Tag Archives: workers

Stop harassment of Iraqi oil workers

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After weeks of industrial action in the southern oil fields in Iraq, management are trying to prevent the Refinery Workers Union from operating by sending four of its leaders to other workplaces. This is a standard management tactic in Iraq, and in the past has often meant sending union leaders to more hostile, violent areas of the country. But pressure from Iraqi trade unionists and trade unionists around the world has stopped this before, and we can do it again.

Refinery workers held rolling sit-ins on 25-26 February, 2 and 18 March, followed by a large demonstration on 28 March calling for wage increases, fair payment of allowances owed to workers, permanent jobs for temporary workers, monitoring of corruption and better local management to improve production.

The union leaders who received the transfer orders on 1 April were Ibrahim Radhi, President of the Refinery Workers Union and Vice President of the umbrella Iraqi Federation of Oil Unions (an ICEM affiliate); Ala’ Sabah Miri’e, Refinery Workers Union Vice President and President of the Central Council of the IFOU; Faraj Rbat Mizba, Refinery Workers Union media officer and IFOU Central Council member; and Khez’al Kadhim: refinery union member and activist.

LabourStart are organising solidarity: “We want trade unionists from around the world to protest about this harassment, demand that the transfer orders are rescinded, and support the call for an ILO-compliant labour law in Iraq.”

Send an email to Iraqi Oil Minister Hussein Al Shahristani to support the oil workers.

David vs Goliath – Colombian community stands up to BP

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Update on the workers and community struggle against BP at Casanare in Colombia: The USO oil workers are back at work and BP has agreed to negotiate, but community mobilisations continue:

 

Movements, particularly in the Global North, could probably learn from the Casanare struggle’s close alliance between BP workers and local community and environmental campaigners. The interests of one do not appear to be abandoned at the expense of others.

A statement by “residents of the region, trade unionists, environmentalists and human rights activists” asked

“Could it be that oil is one of the most important sources of violence? An oil economy leaves a huge environmental damage, it depletes the water, an essential element of life, causes climate change, producing daily disasters and causes loss of many lives.
An economy whose base is the creation of non-durable goods, unnecessary, for a few months of purchase in addition to the pounds of trash that we do not know where to put.

An economy that needs to exhaust the days of men and women in work that does not leave time for socializing, caring for their children, develop creativity and culture, as well as exercise and the right to rest.

An economy that looks like a basic obstacle to the environment, water resources and human rights. One obstacle to be overcome, crushed.

Then you think about if it is absolutely necessary that these resources are exploited by foreign companies, who do not respond to any democracy, no people other than the narrow interests of its shareholders.”

The Colombia Solidarity Campaign, which is organising a solidarity protest at BP’s London AGM on Thursday April 15 reported that”

“Workers at the BP processing plant at Tauramena, part of the Cusiana oil field in Casanare, Colombia went on strike on 22 January 2010 for improved wages. It was the first such labour stoppage in 18 years. On 15 February the notorious ESMAD ‘anti-mutiny’ police brutally attacked the workers’ picket line and the local community with teargas and beatings. three workers were hospitalised. The workers are members of the national Oil Workers Union USO that has only been able to organise in BP plants in the last year.

The workers are back at work, but the community mobilisations continue.

After a month of work stoppage and community protests, on 23 February BP at last met with the strikers and community representatives. The two sides reached a limited agreement, with some ambiguities. Earlier that day BP had tried to run a group of scabs through the picket line on the Tauramena Central Processing Facility (CPF), but the strikers chained themselves to the gates and successfully blocked the strike-breakers. The following day the 30 strikers at SAR Energy, the sub-contractor and their immediate employer, met with managers.

BP needs to recognise the harm it has done. Five negotiating commissions were going to be set up, dealing with labour problems, social investment, goods and services, environment and human rights. They were supposed to be inaugurated on 2 March, but the process nearly broke down due to BP’s arrogant attitude. On 7 March the community held a mass mobilization demonstrating the continuing anger. On 23 March the union USO and the community movement Movimiento de Dignidad por el Casanare presented their joint demands, BP promised to respond 14-16 April. We are waiting.

In the meantime, in the nearby city of Villavicencio at 11.1 Sam on Saturday 27 March two gunmen on a motorbike shot at USO union officials, fatally wounding their bodyguard.”

