with Hilde-Marit Rysst, President, Norwegian Union of Energy Workers (SAFE)
Would you begin with your perspective on the trigger for the recent industry strikes and how it escalated to such an extent with 708 workers on strike and OLF threatening a lock out of 6,500 workers?
Of course, all negotiations are strategic in nature and SAFE has one principal weapon which is that of strike action every second year. 2012 is one of those years and there were issues arising from negotiations with the OLF – Norway’s principal oil company association – which were proving extremely difficult to resolve and were important for our members. SAFE therefore decided to initiate strike action to show OLF that we were serious about the workers’ rights we wished to protect but we did not want to harm the Norwegian gas industry and therefore removed as few members as possible from operating sites.
Hanne Bjurstrǿm, the Norwegian minister of labor, was for the most part content that the strike was not escalating and did not require her to take action to stop it. However, the OLF decided that instead of seeking a resolution to the problem, they would simply declare a general lockdown and force government participation. SAFE did not appreciate this move as it took the ball away from the negotiating parties and placed it at the foot of the government denying our right to express our views.
Actually most indications up until the 11th hour intervention by government and the forced negotiations showed that the OLF was not serious in its intent to shutdown production. The OLF was simply bluffing. The main workers were not even prepared to leave the rigs and nitrogen had not been brought to the facilities to shut them down. However the bluff worked, the European markets kicked up a storm and the government intervened.
It was understandably a grave risk posed to Norway’s reputation as a reliable exporter of gas. Was the government right to intervene even though it was probably a bluff?
The trouble is that if the government intervenes it sets a precedent. The OLF has done this once before and the government intervened back then. It seems that this tactic will work each time and the rights of SAFE members will always be put to one side.
Some reports suggested that Norway could maintain its ability to supply gas for two to three weeks without it causing disruption to the European gas market, especially since there is low gas demand at the moment because of the summer time and also because of Europe’s own storage capacities. Furthermore, one of the largest gas suppliers to Europe would remain unaffected by the shutdown. In any case, I am convinced that the shutdown would not have been maintained for more than two to three weeks and it would have been interesting to see the OLF maintain the shutdown for one to two days.
There was an interesting dynamic between the minister of petroleum and energy and the minister of labor at the time. After the OLF warned that they would lock out employees, the minister of petroleum and energy declared that this would never happen. However, the minister of labor stated that it was a problem between the industry associations and the government would not intervene. It was interesting for the delegation members of SAFE to see who was going to take charge in government.
The core issue which brought about this strike was a change in pension rights for offshore workers. Do you accept that there is room for negotiation and on what terms should this be?
In an ideal world the pension regulations would be outlined in the tariff agreement for offshore contracts. Therefore, any change in these requirements would require negotiation. Currently pension allocations are simply an administrative clause which can be given or taken away like a bonus. In actual fact, we often turn down bonuses because we would rather that these rights were introduced as part of the tariff agreement.
In 1998 the oil companies all signed written deals on pensions but they were never included in the tariff agreement. Understandably, when the companies unilaterally decided to remove these rights the unions decided to make a stand to defend them. The companies claim that removing the right to take pensions at 62 is simply in line with Norway’s overall pension policy. These companies state that they are an extra pension withdrawn for five years before the age of 67 and can therefore be adjusted. These companies have forgotten that originally the unions advocated 57 as the pension age in view of the physically demanding work of manning an offshore rig and the pension allocation is not a major expenditure and the oil and gas industry is the richest sector in Norway.
At the same time, the company leaders who have desk jobs, answering the calls of media, can retire at 62 with colossal pensions. They claim that this is legal because it is a deal between two parties, but then what was our agreement with the companies? Was that not a deal between two parties?
The unions are not happy with the direction being taken now by Statoil. I was personally working for the company from 1995 until last year and have witnessed these changes. The leadership cadres are being recruited from the same universities and learning from a US-centric model. The leaders who have grown from inside Statoil have a very different take on how to run the company and reject this new philosophy of short-term objectives and maximizing profits. The industry should be about making the right decisions rather than appeasing shareholders. This situation is not beneficial to Norway, its citizens or the employees. Responsibility towards their commitments to Norway is no longer the focus within Statoil. When the state is the biggest owner of your company, you have responsibilities beyond those of Exxon Mobil or BP.
These are times of austerity and when Norwegian offshore workers are some of the best paid workers in Norway, earning double that of their counterparts in the UK, is there an acceptance that changes should be made?
Everyone who is not an oil worker in Norway says that oil workers earn too much and have too many days off. However, when you sit down with them and explain what the work actually involves and the equivalent time that people take off normally they come to understand why these wages are justified. In Greece and Spain there is an acceptance in the oil industry that they must accept cuts in their remuneration. However, the firms in Norway are earning colossal amounts and the difference between them and their European counterparts is even greater than the difference between Norwegian worker pay and the average pay in Europe. Therefore if offshore workers are earning 60% more than their European counterparts then Norwegian companies are taking home even more than 60% above the European rate. This is not usually made clear in the press. Moreover, the multiplier effect of having high earners in the oil and gas industry spending money on houses, cars and so forth is good for the economy at large.
Do you think there should be any benchmarking with Europe?
Considering that Norway has come so far in its development it would be dangerous to just benchmark wages in line with the rest of Europe. Norwegian workers would lose money in every comparison. Countries have their own climactic conditions and set of challenges which means that in reality people from Greece could not perform the same tasks as people from Norway and vice versa. There are local differences which are reflected in the wage differences.
The question we should be asking is whether pensions should be differentiated on the basis of the type of work you do. There are plenty of office workers who are more than capable of working past 70 but manual workers who have exhausted their bodies after their working careers should be entitled to an earlier retirement.
Many in the oil and gas industry would be curious to know what type of disruption they can expect to see in the industry in 2012. What is your perspective?
2012 is going to be a tough year. It is many years since the last time we were on strike. The unions have let down their guard and must now defend themselves. There are major discussions on the top of the agenda at the moment. There is always a transition between times of peace and times of war and 2012 will be a year of war. This will influence all negotiations going forward. The problem has not been solved even with government involvement. There is exactly the same problem for KCA Deutag, on the refineries and for the five union groups in Statoil. The workers are fuming and there will be tough negotiations throughout the year – I do not see 2012 as a harmonious time.
What would be your final outlook on the Norwegian industry model?
The Norwegian model is a good system but it needs to be understood and felt for it to have benefit elsewhere. Brazil was starting their large-scale offshore production and the main workers union of Brazil came to us as did their employer’s association to analyze the Norwegian model. My advice would be to understand the system first. Within this system there needs to be people who can make themselves heard. Without open communication it will not work and employees need to be able to say, “Stop.” Otherwise grave accidents like Macondo happen. The industry started here with American firms who did not believe Norwegians were even capable of working for them. They did not understand at first how Norwegians could just diligently get things done. Just as they adapted to our way of doing things, so should the present management structures. There is a bright future for Norwegian offshore workers provided that employers learn to listen and benefit from their experience.