so what's up, docks?

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    So what's up, docks?

    Katharine Murphy
    November 20, 2004

    ON Wednesday morning at the end of a renovated pier at Walsh Bay, one of Australia's best-known chief executives, Chris Corrigan, sat in his office overlooking the working end of the waters of Sydney Harbour and picked up the telephone.

    Corrigan called competition watchdog Graeme Samuel in Canberra to clear up what he felt was a misunderstanding that had already led to two days of increasingly tense sniping between the two in the media.

    Five hours later, Samuel returned the call.

    The two men had a short but friendly conversation. But before signing off, the competition boss mentioned he would issue a press statement making a few remarks later that afternoon.

    An hour later a media release was issued accusing Corrigan of running a cosy duopoly on the waterfront.

    Corrigan was completely blindsided. And since that time it has been all-out war.

    The two ex-merchant bankers have been slugging it out all week about waterfront reform and the boundaries of regulation - about whether Corrigan is ripping lazy profits out of Australia's stevedoring duopoly, or whether Samuel has overstepped the regulatory mark to indulge in a personal slanging match.

    One prominent corporate player who knows both men well describes the spectacle this way: "They are both immoveable objects. They are a couple of bull elephants."

    It had taken five years, but bit by bit, Corrigan was doing everything possible to bury the balaclava - carefully consigning the ugly scenes of waterfront confrontation to history. In a singular act of will, the mercurial chief executive of Patrick Corporation had taken his company forward to achieve his goal of becoming an integrated transport empire and stock market darling.

    Business was booming. The gods were smiling. Thursday was supposed to be a good day - another record Patrick profit - and further confirmation of a stunning personal and professional transformation.

    Then Samuel lowered the boom. Australia's competition watchdog released its annual snapshot of stevedoring performance. For Corrigan and the other major dockside player, P&O Ports, the smoke signals were all bad. Margins were up. Revenue was up. Labour costs were up. There was evidence of congestion meaning container facilities were reaching capacity.

    The story's surfacing during Patrick's profit week was an irritating distraction, but it could have been a one-day wonder. But Corrigan hadn't counted on Samuel's desire as the national competition regulator to reignite the debate around waterfront reform.

    Samuel and the executive floor of the ACCC, while giving Corrigan's acquisitions the green light, had been watching Patrick's manoeuvrings with interest. The time had come to put out some markers and have a serious debate about whether the benefits of the 1990s waterfront reform, which had divided the country, were being sustained.

    The ACCC's report did some international comparisons on rates of return in the stevedoring industry - with Australian stevedoring well ahead of other nations. The comparison troubled Samuel.

    He kicked the story along next day - wondering out loud on early morning radio whether a new commercial player was needed to enter the container moving business.

    He pointed specifically to evidence of capacity constraint and rising charges, crystallising the trends of the waterfront reform in the ACCC's report into some blunt and uncompromising language.

    The story gathered momentum. Corrigan told The Weekend Australian that Samuel was guilty of exaggerating the findings of his own report.

    "He sexed up a press release to give the debate a flavour the report didn't otherwise have," Corrigan says. He added that some of Samuel's central contentions this week were contradicted by the much milder language of the commission's own report. He issued a statement pointing out the contradictions.

    As the days passed, the fight simply escalated. By Wednesday, Corrigan and Samuel were warring by press release. There was the "cosy duopolist" jibe. Corrigan spat back that Samuel was on a power trip, trying to mandate the number of players in the stevedoring industry and trying to damage Patrick.

    It was a strange and slightly unnerving spectacle of powerful friends falling out.

    Samuel and Corrigan are no strangers. They first met in 1981, according to Samuel. Corrigan cannot recall precisely when but thinks that's about right.

    They were something of a golden duo, plotting a decisive strike on the stockbroking cartel, taking a court case against the Fraser government that brought the weight of the Trade Practices Commission down on the industry. By forcing the government to court, it forced the TPC to review the barriers to outsiders dealing in stock. Once the breakthrough came, prices fell. It was a fundamental policy breakthrough of its time.

    From the success of that joint venture, it would be easy to conclude that the two men were friends. But the relationship was never personal.

    Samuel from Melbourne, where business was conservative, was a partner in law firm Phillips Fox and Masel; Corrigan from racier, hard-edged Sydney was running BT Australia.

    People in the merchant banking sector who know both men well laugh at the idea of a close friendship suddenly and spectacularly disintegrating.

    "They are certainly not buddy types. I don't see them as very compatible people," says one long-time associate.

    "Graeme is a networker, Chris is just the opposite. It's no surprise to see them having a stoush. Chris never goes for the jab, he goes for the knockout."

    Samuel recalls the 1980s share brokers episode as being "a very vitriolic and personal battle" in which Corrigan and he fought side by side.

    "But Chris and I have never been friends," he told The Weekend Australian. "This was a professional relationship. It's never been a friendship. I didn't see him at all during the 1990s and all that Maritime Union stuff."

    Corrigan agrees they were more colleagues than friends and says he always had great respect for Samuel as co-conspirator and competitor.

    "I have a great respect for Graeme and I would like that to continue," Corrigan says.

    "But I don't think this gives his office any dignity. All this makes (former ACCC chairman) Allan Fels look polite."

    http://www.theaustralian.news.com.au/common/story_page/0,5744,11439268%255E643,00.html
 
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