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German Deal May Be Illegal Say Unions

Shipbuilder unions see B.C.'s industry dying. Their lawyers may sue BC Ferries directors for violating 'fiduciary duty' to citizens.

By Dan Keeton 21 Sep 2004 | TheTyee.ca
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Chris Brown and Bob Olson are longtime shipbuilders who will probably have enough work to keep them until retirement. Yet both were on their way Friday to take part in a boisterous demonstration protesting BC Ferries' decision to contract out some 2,000 jobs in new ferries construction.

Brown, a steel fitter, says he works about eight months a year in ship repairs and related work, which is enough to live on. Olson, a pipefitter, says the main reason he's headed to the protest is to defend the public's interest. Both workers say they worry about the future of an industry that has seen mass closures of shipyards since the mid-Eighties.

"In five years' time, we'll all be gone," says Brown in reference to the aging crew he sees around the shipyard lunchroom. "Unless there's more put into the industry, young people are not going to train for it - it's going to die."

At a press conference last Thursday the Shipyard union said it might take the corporation to court over the deal.

Board refused to meet local firm

George MacPherson, president of  the Shipyard General Workers Federation, the union representing B.C.'s declining shipbuilding workforce, cited a legal opinion from the firm of McGrady, Baugh & Whyte that disqualification of Washington Marine early in the process might be a violation of the "fiduciary duty" of the board of directors to get the best deal for the B.C. public. The opinion also stated the board might also have breached the duty of fairness by refusing to meet with Washington Marine to discuss its qualifications for the bid.

Some 400 shipyard workers from Vancouver and Victoria congregated outside BC Ferries Services offices on Fort Street in Victoria last Friday to denounce its board's decision that day to contract shipbuilding work for three superclass vessels to Flensburger Shipyard in Germany.

'Money belongs to you and me'

That work is estimated to create 2,000 jobs and be worth about $500 million Canadian, says MacPherson, who slammed Ferries' CEO David Hahn for recent comments that BC shipbuilders couldn't qualify for the work. Addressing a sea of red hard hats occupying the street outside the Ferries office, MacPherson declared: "That money belongs to you and me and the people of this province, and that money should be spent right here in this province.

"We say to David Hahn and [Premier] Gordon Campbell that [for] what you've done today here, you should be absolutely ashamed of yourselves. But what I think is more shameful than that is the board of directors...should've stood up and made the right decision. And the right decision wasn't necessarily to give us the job, but it was to allow us...to be part of that bidding process.

"We've said from the start that there hasn't been a bidding process," MacPherson charged. "There's been a pre-qualification that was designed to disqualify us from being part of any bidding process whatsoever."

Secrecy slammed

What riles the shipyard workers is the dropping of the Washington Marine Group during the pre-qualifying round of consideration of potential contractors. The BC company built the three "fast cat" catamaran ferries which while seaworthy cost more than double their estimated budget and were said to be unsuitable for B.C.'s routes. The succeeding Liberal administration sold the catamarans for a mere $20 million.

The fast cats issue has been raised "as an excuse" for disqualifying Washington Marine Group, contends MacPherson, who plans to attend BC Ferries Services annual general meeting in Nanaimo on September 27. The union wants to bring public scrutiny to bear on the selection process which it charges was excessively secretive.

That point was echoed at the rally by Jackie Miller, president of the BC Ferry and Marine Workers Union representing BC Ferries workers. She said the ferries corporation maintains "a level of secrecy that borders on paranoia."

Corporation: B.C. can't build big

Mike Corrigan is the corporation's vice-president of business development who negotiated the contract with Flensburger. He told The Tyee his company has "a great deal of respect for B.C. shipyard workers." The superclass contract represents only three of 22 planned new vessels, Corrigan said. B.C. companies are certainly qualified to bid on work for smaller open-deck ferries on the shorter routes. Notwithstanding the construction back in the late 1980s of the two Spirit-class vessels in B.C. on the Victoria-Lower Mainland run, there are no longer qualified shipbuilders in B.C. to build the large vessels, he said. "If this were 20 years ago, we wouldn't be having this conversation."

Corrigan also said the process of selection was overseen by BMT, a highly qualified "external naval architectural corporation" with offices in Canada, the US and the UK.

"That's bullshit," was the blunt response of former shipworkers' union president John Fitzpatrick in response to Corrigan's claim about there being no qualified shipbuilders in BC. The Spirit Class ferries, the largest in the fleet, were constructed in Victoria, which assembled the hulls, and completed in Vito's shipyard in Richmond. A modest enterprise, Vito's rented certain equipment like large cranes to complete the work on the vessels which have performed superbly on their route, says Fitzpatrick.

The question isn't about qualified companies at any rate, says Fitzpatrick. "It's about the architects, the welders, the pipefitters...they are the real infrastructure and they are the people who build the vessels in B.C."

Privatization the ultimate aim?

As for the fast ferries, through which large-scale aluminum shipbuilding was brought to BC, they were a political football used to embarrass the previous NDP administration, says Fitzpatrick. They were sold for a pittance when they initially could have fetched a much higher price -- $254 million as opposed to the $20 million the Washington Group eventually paid for them - and never had a chance to prove their worth on B.C. runs, he contended. "When the [provincial] election comes up in five months' time, you can be sure we'll be hearing a lot about the fast ferries again," he predicted.

At the rally BC Federation of Labour president Jim Sinclair said he'd discovered that photos of shipyard workers were recently removed from the walls of  the Spirit of British Columbia superferry. These were the workers who built the vessel and its twin, he said. "They want us to forget our history. They want us to forget what we can do."

The labour critics see a much larger motive behind the offshore contract to build the new ferries. In April, 2003, the Coastal Ferry Act changed the former BC Ferry (Crown) Corporation into the BC Ferry Authority and the BC Ferry Services Inc., an "independent" company. As such, it is not accountable to legislative scrutiny or Freedom of Information requests, and was set up to privatize BC ferry routes, they charge. (The NDP opposition charges that Hahn, a US citizen brought in to run the new corporation, will push privatization at an international ferries conference in November.)

Duty yet to be set

The critics also argue that if the German built ferries are subject to the standard 25 per cent duty - BC Ferries is asking the federal government to exempt the project - the work will be more expensive that if done in B.C.

On the ferry to Victoria - a vessel built by B.C. workers - Chris Brown noted, "We're a maritime nation. Do we need a shipbuilding industry? If yes, we need a government with the political will to make it happen. Right now, we have a provincial government that is more interested in privatizing everything."

At the rally, Sinclair held aloft two tickets for passage on The Coho, the ferry that runs between Victoria and Washington State. The tickets are for Hahn and Premier Campbell, he joked. Sinclair said that while travelling, Hahn can observe that Washington requires all its ferries to be built in the state.

Dan Keaton is a Vancouver-based journalist with a focus on labour issues.  [Tyee]

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