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STATEMENT OF CAPT. J. R. WILLIAMS, PRESIDENT, PANAMA

CANAL PILOTS ASSOCIATION, PANAMÁ CANAL ZONE

Captain. WILLIAMS. Mr. Chairman and members of the committee, I welcome this opportunity to provide certain employee-related impressions on the new Panama Canal Treaty.

In order to further introduce myself to you, I have been a Panama Canal pilot for 11 years and possess a U.S. Coast Guard license as master of ocean vessels, unlimited tonnage. I hold the rank of commander in the U.S. Naval Reserve.

Although only recently of primary interest in the United States, the Panama Canal Treaty issue has been the dominant concern of employees for several years.

Early in 1977, when a general outline of the treaty began to emerge, the Panama Canal Pilots Association developed an active interest in what future situation pilots, and other employees, would be placed in a posttreaty environment characterized by two major changes of the eurrent situation: one, the elimination of U.S. political jurisdiction over the community; and two, an employee transition period that would be in progress for the entire life of the treaty, which implies a reduced scope of employment and promotional opportunities for U.S.-citizen workers. More importantly, however, the duration of the treaty clearly stipulates a shorter career period that will profoundly influence the retention of newer employees in key positions.

U.S. PRIMARY TREATY OBJECTIVE

A primary treaty objective of the United States, and as expressed by our negotiators, is to keep the canal open and efficiently operated for the benefit of all nations; certainly a worthy goal.

An absolutely essential ingredient to its fulfillment will be the retention of a skilled work force that is dedicated to the canal, competent, and highly motivated. Governor Parfitt's statements in this regard have already alerted you to this necessity.

The Pilots Association, therefore, in cooperation with other Canal Zone unions, sought to achieve treaty language that recognized the unique situation created by the treaty as it impacts upon the employees. This has been generally accomplished in two broad aspects: one being an early retirement concept, and the second being a general provision for collective bargaining, as yet absent from the Isthmian labor scene.

A very important characteristic that has typified employee union efforts during this period has been a mutual realization that our futures are as closely intertwined as our present interdependence.

EMPLOYEES CRUCIAL TO OPERATION OF CANAL

In this regard, the Panama Canal pilots are only one of several essential categories of employees crucial to the operation of this international public utility. Further, these employees and their families constitute a community that is very dependent upon the continuation of good schools, medical care, and related services.

In short, gentlemen, we are all in the same boat. There are some problems that we have encountered. It has been, and continues to be,

to some extent, extremely difficult to convince top management that the Panama Canal work force is career oriented, not the usual overseas employment that is rotational in nature, and that attracts a less committed type of individual.

For many employees on the waterway, particularly at the locks, where specialized skills are absolutely vital to the canal operation, the attitude has traditionally been demonstrated to be a highly motivated and professional one. The continuation of the canal's efficiency is absolutely dependent upon this extraordinary degree of skilled dedication.

Pursuant to the retention of these, and other skilled employees, there will be required legislation consistent with the spirit of commitments made to employees, both in the treaty and in Department of the Army assurances.

Specifically important will be the development of a genuinely liberalized early retirement statute in keeping with Department of the Army intent to retain essential skills.

PREMIUM PAY ENTICEMENT

One personnel policy viewpoint of management pertinent to the period of a new treaty is to entice people to remain on the job with unspecified forms of premium pay. We are not opposed to this, of course, but our attitude becomes wary when it is clearly indicated that

At some point in time possibly these incentives would no longer be required, or would be adjusted for recruitment purposes as local skilled labor becomes, available.

Being informed in advance that this viewpoint has a certain acceptance is helpful, but also causes an apprehension about management's intent once our skills become readily replaceable from the local labor pool.

RECOMMENDATIONS RELATING TO EMPLOYEE MATTERS Concluding this portion of my statement, I recommend that the gentlemen of this committee obtain a report to the Chairman of the Board of Directors of the Panama Canal Company from the Personnel Committee of the Board, which was submitted last January. This report, we are informed, contains specific recommendations relating to employee matters, based upon board member perceptions of how Panama Canal employees should be dealt with in a new treaty.