Colombian police repression of BP workers

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On 15 February the notorious ESMAD ‘anti-strike’ police attacked a community and workers’ picket line by the Tauramena BP plant in Casanare, Colombia.

 

Three workers were hospitalised and several children affected heavily by tear gas. Workers at the BP plant at Tauramena, part of the Cusiana oil field in Casanare, Colombia have been protesting since 22 January 2010 for improved wages.

This is the Urgent Action Message from the Oil Workers Union (USO): (to send a message of solidarity emailusopaz@yahoo.com)

The department of Casanare is one of the most prosperous oil producing regions in Colombia. For more than 20 years multinational corporation BP has been exploiting this natural resource. As is common in our country, the presence of extractive projects is accompanied by state depredations and a strong paramilitary presence. During all of this time the workers and farmers of the region have had to bear all manner of assaults and human rights violations. Paramilitary groups imposed labour conditions in the corporations, those who resisted were assassinated, as occurred to several campesino and community leaders in the department.

In 2009, the Oil Workers Union (Unión Sindical Obrera – USO) managed to organise a union branch in Tauramena. From that moment USO initiated a series of actions demanding rights for the workers and the communities in the region, supporting social processes that were already under way.

The union has been leading a peaceful protest since 22 January 2010 demanding that [oil pipeline consortium] OCENSA and BP improve wages and working conditions for the workers at Tauramena.

Due to the workers’ and community struggle a significant advance was made in terms of wages and the reintegration of some sacked workers. The employers committed to holding talks this Tuesday 16 February to discuss the outstanding points; on its side the union stated its willingness to negotiate and to lift the protest action once talks commenced, in the knowledge that it has been repeatedly deceived.

Then in the morning hours of Monday 15 February a squad of ESMAD [anti-mutiny - ‘robocop'] police attacked the workers and local people, not respecting the children who were just then making their way to school. As a result of this brutal aggression three workers were injured and several children contaminated by tear gas.

In the face of this we ask:

1. That the Colombian government of Álvaro Uribe insists that the oil companies in Casanare – BP, OCENSA and SAR ENERGY S.A., – respect the employment rights of the workers, that they work in dignified conditions.

2. That the Colombian government of Álvaro Uribe provides the necessary guarantees for the free exercise of the rights to trade union association and social protest.

3. That the Attorney General (Fiscalía General de la Nación) and the competent state authorities investigate the links between paramilitarism and oil exploitation in Casanare. Evidential proofs of the violations of human rights were presented to the Peoples Permanent Tribunal, but no state investigation is known.

4. We appeal to national and international unions, and to organizations defending human rights, to reject these aggressions and to be vigilant with this process of social resistance.

USO National Human Rights Commission.

15 February 2010

Iraq: New contracts will undermine Iraqi independence

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The mega-oil deals signed and pledged in Iraq in last week have been major news, marking another step by the oil majors back into a country that liberated itself from the “robbery and exhaustion practiced by the monopolistic oil companies” in 1972. But the full consequences of the agreements have been hard to untangle.

BP and Chinese CNPC last week signed the full contract to develop the Rumaila field, which was awarded to the consortium in July. Rumaila is a supergiant field, with 17-25 billion barrels of recoverable reserves – 3 times Azerbaijan’s total. BP’s contract pledges to increase Rumaila’s oil production from under one million barrels per day to 2.85 million. On 4th November, Exxon and Shell were awarded the right to develop West Qurna-1, proposing to raise extraction from 270,000 barrels a day to 2.35 million. Eni will similarly increase Zubair’s production from 200,000 barrels.

Iraqi Oil Minister Hussein Shahristani has been claiming victory in the negotiation battle, presenting an image of having withstood oil company demands (and US government pressure) for better terms. In July, Baghdad insisted that $2 was the maximum it would pay as a “remuneration fee” per barrel of crude extracted. Apart from BP/CNPC, all the oil companies walked away, grumbling that they deserve higher profits. Now they’re back, signing what appear to be the same contracts. E.g. Exxon/Shell’s fee for West Qurna-1 is for $1.90 per barrel.

