Human resources development presentation

2 March 2012 Dr. Paul E. Kent, SVP Nathan Associates Inc. Captain Jasief Putrahardja Prof. Sudjanadi Tjipto Sudarmo Hidayat Mao, SH Ir. Budiyono Doel Rachman, MSc.

Workforce Performance and the Future of Indonesia’s Port Sector

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An efficient, competitive, and

responsive port system that fully

supports international domestic trade

and promotes economic growth and

regional development

An attainable vision

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Indonesia’s Multi-Dimensional Strategy for Achieving its Vision

• Issuing National Port Master Plan and complementary decree

– Establishes investment priorities

– Presents a policy framework that emphasizes

port development

port services competition

human resources development for the shipping sector (ports and maritime)

• Establishing system of landlord port authorities

• Eradication of monopolies

– Benefits of competition

Improved services

Improved working conditions

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Functional Responsibilities for a Restructured and Competitive Port Sector (1) • DGST

Establishing/implementing port policy

National port planning

Port sector advocacy

Regulation

• Port authority tariff guidelines and review

• Monitor port business entity pricing practices and service agreements

• Master plan guidelines and review

• Complaints process/procedures

• Safety and security

• Environmental protection

• Port operational guidelines

Sector human resources development

• Prepare strategy and plan for meeting sector HR development needs

Port Information System

Promoting port competition

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Functional Responsibilities for a Restructured and Competitive Port Sector (2)

•Port Authorities Market analysis/competitive intelligence

Local master/strategic planning

Promoting port competition

Tariff analysis

Concession and lease agreements

Financial management

Customer service

Maintenance of common access areas

Regulation/regulatory compliance

Operational regulations

Safety and security

Environmental protection/contingency planning

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DGST Training Curriculum Requirements

•Competition/economic regulation

•Tariff analysis

•National port planning/planning analysis

•Transportation planning and logistics

•Port operational regulation

•Port environmental planning/analysis

•Safety and security guidelines

•Human resources development/training needs assessment

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Port Authority Training Curriculum Requirements

Management Marketing Planning/ Engineering

Contracts and Regulation

Port Authority Management

Competitive Intelligence

Port Master Planning

Concession/lease Agreements

Strategic Planning Port Marketing Port Development/ Project Management

Operational Regulation

Capital/Operating Budget

Promotion/ Advertising

Operational Performance Monitoring

Safety and Security

Tariff/financial Analysis

Public Relations Terminal Operations

Environmental Protection/Contingency Planning

HR Management Customer Service Maintenance Management

Marketing and Promotion

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Option 1: Status Quo Monopoly TKBM Pool Arrangements

• Port C• Port D

• Port B• Port A

TKBM Coop A

TKBM Coop B

TKPM Coop C

TKBM Coop D

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Improving Labor Performance

Indonesian port labor system

– Reflects pre-reform environment

o System of labor cooperatives/dock labor boards initially created to provide for the welfare of casual workers

o Evolved as labor pool business

o Commonly established as monopolies

Motivation to perform well

– Career progression

– Productivity incentives

– Training

– Cross Training

– Rivalry

– Pride

– Work opportunities based on worker performance

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Ramifications of Monopoly

•Insufficient labor force skills

•Poor work ethics

•Workers not wanted by stevedoring companies

•Payment for services not rendered

•Stevedores prefer to pay the cost even if not used rather than use them

•De-motivated workers

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Options for Labor Pool Arrangements

Restructuring options

1. Maintain status quo

2. Create competition (reflects objective of Shipping Law --“eradication of monopolies”) by

a. Preserving labor cooperatives and allowing them to compete in other jurisdictions

b. Preserving labor cooperatives in their current jurisdictions and create subsidiary labor pool companies to compete for stevedoring assignments/contracts

3. Separate port labor pool from labor welfare

a. Transfer labor pool management responsibility to association of stevedores

b. Allow stevedoring companies to manage their own roster systems and engage casual labor directly

Inducing Competition Scenarios

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Option 2a. Inter TKBM Coop Competition Scenario

• Port C• Port D

• Port B• Port A

TKBM Coop A, B, C, D

TKBM Coop A, B, C, D

TKPM Coop A, B, C, D

TKBM Coop A, B, C, D

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Option 2b. TKBM Coop Inter-Subsidiary Company Competition Scenario

• Port C• Port D

• Port B• Port A

TKBM A Subsidiaries 1, 2, 3, 4...

TKBM B Subsidiaries 1, 2, 3, 4...

TKBM C Subsidiaries 1, 2, 3, 4...

TKBM D Subsidiaries 1, 2, 3, 4...

Transferring TKBM Management Scenarios

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Option 3a. Stevedoring Association TKBM Management Scenario

• Port C• Port D

• Port B• Port A

StevedoringAssociation

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Option 3b. Stevedoring Company TKBM Managed Scenario

StevedoringAssociation

• Port C• Port D

• Port B• Port A

Stevedoring Company A, B, C, D

Stevedoring Company A, B, C, D

Stevedoring Company A, B, C, D

Stevedoring Company A, B, C, D

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Strategy for Improving Individual Worker Performance

Instill pride in workers

Require training certification for casual labor to qualify for placement on rosters, e.g. Basic handling techniques

Stuffing/destuffing

Labor safety

Equipment operation

Specialized handling techniques

Establish career progression system for port labor

Install productivity/quality incentives system

Implement cross training practices