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Tripartite Meeting on Employment and Industrial Relations Issues in Oil refining

Note on the proceedings

Geneva, 23-27 February 1998

International Labour Office   Geneva

Copyright ® 1999 International Labour Organization (ILO)

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Contents

Introduction

Part 1.  Consideration of the agenda item

Part 2.  Resolutions

Part 3.  Other proceedings

Evaluation questionnaire

List of participants

Introduction

The Tripartite Meeting on Employment and Industrial Relations Issues in Oil Refining was held at the International Labour Office in Geneva from 23 to 27 February 1998.

The Office issued a report to serve as a basis for the Meeting's deliberations. It addressed the following topics: the oil industry context; economic and technical issues relating to recent trends in refining; employment; and industrial relations issues.

The Governing Body had designated Mr. P.J. Simanjuntak, representative of the Government of Indonesia in the Governing Body, to represent it and to chair the Meeting. The three Vice-Chairpersons elected by the Meeting were: Mr. S.A. El-Khrachi (Egypt) from the Government group, Mr. A. Muente from the Employers' group and Mr. R.E. Wages from the Workers' group.

The Meeting was attended by Government representatives from Argentina, Brazil, China, Egypt, France, India, Indonesia, the Islamic Republic of Iran, Japan, Kuwait, Mexico, Nigeria, Norway, Romania, Trinidad and Tobago, Turkey, United States and Venezuela; 19 Employer members; and 19 Worker members. A representative of the Government of Malaysia attended the sittings.

Representatives from the Arab Labour Organization and the United Nations Industrial Development Organization attended the Meeting as observers.

The following international non-governmental organizations were also represented as observers: International Confederation of Free Trade Unions; International Federation of Chemical, Energy, Mine and General Workers' Unions; International Organization of Employers; World Confederation of Labour; World Federation of Trade Unions.

The groups elected their Officers as follows:
 

Government group

 

Chairperson:

Ms. M.-A. Richards (Trinidad and Tobago)

 

Vice-Chairperson:

Mr. C. Noisel (France)

 

Secretary:

Mr. A. Isawa (Japan)

Employers' group

 

Chairperson:

Mr. F. Ernst (South Africa)

 

Vice-Chairpersons:

Mr. J.C. Barrenechea Calderón

 

 

Mr. J. Da Costa

 

 

Mr. K.M. Nauman

 

 

Ms. A. Toker

 

Secretary:

Mr. J. Dejardin (International Organization of Employers) (IOE)

 

 

assisted by:

Ms. B. Perkins (IOE)

Workers' group:

 

Chairperson:

Mr. L.A. Myhre

 

Vice-Chairpersons:

Mr. F. Abdel-Bari

 

 

Mr. E. McLeod

 

 

Mr. V. Stanine

 

 

Mr. C. Vanmol

 

Secretary:

Mr. P. Michalzik (International Federation of Chemical, Energy, Mine and General Workers' Union) (ICEM)

The Secretary-General of the Meeting was Mr. V. Morozov, Director of the Sectoral Activities Department of the International Labour Office. The Deputy Secretary-General was Mr. B. Klerck Nilssen, Officer-in-Charge of the Industrial Activities Branch. The Executive Secretary was Mr. J. McLin and the Experts were Mr. N. Jennings and Ms. L. Tegmo-Reddy, officials of the Industrial Activities Branch. The Clerk of the Meeting was Ms. T. Bezat-Powell of the Sectoral Activities Department.

The Chairperson opened the Meeting and drew attention to the importance of the oil and gas sector in general, and of refining in particular, for his country Indonesia: its seven refineries provided directly approximately 20,000 relatively well-paid jobs and the sector as a whole made a substantial contribution to government revenues and to the balance of payments. Turning to the task at hand for the participants, he pointed out that the main object of the Meeting was to discuss the general employment situation in the sector including the framework for and practices of labour-management relations. Their discussion should lead to recommendations on labour policy for action at the national level by the government and social partners, and at the international level by the ILO.

Mr. K. Tapiola, Deputy Director-General of the ILO, welcomed the participants on behalf of the Director-General. He pointed out that the present Meeting was the first sectoral meeting to be devoted exclusively to oil refining and that the last meeting for the oil and gas sector had dealt with exploration and production of oil and, more precisely, with safety on offshore petroleum installations. The topic chosen as the agenda item for the Meeting -- employment and labour relations -- had been priority subjects for the ILO in the recent past, as reflected in the Organization's programmes and activities. The World Labour Report published in 1997, for example, presented an in-depth look at industrial relations, democracy, social stability and the development of employers' and workers' organizations.

Aggregate world employment and production figures for the oil refining sector showed at first glance remarkable stability since 1980. Significant change had, however, taken place: the geographical composition of output and employment has shifted from Europe to Asia and, to a lesser extent, to the Middle East and Africa; the skill profile of the workforce had been markedly upgraded with concomitant increases in labour productivity; total output and output per worker had registered high growth rates owing to the increased emphasis on the production of higher value-added products. The experience of the oil industry had an interest which went beyond the sector itself in respect of several issues which no doubt would be discussed in the course of the Meeting. The first issue was the transformation of state enterprises into commercially-oriented organizations, a first step in many cases towards partial or complete private ownership. This trend, coupled with job losses stemming from technological change, had a substantial employment impact even in industrialized market-economy countries. The second issue of general interest was the effect on employment of environmental regulation. The oil industry had shown in recent years that it could adapt in a responsible manner to increasingly stringent environmental requirements provided they were economically and technically feasible and were introduced at a reasonable pace. In instances where, however, the requirements had been raised particularly rapidly, the resulting uncertainty had sometimes led to the closure of individual plants or firms and to job losses. A third issue of general concern to the world of work was freedom of association. The oil industry was frequently alleged to constitute an essential service which could justify restrictions on trade union rights, and in particular on the right to strike. The ILO's supervisory bodies did not qualify the petroleum sector as an essential service justifying restrictions on industrial action. Freedom of association and the right to bargain collectively were among the fundamental rights singled out for special attention in the ILO, together with the abolition of child labour and of forced labour and freedom from discrimination. A promotional campaign had been carried out with respect to the seven ILO Conventions which embodied these principles and the International Labour Conference would consider at its forthcoming session in June 1998 the adoption of a Declaration concerning the Promotion of Fundamental Rights within the Mandate of the ILO and its appropriate follow-up. In conclusion, Mr. Tapiola reminded the participants that the texts which they would adopt at the end of the Meeting would be as valuable as the effect which would be given to them in the different countries, enterprises and workplaces.


Part 1

Consideration of the agenda item

Report of the discussion(1)

Introduction

1. The Meeting met to examine the item on the agenda. In accordance with the provisions of article 7 of the Standing Orders for sectoral meetings, the Officers presided in turn over the discussion.

2. The spokesperson for the Employers' group was Mr. Stooke and the spokesperson for the Workers' group was Mr. Myhre.

3. The Meeting held five sittings devoted to the discussion of its agenda item.

Composition of the Working Party

4. At its fifth plenary sitting, in accordance with the provisions of article 13, paragraph 2, of the Standing Orders, the Meeting set up a Working Party to draw up draft conclusions reflecting the views expressed in the course of the Meeting's discussion of the report. The Working Party, presided over by the Government Vice-Chairperson (Mr. El-Khrachi), was composed of the following members:
 

Government members

 

Egypt:

Mr. El-Khrachi

 

France:

Mr. Noisel

 

India:

Mr. Kerr

 

Mexico:

Mr. Penagos

 

Venezuela:

Ms. Sosa Brandt

Employer members

 

Mr. Cotes Silva

 

 

Mr. Da Costa

 

 

Mr. Nauman

 

 

Mr. Schluep

 

 

Mr. Stooke

 

Worker members

 

Mr. Boggs

 

 

Mr. Myhre

 

 

Mr. Spis

 

 

Mr. Stanine

 

 

Mr. Thomas

 

Presentation of the report and general discussion

5. The report prepared for the Meeting was introduced by the Executive Secretary. He noted that the refining industry was faced with multidimensional change of unprecedented breadth and complexity. This included change related to intensive and rapid technological innovations, economic and commercial change related to decreased demand and changing structures resulting from either "de-integration from the bottom" or "reintegration from the top", and deregulation in many countries leading to greatly intensified competition. While there was increased liberalization in the economic aspects of refineries, the picture was very different as regards environmental behaviour due to tighter regulations by governments in most parts of the world, particularly in relation to the specifications of oil products and the level of emissions permitted. These changes required considerable investment by the industry. Change had lead to increased productivity which meant that employment levels were declining in relation to output. Refinery staffing levels varied considerably between countries as a function of availability of labour and capital among other factors and would continue to do so, but the downward trend in work-hours per barrel of oil processed was general and would in all likelihood affect all countries. The skill profile of the workforce was changing as a result of information technology and other developments, with the result that manual labour needs were reduced and the education level and skills required were higher. Contract labour was being used more frequently, which had some appealing features for enterprises and some workers, but if not carried out properly it risked lowering social protection levels. Industrial relations institutions and processes had a very important role to play in the process of change. Where industrial relations were weak or non-existent -- where representatives of employers and workers were not genuinely independent -- it was difficult or impossible for them to assist in the process of change.

6. Prior to the discussion of the report prepared for the Meeting, the spokesperson for the Workers' group pointed out that an important characteristic of this type of meeting was the independence of and freedom for workers to discuss issues of concern to ensure better situations in their workplace. But two Workers' delegates (Mr. Kokori and Mr. Dabibi, elected officials of the Nigerian NUPENG and PENGASSAN trade unions respectively) who had been invited by the Governing Body of the ILO to participate in the deliberations were absent and the Workers' group had been informed that they were being detained in prison by the Government of Nigeria without trial -- since 1994 in one case, and since 1996 in the other. The Workers' group demanded that these two colleagues be released, that the Government confirm that they were out of prison and in good shape, and that they be brought to the Meeting in Geneva. If this action could not be guaranteed, the Government of Nigeria should not take part in the Meeting. If it did, the Workers' group would not participate. Delegates to the Meeting were appointed by the Governing Body. The Government of Nigeria was represented, but not the nominated Workers' representatives. Moreover, it would not be possible to discuss human rights and workers' rights in the presence of a Government that jailed trade union officials without trial.

7. A Worker member from the United States affirmed the consensus within the Workers' group on this question. It was impossible to discuss freedom of association when confronted with a situation in which two Workers' representatives, who had been appointed by the Governing Body, were detained in violation of the core values of the ILO. To discuss such matters in the present circumstances would compromise this very serious matter. He implored the representatives of the Government of Nigeria to respond affirmatively, provide the information requested or withdraw from the Meeting.

8. A representative of the Government of Nigeria said the fact that Mr. Dabibi and Mr. Kokori were members of trade unions did not necessarily mean that they were detained as a result of trade union activities, or that the Government of Nigeria had acted in violation of their rights or of Conventions Nos. 89 and 98. He had expected that any discussion relating to grievances of these particular unions would take place at the appropriate time during the Meeting. Late last year, it was announced that some political detainees in Nigeria would be released, but full details were not yet available. The speaker sought clarification as to whether the two persons in question had been invited to the Meeting as individuals or as representatives of the two trade unions. The Workers' group was requested not to attempt to block the participation of representatives of the Government of Nigeria and to enable them to provide information on the situation in their country at the appropriate time.

9. A Worker member from Trinidad and Tobago considered that since the representative of the Government of Nigeria did not have the information to answer the queries of his group, he should leave the Meeting to obtain the relevant details and report back.

10. The spokesperson for the Workers' group said that since the representative of the Government of Nigeria seemed to have knowledge of the two trade unionists, despite it being a large country, he should be able to inform the Meeting as to why they were being detained.

11. In response to the question about the capacity in which delegates were invited to participate in this sectoral Meeting, Mr. Tapiola, Deputy Director-General of the ILO, said that the names of Employer and Worker participants were submitted to the ILO Governing Body by the respective groups and that the nominations were approved by the Governing Body at its 270th (November 1997) Session.

