TOWAGE operator Smit Lamnalco has rejected claims of “sham contracting” in relation to a tug delivery job for Gladstone.

Maritime workers protested outside the Smit Lamnalco Gladstone office on Friday morning, claiming work traditionally done by direct employees had instead been outsourced to a business using half the number of crew members and paying them 60% less.

The Maritime Union of Australia accused Smit Lamnalco of using “sham contracting arrangements”.

“The decision to contract out this tug delivery job — work traditionally done by local employees — to a company using half the number of crew members and paying them just 40% of the wages is a shocking attack on local workers and threatens safety standards at the port,” said MUA Queensland branch deputy secretary Jason Miners.


“Smit Lamnalco claimed it supported local workers when it was seeking the exclusive contract to provide towage services at the Port of Gladstone, but the decision to use a shadowy arrangement to avoid paying decent rates of pay or adhere to appropriate safety standards shows the exact opposite.”

Smit Lamnalco managing director for Australia and PNG, David Fethers, said they had a requirement to dry dock four Gladstone ‘Island Class’ tugs in 2020 and due to the size of the vessels, only three shipyards in the region had the physical capability to complete the docking project.

“PNG Shipyard in Port Moresby was selected based on capability, availability, Smit Lamnalco’s previous experience in the yard, and price,” Mr Fethers said.

Mr Fethers said the voyage to Port Moresby was an international one and the company’s legal representatives confirmed to the Fair Work Commission on Thursday the Enterprise Agreement covering their Gladstone operation did not apply to international voyages.

“Smit Lamnalco has contracted IMS, a specialist Australian ship delivery company to conduct the voyage,” he said.

“IMS possess the necessary regulatory, technical and manning expertise to conduct the voyage safely and efficiently. The personnel undertaking the voyage are all Australian nationals.”

Mr Fethers said the company denied it had contracted out a tug delivery job “traditionally done by local employees”.

“All of Smit Lamnalco’s previous international delivery voyages, including the delivery of the eleven Gladstone-based tugs, have been contracted to specialist international delivery companies,” he said.

“Smit Lamnalco has always, and will continue, to conduct domestic delivery voyages utilising its own management systems and employees, in accordance with the relevant enterprise agreement. “Smit Lamnalco refutes that it is engaged in sham contracting in any way.”