Africa, Development & Aid, Economy & Trade, Energy, Environment, Global Governance, Headlines, Labour

LABOUR-NIGERIA: Oil Industry Crisis Worsening

Sam Olukoya

LAGOS, Jul 29 2004 (IPS) - Indigenous oil workers in Nigeria are angry with multinational oil companies operating in the country’s Niger Delta region over the influx of foreign oil workers mainly from the United States and Europe.

In the past months, indigenous workers in some of the companies have been threatening strikes to protest the influx.

Early this month, Nigeria’s subsidiary of the French company, Total, shut down production for one week after Nigerian workers threatened to go on strike. The workers were demanding promotion into senior positions which they said were normally reserved for foreign workers.

A similar strike threat also came early this month from workers of the Nigerian subsidiary of the American company, ExxonMobil. They accuse the company’s management of violating expatriate quotas by employing foreigners for jobs that could be done by locals.

The workers want an end to the influx of foreign oil workers which they said was increasing the company’s wage bill.

Union officials say about three percent of oil workers at Mobil Nigeria are foreigners who consume about 45 percent of the company’s wage bill. This figure goes across the board in most oil firms operating in the country, they claim.

But Mobil Nigeria could not comment on the allegations regarding the expatriates’ terms of service. In a statement, made available to IPS on Jul. 28, Mobil said it has been engaged in collective bargaining with the labour union over review of employee compensation and benefits. ‘’Discussions are ongoing and we hope for an accelerated resolution,’’ said the statement, signed by Udom U. Inoyo.

Workers of Nigeria’s subsidiary of the Anglo Dutch oil Company, Shell Petroleum are also complaining that the influx of foreign workers is responsible for the firm’s high operating cost. The company’s oil workers union is threatening strike if the firm goes ahead to reduce staff as part of its policy to bring down operating cost. The workers say Shell’s objective is to reduce the staff strength of local workers in order to create vacancies for foreigners.

Elijah Okoubdo, general secretary of National Union of Petroleum and Natural Gas Workers (NUPENG), justifies the discontent among the country’s indigenous oil workers. “What Nigerian oil workers are saying is that the expatriate quota should not be lopsided against them. The multinational companies have been bringing foreigners to do jobs which Nigerians should be recruited to do.”

Okubdo claims Nigerians are not allowed to do certain jobs in the oil companies because they are reserved for foreigners. These include the post of managing director in the companies. He cited Shell which has just appointed Nigerian as managing director after the company has operated in Nigeria for more than 40 years. “There is need for certain positions to be indigenised,” he says. “For years, Nigerians are made to understudy foreigners on the job, yet they are not allowed to take over from them.”

Restive communities shutting down oil installations remain yet another problem for the oil companies. “The unrest in local communities is the result of growing anger in local communities clamouring for a share of oil proceeds and a stoppage to environmental pollution resulting from oil exploitation,” says Isaac Osuaka of Oilwatch Africa.

Osuaka says local communities have not fared any better despite Nigeria’s return to democratic rule in 1999.

The American company, ChevronTexaco is one of those worst affected by communal unrest. Some of the company’s installations in Delta State were destroyed during communal violence in April last year. The company subsequently shut down its operations in the affected areas.

In Abiteye village, where ChevronTexaco shut down an oil field and a pump station, villagers say signs of the company’s prolonged absence is visible everywhere. “Many things that used to show ChevronTexaco’s presence here are now absent. Their giant gas flares have stopped burning, the regular discharge of their oil waste from their premises has stopped, while the familiar sight of white oil workers traveling through the creeks in speed boats is no more,” says Ojo Austin, a youth in the village.

With more than two million barrels of crude oil exploited daily in Nigeria, the country is the world’s sixth largest oil producer. Nigeria’s economy depends largely on oil. “Oil workers strike and unrest in local communities constitute a threat to the country’s economy and the international oil market,” says Steve Ubana, a Lagos-based economist.

Shell Petroleum, the largest oil company operating in Nigeria, accounts for about half of the country’s oil production.

Exxonmobil, another company whose workers are also threatening strike, is the second largest firm operating in Nigeria. The company produces half a million barrels of crude oil daily.

But the oil companies say they are negotiating with their workers to avert any strike.

In the absence of strike, communal unrest is taking a toll on oil production. The shut down of ChevronTexaco’s installations since last year has meant a loss of 120,000 barrels a day.

The company says it will only return to the area when peace returns. Last month, the firm shelved plans to resume operations in the troubled area. This follows the killing by armed youths of oil workers who went there to carry out preliminary works.

Ubana says it is only when the plight of local communities is addressed that communal unrest in the Niger Delta will stop. The Nigerian government says it is addressing the problem through a body, the Niger Delta Development Commission. The objective of the commission is to use part of oil proceeds to develop local communities.