12. A representative of the Government of Nigeria pointed out that the ILO was a tripartite organization intended to provide a democratic forum for discussion and to reach consensus; Nigeria had not come to the Meeting to be humiliated. The Government had not been informed of the individual nominations. If it had, things might have been different. As noted earlier, some political detainees had been released at the end of 1997, details of which remained to be announced. These two nominees had been political detainees. The Workers' group was urged to respect the representatives of the Governments and Employers and not to walk out.

13. The spokesperson for the Workers' group recalled the previous speaker's reference to democracy and emphasized that democracies did not detain political prisoners. So far the Workers' group had not received a satisfactory response. If one was not forthcoming, the Workers' group would withdraw from the Meeting.

14. The spokesperson for the Employers' group stated that the report demonstrated the complexity and varied circumstances of the industry in the national and international contexts. The refining industry was diverse in terms of size, level of technological advancement and performance. A common factor, however, was the high level of competition and thus the need for improvements in productivity. The range of efficiencies within countries and regions was well illustrated in the report, differences which made it difficult to reach broad-based conclusions. Oil refining accounted for a very small proportion of employment internationally -- less than 1 percent -- and it should be reviewed in that context. Employees were generally well paid and their terms and conditions of employment much in advance of those in other industries. Occupational safety and health concerns were internationally recognized as was the need to maintain safe, productive processes while remaining efficient. There were uncertainties; changes in the price of crude oil over the years had triggered adjustment and technical development, with an impact on operations and employment. Since governments were not necessarily immune from the industry's problems, it would be appropriate to hear from their representatives on the role of the State.

15. A representative of the Government of Venezuela considered the report excellent and of great value to the participants. She noted that there was a tendency to consider the various groups (employers, workers and governments) as separate entities, but in a world which was becoming increasingly globalized and competitive all partners should be working towards a common objective. A new work culture was needed where workers would improve their skills on their own initiative to become more competitive. This would enable enterprises to earn more and, in turn, pay the workers more.

16. The representative of the Government of Trinidad and Tobago thanked the ILO and in particular the Governing Body for the initiative it had taken in organizing the Meeting and for having invited her Government, as the oil industry was a mainstay of the country's economy. The report's treatment of changing employment structures, loss of jobs, refinery upgrading and contract labour, was very relevant to the situation in Trinidad and Tobago.

17. The spokesperson for the Workers' group stated that the 11 points suggested for discussion would enable important viewpoints to be shared. He regretted the use of the term "workers and their organizations"; "trade unions" should be used instead. Several points that did not include governments should do so, notably on the important issue of the environment. Technological developments that were taking place in the industry would continue with inevitable reductions in employment. Workers recognized the challenge of new technology and were working with it. There was, however, an increasing trend to resort to the use of contract labour and to decrease regular employment as new technologies were deployed. Where rapid technological change or refinery revisions were occurring, there could be a need for persons with specialized skills to be brought in from time to time, but production workers should be the industry's primary workforce. Contract workers commonly had neither the same working conditions nor the same levels of safety training or equipment. Moreover, they were normally not organized in a trade union. These were issues of major concern. All refinery workers should have the same conditions, wages and training. The report noted that privatization led to loss of jobs. The issue of unemployment and ways to solve the dilemma should be reviewed. Another matter that should be discussed was the importance of ensuring that refineries in developing countries had the same standards and safety records as those in industrialized countries. He also emphasized the importance of providing more education to the existing workforce in refineries.

18. The spokesperson for the Employers' group expressed his group's reservations about the suggested point for discussion which concerned the use of contract labour. This issue was not specific to the oil industry and was the subject of a more substantive debate at the International Labour Conference. It should not form part of the agenda of the current Meeting. The question of environmental regulation should be discussed in the context of the Conference of the Parties to the United Nations Framework Convention on Climate Change in Kyoto in December 1997 and the recommendations from it. As to the matter of the definition of workers' representatives, he drew the Meeting's attention to Article 3(a) and (b) of the Workers' Representatives Convention, 1971 (No. 135). The spokesperson for the Workers' group agreed that the outcome of the Kyoto Conference should be considered.

Point by point discussion

Main influences on refinery employment in the next decade

19. The spokesperson for the Employers' group stated that there was a difference between state and private sector industry, the former needing to become more competitive and efficient by following private sector practices. Continuing technological advancement, in areas such as process control, would lead to the need for a more technically educated workforce to match the new and more skilled job requirements. Alternative sources of energy were exerting pressure on the industry and could lead to closures of inefficient operations. State ownership often resulted in low profitability and a shortage of the capital required to enhance the industry's growth. Governments should give this attention to avoid stagnation. Uncertainties over the cost of raw materials could place pressures on individual plants. The practice of increasing refinery output at very low marginal cost had contributed to overcapacity. The incidence of amalgamations was placing pressure on smaller operations due to economies of scale. Pressures would also be placed on older refineries with less resources. All these factors would intensify competitive pressures on the industry.

Environmental regulation

20. The spokesperson for the Workers' group said that this was a major issue and that governments had to be involved as environmental regulation was their responsibility. Where industry "cleaned up its own act" regulatory pressure would be less. This could be accomplished in different ways at the company/plant level provided there was union involvement and top management was committed. While it was governments that ratified labour standards, the provisions of the Chemicals Convention, 1990 (No. 170), and the Prevention of Major Industrial Accidents Convention, 1993 (No. 174), should be adopted as minimum standards by the industry. No matter where in the world companies were operating, they should apply the same standards.

21. The representative of the Government of Argentina agreed that governments should be included as they were empowered to legislate in environmental protection matters. Nonetheless, workers and employers should proactively participate in drafting legislation to ensure cleaner products and processes and jointly shoulder their responsibilities.

22. The spokesperson for the Employers' group supported the views expressed on the inclusion of governments. The oil industry had been a pace-setter in caring for the environment and in setting standards on its own initiative. The relationship between the industry and environment was vital. Sustainability was a key issue.

23. A representative of the Government of Egypt considered that the introduction of new technologies was important, especially in relation to the environment. All refineries and manufacturing processes should take due account of the environment. There should be regular inspections of refineries and enterprises. The social partners should abide by all environmental regulations.

Manpower levels and costs in relation to competitiveness

24. The spokesperson for the Employers' group considered that competition for survival would require enhanced efficiency which, in turn, would require a reduction in labour costs. The industry had to work smarter and improve productivity. The industry had historically been a pace-setter in wages and conditions and this could not be ignored by workers' representatives when adjusting to current and future market conditions. High cost operations would be the most vulnerable. Workers generally preferred reduced manning rather than reductions in their terms and conditions of employment. Shareholders set targets for the return on investment and those refineries that could not meet them would be deprived of capital and become the most vulnerable. There was a need for a legal and institutional framework which was sympathetic to employment and investment and governments could review their role in this regard. They should support only sustainable wage movements and tax regimes should also be analysed and adjusted.

25. The spokesperson for the Workers' group pointed out that labour costs amounted to 2 to 4 per cent of refining costs, yet there had been massive increases in productivity and value added, almost doubling to US$312,000 per employee between 1982 and 1995. So the industry was not performing as poorly as was sometimes mentioned.

26. A Worker member from the Russian Federation said that the privatization process in his country was in the re-equipping phase, during which wage levels were blocked at US$300 to US$500 per month and manning levels were also being kept down. A number of problems needed to be resolved by the Government, such as job creation, retraining, and decent wage levels and working conditions. A Worker member from Brazil emphasized the importance of maintaining existing workers, such as those employed by PETROBRAS which had been a monopoly for the last 40 years, as they had accumulated a wealth of knowledge of the industry. Any new industry without recourse to an experienced workforce would be at a competitive disadvantage.

27. A Worker member from South Africa said that the trend towards privatization was of major concern to the labour movement. In developing countries it could have a negative effect on employment; governments should therefore play an important role in minimizing the negative effects of privatization.

28. The spokesperson for the Employers' group believed that labour costs amounted to 13-15 per cent of operating costs. In terms of variable costs they amounted to about 30-35 per cent. Thus the management of labour costs was a key issue in increasing efficiency.

29. A representative of the Government of Egypt noted that both privatization and acquisitions in developing countries and countries in transition affected labour costs. In his country new jointly funded refineries had been set up. Workers from public sector refineries were retrained with a view to employing them in the private sector, but there had been problems with their efficiency and their ability to be trained to use new technologies.

30. The representative of the Government of Argentina noted that refinery privatization was a response to economic demands, which occurred in all regions of the world. With regard to the privatization of the state company (YPF) which was mentioned in the report, she pointed out that the social consequences had been minimal in the refining sector which was the object of the present Meeting. Investment in new technologies was important since it would lead to more value added products and higher revenues.

31. A Worker member from Argentina disagreed with the previous speaker, stating that privatization in Argentina had in fact led to major social imbalances.

Work practices, efficiency and competitiveness

32. The spokesperson for the Employers' group recalled the structural differences across the industry, with major changes having taken place in some countries but with others still having a long way to go. However, in seeking best practices, there were common elements. Employees had to work smarter; demarcation disputes needed to be eliminated and flexibility introduced in response to a blurring of process, instrumentation and maintenance boundaries. Multiskilling and the development of process maintenance skills were also key areas, together with an increase in skills related to supervision. This would not mean the total displacement of maintenance staff, rather the better use of the workforce. Training facilities would promote core skills and remove demarcations. Regulations on shift work should be reviewed as restrictions impeded companies' competitiveness. The notion that resistance to change would protect jobs was incorrect; the opposite was true. A better acceptance of change was needed. Greater mobility and flexibility between vocations and places of work was vital and special skills had to be developed and be accessible. There should be a move away from fixed pay rates to performance-related pay and workers should embrace this approach. The education of employees was the key and should encompass knowledge of the economics of business. Deregulation was essential for survival. Cooperation and the use of consultative committees at the enterprise level should be used to introduce change and improve labour-management relations.

33. An observer from the International Federation of Chemical, Energy, Mine and General Workers' Unions stated that workers agreed to being flexible but did not accept all that was said on multiskilling. The human quality of the workforce in refineries was often ignored. Workers' lives were often placed at risk since they were exposed to processes operating at high temperatures and pressures. Safety at the worksite should not be jeopardized when referring to labour flexibility.

34. A Worker member from the United States noted that at every stage of technological development there had been pressure on workers. Governments and employers had to acknowledge that, in order to bring workers to the table and convince them of the need to change, they had to be offered something in return. One kept hearing of the high costs of labour, but if more was wanted from workers they had to be compensated. Safety and health considerations were vital, yet unqualified workers were called on to undertake work they were not trained for, with dire consequences. Multiskilling and multitasking had to be considered in relation to job security. While the link between new technologies and higher skills was recognized, there was a need for collective bargaining to ensure that these additional skills were compensated for and job security ensured. The question of performance-related pay could be considered, but not at the expense of ignoring basic rates of pay. Rules were required in relation to flexibility and maintaining a safe working environment.

35. An Employer member from Israel agreed that there was a need to pay for new skills but did not consider this to be a safety issue. Another aspect of multiskilling that had been overlooked was job enrichment and its benefits for workers.

36. The spokesperson for the Employers' group noted that the most efficient refineries in the world were also the safest ones. Safety was a top priority for employers. The Workers' representatives had referred to cutting wages or conditions to reduce costs, whereas a better quality of work would lead to cost savings and higher productivity. Multiskilling enabled jobs to be performed safely and competently. In Australia an approach known as "SELL" (Safe, Efficient, Legal and Logical) was utilized to develop multiskilling, flexibility and obtain the benefits from them. Collective bargaining was not the only way that job security could be ensured, it was individuals' own contributions that maintained an efficient organization.