However, there are various reports indicating that the terms were sweetened to tempt the oil companies back. Referring to Eni’s deal for Zubair, Carola Hoyos writes on the FT blog :

“Privately, oil executives say Iraq sweetened other fiscal terms that brought the entire project’s economics to about half way between the minimum Eni was willing to bid and the maximum $2 Baghdad was willing to pay during the June auction, in which every western oil company except BP walked away complaining about Iraq’s unrealistic terms. In June Eni was willing to accept no less than $4.80 a barrel. The new terms make the deal equivalent to the Iraqis paying about $3.80, one executive said.

Others claim that the oil companies had misunderstood the 35% corporate tax rate – that it only applies to the fee paid per barrel, not to net profits, thus improving their rates of return.

Either way, a recent interview with BP Chief Executive Tony Hayward in Petroleum Intelligence Weekly indicates that the oil companies will still be taking major profits from Iraq’s oil:

“Q. You’ve made a very bold move with the Rumaila contract in Iraq. Why did you go so low and isn’t the margin so small that it’s almost immaterial to you as a company?
A. It’s a 65 billion barrel oil-in-place field, the third or fourth largest in the world, of which 12 billion bbl have been recovered and we estimate there’s probably 20 billion bbl to be recovered — the range is probably 17 billion-25 billion bbl. Over the last five years we’ve worked with the South Oil Co. (SOC) exclusively, providing technical support to the field, so we know a lot about the reservoir. That’s the first thing — we understand the rocks. We are confident that the returns from this investment will be compatible with other opportunities in our portfolio. That means a 15%-20% return. […]
Q. A return of 15%-20% even with this fee-based structure of $2 per barrel?
A. Yes. It’s material because it’s a small margin times very many barrels. We are going to take the field from around 1 million barrels per day to nearly 3 million b/d, so 2 million b/d will be incremental production and that adds up to a lot — it’s material for BP.”

 

The interviewer was surprised at Hayward’s response, as a 10-12% rate of return provides comfortable profit levels. So 15-20% is not what you’d expect given the repeated complaints from Western oil companies and governments that Iraq wasn’t giving them fair terms. Furthermore, it reveals the greed behind the previous demands for $4 fees per barrel or Production Sharing Agreements and the lies spun in arguing that these were the minimum terms possible.

Interestingly, Hayward also points to something else important – that BP have been “providing technical support to the field, so we know a lot about the reservoir”. Greg Muttitt of PLATFORM warned about this in 2005, that Shell and BP were providing “technical assistance” for various fields to get access to all the geological data. By “understanding the rocks”, the companies are able to make a well-targeted pitch for the development licence and beat off competition.

However, the real clincher on why BP will be able to make such high profits is in Haywards’s next statement:

“The field is already in production. As you get cost recovery immediately you never have to make very large investments, so even to go from 1 million to nearly 3 million b/d the amount of capital we have to expose at any one moment is not very great as we’re getting our money back as production grows.”

 

 

Iraq’s oil, especially in mega-fields like Rumaila, is cheap and easy to get out of the ground. You don’t need to invest much to begin receiving large revenues in return. The current comparatively low level of output from these fields is due to the legacy of war and sanctions, which means that boosting production is simple. Former Oil Minister Esam Chalabibelieves that

“During the first months, BP and CNPC will not do much work, because they have to raise output in Rumaila by 10% in three years and that is an easy job for them. The first phase of the Rumaila contract does not need a lot of cash or much effort. South Oil Company did a good job recently, but BP and CNPC will collect the fruits.”

 
BP and CNPC are only committed to spending $300mn in the first 33 months, a small amount for oil majors and a very comfortable length of time in which to guarantee the production increase.

Hayward also inadvertently refers to an issue that has caused much opposition in Iraq:

”Now, people don’t really understand the contract and we haven’t sought to explain it because we haven’t signed it yet. When we have concluded it we will explain it to the investment community.

 

 

Hayward is focused on the investment community – BP’s true stakeholders. But it doesn’t seem to occur to him that the Iraqi people might want to understand a contract that governs 20% of Iraq’s proven reserves. With oil making up 95% of Iraqi government revenues, Rumaila alone could be responsible for one fifth of government income.

The lack of full transparency around the terms of the contract, including revenues and who controls development, undermine accountability of the Iraqi government and the ability of civil society to challenge problems with the contracts. This has led to opposition within Parliament, with MPs insisting that oil contracts require Parliamentary oversight. Noor Adin al-Hadyi, an opposition member of the Parliament’s oil and gas committee, said the committee could decide to take the issue to court to ask that the contracts be cancelled.

