Energy Chamber of Trinidad & Tobago
Press Release on the strike action initiated by the OWTU
FOR IMMEDIATE RELEASE
Wednesday 4th January 2017
The initiation of strike action today by the Oilfields Workers’ Trade Union(OWTU) against the Petroleum Company of Trinidad and Tobago (Petrotrin) is an ill-advised and potentially costly decision that is likely to cause more hardship to Petrotrin and further weaken the country’s economy.
The decision to strike by the OWTU can only be described as reckless and cavalier and inimical to the interest of the very workers that the OWTU represents. Such action only serves to imperil Petrotrin’s survival and cause unnecessary hardship to the citizens of the country.
The Energy Chamber recognises that the majority of the employees of Petrotrin are hardworking, diligent and highly skilled and, like everyone else, they would like to see improvement in their remuneration packages. But while no one can argue with this desire, the reality is that Petrotrin just cannot afford the increases proposed by the OWTU.
In a memo to workers, the company’s President Fitzroy Harewood, revealed that Petrotrin’s revenue has declined by more than 50% from TT$37B in 2012 to approximately TT$16B in 2016, resulting in two years of net after tax losses of TT$819M for fiscal year 2015 and approximately TT$600M for fiscal year 2016. The company is also highly leveraged, has a low investment rating and is faced with rising capital and investment costs.
Mr Harewood noted that Petrotrin has had to use government-guaranteed loans to finance some of its working capital and trade financing. This stark picture does not even take into account Petrotrin’s other challenges including aging infrastructure, high lifting costs, low international crude prices, falling refining margins and lower crude production. Petrotrin’s very viability is already under threat, even without a damaging strike.
The decision to call strike action should always be taken as a last resort and should be taken only after careful consideration of the likelihood of success and the ability of the employer to meet the demands of the workers. If this is not done, then the union would have failed its members and would have unnecessarily endangered their livelihood. In light Petrotrin’s financial state, it is hard to see how any reasonable union would initiate strike action.
The Energy Chamber is deeply concerned about the effect of the strike on the wider local economy and, in particular, the economy of south Trinidad. Petrotrin is a very important tax-payer, even in its present financial state. Increasing oil production is one of the very few short-to-medium term revenue raising strategies available to Trinidad & Tobago and Petrotrin has a crucial role to play in this effort. As both a major user of foreign currency, to import crude oil for the refinery, and a major generator of US dollars through sales of refined products, Petrotrin also has a crucial role to play in resolving the current shortages of foreign exchange. The financial state of the company impacts on all our citizens.
There are rumours that significant numbers of employees do not wholeheartedly support the strike. This situation begs the question: how many of Petrotrin’s workers would vote to strike if there was a secret ballot? This in turn highlights the need for serious reform of our industrial relations framework.
We strongly condemn the OWTU’s decision to serve strike notice on Petrotrin today. We call on the company’s workers to ignore the union’s call and to return to work in the interest of themselves, their families, their company and their country.