37. A Worker member from Trinidad and Tobago noted that oil companies had in the past conducted training programmes for their workers and had benefited from them. Subsequently the search for competitiveness led to the use of contract labour and a number of issues with regard to the safety and well-being of workers had arisen.

38. A Worker member from South Africa highlighted the need for workers to have full information when efficiency and competitiveness were being discussed. Trade unions had resisted these issues because the lack of information made them suspicious.

39. An observer from the International Federation of Chemical, Energy, Mine and General Workers' Unions considered that technological progress was welcome as a challenge to humanity but when it was improperly managed changes led to social contamination. Multiskilling called for greater efforts on the part of workers without any benefits and led to a reduction in their numbers. Working time should be reduced instead.

Managing staff reductions through labour-management relations and social measures

40. The spokesperson for the Employers' group said that while voluntary workforce reduction was preferred, enforced redundancies where fair treatment was ensured could not be discounted. Different national and local situations meant that there were wide differences in the way in which such reductions were handled. It had to be realized that there was a general contraction in manufacturing employment, whereas the service sector was expanding. Governments could assist in managing the absorption of displaced workers into the workforce. Enterprises had to have regard for the statutory period of notice prior to restructuring. Consultation processes should be in place to reduce the impact of job losses on workers. Outplacement services, ensuring workers' social rights, identifying alternative career options, CV preparation, and improving interview techniques were among the services that should be provided to lessen the impact of job losses during the transition period. Outsourcing of services could be beneficial to both enterprises and workers during periods of change. Workers could make their skills available to specialized enterprises that could better adapt to and use such skills, leading to job enhancement and enrichment. His group supported the disclosure of information to workers' representatives concerning technological change, provided that commercial matters were not compromised. Some countries already had legislation in this regard. The better the workforce understood all aspects of the business, the better change would be accommodated.

41. The spokesperson for the Workers' group was concerned that workers were too often considered to be merely the tools necessary to run machinery. When changes were required, it was workers who were changed to achieve the desired results. Workforce reductions were often necessary, but they should not be an end in themselves. Changes needed to be negotiated in an open and meaningful way with trade unions. Other avenues, such as early retirement, reductions in working time (both core hours and overtime), various types of education, training and retraining, and the transfer of workers to other enterprises, should also be explored. In the event of job losses, periods of income protection were important at the individual and community levels. The practice of using contract workers to replace those who had retired early or lost their jobs should be examined with a view to making more use of existing workers.

42. The representative of the Government of Trinidad and Tobago, speaking on behalf of the Government group, highlighted the need for a comprehensive study on labour oversupply and requirements and how to match the two using training, transfer, income protection and other social benefits as appropriate. New technologies could lead to higher levels of productivity, quality and profit which, in turn, could be used to the benefit of displaced workers.

43. Several Worker members recounted the approaches to workforce reductions in their countries and the ensuing problems. A Worker member from the Russian Federation drew attention to the acute employment problems in the refining sector in his country. No new jobs were being created, anywhere. It was extremely difficult for displaced workers to contemplate moving to another location even if a job was available. It was important for trade unions and employers to negotiate with regard to redundancy programmes. The trade union was developing an employment programme, but government and employer participation was necessary for it to be implemented. The lack of employers' organizations was a major drawback in reaching common ground; workers should not bear the brunt of the consequences of structural change. A Worker member from Belarus described a similar situation with privatization being held back for want of adequate legislation. Trade unions recognized the need for restructuring and the inevitability of job losses, but were unable to have much input on redundancies and wage setting. Employment was being maintained which was having an adverse impact on salaries. The union was trying to deal with impending redundancies by developing programmes for job creation, training and early retirement. A Worker member from China stressed the important role of the union in defending the long-term interests of its workers as competitive forces increased with the strengthening of the socialist market economy. Unions were involved in: policy-making concerning redundancies and re-employment; encouraging enterprises to participate in the social security system; supervision through enterprise-level labour committees; mediation of disputes; workers' education and training; advising on new employment opportunities; assisting workers in difficulty; and setting up workers' consumer cooperatives that created new jobs. A Worker member from Algeria stressed the need for dialogue, consultation and worker participation in managing change. He pointed out that different national situations cast a different light on practices such as subcontracting and privatization. While there was some scope for harmonization, national differences had to be respected. A Worker member from Canada drew attention to the adverse effects of unemployment, especially for highly paid skilled workers, on communities. He did not accept the inevitability of forced redundancy, believing in training and retraining to meet new technologies. He referred to jointly funded training centres in the United States and Canada in which about 50,000 persons a year were assisted in getting new skills and jobs. He also stressed the need to link employment data so that there was a match between the skills needed and those being provided in training programmes. The question of reducing work time without loss of pay was a means of creating jobs that deserved careful consideration.

44. The spokesperson for the Employers' group disagreed that reduced work-hours led to more jobs. The continuous nature of the refining industry meant that there were limited opportunities to achieve maximum efficiency. Low working hours in his country had not insulated the workforce from reductions. Moreover, they did not guarantee increased efficiency. More important was the commitment of the workforce to the success of the enterprise. Governments should have a role in addressing structural questions and in taking a major responsibility for supporting workers who had been displaced from the industry, such as pension and tax relief on early retirement.

45. The representative of the Government of Trinidad and Tobago drew a distinction between the roles of enterprises and governments during times of technological and structural change. Governments should monitor what was happening, encourage dialogue between the social partners and develop policies and systems to help the transition to new jobs. Governments were not, however, in the business of providing new jobs. Highlighting the role of education, training and re-education for new jobs, she recognized the government's role in ensuring the provision of basic education that equipped people to meet new workplace requirements.

46. The spokesperson for the Employers' group said that governments had the primary responsibility for ensuring adequate social measures to support individuals. Technological change and increased competition were managed in a variety of ways and penalizing enterprises could make matters worse. Governments had many policies at their disposal to support the viability of industry.

47. A Worker member from Egypt said that modernization should not lead to low employment. Cooperation was needed if change was to be managed. Workers should be encouraged and given the means to increase their skills. When privatization led to redundancies, workers and their families should be adequately protected. Governments should guarantee pensions and social security payments and provide resources for training for new employment.

48. A Worker member from Argentina agreed on the importance of a tripartite approach to the problems of redundancy. Predictability was important and workers' organizations needed access to information to enable them to play a full role on behalf of all workers in the industry, including contract workers. Employers' responsibilities extended to contract workers who were covered by collective agreements. Rationalization should not begin and end with workers and everything possible should be done to preserve employment, provide training and increase their skills. He referred to the privatization process in his country, which had entailed a high social cost and during which the Government had not fully assumed its responsibilities. He hoped that others would learn from this. The large numbers of lay-offs had had serious social consequences. He recognized, however, the commercial skills of management in creating a leading industry in Latin America.

49. A Worker member from Singapore drew attention to the spiralling effect of refineries around the world reducing the workforce to increase competitiveness, which put more pressure on others to do the same. Workers had to be convinced that they were not considered as mere factors of production. Change was traumatic and had to be addressed well ahead of time, with counselling and practical assistance as necessary. It was for employers to ensure that if job security was not possible, workers had to be equipped for re-employment by acquiring certificated, portable skills. Governments had to ensure the correct economic and regulatory framework, including social security support. Trade unions had to change too in order to meet the needs of their members in times of rapid and significant change. Government and employer support was important if the unions were to succeed in helping workers manage change for the better. There needed to be a better balance between the costs of change, which generally accrued to workers, and the benefits which tended to flow to management.

Changes in labour-management relations

50. The spokesperson for the Employers' group said there was a strong link between the welfare of an enterprise and that of its workforce. A workforce that was well informed would enhance business performance. Such an approach could entail a change in both worker and management attitudes in some organizations. The consultative process, that was well developed in the refining industry, should be encouraged and used for mutual benefit. Employers and workers had to understand and manage new technologies. Failure to do so would lead to poor operating performance. Training was fundamental to ensuring that new technology was used so that the maximum economic benefit was obtained.

51. The spokesperson for the Workers' group to ensure that collective bargaining was carried out with independent trade unions. He recalled conclusions and resolutions on trade unions and collective bargaining that had been adopted by the former Petroleum Committee and noted that 1998 was the 50th anniversary of the adoption of Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). Yet the report for this Meeting referred to "... the ambivalent attitude of the oil industry to trade unions and collective bargaining". Trade union recognition and collective bargaining were therefore crucial.

52. A Worker member from France referred to the need for dialogue to evolve between the social partners, particularly in the light of globalization and structural changes in enterprises. Globalization meant that governments too had to understand the necessity for strong social regulation, reinforced social dialogue and recognition of the importance of trade unions at a time when new challenges had arisen.

53. A Worker member from Trinidad and Tobago felt that labour-management relations could be enhanced in a way that would promote the resolution of disputes, or avoid them. High-level tripartite consultations had been widely held in the industry in his country with this objective in mind. In fact, discussions had gone beyond industrial relations to include education, training and manning levels.

54. The representative of the Government of Trinidad and Tobago, speaking on behalf of the Government group, stressed the importance of parties meeting on an equal footing with a common interest in developing policies in collaboration. Re-education and training to meet the needs of new technologies were beneficial for workers and employers. Government could use its influence on employers' and workers' organizations to facilitate the elaboration of appropriate strategies. Alternatives to redundancy should be sought and employers and workers' organizations should encourage each other to prepare for and adjust to contemporary economic, social and technical conditions.

55. The spokesperson for the Employers' group recognized that collective bargaining was widely practised. Nonetheless, it was not the only means of bargaining, just as trade unions were but one source of worker representation. Centralized negotiations could have the effect of disenfranchising employees and management, as had happened in his country. Government's role was not to intervene in the labour-management relationship, rather it should set up the appropriate structure so that when the parties could not resolve their differences there was somewhere for them to turn to.

56. A Worker member from Algeria regretted that there was no objective evaluation of what was happening as far as dialogue and improving labour-management relations were concerned. The institutions to cope with new situations were for the most part in place. What was needed was an increased effort to deal with new issues as they occurred.

Principles of freedom of association and collective bargaining

57. The Chairperson of the Meeting announced that a draft resolution concerning Nigeria had been declared not receivable by the Working Party on Resolutions and had been referred to the Meeting for consideration.

58. The spokesperson for the Workers' group said that even if threats to freedom of association and collective bargaining were limited to one country, it would be enough to provoke condemnation. Governments at this Meeting had ignored Convention No. 87 and the decisions of the Committee on Freedom of Association. Trade unions were illegal in some countries. Turning to the question of Nigeria, the speaker referred again to the imprisonment of two union officials who had been invited to the Meeting and to the coverage of this topic in the report. He read the following text from the draft resolution that had been declared not receivable:

The Workers' group demanded: the immediate unconditional release of Milton Dabibi and Frank Kokori; the immediate removal of the government-imposed "sole administrators" who had been appointed to run the unions, and the return of trade union resources to the legitimate leadership of the trade unions; that all possible action be taken to ensure the restoration of trade union rights in Nigeria. He called on member States of the ILO and employers in the oil refining sector to publicly demand the immediate unconditional release of Milton Dabibi and Frank Kokori. To ensure that, until this demand was met all measures should be taken to stop the trading in Nigerian products, including oil and gas, on international markets. Further, he called on governments, employers and trade unions to cooperate in monitoring the compliance of companies and ILO member States with this statement. The speaker then drew the Meeting's attention to other examples of violations of workers' rights in Colombia, the Islamic Republic of Iran, Turkey, the United Kingdom, Brazil and Indonesia. Eighteen Colombian oil workers were in prison because of their union activities. Trade unions were deemed illegal in the Islamic Republic of Iran and the speaker provided information that had been provided by groups in exile on demonstrations and arrests of oil workers. These included strikes at the four refining centres in protest at the arrest of workers and their elected representatives who had been picketing the oil ministry in Teheran. Some arrests were said to have taken place at workers' homes. Other oil workers were said to also have joined the strike. The Government's response had been to outlaw all workers' organizations and to refuse demands for collective bargaining. The speaker provided information on previous industrial action by oil workers in support of better pay and conditions and for the right to form their own unions and to bargain collectively. He alleged that promises had been broken and that there was little or no real collective bargaining in the Islamic Republic of Iran. Contract work in Turkey had been introduced in a way that made it impossible for unions to bargain collectively. Unions had been derecognized at a number of refineries in the United Kingdom, a move criticized by the European Parliament. In Brazil unions' funds and property had been confiscated to ensure payment of $45 million in fines following a two-day strike in 1995. The speaker said that the Government was intent on destroying the union's ability to counter neo-liberalism. He referred to several warnings concerning violation of the right to strike and the right to negotiate that had been given by the ILO and a recommendation that the fines be cancelled. The Committee on Freedom of Association had recommended in 1997 (Case No. 1889) that the Government take measures so that its new strike Bill did not include the imposition of fines and sanctions on unions because of strikes. In Indonesia the right to organize was severely restricted. The speaker reiterated that workers in oil refining demanded the right to organize and the right to strike. The question of essential services needed to be clarified so that it was restricted to cases where life and health were endangered. Worker members from the United States and Switzerland referred to limitations on the right to strike in their countries.