This licence round previously caame under major criticism from both the oil workers’ union and the management of the South Oil Company. The Iraqi Oil Ministry went as far as firing Fayadh al-Naama, head of the South Oil Company, in late July for opposing the current contracts.

As neither BP nor the Iraqi government have sought to explain the terms of the deal, it has been particularly difficult to assess the impacts on management and control over Iraq’s oil industry. Iraqi oil analyst Munir Chalabi has raised particular concerns over how the contract creates “field operating divisions” (FODs), which exist as legal entities and give BP/CNPC a major role in “their decision-making, control, management, development and operation of all the giant fields.” Chalabi feels that these FODs would also would “mean the fragmentation” Iraq’s North Oil Company and South Oil Company, which currently produce Iraq’s total of 2.4 million barrels per day. Having operated Iraq’s oil & gas fields through 30 years of sanctions and war and built up enormous experience, “their role will be reduced to no more than sub-holding companies for the giant oil fields, and limited in their management to distant and marginal fields.” The contracts undermine the national oil companies, creating greater pressures towards privatization, threatening a situation where Iraq is no longer able to produce its oil autonomously.

These fears about the carving up of the Iraqi oil companies appear to be confirmed by a further comment by Hayward:
“The model we have agreed with the Iraqis is to carve out of SOC [South Oil Company], which currently operates the field, the operating part for Rumaila. We are going to create a Rumaila operating company which will be principally Iraqi staff into which we are going to put BP technical specialists, much as we did in TNK-BP. So, sprinkle BP and CNPC technical specialists and then have the leadership populated between BP, CNPC and Iraq. It means we get an enormous amount of leverage from not having many people there. So we don’t have to deploy hundreds of people to Iraq. The model is exactly what we did with TNK-BP, particularly what we have done at Samotlor.”

So BP will maintain “an enormous amount of leverage”, while removing Rumaila from the existing Iraqi national oil companies. The state will only retain a minority 25% stake in the Rumaila operating company, down from an originally proposed 51%, leading to further marginalisation.

Hayward’s unfortunate example of TNK-BP formally operates as a private company pursuing corporate interests (of BP and its Russian oligarch shareholders), without regard for Russian public interests or needs. The arguments between BP and its rivals over control of TNK-BP can in large part be traced to the Russian shareholder’s unhappiness with the level of leverage available to London.

Hayward’s comment indicates that BP sees this model as a recipe for success. Increased leverage for BP means reduced leverage for Iraqi national oil companies, the Iraqi state, Iraqi workers and the Iraqi public.

The fact that these contracts are not Production Sharing Agreements is a testament to the successful campaigning and resistance on the part of the Iraqi oil workers and the international solidarity behind them.
However, in their current form, BP and Shell’s new deals signal a major threat to Iraq’s future ability to control extraction of its natural resources.

BP putting workers at risk in US

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Even after BP’s refinery in Texas City exploded in 2005 killing 15 workers and injuring hundreds, the company continues to break the safety standards it promised to meet as part of a settlement agreement. Four workers have died in separate occasions since.

Yet documents obtained by the FT’s Sheila McNulty show that the company continues to cut corners in terms of essential anti-corrosion and safety maintenance. This follows a recent story on BP’s abuse of the oil derivatives markets in the US.

