Limon’s Redevelopment – Stalemate Between Union and Government

The controversy between private enterprise and a government control port has set the union and government at odds with each other.

If you love historical redevelopment, it is so easy to see how Limon would be the perfect candidate,  and at the same time become a world-class port bringing in billions to Costa Rica. Its shipyards with historical railroad equipment, the downtown look of Caribbean/New Orleans, with its Victorian homes flaunting long balconies and colorful façades add old-world charm . And not counting a gateway for cruise ships with millions of tourist dollars, just ready to be dumped into the community.

Eight – 10 years ago local businesses started talking about redevelopment, and when Costa Rican [then]President Oscar Arias signed a bill (about 18 months ago) providing $80 million dollars to the Caribbean port town to initiate a full-scale renovation project in five areas, restoration of cultural buildings, drainage and sanitation improvements, enhancement of municipal functions, small business development and most importantly, port modernization. That said, it would boost the goal of attracting nearly $900 million in additional private investments. Limon looked like  it was on it way to become Central America’s first New Orleans style city and with a modern port  to  attract new shipping businesses in the Caribbean area.

Back in June, 2009 we wrote about how local business were skeptical about the redevelopment of Limon and how crime and filth have taken over this once-was thriving city when multinational giant United Fruit Company pulled its operation. I appears local business were right.

Redevelopment of Limon would give Costa Rica its first New Orleans style city and be a major asset that attracts tourist dollars

At first, redevelopment started to step forward. After Arias left office Legislative Assembly had approved a $72.5 million World Bank loan as front money, and the path to port privatization looked like it was becoming reality.

The Arias plan relied on Costa Rica’s ability to attract $860 million in foreign investment, including those “private” investors that would get involved in an efficient operation of the port.  Arias felt investors were the key and local business owners would never fork out money if any of them felt threatened by government red tape and bureaucracy. In a way that made sense; most people agree, ‘anything the government runs usually ends up costing taxpayers money.’

However,  Atlantic Port Authority’s Workers Union (Sintrajap), did not see it that way, instead they claimed the government was trying to break the union with privatization so they sued and also claimed privatization constitute a threat to the nation’s sovereignty.

This week, Arias plan took a grinding halt when the Constitutional Chamber of the Supreme  Court (Sala IV) ruled in favor of the Union. Suddenly it became a cheering victory for workers’ rights that had the support of many US unions like The International Longshore and Warehouse Union (ILWU) Coast Longshore Division who condemned the Costa Rican government for disrupting democratic processes relating to leadership of Sintrajap.

Now this is where it gets interesting, back when the lawsuit was filed, union leaderships were very anal opponents of privatization. However, that changed back in January when new union leaders were elected, and they made some backdoor deal, where a government payment of $137 million went to union members in return for accepting transition of the port to private management.

Well Sala IV did not like that, and ruled, this had violated due process and the unions own procedures, which forced the union to reinstate their past leadership to those who filed the lawsuit in the first place.

So where does this get us? –  nothing but an egoistic and political stalemate.

President Laura Chinchilla, who is in favor of the Limon Redevelopment, told local media that the Supreme Court ruling was “one more bump in the road” and “a blow to democracy.”

Fact remains, government and union officials are at a stand still.  Labor Minister Sandra Pizsk met with the reinstated union leaders last Monday to begin negotiating a new plan, and was optimistic, “We are looking for a quick solution, and a solution not just for workers’ rights, but fundamentally for the modernization of the port.”

In other words, is the union is trying to stop modernization?  Everyone knows modernization does cut jobs, like when US auto makers started using robotics to build cars more efficiently.

Union leaders quickly defended, they are not “interested in blocking modernization,” but they don’t want to sacrifice the welfare of the workers, which they claim will happen if privatization happens.

It narrows down to who will run a better port, the private sector or the government?

It is pretty clear that the union will have more control if the port is run by government than if it was run by private enterprises.

No doubt, privatization has better negotiation powers and has broken many a unions and this is what the union mostly fears, which is understandable if they are to protect their members.

Sintrajap is using at the port of Caldera, near Puntarenas, as a perfect example. Union leaders are claiming, Puntarenas is now suffering from high unemployment as a result of privatization; almost like what US auto workers claimed when robots started painting and welding cars. Or could it be a major slump in the World-wide economy in general?

Government quickly shot back defending Puntarenas redevelopment privatization. The port now has become a prime stop for cruise ships and revenue has jumped up and has created many jobs for locals, not just the port area, but also within the community. Personally, if you can remember what  Puntarenas used to look like –   redevelopment has changed it into a cultured and attractive town.

It is pretty clear the government wants to follow in the footsteps of other countries where they lease ports to private companies as many European countries have done, including the US like the Port of New Orleans and where government collects a huge check each month without the hassle of management.

Unfortunately, this stalemate has caused local business owners who have been waiting for this for years,  Limon’s redevelopment now looks hopeless.

As one of our accounts said this week, “It’s not about the union, it’s not about the government, it’s about the welfare and future of Costa Ricans in general.”

Calypso Cruises