59. The spokesperson for the Employers' group said that freedom of association in the context of the report was supported by his group. He recognized the right of workers to belong to workers' organizations, including trade unions. But workers had an equal right to refrain from membership and to decide whether or not to take part in collective bargaining. In exercising the principle of freedom of association account should be taken of the economic well-being of the community at large. He recognized that legislative mechanisms and industrial laws provided by governments to protect the "public interest" coexisted with the principle of freedom of association.

60. Turning to the question of Nigeria, the Chairperson of the Employers' group said that the ILO had sufficient mechanisms to deal with violations of freedom of association. There had been considerable discussion about Nigeria at sessions of the Governing Body and the International Labour Conference. He referred to the report of the Committee on the Application of Standards at the International Labour Conference in 1997 that had expressed great concern that, although the case of Nigeria had been the subject of a special paragraph in 1995 and 1996, no concrete progress had been made. The Committee of Experts and the Committee on Freedom of Association had both profoundly deplored the gravity of the situation of trade unions in Nigeria and lamented that the Government had not replied to requests for an ILO mission to the country. This request was reiterated by the Governing Body in November 1997 (Case No. 1793). The Director-General had called on the Nigerian Government as a matter of urgency to propose the earliest dates during which a mission that would visit jailed trade union leaders could be received. The Employers' group strongly supported the action of the Governing Body. Although this Meeting concerned oil refining, the Nigerian question had been addressed and the problem deplored. Action was under way in the Governing Body and the speaker supported it.

61. An Employer member from Nigeria wanted to clarify some statements made by the Workers' group concerning his country. He recognized that the dissolution of PENGASSAN and NUPENG had been the focus of ILO attention for some time. As far as this Meeting was concerned, however, he felt that had the ICFTU contacted the oil workers' organization in Nigeria, the chairmen of the branches of the union in the refining sector would have been present. He noted that oil refining workers did not join the strike that led to the problems of Mr. Dabibi and Mr. Kokori and that the oil unions were still operational. They should have been given the opportunity to nominate appropriate people to participate in the Meeting. The speaker also pointed out that PENGASSAN and NUPENG still existed, their bank accounts were not frozen, workers could now hold delegates' conferences to elect their representatives, and check-off payments of union dues had been reinstated. He felt that it was a dangerous precedent for a technical meeting to focus on general rather than industry-specific issues. Calls for boycotts of Nigerian oil would have on impact mainly on the workers concerned. The process of democratization was under way and collective bargaining was taking place in Nigeria.

62. The representative of the Government of Trinidad and Tobago, speaking on behalf of the Government group, acknowledged that there were instances where the principles of collective bargaining and freedom of association were not respected, but doubted that they were widespread, particularly in oil refining. It was more pertinent to examine the effectiveness of existing mechanisms in guaranteeing workers' rights. Governments had a critical role in ensuring workers' rights were protected, promoted and could be freely exercised.

63. The representative of the Government of Brazil referred to the Workers' group's remarks on the situation in her country. The case was discussed by the Committee on Freedom of Association in March 1997 and the Government had taken good note of the recommendations. PETROBRAS, which had a monopoly on oil production and refining, was responsible for essential services as set out in the Constitution and was subject to the law which regulated strikes. The labour conflict in question took place in 1995. A negotiated solution was not possible and the case went before the Supreme Labour Court. The Court judged the strike illegal and ordered a return to work to avoid further damage to the population at large. Since the workers did not comply, the union was fined. The Government could not intervene in a judicial process. In the meantime, the Government had presented a bill to change the law regarding such fines and was considering a draft constitutional amendment to strengthen collective bargaining and reduce the involvement of the labour tribunal in collective labour conflicts.

64. The representative of the Government of the Islamic Republic of Iran provided information on statements made by the Workers' group and in the report concerning the industrial relations situation in his country. There was an industrial action at the Teheran oil refinery; workers had demanded a revision of their job classification scheme according to the new Labour Code, and an increase in non-wage benefits on the basis of acquired rights. After several meetings between workers' and employers' representatives, an agreement was reached and implemented. Reports of industrial action at other refineries were not correct. As to the demonstration at the headquarters of the oil company, senior officials of the Ministry of Petroleum went to the gathering and reported on the measures taken to apply the collective agreement, the text of which was available. Workers' representatives agreed to the measures and they were being implemented. The speaker cautioned against relying for information on politically motivated sources from outside the country. The real situation should be distinguished from allegations which were not true. The ILO report also stated that other allegations had not been confirmed.

65. The representative of the Government of the United States said that it was his Government's policy to support workers' rights to freedom of association and collective bargaining. His Government's membership of the ILO and support of its formal mechanisms demonstrated its desire to ensure that these rights were not compromised. The Committee on Freedom of Association had determined that Mr. Kokori had been jailed for exercising his legitimate rights and that the Government of Nigeria had violated the principles to which it and all ILO member States subscribed by virtue of their membership of the ILO. The Government of Nigeria had an obligation to comply with the request of the Committee on Freedom of Association that Mr. Kokori be released. He urged the Government to meet this obligation.

Policies for contract labour

66. The spokesperson for the Workers' group did not see any technical advantages in using contract labour. Its increasing use was partly due to corporate downsizing and had also been a means to cut companies' social costs, avoid job security and undermine union organizing. Contract workers should be subject to the same rules and training requirements as the regular workforce. The introduction or extension of the use of contract labour should be subject to prior negotiation with trade unions at the enterprise level. Contract workers should have the same rights as regular workers as far as trade union membership and collective bargaining were concerned. Trade unions considered contract labour as a threat to workers' pay and conditions leading to a casualization of work and reduced standards of safety and health.

67. A Worker member from the United States referred to parts of the report that cited a study carried out in his country that found that the profile of contract workers was less than the company expected of its regular workers. It also showed that the driving force behind the use of contract labour was cost reduction. The report provided important lessons regarding the expectations of the quality of contract workers and the reality and the responsibility of the host company for training and quality improvement.

68. The spokesperson for the Employers' group reiterated his earlier reservations on this point. He recalled that oil refining accounted for only about 1 per cent of employment and that it was more appropriate to discuss contract labour in a wider context, as was being done at the International Labour Conference.

69. The representative of the Government of Trinidad and Tobago, speaking on behalf of the Government group, said that while contract labour was an integral part of oil refining it existed elsewhere too. A distinction needed to be made between regular contract labour and ad hoc "one-off" use of contract workers which carried risks of excessive working hours and lower safety standards. Contract work was not bad in itself and it also involved highly skilled workers. The phenomenon of contract labour should be dealt with in the context of skills, guarantees of safety standards, minimum wages and levels of education to ensure that differences between contract and regular workers were eradicated or minimized.

70. The representative of the Government of India drew the Meeting's attention to the trend towards labour cooperatives in his country in which workers were the members and sought contract work and shared the benefits while improving their skills. Employers had been encouraging these cooperatives.

Other employment and industrial relations issues and the role of the ILO in regard to labour issues in oil refining

71. The spokesperson for the Workers' group felt that the report dealt extensively with all the relevant issues. Nonetheless, several Worker members identified issues that would merit additional attention at the national level and/or by the ILO. These included: new approaches to training, including in schools; social consultation -- whereby the ILO should study how it could be maintained and improved in the oil refining industry; the establishment, through employer-worker consultations, of social agreements covering training centres and facilities for workers and their families to improve professional and personal development so that workers could better meet the high standards set by the industry; an increased perception of the environment throughout the industry and a suggestion that the ILO could undertake some work in this area, and an improved attitude by foreign investors to social development alongside technical development.

72. The representative of the Government of Kuwait also highlighted the importance of protecting the environment and felt that it should be subject to legally binding international standards.

73. The spokesperson for the Employers' group recognized the need to pursue goals causing no harm to people, protecting the environment, using resources efficiently in the provision of appropriate products and services, publicly reporting on performance, promoting best practice, managing health, safety and environment matters in the same way as other critical business activities, and promoting a culture in which workers shared these objectives. Employers also supported a systematic approach to health, safety and environmental management in compliance with the law and to achieve improved performance, and setting targets for improvements and reporting. Workers would have to be involved in the management of health, safety and the environment, which should be included in the performance appraisals of management and workers. As far as greenhouse policy was concerned, employers had a responsibility, along with society in general, to provide future generations with a world such as was currently enjoyed. Employers supported the development of continuous improvements in emission levels using a "no regrets" approach (actions that were economic in their own right and also reduced greenhouse gas emissions). They explicitly considered greenhouse gas issues in day-to-day management decisions. Increased energy efficiency at all stages was a continuing goal, together with the promotion of efficient products that were as harmless to the environment as economically possible. Fossil energy was and would remain essential to economic growth and development. Global problems, such as climate change, required global solutions. Commitments by industrialized countries should be linked to future commitments by developing countries, assisted by technology transfer. Climate change was a long-term issue and policies to reduce it needed to be phased in. Since the costs of mitigation were not equal to all countries and sectors of the economy, policies should enable the most cost-effective options to be implemented through cooperation. Flexible responses should be developed in order to take account of increased understanding of climate change over time.

74. The representative of the Government of Trinidad and Tobago, speaking on behalf of the Government group, raised six points: the importance of upgrading skills, including sharing experiences on training schemes in the oil-refining industry; a proposal for a sectoral meeting that would address safety and health in the industry; technology transfer; the safe transportation of oil products; the creation of consultative machinery to facilitate greater and more meaningful employer-worker dialogue; and safety at the workplace from the perspective of drug and alcohol abuse. This last matter was a delicate and important issue that should be examined.

75. A Worker member from Canada pointed out the Polar region problems caused by global warming that directly affected the petroleum industry. The tundra was "baking" as a result of the hole in the ozone layer, shifting oil transmission pipes (pipelines) to the point of rupture. Thus, the environment, including questions related to exploration and extraction in the Polar Zone, was of primary importance to the industry.

Consideration and adoption by the Meeting of the draft report and the draft conclusions

76. The Working Party on Conclusions submitted its draft conclusions to the Meeting at the latter's sixth sitting.

77. At the same sitting, the Meeting unanimously adopted the draft conclusions and the present report.

Geneva, 27 February 1998.

(Signed) Mr. Sayed Ahmed El-Khrachi,
Government Vice-Chairperson.

Conclusions on employment and industrial relations issues in oil refining(2)

The Tripartite Meeting on Employment and Industrial Relations Issues in Oil Refining,

Having met in Geneva from 23 to 27 February 1998,

Adopts this twenty-seventh day of February 1998 the following conclusions:

1. Owing to intensified competition, technological development is likely to continue to be a characteristic of the oil refining sector. Conditions vary considerably from region to region. Nevertheless, the general effect of such developments may be to reduce employment levels relative to output. Privatization and consolidation will have impacts on job levels in the industry. Skill requirements can be expected to continue to rise, the need for tertiary education becoming widespread. The necessity of change should be embraced; change must be managed in a positive and socially responsible manner. In meeting the need for a more skilled workforce, priority should be given to upgrading the existing workforce through appropriate training and retraining.