BP fails to comply with safety standards
By Sheila McNulty in Houston
Published: September 28 2009 21:42 | Last updated: September 28 2009 21:42
It has been four years since BP’s biggest refinery exploded in Texas, killing 15 people and injuring hundreds in the worst US industrial accident in more than a decade. Yet US authorities have not yet succeeded in getting the UK oil major to bring the facility into compliance with safety standards required by its settlement agreement.
The lapses have caused even the unit in charge of enforcing compliance – the labour department’s Occupational Safety & Health Administration (Osha) – to be
The Financial Times has seen copies of documents showing that, as late as August, safety authorities in the department notified BP it was late in checking thickness on 143 pipes at the Texas City refinery, which could uncover corrosion, as well as visual inspections and maintenance on three internal tanks and seven internal vessels.
The company also was overdue to perform inspections and preventative maintenance on 77 critical instruments, and two equipment tests were overdue.
Yet, even after four separate deaths at the facility following the fatal 2005 blast, Osha let the deadline for BP to come into compliance pass on September 23. It says it is considering BP’s request for yet another delay to meet safety standards before being deemed non-compliant with a settlement agreement with Osha set following the 2005 blast.
Osha found more than 300 “egregious, wilful violations” in Texas City after the 2005 explosion. While BP did not admit guilt, it agreed in a settlement with Osha to a maximum allowable $21m fine and to spend $1bn on the refinery over the next five years.
BP told the FT last week it believed it was in “full compliance’’ with its commitments noting that, since 2005, the company had made substantial investments at Texas City, in its people, work processes and in upgrading its facilities.
“BP Products has completed more than 550 Osha citation abatement requirements and process safety related recommendations and has significantly reduced hazards on-site and off-site,’’ said Daren Beaudo, BP spokesman.
“We continue to work with Osha through the appropriate processes to resolve any expressed concerns,’’ he said. “BP Products remains committed to building upon the safety investments and improvements at its Texas City Refinery.’’
But Osha has come under fire too. It was censured by the US Department of Labor’s Office of Inspector General-Office of Audit for not increasing oversight of the facility under provisions aimed at “indifferent employers’’ with repeat offences.
The audit noted the death in 2008 of William Joseph Gracia, a veteran BP operations supervisor, from head injuries after a 500lb lid blew off a water-filtration unit that was being restarted, should have led Osha to apply its “enhanced enforcement provisions”. That would have resulted in additional enforcement efforts, such as enhanced follow-up inspections, inspections of other workplaces of the employer and more stringent settlement terms.
Instead Osha fined BP just $28,000, set firm deadlines by which BP had to improve its processes and then agreed to delay them into this year.
Osha hired a third party to do its auditing of the site after the 2008 incident, despite this being contrary to best practice because of the potential for conflict if auditors look for work from the companies they are investigating.
“You’re getting into the neighbourhood of 40 people killed in the facility over the last 35-40 years,’’ said one industry investigator who has been to the facility. “I don’t know of another industrial site in America at which 40 people have been killed over the last 35 years.’’
Many of the problems at the 70-year-old plant had, no doubt, been inherited by BP when it acquired the refinery in 1998 as part of its purchase of Amoco. Before the blast, the Texas City site had in 30 years suffered 23 fatalities – four since BP took over. But instead of making the investments needed to improve safety, BP in 1999 ordered a 25 per cent cut in fixed costs. Osha notified BP in August 2009 of several continued lapses at the site, noting that its settlement agreement with the government required the company to retain an expert to conduct a process safety audit, with special emphasis on several items, including the “adequacy of pressure relief for individual pieces of equipment’’.
In addition, CSB, which conducted an exhaustive two-year probe into the 2005 blast, has opened a second full investigation of the refinery in February 2008, following Mr Gracia’s death.
The probe, which is to run into next year, is focusing on whether safety system issues were put in place before or after 2005. At that time, the CSB concluded, budget cuts had progressively deteriorated safety, resulting in all the symptoms of a “failed safety culture,” but BP pledged to get the refinery in order.

Regulator’s list of concerns
The US labour departments Occupational Safety and Health Administration gave BP until September 23 2009 to address continued failings at its Texas City refinery or be considered non-compliant with its settlement agreement with US authoritieswrites Sheila McNulty.
Yet the deadline came and went, with Osha saying it was considering BP’s request for more time to comply with a string of problems outlined in a letter to the company in August.
For example, it said regulations recommended refineries established a maximum default rule of 3 per cent inlet pressure loss on spring-loaded pressure relief valves, yet BP had allowed a maximum pressure drop of 7 per cent.
Osha said: “We have found a significant number of valves with inlet pressure drops above 3 per cent and, disturbingly, several valves with inlet pressure drops above 7 per cent, with some as high as 27 per cent” .
In addition, Osha said BP had not completed a determination of which interlock, trip and alarm functions in each unit were critical to process safety.
It wrote that BP had identified a large number of uncontrolled or unmitigated hazards involving instrumentation that had resulted in substantial “residual risk” in affected systems throughout the refinery.
“There still exist a large number of identified unmitigated risk scenarios,’’ Osha said. For some of the identified hazards, BP had either not specified or allocated the specific layers of protection needed. For others, where BP had specified layers of protection to control hazards, the instrument controls had not been installed or were not operational.
The documents paint a picture remarkably similar to what the authorities found on investigating the 2005 explosion.
Among the citations for the death of William Joseph Gracia, a veteran BP operations supervisor, at the refinery in 2008, Osha noted that some of the problems identified after the 2005 refinery explosion had yet to be corrected, in that BP had still not implemented sufficient operating procedures.
BP said that since 2005 it had increased staffing in the area of health, safety and the environment; increased safety and operations training levels, and upgraded the Texas City refinery’s infrastructure, refurbishing and rebuilding key gasoline production units, updating control systems, moving to a more powerful maintenance management system, improving training and implementing other recommendations.
The company also eliminated the use of blowdown stacks, such as that which exploded, and established new guidelines governing the placement of trailers and temporary structures, which did not offer enough protection to staff during the accident.