CHANGE IN JURISDICTION OVER CANAL ZONE

The change in jurisdiction over the Canal Zone: For most Canal Zone residents, the elimination of U.S. political jurisdiction over their communities is truly a profound change that will require an individual and thoughtful adjustment by many, if not most, employees.

For second and third generation employees, this represents a complete alteration of their actual self-identity. This "crisis," such as it is, includes many Panamanians of West Indian origin, who have identified solely with a Canal Zone existence for their entire lives and English is their primary language.

However, most employees appear to be quietly developing an individual attitude that will cope with such an impending change. It is a very personal reaction that makes it nearly impossible to provide any sort of institutional or otherwise organized opinion.

These aspects, coupled with the fact that the jurisdictional change is not in keeping with the career expectations of most employees residing in the Canal Zone, is a very important fact that cannot be overemphasized.

Recognizing this, however, it should be borne in mind that what was previously blind resistance to change has moderated considerably, to the point that a more openminded tolerance to "wait and see" is now prevalent.

EMPLOYEE RESIGNATION ESTIMATES How many key employees, such as pilots, will terminate their employment if this treaty enters into force? Preliminarily, our estimate is that perhaps fewer than 5, possibly as many as 10, pilots would take steps to resign. This number could go much higher within the ranks of newer men if legislative and related responses fall significantly short of expectations.

My conversations with other Canal Zone union officials provide a similar picture for other categories of employees.

This rather conditionally optimistic outlook on attrition of key employees should be received, however, by keeping in mind one very critically important element that will, to a great extent, determine the success of this treaty. By this, I am referring to the necessity of a hospitable and cordial attitude toward former Canal Zone residents by the Panamanian Government that translates into a spirit of active and harmonious cooperation in administering the affairs of the canal.

That there is a realistically tolerant expectation of this development is probably a significant factor, among others, that has contributed to a marked reduction in the resignation rate of U.S. citizen employees

The immediate posttreaty transition era will obviously be a delicate period requiring the disciplined restraint and good judgment of all concerned.

A related aspect of this situation that should be recognized, however, is that in those categories of employment where loss of jobs is most likely to occur, the very generous application of unemployment and severance benefits and priority transfer policies should govern in all cases.

It is obvious that the extreme dislocation, coincident with loss of employment in this situation, would justify such measures.

CANAL PILOT REQUIREMENTS FOR FUTURE

Panama Canal pilot requirements for the future: The Panama Canal, compared with other major pilotage waters, presents a combination of navigational conditions that make for a very demanding ship-handling task, possibly the most difficult in the world.

Due to several reasons, including the prolonged and continuing uncertainty posed by this treaty issue, there is a genuine concern, both by this association and the Panama Canal Company, about the mainte

nance of a proficient pilot force with high professional standards that will assure the confidence of shipowners throughout the world.

Therefore, it is essential, in order to continue operating an efficient canal, that these high standards be maintained.

At present, Panama has very few pilot candidates ready to be trained. The Panamanian Government is aware of this, and is taking steps to train merchant marine officers at the recently established Escuela Nautica in Panama.

The United States could assist in this situation by increasing the quota of Panamanian cadets eligible to attend the U.S. Merchant Marine Academy at Kings Point, N.Y.

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U.S. TREATY OBLIGATION TO EMPLOYEES

There is one final observation on this subject that we would like to make, and stress its importance very heavily. That is the essential requirement for the United States to take every reasonable step to fulfill its treaty obligations to the employees in order that no substantial exodus of pilots ensues.

If, in reaction to a high resignation situation, shortcuts or some form of crisis management were to be adopted to fill a sudden need for pilots, the resultant deterioration of professional standards, triggering even more resignations, could very well inhibit the ability of the Panama Canal to maintain its traditional high standards of performance.