2. While environmental regulation in general is the responsibility of governments, regulations pertaining specifically to refinery activities, products and emissions should be drawn up in consultation with the industry and other relevant parties. This is intended to ensure that such regulations are economically and technically feasible, with enhanced viability of the refinery operation and a reduced threat to employment. Further, it is recognized that effective voluntary steps taken by the industry constitute a positive contribution to underpin the basis of government regulations. As a principle, when new equipment or technology is introduced there should be no significant difference between industrialized and developing countries in respect of all applicable environmental standards. The principle of sustainable development should apply, and measures should be in conformity with positions taken at the Kyoto conference on climate change. Employers should pursue continuous improvement in emission levels which are economic in their own right and simultaneously reduce greenhouse emissions.

3. As stated in the Philadelphia Declaration, "Labour is not a commodity". Accordingly, decisions on the number of workers and the level of their remuneration should be made on the basis of broader considerations than those that apply to other factors of production. In an increasingly competitive environment, it may be necessary for firms to seek ways to increase productivity and control costs. Historically, remuneration and working conditions in refining have tended to be favourable relative to other industries, and in some countries there have been significant increases in labour productivity in recent years.

4. New work practices can contribute significantly to enterprise competitiveness and thus help to secure jobs for the medium to long term. Such new work practices may include the introduction of "multiskilling", new types of training and certification, adaptations in shift work schedules and improvements in the way work is supervised. To be effective and fair such changes in work practices should only be introduced after consultation and/or negotiation with workers' representatives and/or workers' organizations.(3) This will provide workers with timely information which will assure as much employment security as possible. Remuneration will be offered that is commensurate with the skills required.

5. It is highly important in introducing new technology and work practices to do so in ways that do not adversely affect occupational safety and health. There need be no conflict between the requirements of efficiency and those of safety; indeed the two are closely correlated. Safety performance objectives and scope should be set at an appropriate level in all countries. They should be applied to all workers without discrimination. The principles contained in the Chemicals Convention, 1990 (No. 170) and in the Prevention of Major Industrial Accidents Convention, 1993 (No. 174) can provide useful guidance for enterprises as well as governments. Employers should manage health, safety and environment and provide appropriate training in a systematic way so as to enable compliance with the law and safe working practices for all workers in the facility, and to achieve continuous performance improvement. Performance should be measured, appraised and reported on in relation to set targets in consultation with workers and/or workers' organizations.

6. Selective privatization and other forms of liberalization may bring major economic benefits to some, but privatization has had negative employment effects in certain countries and especially in the short to medium term. There is no justification for reducing staff levels as an end in itself, nor should there be systematic recourse to overtime in conjunction with staff reductions. Reductions may, however, be necessary through the introduction of new technology. To the extent possible, such reductions should be carried out through attrition and, where possible, should be phased in ways that minimize the impact of adjustment. Changes should be introduced only after consultation and/or negotiation with workers' representatives and/or workers' organizations. Options explored should include organization of working time, retraining of the individuals for other jobs within the enterprise, engagement by affiliated firms or, in cases of privatization, engagement by growing or newly created private enterprises. The dignity of the individuals who depart, voluntarily or involuntarily, should be respected, and consultative mechanisms used to alleviate the adverse impact. Notice periods should be respected and where possible should be sufficiently long to facilitate the transition. Where appropriate, outplacement services should be provided. Governments should endeavour to have legal and tax frameworks that are stable and that serve to attract investment and promote employment.

7. Actions taken by employers related to staff reductions should be accompanied by appropriate forms of social support provisions by governments. These include social security measures such as income maintenance and protection for the disabled and other vulnerable groups; the provision of labour market information and advisory services; support for education and training; and special measures of support to communities whose economic base depends heavily on refining and where there are few alternatives. The government role may need to be greater in developing and transitional economies, because of the scarcity of alternative employment opportunities and the underdevelopment of the service sectors of the economy.

8. Although national law and practice vary considerably, there is clear advantage for both employers and workers and workers' organizations if maximum use is made of existing and innovative mechanisms of industrial relations for consultations on technological change and other factors affecting the workplace. The appropriate level for such dialogue will vary from case to case, and over time, as will the suitability of government participation in the dialogue. All workers, irrespective of their status, should have the right to belong to workers' organizations of their own choosing, including trade unions, and to participate in the relevant bargaining processes, including collective bargaining channels. Possibilities should be promoted for developing cooperative cultures of labour-management relations based on "win-win" concepts.

9. The freedom of workers to associate and bargain collectively is a fundamental right enshrined in the ILO Constitution and in international labour standards. The freedom of individual workers to choose their bargaining agent should also be respected. There are countries where violations of the principle of freedom of association occur in the oil refining industry. Where there is evidence of infringements of the principle of freedom of association in oil refining as in other industries, such situations should be corrected. Until they are, the cases should be vigorously pursued in the appropriate ILO supervisory bodies. The Meeting notes the view taken by the Committee on Freedom of Association that the oil industry generally does not constitute an essential service justifying limitations on the right to strike.

10. Other issues facing the oil refining industry which merit international attention include the continuing need within enterprises for training of staff at all levels, for example through trust funds jointly managed by employers' and workers' organizations, and appropriate systems of skill certification; safety and environmental matters associated with the transport of crude oil and oil products; and the need for effective mechanisms of labour-management consultation.

11. Future ILO activities related to oil refining should include:

12. On the issue of freedom of association, a case (No. 1793) before the Committee on Freedom of Association was raised during the debates. The Meeting expressed serious concern on this case of freedom of association and requested the Governing Body of the ILO to pursue its actions in resolving this problem.


Part 2

Resolutions

Consideration and adoption by the Meeting of the draft resolutions

At its third plenary sitting, the Meeting set up a Working Party on Resolutions, in accordance with article 13, paragraph 1, of the Standing Orders.

The Working Party, presided over by the Chairperson of the Meeting, consisted of the Officers of the Meeting and three representatives from each of the groups. The members of the Working Party were:
 

Officers of the Meeting

 

Mr. P.J. Simanjuntak (Chairperson)

 

Mr. S.A. El-Khrachi (Government Vice-Chairperson)

 

Mr. A. Muente (Employer Vice-Chairperson)

 

Mr. R.E. Wages (Worker Vice-Chairperson)

Government members

 

Brazil:

Ms. M.L. Di Iorio Andrade

 

China:

Mr. Zhang Wei

 

Norway:

Ms. B. Stueflaten

Employer members

 

Mr. P. Charpentier

 

Mr. F. Ernst

 

Mr. W.A. Galoyo

Worker members

 

Mr. E. McLeod

 

Mr. C. Rani

 

Mr. Wang Ruihua

At the Meeting's sixth plenary sitting, the Chairperson, in his capacity as Chairperson of the Working Party on Resolutions and in accordance with article 14, paragraph 8, of the Standing Orders, submitted the recommendations of the Working Party regarding the draft resolutions before the Meeting. As required by the same provisions of the Standing Orders, the three Vice-Chairpersons of the Meeting had been consulted on the contents of his oral report.

The Working Party had before it five draft resolutions, three of which were submitted by the Workers' group, two by the Employers' group; four resolutions were declared receivable and one was referred to the Meeting for consideration.

The draft resolution concerning Nigeria, submitted by the Workers' group, was declared not receivable by a vote which resulted in 4 votes in favour, 7 against and no abstentions. The Employer members voted against the receivability of this text because it related to a specific case clearly excluded by the Standing Orders governing ILO sectoral meetings; although they expressed their sympathy for the workers in Nigeria, they felt that the matter should be addressed by resolutions of the ILO's Governing Body. The representative of the Government of Brazil wished to put on record that, although his Government could not agree to declare this resolution receivable, they were in favour of urgent measures to settle the serious problems evoked in the draft text. The representative of the Government of Egypt stated that the Governing Body and other competent bodies should take all appropriate measures, individually or collectively, to free the trade unionists. The Workers argued that there had been examples in industrial committees where individual regimes had been targeted. Furthermore, this text dealt with freedom of association which made it fall within the competence of the Working Party. In light of the Working Party's decision not to consider this text, it was agreed that it should be referred to the Meeting to be dealt with at the appropriate moment during its discussion of the report or the conclusions, in accordance with article 14(2) of the Standing Orders.

The Working Party subsequently amended the texts of the four resolutions declared receivable within the time-limit set by the Officers of the Meeting and agreed unanimously to submit them to the Meeting for adoption.

I. Resolution concerning freedom of association in the oil refining sector

The Chairperson indicated that this draft resolution was based on a text submitted by the Workers' group. The original draft text was declared receivable after a vote which resulted in 6 votes in favour, 4 against and 2 abstentions. The amendments presented by members of the three groups were subsequently approved by the full Working Party.

The Meeting unanimously adopted the draft resolution.

II. Resolution concerning health, safety and environmental protection in the oil refining sector

The Chairperson stated that this draft resolution was based on a text submitted by the Workers' group. The Employer Members were of the view that the draft resolution was irreceivable because the topic had been adequately covered in the report submitted to the Meeting; the text was nevertheless declared receivable with the approval of Government members. The Working Party agreed to a revised draft on the basis of amendments proposed by its members.

The Meeting unanimously adopted the draft resolution.

III. Resolution concerning voluntary initiatives in the oil industry towards the protection of the environment

The Chairperson informed the Meeting that this draft resolution originated from the Employers' group. The Working Party amended it to the general satisfaction of its members.

The representative of the Government of India proposed a drafting change to ensure consistency between the text of the resolution and the reference in the conclusions to the Kyoto Conference.

The Meeting unanimously adopted the draft resolution with the proposed amendment.

IV. Resolution concerning the promotion of good industrial relations practices

The Chairperson pointed out that this draft also stemmed from a text submitted by the Employers' group and subsequently amended by the Working Party.

The Meeting unanimously adopted the draft resolution.

Texts of the resolutions adopted by the Meeting

Resolution concerning freedom of association in the oil refining sector(4)

The Tripartite Meeting on Employment and Industrial Relations Issues in Oil Refining,

Having met in Geneva from 23 to 27 February 1998,

Noting that this year marks the 50th anniversary of the adoption by the ILO of the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87),

Considering that certain ILO member States have not yet ratified Convention No. 87 and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and that many member States have not yet ratified the Workers' Representatives Convention, 1971 (No. 135),

Concerned about the reported violations of workers' rights, and taking note of the violations of trade union rights reported by the ILO Committee on Freedom of Association,

Concerned about non-compliance with the rulings of the Freedom of Association Committee, in some cases related to the oil refining sector,

Reaffirming the rules of freedom of association and the consequent rights of petroleum workers as expressed at the Ninth Session (1980) of the ILO's Petroleum Committee;

Adopts this twenty-seventh day of February 1998 the following resolution:

The Tripartite Meeting on Employment and Industrial Relations Issues in the Oil Refining Sector invites the Governing Body of the International Labour Office:

(1) to continue and strengthen the actions taken by the ILO to promote the principle of freedom of association;

(2) to encourage all member States to ratify the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), and the Workers' Representatives Convention, 1971 (No. 135);

(3) to study measures to promote the compliance of governments with the rulings of the ILO Committee on Freedom of Association;

(4) to request the Director-General to conduct a survey on the application of the principles of freedom of association, the right to organize and the compliance of governments with rulings of the Committee on Freedom of Association affecting all workers in the oil refining sector.

