Pan-Pacific Conference XXXIV. Designing New Business Models in Developing Economies

divested fifty-nine percent of its shares in FPCL at
more than FJ$100 million. Two key agreements
were signed – Share Sale & Purchase Agreement
and Shareholders Agreement. Under this agreement,
Government maintained forty-one percent of the
shares in FPCL, Fiji National Provident Fund
(FNPF) owns thirty-nine percent and Aitken Spence
PLC owns twenty percent. This means eighty
percent of the shares in FPCL remains Fijian
owned. FPCL transferred all real estate to a
government holding company Asset Fiji Limited
who leased the assets for ports operations to FPCL.
Government owns all the land interest. Under the
shareholders agreement, Government can appoint
four directors, FNPF can appoint three directors and
ASPLC can appoint two directors to the FPCL
board.
Problems and Challenges of Reforms
Board of Directors and Management
FPCL and its subsidiaries are controlled by a board
of directors who are responsible to oversee
company performance, implement correct and good
governance policies, achieve corporate targets and
work within budget. The board was accountable and
needed to provide regular financial reports and
update on business performance. There were issues
with the board members and management in terms
qualification and proven track record in the port
industry. CEO abused office and practiced
mismanagement. There were myriad of changes to
the appointment of board members. It was claimed
that social obligations were political, board
members lacked qualification and experience and
politically appointed board did not help in meeting
its commercial objectives. Qualified and
experienced people refused to be part of the board
due to travel bans imposed by international
countries driven by military-led government. All
decisions had to go through the government, new
strategies and plans were declined by the
government. A number of political decisions were
made which duplicated the functions of Maritime
and Ports Authority of Fiji (MPAF) and PTL
resulting in customer confusion and dissatisfaction
in dealing with the two entities.
Employees
Reorganisation led to downsizing the workforce due
to port restructure. PAF had implemented Voluntary
Severance of Employment (VSE) package to release
staff to establish MPAF. There was high
redundancy payouts. PAF failed to prepare
employment and industrial plan under PE Act
(1996) and denied consultation requests from Fiji
Public Service Association (FPSA) which led to
legal actions filed against PAF and government but
these actions were dismissed by the court. This
delayed the establishment and operation of MPAF
and PTL. All employees reapplied for their
positions and MPAF took over the employee legal
claims from PAF.
Individual three-year employment contracts,
redesign of work pattern to avoid overtime and
penalty rates, more flexible days and working hours,
staff rewards and performance reviews were
implemented. (Narayan, 2013). PTL changeover of
civil service permanent contract to individual
contracts led to labour actions and were resolved in
court (ADB, 2002). Despite PTL educating the
workers about the betterment of changes through
better working conditions, led to the resistance to
change due to union influence. PTL faced court
proceedings in this matter. MPAF hired
professionals to handle legal matters in-house and
many staff became FPSA members. MPAF had to
accept the compulsory recognition of union and
there was negative and ineffective union and
management relationship. MPAF did not allow
union fees to be deducted from pay which resulted
in the collapse of union. MPAF and PTL used
traditional Fijian ceremonies and protocols to get
the ethnic Fijian support towards reforms and left
union aside (Narayan, 2013). Workers of both
entities have formed Longshoreman’s Union who
have regular meetings and consultations.
Skills Development and Corporate Culture
Staff were continuously trained to keep up with
technological advancement after the reforms (FPCL,
Website). All staff were trained on effective usage
of computers and sent for training at respective
institutions. FPCL conducted seminars for
management and engineer’s from regional ports to
promote co-operation. FPCL has implemented
Performance Management System (PMS) to
promote change to a performance based culture
through leadership. Staff did not accept this change
as they saw it as monetary-oriented and favored to
those who were on higher positions. An awareness
programme was organised to educate employees
and clear the misunderstandings.
FPCL and PTL faced huge challenge of culture
change. There was high absenteeism with previous
civil service work culture (Narayan, 2013). FPCL
organises Sports Day for the staff, management and
their families to promote harmony. Board and
management staff discuss reviews, corporate plans,
statement of corporate intent and budget in
consultation. FPCL continuously holds meetings
with customers to take their feedback and resolve
any issues.
Organisational Structure
FPCL realigned its organisational structure in
October 2008 to improve operational efficiency and
financial returns. Cost reduction and processes were
streamlined to remove duplicate functions and
mainly to improve management responsibility,
accountability and transparency. Change realigned
the marine and stevedoring in single Ports
Operations Division. FPCL manages and controls
all the commercial marine operations of the ports
143