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5 May, 2008
An eight-day strike by 1,400 upstream workers of Mobil Producing Nigeria ended on 1 May, following mediation over wages, benefits, and alternative forms of payment for a two-year period. The talks were concluded in the capital of Abuja after mediation by both the Nigeria National Petroleum Corp. (NNPC) and the Ministry of Labour and Productivity.
The strike by PENGASSAN, ICEM’s white-collar oil and gas workers’ affiliated trade union in Nigeria, had shut in 860,000-barrels-per-day of oil production. The settlement is expected to establish the upstream pattern for major oil and gas producers in Nigeria for 2008 and 2009. Only Total’s upstream workers had reached agreement earlier.
PENGASSAN's Mobil Producing Bargaining Committee
The strike settlement, however, has no bearing on a dispute between PENGASSAN and Mobil Oil Nigeria Plc. in the downstream sector. That dispute has to do with discrepancies on compensation regarding redundancies.
The strike in the upstream sector was brought on by Mobil Producing’s intransigence in reaching a new deal following the 31 December 2007 expiration of a prior agreement. The company refused to budge from a total compensation offer of 10% over a new two-year period. NNPC and the Labour Ministry intervened in mediation efforts once the strike began on 24 April.
Mobil Producing is jointly owned by NNPC and US-based ExxonMobil, with ExxonMobil serving as the operating partner in what is currently Nigeria’s largest crude exporter, as well as lowest operating cost producer.
PENGASSAN’s Mobil Producing Branch Chairman Olusola George-Olumoroti said four of the five major points on the union’s agenda were resolved in marathon talks on 30 April, but it took the two Nigerian parties – NNPC and Labour Ministry – to move the multinational company from its low 10% offer.
Branch Chairman Olusola George-Olumoroti
On 1 May, the union’s branch committee accepted a 20% total pay package, which is retroactive to 1 January and includes benefits and other remuneration items. PENGASSAN’s Mobil upstream branch committee also included members of the Mobil Producing Contract Staff Branch, since a major point on the union’s agenda was casualisation.
The union charged Mobil Producing with over-extending service professionals in work that could be more efficiently done by full-time staff. George-Olumoroti casual staff work under two-year contracts, and some worked in such status for as along as 19 years. In negotiations on 30 April, the two sides agreed to set up a joint committee to review contract staffing, and then compare Mobil’s record with that of other companies in the industry.
Another major concern was the inconsistency of Mobil’s defined benefit plan to Nigeria’s Pension Reform Act of 2004. That issue met resolve by the two sides agreeing to a team of independent actuaries to examine the company’s current pension plan.
Other issues included the rapid influx of expatriates that violate the government’s quota regulations, and hazardous equipment and facility deterioration, particularly in the company’s western area of operations along the Niger Delta. The PENGASSAN branch cited leakages at two offshore oil pipelines of the company – Idoho and Edop – in February.
The Nigerian government has agreed to conduct an audit regarding expatriate quotas, while a joint committee will be put in place immediately to develop a charter and recommendations on facility deficiencies. That committee will be on a stringent time frame, with reporting on or before 30 June.
In the downstream sector, Mobil Oil Nigeria Plc., also jointly owned by NNPC and ExxonMobil, and the PENGASSAN branch there are in dispute over terms of a redundancy package negotiated late in 2007. The company made 67 of 170 senior staff members redundant, and intentionally targeted PENGASSAN members and activists for sackings.
At question is a miscalculation in the redundancy package. In implementing a new information technology programme, ExxonMobil has eliminated jobs in Nigeria and moved them to Egypt, Taiwan, and Hungary. All the workers made redundant are to be paid their full salaries until 31 May, at which time the severance package is scheduled to take effect. The ICEM has demanded that the American company rectify its error.