Resolution concerning health, safety and environmental protection in the oil refining sector(5)

The Tripartite Meeting on Employment and Industrial Relations Issues in Oil Refining,

Having met in Geneva from 23 to 27 February 1998,

Considering that the highest standards of health, safety and environmental protection are essential for the long-term security of the oil refining sector, its workers, shareholders and the community it serves,

Recognizing the central position of oil refining in both the industrialized and modernizing economies of the world,

Acknowledging that the oil refining sector presents certain health, safety and environmental challenges including the possibility to use technology and/or organizational design and good work practices to avoid potential risk to human health, the environment and property,

Recognizing the importance of applicable health, safety and environmental standards and the contribution to such standards made by the ILO's Conventions and Recommendations,

Considering the crucial importance of well trained, well motivated worker and worker representative involvement in safety assurance in the oil refining sector;

Adopts this twenty-seventh day of February 1998 the following resolution:

The Tripartite Meeting on Employment and Industrial Relations Issues in the Oil Refining Sector:

(1) invites the Governing Body of the International Labour Office:

(2) calls on employers and workers' organizations:

(3) calls on companies in the oil refining sector to consider as minimal industry standards in all their operations the principles contained in ILO Conventions Nos. 170 and 174, bearing in mind the accompanying Recommendations.

Resolution concerning voluntary initiatives in the oil industry towards the protection of the environment(7)

The Tripartite Meeting on Employment and Industrial Relations Issues in Oil Refining,

Having met in Geneva from 23 to 27 February 1998,

Considering the efforts made in the oil refining industries to address environmental concerns through the implementation of programmes aiming at protecting the environment,

Recognizing the positions adopted at the Kyoto Conference on climate change,

Recognizing the contribution of oil refining industries, their workers and workers' organizations(8) to the improvement of living standards and conditions, and to economic growth and the need for a balanced approach between continuous environmental improvement and sustainable economic development,

Further recognizing that voluntary programmes should not be a substitute for appropriate and applicable governmental regulation;

Adopts this twenty-seventh day of February 1998 the following resolution:

The Tripartite Meeting on Employment and Industrial Relations Issues in Oil Refining invites the Governing Body of the International Labour Office:

(1) to undertake a study of voluntary and other programmes adopted in the oil refining industries for the protection of human health, the environment and the better use of natural resources;

(2) to examine ways in which employment may be positively affected through a balanced approach between continuous environmental improvement and sustainable economic growth.

Resolution concerning the promotion of good industrial relations practices(9)

The Tripartite Meeting on Employment and Industrial Relations Issues in Oil Refining,

Having met in Geneva from 23 to 27 February 1998,

Considering that the employment and welfare of oil refineries workers and the health of many national economies depend on the viability of the oil refineries sector,

Considering that the viability of the oil refineries sector depends, inter alia, on the quality of the workforce, good industrial relations and the maintenance of production and supply of the output to markets and consumers,

Considering that when industrial disputes are not dealt with in line with applicable ILO standards, production and supply could be adversely affected. Such a result could be harmful to the enterprise, workers and national economies dependent on the viability of the industry,

Considering that it would be desirable to promote cooperative approaches to problem-solving in industrial relations in the oil refineries and to seek appropriate means of preventing and settling industrial disputes;

Adopts this twenty-seventh day of February 1998 the following resolution:

The Tripartite Meeting on Employment and Industrial Relations Issues in Oil Refining invites the Governing Body of the International Labour Office:

(1) to request the Director-General to initiate programmes which would examine and emphasize solutions for settling industrial disputes, consistent with applicable ILO Conventions, taking into account cooperative approaches to problem-solving in industrial relations;

(2) to place on the agenda of the next tripartite meeting on issues in the oil refining sector the following item: "Promotion of good industrial relations practices, with due consideration given to cooperative approaches to problem-solving".


Part 3

Other proceedings

Panel discussions

ILO activities of interest to the oil industry
 

Chairperson:

Ms. M.-A. Richards, Chairperson of the Government group

Panellists:

Ms. K. Curtis, Freedom of Association Branch, ILO, Geneva

 

Ms. P. Kelly, Labour Law and Labour Relations Branch, ILO, Geneva

 

Dr. N. Watfa, Occupational Safety and Health Branch, ILO, Geneva

Ms. Curtis provided information on the rights and obligations arising from two fundamental Conventions, the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Collective Bargaining Convention, 1949 (No. 98). The former set out the basic right of employers and workers to form and join organizations of their own choosing, without government interference, as well as each organization's right to draw up its own constitution and rules, elect its representatives in full freedom, and organize its administration and activities without any interference from the public authorities. From the right to organize their own activities had been derived an intrinsic corollary, namely, the right to strike. This right to strike could only be limited in very specific and strictly defined circumstances involving workers in essential services, public servants exercising authority in the name of the State (but not including workers in state enterprises) and cases of acute national crisis. Essential services were limited to those which, if interrupted, would endanger lives, personal safety or health. The petroleum sector had been specifically listed as one that did not constitute an essential service, although the difficulties that might arise from a strike in this sector were known. The supervisory bodies considered, nevertheless, that it would appear legitimate that a minimum service be maintained in the event of a strike whose extent and duration could result in acute national crisis. However, this had to be confined to strictly necessary operations to avoid endangering the life, personal safety or health of all or part of the population, while permitting the strikers to maintain pressure. Workers' organizations had to participate in defining what such a service entailed. Convention No. 87 also provided for the protection of workers' and employers' organizations from dissolution by an administrative authority, and the right to establish and join federations and confederations and to be affiliated with international organizations. While Convention No. 87 focused on protection from government interference in the functioning and activities of these organizations, Convention No. 98 focused more on the relationship and dynamic between workers' organizations and employers and their organizations. It provided for protection of workers against acts of anti-union discrimination in respect of employment, including protection at the time of hiring, as well as throughout the full duration of the employment relationship. It also protected organizations from interference by employers and promoted the full development and utilization of machinery for voluntary negotiation between employers or their organizations and workers' organizations with a view to the regulation of terms and conditions of employment by means of collective agreements. Convention No. 87 had been ratified by 122 member States and Convention No. 98 by 138. In the early 1950s, the ILO Governing Body had determined that freedom of association was so fundamental to the aims of the Organization that its basic principles should be observed by all member States, regardless of ratification, and a tripartite Governing Body Committee on Freedom of Association was established to examine complaints of violations in all member States. Over the past 12 years, at least 30 cases of alleged violations in the petroleum sector had been submitted, often in the refining industry. The main problems concerned the effectiveness of the collective bargaining process and unwarranted restrictions on the right to strike. In concluding, Ms. Curtis emphasized the role of the ILO in providing advisory and technical services to member States to help them understand and carry out their commitments in respect of the principles enshrined in these two Conventions.

Ms. Kelly presented the findings of a recent ILO study which reviewed the role of collective bargaining in introducing labour market flexibility, based on information from 22 country studies. Flexibility measures related to employment, pay, working time, and work organization had been considered and the increase in temporary or part-time employment from 1990-95 reviewed. It was found that although more women than men worked part time, in some countries the increase over the period was proportionately higher for men, which demonstrated that involuntary part-time work was probably growing. Pay flexibility measures included pay for performance, gain-sharing plans and productivity-based schemes which linked remuneration to individual or collective productivity. In a number of countries there had been changes in minimum wage rates: in some cases they had been eliminated and in others they had been lowered for younger workers. A review of working time showed that hours set on a weekly or daily basis were tending to be replaced by other schemes such as annual hours. Working time could thus vary from one week to another in low-demand or peak periods, with remuneration remaining constant. There had also been changes in daily and weekly working hours in cases where, for example, there were longer shop-opening hours or additional shift work in manufacturing. Work organization flexibility demonstrated a move towards multiskilling and an emphasis on teamwork. Flexibility was introduced not only through collective bargaining but also through legislative measures or unilateral action by an employer. Employers were the driving force behind the introduction of flexibility measures aiming to improve competitiveness, reduce costs and increase productivity. There was a trend towards eliminating the overtime pay premium and recruiting temporary workers for peak periods. However, employers also recognized the importance of having a skilled core group of committed staff. The trade unions had initially resisted the introduction of flexibility measures, which to them meant giving up employment security, regular hours of work, overtime pay and a stable salary, but they later realized that it was inevitable. There were certain trade-offs, mainly in working time, which could be of benefit to both employers and workers, such as lowering annual hours in exchange for more flexible working time. Some workers, particularly the increasing number of women taking up jobs outside the home, reacted positively to certain forms of flexibility, such as flexible hours, part-time work, compressed work schedules and telecommuting. To conclude, flexibility was a means of enhancing competition in a global market but often meant sacrifices from workers. Therefore, it was desirable to include them in the process of change and to promote a climate of mutual trust and loyalty.

Dr. Watfa informed the participants that of the 181 Conventions and 187 Recommendations adopted as international labour standards, about one-half related to occupational safety and health. Of those specifically dealing with safety and health, recently adopted instruments included the Occupational Safety and Health Convention, 1981 (No. 155), the Occupational Health Services Convention, 1985 (No. 161), the Safety and Health in Construction Convention, 1988 (No.167), the Chemicals Convention, 1990 (No. 170), the Prevention of Major Industrial Accidents Convention, 1993 (No. 174), and the Safety and Health in Mines Convention, 1995 (No. 176). Of particular relevance to the Meeting were Conventions Nos. 174 and 170: petroleum activities including refining were covered under Convention No. 174, and Convention No. 170 covered hazardous chemicals. Some major publications of importance were the new Encyclopaedia of Occupational Health and Safety, a manual on hazard control, and a number of codes of practice on safety and health for specific industries. Future priorities included the development of adequate data collection mechanisms in all areas and the promotion of a safety and health culture. In this context, the ILO had launched a new ILO global programme on occupational safety, health and the environment.

Discussion

On the topic of freedom of association, the participants' questions focused on the links between the two Conventions and the right to strike; the relationship between the Committee on the Freedom of Association and the Committee of Experts on the Application of Conventions and Recommendations; and the types of services provided by the ILO to member States. Ms. Curtis noted that specific mention of the right to strike did not appear in the Conventions but was an interpretation of the supervisory bodies. She reiterated that the Committee on Freedom of Association had been established to receive and examine complaints which concerned even those countries which had not ratified the Conventions and that, as such, it represented a vital forum for workers' and employers' organizations which had no means of recourse to the supervisory bodies which dealt solely with ratified Conventions. As regards advisory services, these could take many forms, for example, assistance in drafting legislation or in improving the collective bargaining processes.

In the discussion on collective bargaining and flexibility, some participants considered that the driving force behind flexibility measures was globalization and that workers had to bear the negative aspects but reaped none of the gains. Trade unionists were sometimes excluded from discussions on measures to be introduced even though flexibility could have adverse effects on employment and lead to social exclusion. While flexibility was unavoidable, it should be used for job creation, for example through the reduction of working time. However, if flexibility measures were negotiated they could benefit all parties. Trade unions had to be given information to ensure that workers' interests were guaranteed. One participant noted the tendency to criticize employers and pointed out that they were responding to intense competition. They too were concerned about quality of life issues and were aware that competition had its limits. Ms. Kelly emphasized that it was important for employers and workers to resort to the collective bargaining process, particularly at the enterprise level, as this was likely to ensure the best results.

The participants emphasized the responsibility of the tripartite partners in the field of occupational safety and health. Concern was expressed about the continued risk for workers due to their exposure to harmful substances, and about the different standards and measures used throughout the world. One participant referred to a bilateral safety and health programme in his country which had a positive impact and had lowered mortality rates. Dr. Watfa noted that Article 19 of Convention No. 170 made it incumbent on States which exported chemicals to provide information to the receiving country to enable it to decide whether or not to import the chemical, to gauge existing hazards and to assess how they could be tackled.

Does the oil industry have, and can it attract, the workforce that it needs?
 

