aimed at blocking the concession.

Meanwhile, damage to producers lingers. Pineapple, melon and banana companies were the worst hit, and they now face burdening costs and losses in sales.

“When dealing with perishable produce like pineapples, you need to think of additional refrigeration and storage costs for that whole week,” said Christian Herrera, owner of one of the country’s largest pineapple producers and exporters, Del Huerto, and former president of the Pineapple Producers Chamber.

“It was one week, but this strike has felt longer than any other,” he said.

For Herrera, the strike cost him $13,000 for refrigeration and storage costs alone, while his estimates for total losses are around $40,000. Containers shipped a week late will deliver fruit soon to expire that will not last on supermarket shelves.

“This will definitely be reflected in the price, because I’m not exporting just pineapple, I’m exporting high-quality pineapple. Buyers are not going to pay full price for that shipment,” he said.

Pineapple exports for the first three months of this year grew by 18 percent compared to the same period last year and totaled over $200 million. 

Seventy-six percent of the country’s exports are shipped through Limón and Moín, which gives workers at these docks leverage on the negotiating table. “We managed to strike a balance,” said Allan Hidalgo, head of Japdeva. 

“We didn’t budge to the union’s demand of changing the exclusivity clause and we also got resources to modernize and better equip the ports,” he said.

It is now up to the government to present the $70 million dollar project before the Legislative Assembly and convince lawmakers to approve it.

The use of new equipment could translate to $3 million dollars in additional profits per year, Hidalgo said.

Still, Herrera remained skeptical.

“These resources haven’t been approved, and if December comes around and the workers don’t see an improvement, I’m afraid this will happen again,” he said. “I don’t think this is a long-term solution; it’s possible that they just kicked the can down the road.”

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