* Planned port strikes come during peak grain export period
* Prolonged strikes not ruled out
* Regulatory reform will put exports in "crossfire"
* Brazil could auction 159 terminals to private sector
(Adds threats of strikes on Friday, Tuesday)
By Reese Ewing and Gustavo Bonato
SAO PAULO, Feb 19 Brazilian dock workers in
Santos on Tuesday ended a two-day occupation of a Chinese ship
in protest at port modernization plans, as unions threatened a
national port strike over the government plan which they fear
will cost jobs and cut wages.
About 60 stevedores boarded the Zhen Hua 10 early on Monday,
stopping it from unloading cranes manufactured by the Shanghai
Zhenhua Heavy Industry Co.
The cranes are to be installed at Embraport, a new $1.2
billion private container terminal in Santos that does not use
established union procedures to hire workers.
Although the protest was brief with no perceived impact on
Santos port, it gave a taste of what is likely to come as unions
gear up to resist a sweeping reform of port regulations.
Port workers nationwide plan to walk off the job from 7 a.m.
until 1 p.m. on Friday and again from 1 p.m. until 7 p.m. on
Tuesday, Paulo Pereira da Silva, a congressman and President of
the umbrella union Forca Sindical told Reuters.
"All the ports in Brazil will be stopped at those moments,"
Paulo Pereira da Silva, President of the Força Sindical trade
union, said late on Tuesday.
He said the workers hadn't ruled out a prolonged strike.
The government says the planned changes are imperative to
boost efficiency for its world-leading commodity export sector.
Embraport said in a statement that workers left the Chinese
ship after the terminal agreed to contract unionized workers to
watch over the unloading and assembly of the cranes to be
carried out by representatives of the Chinese manufacturer.
Embraport denied allegations by unions that it was
contracting Chinese workers as substitute dock workers and said
the unloading and assembly of the equipment by the manufacturer
was pre-established in the purchase contract.
Twenty years ago, Brazil opened the door to private
investment in its terminals, although much of the infrastructure
at the country's ports remains in state hands. But private and
public terminals at Brazilian ports are still required to source
workers through a centralized agency called the OGMO that doles
out available shifts to union members.
Embraport, owned by local chemical and infrastructure group
Odebrecht, trading company Coimex and the United Arab Emirates'
DP World, is one of the first private terminals here not
required to contract labor through the OGMO.
And unless President Dilma Rousseff or Congress modifies
Decree 595 outlining port regulation reforms, the government
could auction off 159 terminals to private investors who would
also be free to ignore the OGMO and hire their own labor.
"I'm afraid this will end up in the courts," said Paulo
Fleury, a director at the Logistics and Supply Chain Institute
(Ilos). "And it will be the exporters and shippers caught in the
crossfire between the unions, government and current terminal
Fleury said it would be disastrous for existing terminal
concession holders, who will still be obliged to use the OGMO
"if the government allows competing terminals to set up next
door with a completely different cost structure."
Shipments of grain, sugar and coffee from Brazil might be in
for a rough ride during strikes and protests that unions are
planning for the coming weeks. Interruptions in the flow of
these basic commodities could affect futures prices, especially
for crops whose yields have been hit by drought in North and
Brazil's grain belt is in the midst of a record harvest of
83 million tonnes of soybeans and 74 million tonnes of corn.
Exporters have already dispatched scores of ships to load and
carry the crops away from local ports in the coming months.
As the world's population expands, Brazil will be one of the
21st century's most important exporters of food due to its
abundant arable land, water and sun.
The government plans to attract $27 billion in private
sector investment in the next few years to modernize Brazil's
President Rousseff has pushed forward the reforms as part of
an infrastructure package she hopes will help bring down what is
often referred to as the "Brazil Cost." She expects to lower the
cost of moving goods through ports by 20 percent.
($1 = 1.9567 Brazilian reals)
(Additional reporting by Roberto Samora, Peter Murphy and
Marcia Carolina Marcello; Editing by David Gregorio, Andre
Grenon and Michael Perry)