Moderator:

Mr. R.E. Wages, Worker Vice-Chairperson of the Meeting

Panellists:

Mr. J. Gault, President, John Gault S.A., Geneva

 

Mr. P. Charpentier, Directeur adjoint des relations sociales, Union française des industries du pétrole, Paris

 

Mr. E. McLeod, General President, Oilfield Workers' Trade Union, Trinidad and Tobago

Mr. Gault underlined that the four driving forces of the petroleum industry throughout its history had been oil prices, geology, technology and politics. Current principal trends all had influence on employment; for example, the growing worldwide demand for oil, which had increased annually by 1.5 to 2 per cent during the past decade; reserve replacement efficiency; improvements in production efficiency such as the ability to move to deeper offshore locations; declining real prices of oil; disappearance of oligopoly and increasing competition; privatization, mainly to attract capital; globalization, which gradually eliminated national monopolies; and environmental concerns. While many of these had a generally negative impact on employment, the petroleum industry lacked, nevertheless, experienced staff including geologists; geophysicists; drilling, reservoir and process engineers; and information technology specialists. Highlighting a recent article written by Mr. Urban of Amoco which appeared in the OPEC Review, Mr. Gault emphasized that the industry required dedicated geoscience staff with solid technical qualifications as well as a broad education covering such areas as economics, finance, environmental sciences and foreign languages. The article had also underlined that the staffing gap would persist during one or two more decades as a result of the oil price crash which occurred in the 1980s. Mr. Gault emphasized the need for leaders who had a global vision and international experience, and who could redefine the industry. They would be responsible for improving customer satisfaction and transcending the narrow focus on gasoline. The trend towards downsizing would continue and companies should provide continuous, internal, on-the-job training programmes aimed at diversifying the work experience of staff and offer generous severance packages if job losses were necessary. Governments should offer job transition and retraining programmes for displaced employees. They should distribute environmental burdens more proportionately among hydrocarbons, as it made little sense from an economic or environmental standpoint to provide direct or indirect subsidies to the coal industry while heavily taxing the petroleum industry. Governments should also be encouraged to minimize their reliance on the petroleum industry as a tool of foreign policy. Restricting petroleum industry activities reduced the industry's global efficiency together with employment opportunities. Society at large should encourage the broadest possible education for children to ensure that they would be prepared for the challenges of the future.

Mr. Charpentier noted that the existing workforce needed to adapt to rapid technological developments; this could lead to redundancies for older and less skilled workers. Downsizing, subcontracting and multiskilling of workers were accompanied by a move away from classic hierarchical structures to flatter structures. Supervisory and management jobs were no longer based on technical areas of competence but rather on the ability to manage and motivate teams of workers with different skills. The industry was becoming increasingly transnational, decisions in one country having an impact on others. New areas of activity, including renewable energy and new chemical products, were being developed and computerization was increasingly important at all levels. These trends led to a considerable change in job content and enterprises had to face two consequences: the need to train their workers on an ongoing basis and the need to improve the qualitative aspects of work and relations among staff members. Managers had to be trained to be able to motivate teams of workers and to link local aspects to universal ones. The activity and attitude of each worker would, in future, have a greater influence on efficiency. With regard to the renewal of the labour force, enterprises should have no difficulty in finding qualified staff owing to the high levels of remuneration, the career development possibilities, the internationalization of work and the generally positive image of the industry. To retain highly qualified personnel, it was necessary to improve communication and the social image of the industry, for example as regards the environment, business conduct in developing countries or the use of large sums of money.

Mr. McLeod informed the participants of a gas conference held in 1997, during which a chief executive officer of a major oil company which had retrenched thousands of workers worldwide had intimated that if he had to do this again, he would be far more selective, careful and people-centred. After losing the staff through "downsizing" or "right sizing", the whole industry was at a serious disadvantage as the workers who had been retrenched were among the best employees. In Trinidad and Tobago, the industry had been faced with downsizing, right sizing, structural realignment and adjustment, and privatization. Four companies had employed 18,000 persons of all categories and when three of them merged, "voluntary" and selective separation programmes had led to the departure of some 11,000 workers. The personnel who left were the most skilled and experienced and the best trained. While the industry was perpetually undergoing challenging developments, workers had to be closely involved as participants in the changes. They had in the past been intimately involved in discussions, but that no longer seemed to be the rule and they were increasingly nervous and concerned about their futures. In developing countries workers were frequently faced with the consequences of decisions taken elsewhere within the framework of globalization. Even though jobs disappeared and the technician or process operator was retrenched, the work still remained. Private contractors were increasingly being hired and individuals with a lower level of skills were hired at very low pay rates, with serious consequences for health, safety and the environment.

Discussion

A participant from Israel pointed out that, in view of the proportion of labour costs in the total operating costs, it was necessary to reduce the workforce and the level of salaries. In his country a "second-generation" system had been set up, which provided staff on labour contracts with fewer benefits and did not offer guarantees of permanent or lifetime employment. Younger workers were more interested in cash payments and less so in benefits. The industry was becoming semi-high tech and the minimum level of education required was a college degree; workers were encouraged to develop multiple skills and were remunerated for additional skills which were of use to the enterprise. Mr. MacLeod did not object to the recruitment of young workers but argued that they should not be offered exploitative conditions. Mr. Gault agreed that the most highly skilled workers tended to leave first as they had opportunities elsewhere. Mr. Charpentier indicated that workforce reductions through early retirement often led to the departure of older workers who were less trained than their younger colleagues; he further disagreed with the statement that the employees of all subcontractors were less paid or skilled and affirmed that they were frequently highly skilled and had in-depth knowledge of safety issues.

A number of participants, after having heard the information provided by Mr. Gault and Mr. Charpentier, were led to conclude that increasingly high skills were being required of regular staff and that the remaining jobs were being entrusted more and more frequently to contract workers. Safety and health risks were inherent to activities in oil refineries and it was vital that experienced staff ensure proper observance of safety and other rules. It was incoherent to state that the industry should be more people-centred while at the same time lowering social benefits and disregarding trade unions. A number of Worker participants stated that while they did not object to the introduction of new technologies, this process should not be used as a pretext to increase retrenchments and unemployment and to lower wages; it should instead result in shorter working days and improved quality of life. In the past, enterprises took pride in their workers and provided them with training with a view to their integration and to improving their social status. With outsourcing, the oil industry would fall behind other sectors in this regard.

A participant from Argentina stressed that in his country there had been an arduous struggle against privatization of the sector, which was ultimately approved by Parliament. The workers had been paid indemnities and through the trade unions formed their own enterprises which undertook peripheral work such as transport and exploration. They owned shares in enterprises and in one case controlled 65 per cent of a refinery. A participant from Egypt noted that his country's trade union had as members workers from enterprises in the public and private sectors as well as those organized in the form of joint ventures. During the privatization process it was important to avoid redundancies; workers had to be provided with the proper training to enable them to handle the operations of new companies. In Egypt, it had been decided that private and public sector companies should have comparable statutes. Mr. Gault pointed out that there should be a phased approach over time as privatization was a very complex process. A participant emphasized that refineries should be efficient and adapt to competition regardless of whether they belonged to the public or private sector.

Staffing levels, work practices and refinery performance
 

Moderator:

Mr. A. Muente, Employer Vice-Chairperson of the Meeting

Panellists:

Mr. L. Anness, Solomon Associates, London

 

Mr. R. Wages, President, Oil, Chemical and Atomic Workers International Union, United States

 

Mr. F. Ernst, Labour Relations and Remuneration Manager, SASOL Ltd., South Africa

Mr. Anness divided his presentation into three parts: a description of Solomon Associates' methodology in obtaining comparable data on the refining industry; an overview of industry trends in 1992-96; and some observations on the results of the 1996 survey.

The refining industry was divided into three regions -- Europe and the Middle East; North and South America; and Asia/Pacific. The biennial survey covered about 80 per cent of all fuel refineries located outside the former Soviet Union and China and included over 370 refineries in the study. Despite the fact that refineries were all distinct, it was possible to make valid comparisons in a sector that dealt with world-priced commodities. Solomon Associates had devised an accepted system for comparing operating costs, based on the concept of Equivalent Distillation Capacity (EDC). EDC combined capacity and complexity, describing what was manned and maintained. A Personnel Index measured standard man-days per EDC. It included all hours worked, including by contractors. A Maintenance Index measured annualized maintenance costs per unit of EDC. Other indices showed energy, yield, utilization and pricing performance.

Three surveys had been carried out between 1992 and 1996. Relative price movements of refined products over the period had meant that profits on distilled products had remained fairly constant while those for products produced by catalytic cracking had fallen. Although the increased yields of about 2 per cent could appear to be low, such a gain required considerable effort. In Western Europe over 50 per cent of refiners' cash profits had been reinvested in 1992-96 to achieve these gains. The number of personnel per 100,000 units of EDC (based on 2,080 hours of work a year) had fallen in all three regions in 1992-96 (from about 47 to 40 in North America; 58 to 48 in Europe, and 70 to 58 in Asia/Pacific) reflecting higher productivity. The Personnel Index fell by 14, 20 and 17 per cent respectively in the three regions. When different categories of oil-refining personnel were taken into account, there were some regional variations. North America and Europe had similar numbers of blue- and white-collar workers per unit of output, whereas the number of blue-collar workers in Asia/Pacific was over 40 per cent higher and over 10 per cent for white-collar workers. In terms of white-collar work assignments, there were far fewer operations supervisors in North America and far more administrative personnel in Asia/Pacific, while the number of maintenance and technical personnel was similar in all three regions. Asia/Pacific refineries had more operations, maintenance and administrative/technical blue-collar workers than the other two regions, up to twice as many for the latter category. Personnel costs (cents per unit of EDC) ranged from just over 40 cents in Asia/Pacific to 30-32 cents in the United States and Europe. When personnel costs were considered in terms of overall costs, the picture was rather different, with 22 and 26 per cent in Asia/Pacific and the United States and 33 per cent in Europe. Benefits as a proportion of salaries amounted to 35, 46 and 57 per cent respectively. Within Europe there were significant variations in the Personnel Cost Index, which ranged from 79 per cent of the European average in the United Kingdom to 113 per cent in "inland Europe". In comparison, costs in the United States were 76 per cent of the European average and 122 per cent in Asia/Pacific.

When Solomon Associates compared the lowest manned quartile with the highest manned, it was seen that the former was 8 per cent more energy efficient, had 20 per cent lower maintenance costs, 0.1 per cent higher volume recovery, 42 per cent less time lost due to accidents (78 per cent less in the case of white-collar workers), and had a return on investment that was almost 50 per cent higher. Mr. Anness stressed that his company's conclusion, when faced with these figures, was that those refineries with lower levels of manning seemed to produce better results. What many refineries were concluding, however, was that performance would improve if the workforce were reduced. Manpower reduction schemes did not in themselves bring about greater efficiency; it was a question of developing work systems that needed fewer people. The survey data showed little difference between refineries with an organized workforce and those staffed with non-union labour which meant that unions were not an obstacle to excellent performance. The lowest-manned quartile showed an average of 1.2 persons engaged in full-time union activities and the highest quartile showed 1.9 persons. It did appear, however, that supervisors might behave differently in unionized operations, sometimes using the union as an excuse to avoid responsibilities.

The practices which had been introduced by highly performing refineries to achieve improvements included: benchmarking of results; validation of the refinery's capabilities; upgrading of current practices; and involving the workforce. An enlightened management team that demonstrated a consistent vision, included committed leaders, delegated authority and valued employees as individuals -- not as a resource to be minimized -- was essential for enhancing performance. Analyses of best practices had shown that at least half of the elements were so-called "soft" issues such as personal responsibility and accountability, flexibility, training, clear objectives and communications, and a focus on the economics of the business. For the future, Solomon Associates saw no reason for competition in the industry to lessen. All operating costs, including personnel costs, would remain under pressure. While the closure of excess capacity would ease competitive pressures, it would have other effects particularly for employment in the industry.