Gentlemen, in these few pages I have attempted to explain with as much candor and precision as possible the likelihood of a sufficiency of pilots and other critically important workers remaining employed in order to keep the canal operating efficiently. If questions arise from my observations, I will attempt to answer them.

Concluding then, and conditioned by the viewpoints contained in this statement, the treaty language, with its general recognition for the unique circumstances that it creates for employees, shows promise of providing a workable employee transition period.

Thank you.

PANAMA CANAL PILOTS' ASSOCIATION POSITION

The CHAIRMAN. Do I understand that you approve the treaties, but you see problems? Is that a fair statement, Captain? Let me put it another way. Are you for the treaties or against them?

Captain WILLIAMS. The Panama Canal Pilots' Association, Senator Sparkman, has taken no position on the treaties. They have, by virtue of the statements contained here and the conditions placed upon those statements, also in my documents, endorsed this treaty as a workable instrument as far as operating the Panama Canal. The political aspects of the decision, however, are so profound and complex as to require an individual opinion on which I am not prepared to speak in behalf of at this time. I have a personal opinion and I am sure many other pilots have their opinions.

The CHAIRMAN. Very well. I think we understand your position.

[Additional information follows:]

PANAMA CANAL PILOTS ASSOCIATION,
P.O. Box 601, BALBOA, CANAL ZONE,

October 17, 1977.
Hon. JOHN J. SPARK MAN,
Chairman, Committee on Foreign Relations,
Dirksen Office Building, Washington, D.C.

DEAR SENATOR SPARKMAN: Pursuant to my statement and testimony before members of your committee last week; I appreciate your perception of the extreme difficulty for a Canal Zone union to take a definitive position on the total concept and specifics of a new treaty that has so many ramifications.

The views of our membership range from a very strong opposition, to those who favor the new Treaties as in the best interests of all concerned. Most pilots, however, are at a tolerant-although watchful-frame of mind, whose opinion varies widely, dependent upon which aspects of the Treaties are being considered.

Obviously, there is much "digestion" that remains, but I believe that most pilots would acknowledge that the status-quo is outmoded, and that an early resolution to this issue should be achieved.

It is certainly true, and as my testimony clearly indicated, we do not subscribe to the extreme forms of political harangue that characterize much of what you have heard in opposition to these Treaties. Sincerely,

J. R. WILLIAMS.

OCTOBER 25, 1977. Capt. J. R. WILLIAMS, Panama Canal Pilots Association, P.O. Box 501, Balboa, Canal Zone.

DEAR CAPTAIN WILLIAMS: I wish to acknowledge your letter of October 17 providing some further comments relating to your recent testimony before the Committee on the proposed Panama Canal agreements.

I believe you've provided the Committee with very valuable testimony and I appreciate your additional comments. If you have no objection, I think it would be useful to have your letter included in the hearing record, With best wishes, I am Sincerely,

JOHN SPARKMAN, Chairman. Mr. Lioeanjie, may we have your statement please?

Mr. LIOEANJIE. It will take less than 2 minutes, therefore I will read it, please.

The CHAIRMAN. Very well.

STATEMENT OF RENE C. LIOEANJIE, REGIONAL DIRECTOR, CEN

TRAL AND SOUTH AMERICA, NATIONAL MARITIME UNION OF AMERICA, AFL-CIO

Mr. LIOEANJIE. I am Rene Lioeanjie, regional director for the National Maritime Union in Latin America and the Caribbean. I am appearing on behalf of the National Maritime Union, which represents approximately 7,000 workers of which approximately 98 percent are non-U.S. citizens, in all phases of the operation in the Canal Zone.

These members are spread throughout the Panama Canal Company, Canal Zone Government, Departments of the Army, Navy, Air Force. and the Armed Forces nonappropriated fund activities. These workers are employed in practically every bureau.

President George Meany of the AFL-CIO has expressed the views of organized labor with respect to the Panama Canal treaty revisions

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