Iraqi Opposition to BP’s Rumaila Contract

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Iraqi oil workers have come out in strong opposition to BP’s new contract for the super-giant Rumaila oil field, saying they will not allow foreign oil companies

Signed in early July as part of the first bidding round for Iraq’s oil, the 20-year contract gives BP and Chinese oil companyCNPC significant control over production from Rumaila, which holds reserves of 17.8 billion barrels – more than twice Azerbaijan’s total, and over 10% of Iraq’s proven reserves.

Hassan Juma’a, president of the Iraqi Federation of Oil Unions (IFOU) said that: “We think that these contracts are illegal and illegitimate” and that “We oppose the position of the (Ministry of Oil) that signed the contracts, but we also oppose the position of the foreign companies that signed illegitimate contracts without looking for gaps such as the role of the oil union.”

Faleh Abood Umara, the General Secretary of the Union, said that the union: “will arrange protests and strikes if the foreign companies have entered Basra.”

Clear opposition to BP’s newly signed contract also came from the current and the past management of the South Oil Company, the Iraqi state company that currently produces from the field. They feel the Iraqi Oil Ministry could have focused on allowing the state companies to fix existing infrastructure to increase production, rather than being pre-occupied with opening up known fields to foreign oil companies.

Both the workers and the management are open to foreign oil companies playing a role in Iraq – but preferably as service contractors — providing technical experience while allowing Iraqis to control their own oil. Hassan Juma said: “What we want from the foreign companies is to give their efforts to serve the interest of the Iraqi people and not to just increase the oil production or develop the oil fields.”

Iraqi oil analyst Munir Chalabi has produced an analysis of BP/CNPC’s contract, concluding that while the 20 year technical service contract is not in itself privatization, it represents “a very dangerous move, leading to the dismantling of the Iraqi national oil and gas industries.”

Particular concerns include the “field operating divisions” (FODs), which exist as legal entities and give BP/CNPC a major role in “their decision-making, control, management, development and operation of all the giant fields.” Chalabi feels that these FODs would also would “mean the fragmentation” Iraq’s North Oil Company and South Oil Company, which currently produce Iraq’s total of 2.4 million barrels per day and employing 20,000 people. Having operated Iraq’s oil &gas fields through 30 years of sanctions and war and built up enormous experience, “their role will be reduced to no more than sub-holding companies for the giant oil fields, and limited in their management to distant and marginal fields.” The contracts undermine the national oli companies, creating greater pressures towards privatization, threatening a situation where Iraq is no longer able to produce its oil autonomously.

Chalabi argues that the question for those concerned with the impacts of privatisation of Iraq’s oil is not merely “will there be Production Sharing Agreements?” The signed and proposed contracts in the current bidding rounds are undemocratic, damaging to the rights of oil workers and undermine Iraq’s economic future. Chalabi argues that the “Heads of Agreement” which gave Shell a virtual monopoly over gas production in Iraq’s south is “as disastrous to the future of Iraq’s economy and political independence as any PSC contract, if not worse”.

Various oil producing countries have allowed foreign oil companies in after years of self-production — Russia, Azerbaijan and Algeria in the 1990s, Libya and Iran in the 2000s. However, Iraq’s attempts to sign 20 year contracts for 80 billion barrels of its reserves in less than a year is unheard of.