Labour dispute threatens Nigerian Content policy; .Over 1000 workers laid off as PENGASSAN shutters indigenous firms

Billions of dollars staked by government and investors in growing local capacity for in-country delivery of oil industry jobs are at risk following prevailing war by labour leaders against fledgling indigenous service companies that form the engines of the policy drive.

It was gathered that labour crisis in the service segment of the petroleum industry arose from struggle by indigenous companies to retain indigenous workers they groomed under various capacity building programmes that took substantial investments.

The raging dispute has led to sack of nearly 1000 field operations staff as the service companies shrink down to avert further exposure to labour union liabilities.

The workers’ unions protest write down in financial entitlements while the oil service companies point  at low oil price cycles, dearth and outright cancellation of contracts by operators whose projects have dropped from investment tables, as well as elongated downtime due to call-off contracts.

President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade F.O. Johnson declined calls put to his cell phone on the matter but other members of the group confirmed that the oil workers’ union is driving a movement against nearly 20 companies that fail to meet their demands for internal unionism, reinstatement of sacked workers and payment of fat exit packages to disengaged staff.

It was gathered that some of the workers demanding severance packages are leaving for foreign multinational oil service firms after they have been employed as pupil staff and trained by the indigenous firms to meet industry skills standards.

Foremost indigenous well intervention and wellsite health, safety and environment (HSE) contractor, Weafri Well Services, though not involved in the current crisis, had unsuccessfully driven a campaign against poaching of groomed employees by foreign companies. The company had decried the glee with which workers it spent fortunes to train walked over to foreign competitors on the promise to work abroad.

Managing Director, Mr. Chris Onyekwere, whose company had vehemently fought against massive poaching from Halliburton, had argued that regulators should insist that poaching must carry a condition that the foreign employers must first offset the training cost of the employees they seek to pull out from indigenous companies.

The workers who regularly succumb to the allure of working abroad for foreign service companies also seek full exit entitlements from wound-licking indigenous firms, thus triggering a war cycle that has drawn in mother PENGASSAN and sister blue jacket National Union of Petroleum and Natural Gas Workers (NUPENG).

Attacks launched by both unions against mainly indigenous oil service firms, it was gathered, led to downsizing and outright shut down that resulted in massive lay off in the past six months. And demand for exit entitlements has also become cyclical as more demands from sacked workers pour in against weakened capacity of the companies to write cheques.

Currently, over 17 indigenous service companies based in Port Harcourt, Rivers State, are battling to save their businesses from the impact of the attacks from NUPENG and PENGASSAN over unresolved entitlement issues. Other five companies have received demand notices from the workers’ groups.

One of them, Ciscon Nigeria Limited, has been forced to declare insolvency as hostility from labour unions and sacked employees take threatening dimension. The situation has led to massive staff load off after resolution agreement failed.

The company pointed at low business cycle in the industry as the reasons for delays in payment of entitlements.

Chairman and Chief Executive of Ciscon, Mr. Shawley Coker, explained that the company had to downsize in response to activity downturn in upstream operations after weak oil prices and low oil income forced operators to call off projects and cancel contracts at a time government offered no buffer for companies that staked funds on equipment and facility acquisition.

He lashed at the leadership of PENGASSAN for being too parochial in their appraisal of the prevailing situation in the industry and advised them to get clear understanding of their roles as partners in building the nation’s economy and not to align with agents that demolish business structures that create jobs.

He reminded the labour leaders that PENGASSAN was formed to protect the local economy from the activities of the foreign multinational oil firms that were exploiting national resources at the expense of the Nigerian people. He lamented that the current labour leaders were trying to outsmart the system by projecting personal interests ahead of national interests.

He also blamed government for folding its arms and allowing few interests in the industry to inflict the economic losses associated with prevailing investment flight on the country. He said that most of the companies under attack have started relocating from the country and shedding local staff.

With the massive downsizing going on in the oil services segment of the petroleum industry, he said, the country has recorded active job losses, shed substantial industry capacity to create employment for fresh graduates, and lost deep pocket investments in local job delivery capacity.

Chairman of Petroleum Technology Association of Nigeria (PETAN), Mr. Bank-Antony Okoroafor, said the group was working with all parties in the disputes to address the worrisome development.

He said a meeting has been scheduled to look into series of complaints by workers and employers involved in the disputes. He clarified that over 15 other companies outside PETAN are also affected by the labour dispute.

He admitted that low activity cycle affected the financial capacity of most service companies in the country, adding that labour leaders should situate the prevailing crisis in the industry in the context of the current economic condition of the country and close ranks with investors to move the sector up from the doldrums.

Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who deplored the labour crisis in the service sector, said government is working to attract the right level of investment capital to keep the Nigerian Content scope of the industry vibrant in the short to medium term. He however stated that it would require over $100 billion worth of investments to recalibrate activity the industry.

He acknowledged existence of the conflict and pledged to wield into the crisis with a view of finding a middle point between the employers and labour leaders.  He admitted that the problem deserves greater attention than it currently receives from government and explained that Ministry of Labour should lead intervention while Ministry of Petroleum Resources assists with details.

“I have appealed to the unions to bring labour issues in the industry to me for initial dialogues before they become labour issue. My advice is that ultimatums and work stoppage are something that must be used very sparingly.  In a typical year, we lose a lot of time because we are back to back with strike.

“It is almost like the organized labour in the industry believes that the only way to get attention from us is to go on strike. But it shouldn’t be. When we are not doing things right we need to correct ourselves.

“I will pay attention to this more than we have already done because I must confess to you that we have not given enough attention to some of the developing labour issues in the industry,” the minister promised.