1. Workforce Performance and the Future of
Indonesia’s Port Sector
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.

2. An attainable vision
An efficient, competitive, and
responsive port system that fully
supports international domestic trade
and promotes economic growth and
regional development
2

3. 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
3

4. 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
4

5. 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
5

6. 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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7. Port Authority Training Curriculum
Requirements
Management Marketing Planning/ Contracts and
Engineering Regulation
Port Authority Competitive Port Master Concession/lease
Management Intelligence Planning Agreements
Strategic Planning Port Marketing Port Operational
Development/ Regulation
Project
Management
Capital/Operating Promotion/ Operational Safety and
Budget Advertising Performance Security
Monitoring
Tariff/financial Public Relations Terminal Environmental
Analysis Operations Protection/Contin
gency Planning
HR Management Customer Service Maintenance
Management
Marketing and
Promotion 7

8. Option 1: Status Quo Monopoly TKBM Pool
Arrangements
• Port A • Port B
TKBM TKBM
Coop A Coop B
TKBM TKPM
Coop D Coop C
• Port D • Port C
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9. 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 9

10. 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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11. 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
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12. Inducing Competition Scenarios

13. Option 2a. Inter TKBM Coop Competition
Scenario
• Port A • Port B
TKBM TKBM
Coop A, Coop A,
B, C, D B, C, D
TKBM TKPM
Coop A, Coop A,
B, C, D B, C, D
• Port D • Port C
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14. Option 2b. TKBM Coop Inter-Subsidiary
Company Competition Scenario
• Port A • Port B
TKBM A TKBM B
Subsidiaries Subsidiaries
1, 2, 3, 4... 1, 2, 3, 4...
TKBM D TKBM C
Subsidiaries Subsidiaries
1, 2, 3, 4... 1, 2, 3, 4...
• Port D • Port C
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15. Transferring TKBM Management
Scenarios

16. Option 3a. Stevedoring Association TKBM
Management Scenario
• Port A • Port B
Stevedoring
Association
• Port D • Port C
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17. Option 3b. Stevedoring Company TKBM
Managed Scenario
• Port A • Port B
Stevedoring Stevedoring
Company Company
Stevedoring D
A, B, C, D A, B, C,
Association
Stevedoring Stevedoring
Company Company
A, B, C, D A, B, C, D
• Port D • Port C
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18. 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
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