This article was originally published in the Sunday Guardian by a guest author and was republished by the Energy Chamber
The end was somewhat sad and a bit of an anti-climax.
Bar the sit-ins, union grandstanding and the unsurprising disregard for public assets with the odd building set on fire, Petrotrin’s operational closure happened on Friday without much of a whimper, quietly joining Trintoc, Trinpetro and Trinmar in the graveyard of failed state-owned energy enterprises.
It is now replaced – minus its refining business – mainly by Heritage and Paria, the two companies set up to focus, respectively, on the exploration and marketing side of Petrotrin’s old business.
No one likes to see failure, especially when it is something so symbolic for a nation and also so dear (in the emotional and financial senses of the word) to T&T’s population. But Petrotrin’s writing had been on the wall for a long time, just like many other state enterprises that, over the decades, turned themselves into expensive providers of jobs for jobs’ sake, with little or no accountability and woeful services to its customers (who are also its indirect shareholders).
If the government is serious about getting the state enterprise house in order, others should be joining Petrotrin’s same graveyard or we will keep pumping good money after bad into them on a regular basis.
However, Petrotrin’s tragic history also tells us that changing names, creating new companies or merging mediocre operations don’t solve anything. Quite the opposite. If fundamental changes are not implemented from day one, it will be just like, as they say, putting lipstick in a pig. And an expensive one, as both winding down and setting up new companies can incur considerable additional costs, as the $2.7 billion termination payments at Petrotrin can confirm.
As Petrotrin ceases to operate, the new companies must already demonstrate they are determined to change not only the old company’s but, indeed, the country’s culture when it comes to state enterprises.
It can begin by jettisoning the old culture of privilege that made Petrotrin unviable by paying well above what the market and the company itself could justify. It effectively created – bullied by the Oilfields Workers’ Trade Union – a caste of privileged few funded by every taxpayer in the country.
Ditching this approach doesn’t mean below market wages and benefits. If anything, the new business must remain competitive in employment terms so as to be able to attract the best in the market (like all businesses do), as long as productivity is commensurate with the pay package.
Pretty much all major employers in the country offer more than just pay, often including pension plans, health and life insurance, training and professional development programmes and much more to help retain and develop their workforce.
This is good practice and Petrotrin’s successors will be right to adopt good employment policies as long as they are affordable. Unrealistic packages generate even more unrealistic expectations and disastrously unrealistic expenses. Heritage and Paria cannot fall into this trap again.
Jobs and roles must also be in line with what the sector needs and with what technology requires. This is something all of us – including legislators and judges – ought to understand. The world moves on, some roles become redundant whilst new ones are created.
Trade unions, industrial tribunals, politicians and, indeed, business leaders must always remember this. They ignore this basic principle at their peril as holding on to every single role or job now can have dire and wider consequences later on.
Many of us will remember the regular trip to the photo shop to buy film rolls and get photos processed, in what was a lucrative market once dominated by Kodak.
Ironically, it was Kodak that created the first digital camera in 1975 but it decided not to market it as it felt the technology would damage its film and photo print business. Its failure to move with the times, especially as new market players were less concerned about print pictures, lead the once mighty Kodak to file for bankruptcy protection in 2012; by then, its global payroll was down to 18,800 from a peak of 145,000 in 1988.
Its refusal to see and embrace market changes didn’t save jobs. Instead, it destroyed them whilst it ate into its cash reserves to cover its losses, further reducing its ability to invest for growth.
Together, all stakeholders must be weary of lumbering Petrotrin’s successors (and, indeed, any other employers) with outdated and irresponsible demands that will simply make them unviable. Instead, they should all keep looking ahead to change and adapt (even when that means job changes or losses) in order to remain viable.
The momentum is good and it shouldn’t be wasted.
The fact the population as a whole seemed to have mostly ignored the OWTU’s calls for major disruption since the closure was announced suggests the majority understood the issues and the challenges faced by Petrotrin (and many other state-owned companies).
Just as the leadership of the new companies must show maturity, professionalism and a respect for taxpayers’ money from day one, the moment is also ripe for the OWTU (and trade unions as a whole) to show it matters in the 21st century by dropping its scorched earth approach to everything and replace it with a positive engagement with the new boards (should they become the recognised majority union).
It must also rethink its approach, just like modern unions around the world are doing. Its lack of a credible response to the challenge posed by Petrotrin’s closure exposed a movement without fresh ideas and without a plan to deal with skills and employment needs in the digital era.
And politicians must also learn to allow state companies to be run efficiently and without the temptation to meddle in their day-to-day operations.
If we move in the right direction, out of Petrotrin’s ashes we may see the phoenix we so much crave for and desperately need. If we don’t, say hello to the newest albatrosses to join the many other already round our necks.