Brazil Dock Strike Adds Pressure Against Ports Reform Bill

Stevedores at Brazil's three main ports walked off the job on Tuesday to protest last-minute changes to legislation aimed at modernizing the country's port system by opening up to more private initiative.

The strike began at 1 p.m. local time (1600 GMT) at the ports of Santos, Paranagua and Rio de Janeiro, as the reform bill was being debated in the lower chamber of Congress in Brasilia.

Stevedores say legislators are breaking an agreement to allow direct negotiations for hiring of workers with their unions or through a centralized hiring agency known as the OGMO.

"They are interfering with the agreement we had and left it out of the bill," the president of the National Stevedores Federation, Wilton Ferreira Barreto, said by telephone.

Another top stevedore union representative, Cesar Rodrigues Alves, told Reuters the strike was likely to persist until a favorable outcome was found. An evening congressional session could still resolve the issue on Tuesday, he said.

Santos is the largest port in South America, and Paranagua is the region's biggest grains terminal.

The draft bill would allow more private operators to handle cargo at state-owned ports and privately owned ports to handle third-party cargo in general. The unions have opposed the bill because it would undermine their control over labor contracts.

President Dilma Rousseff has made passage of the port reform a priority to help restore growth to the once-booming Brazilian economy. She recently urged lawmakers to approve her government's proposal, but her ruling coalition of 18 parties is split on the issue and the bill might flounder in Congress.

Congressman and union leader Paulo Pereira da Silva announced the strike to legislators as they debated the latest version of the bill, which he said curbed workers' rights.

Other unions have backed the reform bill that seeks to raise efficiency and end severe congestion at Brazil's ports, where delays and high costs are undermining the country's ability to compete on world markets.

Brazil is in the middle of exporting an expected record soy harvest, while coffee and sugar crops are due to hit its overburdened ports within weeks. Even a one-day stoppage would lengthen already-long queues for ships and rack up tens of thousands of dollars in demurrage costs.

Unions staged a six-hour stoppage to protest a first draft of the port reform bill on Feb. 22.

--Reporting by Eduardo Simoes in Sao Paulo, Maria Carolina Marcello and Peter Murphy in Brasilia; Writing by Anthony Boadle; Editing by Dale Hudson