By Victor Ahiuma-Young
WORRIED by the alarming rate of unfair labour practices in the Petroleum industry and its threat to industrial unrest, the National Union of Petroleum and Natural Gas Workers, NUPENG, has petitioned the Minister of Petroleum Resources, urging him to address the issues to calm the restiveness in the sector and avoid industrial unrest.

NUPENG in a petition by its General Secretary, Comrade Elijah Okougbo, listed some of such unfair practices as casualization and contract staffing, outsourcing and refusal to allow workers to freely associate and unionise in accordance with with Section 40 of the Laws of the Federation- 1999 and ILO Conventions 87 and 98 of 1948 and 49 respectively.

NUPENG's General Secretary, Comrade Elijah Okougbo, Comrade Achese Igwe, President and Comrade Tokunbo Korodo, Chairman, Western Zone of NUPENG, at a recent briefing in Lagos.
The union lamented that between 2001 till date 2005, no fewer than six different agreements were reached among stakeholders over the issue of casualisation and contract staffing to no avail .

The union named Shell Petroleum Producing and Development Company, SPDC, Mobil Producing Nigeria Unlimited , Nigeria Agip Oil Company, Total Exploration and Production Nigeria Limited are among the main culprits.

According to the petition: “Casualisation and Contract staffing have become a social phenomenon and a hydra – headed evil in labour relations in the Oil and gas Industry. What constitutes casualisation in the industry is the deliberate policy of the multi-nationals and Oil Service companies, which created casual and labour contract workers in place of permanent labour employment. That is, the placement of workers as temporary employees on jobs that are routine, contentious and permanent in nature.

In the oil and gas industry and in manufacturing companies, various nomenclatures have been used to describe the workers/casuals these includes: Labour Contract Workers Temporary Staff, Service Contract Workers, Direct Hire, Body Shop individual Consultancy fixed time Contract Casuals, etc. Whatever the nomenclature in use, the bottom line is that these workers are not on the principals’ payroll and are therefore paid pittance wages, hired and fired at will by the service providers.

The multi-nationals and oil service companies in the industry, contract out/outsource very large portion of their workforce to unlicensed labour contractors to provide support services to the companies notwithstanding that the jobs are continuous, routine and permanent in nature and pay the contractors service handling charges or commission. The principal companies in most cases employ these categories of workers, supervise their conduct and determine their salaries but only transfer payment to the labour contractors.”

“The most worrisome shift in the casualisation policy of the companies in the industry now is the wicked conversion of labour contracts to service contracts and their fragmentation to very little contract tenures, which are reduced to short tenures to make the unionization drive impossible.

Although we have made effort and have unionized the other categories of workers (Service Contract Workers, Direct Hire, Temporary Staff, Body Shop, Casuals etc.) by aggregating them in each of the companies as Service Contract Workers irrespective of the number of service providers, we have been having running, battles with the Service Contractors and their Principal companies for recognition and negotiation of Conditions of Service.

This group constitutes over 90% of the workforce of these oil companies. Another new dimension to the casualisation policy in the oil and gas industry is the resistance by some companies to unionization especially by NUPENG. The principal companies now wish to influence the choice of industrial union, which will unionise their Service/Labour Contract Workers in the oil and gas industry.

They are carrying out their evil plans by terminating the existing labour contracts some of which have run for over 20 years and re-awarding same to companies outside the oil and gas industry to create jurisdictional problems. NUPENG represent the labour service contract workers in their operations.”


Commenting on outsourcing in the nation’s petroleum industry, NUPENG said, “though it is a global phenomenon in employment relations and the world is now a global village, the method of outsourcing core jobs to contractors in order to trivialise workers’ job security and their conditions of service does not amount to internationally accepted best practices in the oil and gas industry in Nigeria.

Outsourced workers have been derided and humiliated in most cases. Some outsourced core jobs to contractors are made to last for two years and in such contracts, workers are made by contractors to sign yellow dog agreement which provides that the employee must not join the union while in the service of the company.”

“Where they are unionized, their services are brought to an end either at the end of one year or two years. There are different names for outsourcing workers from their jobs viz:- Rightsizing, downsizing, rationalisation, redundancy or retrenchment.

