GENEVA (ILO News) – Amid a global downturn in employment in the oil and gas sector, senior representatives of governments, workers’ and employers’ organizations are to discuss the state of industrial relations in the petroleum industry at a meeting at the International Labour Office (ILO) on 11-14 May.

A new ILO report (Note 1) prepared for the meeting says employment in the oil and gas extraction subsector peaked at about 4 million jobs in 2004 and gradually declined to the level of about 3 million in 2006. Another 1.5 million workers is estimated to work in the world’s oil refining industry.

The report also forecasts a deficit of more than 6,000 skilled workers in the oil industry by 2010. “This is a conservative estimate. The reality could be worse. The shortage of skilled workers has its roots in the job cuts and lack of recruitment during the 1990s, perceived poor and dangerous working conditions, and is now aggravated by the current economic crisis”, says Ms. Elizabeth Tinoco, Director of the ILO’s Sectoral Activities Department (SECTOR).

According to the report, employment volatility in the sector led to a sustained increase in contract labour, which has become the norm in the oil industry and caused industrial relations problems. The report observes a “dualization” of the workforce into core and peripheral workers, and says that complex employment practices often result in making it difficult to determine the identity of the employer, sometimes affecting collective bargaining outcomes.

The report also notes important wage gaps, depending on occupation, skills and gender, and highlights occupational safety and health issues. It estimates that contract workers are twice as likely to be involved in a fatal accident as regular company employees and all workers aged between 21 and 35 years old are more prone to accidents than any other age group. It also says that despite the image of offshore work as more dangerous than onshore, the fatal accident rate onshore is almost twice as high as that offshore.

Regarding industrial relations, the ILO report observes that unionization levels are low and falling throughout the oil industry, although union membership is more widespread in the refining sector than in exploration and production. It is extremely low on offshore facilities and among women workers. The Meeting will discuss how to ensure that workers’ rights are respected.

“The shortage of skilled workers is a global phenomenon which particularly affects the oil industry because it requires high skills to operate,” Ms. Tinoco said. “Oil companies have diversified their recruitment processes in order to meet current and future business needs. Their efforts include significant investments in education and training. But the oil industry alone is unable to sufficiently increase the pool of skilled workers. Governments have a key role to play. The report suggests that dialogue between governments and the oil industry, including workers’ organizations, should be conducted so that the larger pool of skilled entrants to the workforce is well equipped for oil industry work.”

Other issues that will be discussed in the meeting and which are key to the Decent Work agenda are working conditions and working time.

On the basis of the discussions, the meeting will adopt conclusions that include proposals for action by governments, by employers’ and workers’ organizations on a separate, tripartite or bipartite basis, and by the ILO to promote sustainable enterprises and contribute to decent work in the oil industry.

Interviews can be scheduled via the Department of Communication with ILO experts on the oil and gas sector. For more information, please contact the Department of Communication at +4122/799-7912, communication@ilo.org.

Note 1 - Social dialogue and industrial relations issues in the oil industry, Report for discussion at the Tripartite Meeting on Promoting Social Dialogue and Good Industrial Relations from Oil and Gas exploration and Production to Oil and Gas Distribution, International Labour Office, Geneva 2009. /public/english/dialogue/sector/techmeet/tmoge09/tmoge-r.pdf