Mr. Wages stated that he was positively surprised by the presentation. The reports prepared by Solomon Associates were sometimes used in the United States as an excuse to cut manpower. It was reassuring to see that less was not equated with best by Solomon Associates. The discussions at the present Meeting had shown that the companies with the best practices were those with highly developed labour-management relations which prescribed involving the workforce in the process of performance improvements. Trade unions did not subscribe to the view that accumulating skills was always beneficial. It was more a question of how new work practices and therefore skills were developed, introduced and used. Use of the term "flexibility" often resulted in an immediate and adverse reaction from workers. What did flexibility mean to Solomon Associates? How far could flexibility be carried and how could it be achieved? For example, he did not believe that using contract workers for maintenance was a good practice, especially when there were highly skilled workers "in house". But management often took this path on the basis of Solomon's comparative reports that seemed to prone recourse to contract workers. It would be very helpful to workers and to the companies if Solomon would acquire a better understanding of the facilities concerned by obtaining input from workers in their studies.

Mr. Ernst said that a message from the Meeting was that there were major challenges ahead and that to remain competitive the industry had to take a proactive approach to change. Benchmarking, which was an important tool, was often seen by workers as a stick with which to enforce change. This was not the case. Companies such as Solomon played a useful role in learning what made refineries work best and passing on this information. Benchmarking, however, tended to focus on the technical and financial aspects of refinery operation. Elements such as health, safety, environment and the quality of working life were generally absent from such studies, Why was this so, particularly when so much was spent on training and occupational safety and health? Although the human element was increasingly seen as the key to commercial success, its measurement and evaluation were less well developed. The challenge was to stimulate the same enthusiasm for identifying and measuring human resource elements as was the case for costs and product quality. He referred to the special situation in South Africa with its combination of oil and synthetic fuel refineries and the adaptation of indices to this situation.

Discussion

A Worker participant requested information about the situation in Latin America and the industry's prospects in that region; he wondered whether there was a link between labour flexibility and accident frequency. Mr. Anness replied that the fast growing economies in this region presented important opportunities for the industry. For historical reasons, employment levels in state-owned refineries were several times higher than in the best-performing private enterprises. Thus, when cost-cutting was being considered, the state-owned refineries generally had more sacrifices to make. With regard to accidents, Mr. Anness referred to the situation in Europe where the lower-manned, best performing refineries had a markedly lower accident rate. This could be attributed to better work planning and communication procedures. An excessive number of levels of responsibility combined with a complex structure would more likely result in a greater number of accidents than would a cooperative and flexible structure.

An Employer participant sought information on the level and trends of the formal education of refinery workers, on the extent of outsourcing, and on the extent of multiskilling and its effect on refinery performance. Mr. Anness replied that Solomon Associates did not request information on education levels. However, when visiting refineries with high manning levels comments were frequently heard to the effect that the amount and quality of training were inferior to other locations. There were cases where up to 50 per cent of the workforce was undergoing some form of training. He cited other examples of skilled workers delegating their work in a form of "micro" outsourcing, which added an additional and often informal level of responsibilities and further complicated matters. Solomon did request information on the minimum safe manning level for each process in order to make comparisons. It was not possible, however, to give an optimum level of outsourcing, a certain amount being inevitable in order to even out peaks and troughs in workload. In Europe, about 58 per cent of maintenance work was outsourced in 1998 (61 per cent in the lowest cost quartile). Reliability and commitment of workers were important and it was recognized that contractors often did not have the same commitment as regular workers. He noted, however, that contract workers in European refineries often worked in the same location for many years, whereas in the United States contract workers tended to be more migratory. His personal view on the issue of multiskilling was that he had reservations about formal multiskilling programmes but that it could be useful in small refineries to have workers who had acquired two skills although it was unlikely that these workers would be equally proficient in both skills.

In reply to Mr. Wages and Mr. Ernst, Mr. Anness stated that neither advantages nor recognition would be obtained by a refinery which placed itself in the lowest employment quartile since the important figure was the operation's cash margin. No refinery had been placed in the first quartile for all the factors measured by Solomon. The age and size of refineries and the type of crude oil used influenced performance somewhat, but less so than the other factors considered. It would be preferable if "soft" issues such as health, safety and environment could be measured and compared more effectively. No refinery, however, could tolerate being classified in the bottom quartile for safety and health since this could result in significant legal implications.


Closing speeches

Mr. Myhre (Chairperson of the Workers' group) made a statement, on behalf of the Workers' group, deploring the fact that two Worker members appointed by the Governing Body to the Meeting had been prevented from attending by the Government of Nigeria. Trade union leaders Milton Dabibi and Frank Kokori were detained arbitrarily, without charge or trial, since 1994 and 1996 respectively. The Governing Body had recognized that their detention was due to their trade union activities (Case No. 1793 of the Committee on Freedom of Association). The Workers were outraged at the behaviour of the Government of Nigeria, which was in flagrant contradiction of the most fundamental principles of the ILO. As a titular member of the Governing Body, Nigeria had a special responsibility to uphold, in deeds and words, the values embraced by all member States when they joined the Organization. The speaker's main and immediate concern was that Messrs. Dabibi and Kokori were denied access to medical treatment, in spite of their poor health. It was deplorable that the Government of Nigeria had so far refused to accept an ILO mission to visit the detained trade unionists and to examine other allegations of trade union rights violations. He appealed to all participants to urge the Governing Body to use all possible means to bring about their release, and he asked the Chairperson of the Meeting to request the Director-General to bring this statement to the attention of the Government of Nigeria and to seek its response.

Mr. Ernst (Chairperson of the Employers' group) expressed his group's concern about the case concerning Nigeria that had been submitted to the Committee on Freedom of Association. Respect for basic human rights -- in this case the freedom of association and protection of the right to organize -- was a constitutional obligation of all ILO member States. The Employers' group requested the Government of Nigeria to respond positively to all the recommendations of the Committee on Freedom of Association and to accept, at the earliest possible date, a direct contacts mission as proposed by the Governing Body.

Mr. El-Khrachi (representative of the Government of Egypt; Government Vice-Chairperson of the Meeting) expressed his Government's full support for all efforts aiming to obtain the release of the two trade unionists. Individual and collective efforts should be pursued, and the matter should be dealt with through the Governing Body.

Mr. Ahmad (adviser, Government of Nigeria) regretted that this issue had been raised. His Government had consistently maintained that the detention of the two individuals in question had nothing to do with trade union rights which were still exercised in accordance with national law and ILO Conventions Nos. 87 and 98. His delegation was of the view that the Meeting was being "hijacked" by those who wished to use it to target Nigeria. Indeed, the report prepared by the Office mentioned a number of countries where freedom of association was an issue in the oil refining sector, but the Meeting had focused its attention exclusively on Nigeria.

The Chairperson took note of the statements made by representatives of the three groups on this question. His understanding was that the Meeting generally viewed that, where there was evidence to support allegations of infringement of workers' and trade unions' basic rights, these allegations should be vigorously pursued by the appropriate ILO supervisory bodies. As regards the case of Nigeria, it appeared that the Meeting fully associated itself with the views expressed in June 1997 by the Committee on the Application of Standards at the International Labour Conference and in November 1997 by the Committee on Freedom of Association. The way forward was for an ILO mission to further study the matter.

In her concluding remarks, Ms. Richards (representative of the Government of Trinidad and Tobago; Chairperson of the Government group), speaking on behalf of the Government group, judged that the Meeting had been productive. Issues and concerns affecting the sector had been identified and examined. Participants had underlined repeatedly that there was a need for more frequent use of consultative mechanisms, both in organizations such as the ILO and in enterprises, to enable workers and employers to discuss developments in the industry and to try to reach mutually acceptable solutions without neglecting the human element.

Mr. Muente (Employer Vice-Chairperson of the Meeting) expressed his group's satisfaction both with the agenda and the level of discussions that had taken place. Although at times difficult, the debate had taken place in a spirit of respect and tolerance. The week passed in the company of members representing a great diversity of experiences had been edifying.

Mr. Wages (Worker Vice-Chairperson of the Meeting) recalled that the Meeting had taken place at a time when the industry was experiencing some of the most radical changes in decades: rationalization, technology-driven modernization and profound political changes. The introduction of distributive control systems in refineries had generated pressure for more multiskilling, work flexibility, subcontracting and outsourcing. Although the Workers did not subscribe to all these measures, they did not systematically oppose change. It was essential that change be managed taking into account its effects on people's lives. The presentation by the representative of Solomon Associates during one of the panel discussions had been very revealing: the best performances in the industry were those of enterprises which embraced their workers and their unions.

The Chairperson concluded that while the Meeting had been difficult at times, it was justifiable since the issues were real and the stakes were high. That a consensual agreement had been reached was a tribute to the professionalism and sense of responsibility of all participants and group leaders. The conclusions and resolutions adopted would only have value if they were fully applied and he called on participants as they returned home to help translate these texts into concrete action. The Chairperson declared the Tripartite Meeting on Employment and Industrial Relations Issues in Oil Refining closed.


Evaluation questionnaire

A questionnaire seeking participants' opinions on various aspects of the Meeting was distributed before the end of the Meeting; the response rate was 27.6 per cent. Items were rated on a five-point scale. The following table gives the absolute number of respondents who assigned each rating and the weighted average score on each item evaluated.
 

1. How do you rate the Meeting as regards the following?

 

5
Excellent

4
Good

3
Satisfactory

2
Poor

1
Unsatifactory

Average score


The choice of agenda item (subject of the Meeting)

6

20

1

0

0

4.19

The points for discussion

8

15

4

0

0

4.15

The quality of the discussion

6

12

8

0

1

3.81

The Meeting's benefits to the sector

7

10

8

2

0

3.81

The conclusions

3

10

10

1

0

3.63

The resolutions

2

9

8

4

1

3.29

Panel discussion: ILO activities of interest to the oil industry

3

14

7

0

0

3.83

Panel discussion: Does the oil industry have, and can it attract, the workforce that it needs?

4

10

5

0

0

3.95

Panel discussion: Staffing levels, work practices and refinery performance

5

8

6

0

1

3.80

Opportunity for networking

2

12

3

3

1

3.52

2. How do you rate the quality of the report in terms of the following?

 

Excellent

Good

Satisfactory

Poor

Unsatisfactory

Average score

Quality of analysis

7

17

2

1

0

4.11

Objectivity

8

15

3

1

0

4.11

Comprehensiveness of coverage

13

10

4

0

0

4.33

Presentation and readability

13

10

2

0

1

4.31

Amount and relevance of information

3

16

6

0

1

3.77

3. How do you consider the time allotted for discussion?

 

Too much

Enough

Too little

 

 

 

Discussion of the report

3

16

5

 

 

 

Panel discussions

0

18

7

 

 

 

Groups

1

19

6

 

 

 

Working Party on Resolutions

2

15

4

 

 

 

Working Party on Conclusions

2

16

6

 

 

 

4. How do you rate the practical and administrative arrangements (secretariat, document services, translation, interpretation)?

 

 

Excellent

Good

Satisfactory

Poor

Unsatisfactory

Average score

 

 

17

4

3

0

0

4.58

5. Respondents to questionnaire

Government

Employer

Worker

Observer

Total

(% of participants: 27.62)

10

5

11

1

27

6. Participants at Meeting

Government

Employer

Worker

Observer

Total

 

36

20

26

16

98


1.  Adopted unanimously.

2.  Adopted unanimously.

3.  Throughout this text, when the term "workers' organizations" is used, it refers primarily to trade unions as well as other workers' organizations.

4.  Adopted unanimously.

5.  Adopted unanimously.

6.  When the term "workers' organizations" is used, it refers primarily to trade unions as well as other workers' organizations.

7.  Adopted uanimously.

8. When the term "workers' organizations" is used, it refers primarily to trade unions as well as other workers' organizations.

9.  Adopted unanimously.

 


Updated by BR. Approved by OdVR. Last update: 2 February 2002.