And outsourced jobs have different nomenclatures for instance Yellow dog, Direct hire, Service Contract, Labour Contract etc. All these terminologies will not put food on workers table if ILO Conventions on decent jobs and equal pay for work of equal value are not respected. The Ministry of labour should endeavour to play the role of the supervisor in industrial relations instead of allowing slave labour to be the dominant factor in the oil and gas industry.”

The contract tenure approved by NAPIMS for contractors operating with multinationals in the oil and gas industry ranges from one to two years at the end of which contract staff’s appointments are either terminated abruptly and they are paid off with a pittance or asked to re-apply for the same job which has not changed in content.

The job/contract tenure often approved by NAPIMS is too short and as such promotes, rancour, insecurity, faithlessness, frequent labour turn over which do not conform with international best practices advocated by the International Labour Organisation (ILO). It promotes corruption in the system and undermines our core values in industrial and economic relations.”

Our demands -NUPENG

In the petition, the union is demanding among others, “the immediate conclusion of the draft Labour Relations manual by the Standing Working Committee on Labour Relations in the oil and gas sector designed to formulate a viable and sustainable federal government policy on casualisation/contract labour, that will clearly stipulate the employers’ rights and obligation when using contract labour as well as the right of contract workers.

The immediate conversion of all qualified and experience direct hire, labour and service contract workers and casuals who have put in a minimum of three years in continuous service, engaged In jobs that are continuous, routine and permanent to permanent employment status. A progressive employment policy to strengthen the provision of the Labour Act Section 7 (i) of the laws of the federation of Nigeria, 1990 with a view to abolishing casualisation and contract employment in the long run.

All labour/service contract workers not converted as in (ii) above in the oil & gas industry should be allowed to be unionized by NUPENG or PEGASSAN, so that a humane Collective Bargaining Agreement can be negotiated for them. The multinational and oil service companies should create a conducive atmosphere and facilitate the formation of a Labour/Service contractors forum where they are more than one (1) in a company for the purposes of negotiation.

The management of Shell Petroleum Development Company and Mobil Producing Nigeria Unlimited and their contractors as a matter of urgency should go into negotiation of conditions of service for all service contract workers in their employment and severance benefits for workers made redundant during contract renewal process and as well as re-instate all union leaders victimized for their Trade Union activities.”

“The principal companies should institute pre-qualification and contracting processes with third party companies (Labour and service contractors) to ensure they meet minimum labour standard. The terms of any contract with any third party companies should include clear contractual terms and terminal benefits. The principal companies should monitor compliance with the provisions of extant labour laws and the contract by its contractors including the right to belong to the union.

There should be enforcement of the principle of voluntarism in industrial relations practice in the oil and gas industry in paiticular and the nation in general in consonance with Section 40 of the Laws of the Federation- 1999 and ILO Conventions 87 & 98 of 1948 and 49 respectively. That all labour and service contractors in the oil & gas industry must have recruiters’ license.

The various communiques signed with stakeholders in the industry particularly the ones dated 28th January 1992 and 6 November 2001 which agreed on the rights of workers to unionise, conversion of qualified contract employees to regular employment and equitable remuneration for staff on similar jobs should be implemented without any further delay.”

In advanced societies from where we imported globalisation and outsourcing, contract workers

are better paid than permanent staff. Therefore instead of a lopsided approach, contract tenure should be revalued and elongated to five years minimum and contract workers’ income/pay should reflect in the value of the contract. The Group Managing Director, GMD, NNPC should ensure that NAPIMS is humane and proactive in the award of contracts to Nigerian contractors operating in the oil and gas industry.

Contracts by NAPIMS to Nigerian contractors should bear a tenure or span a duration of five minimum vears before expiration.

We surely need a William Wilberforce to abolish some of these labour malpractices. We appeal to you to use your good offices to address the issues of casualisation and non recognition of the union in some companies in the industry so that the pending Shell Petroleum Development Company issue and agitation from the Branch locales in the oil and gas industry will not precipitate a nation-wide strike action which may disrupt industrial peace and harmony. With good faith based on a win-win approach, we can all enthrone positive social conditions and a proactive labour-economic agenda in the world of work.


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