Taking the Labour out of Labour History: The consequences of a unionfree world in Britains Offshore

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Taking the Labour out of Labour History The
consequences of a union-free world in Britains
Offshore Oil Industry

• Charles Woolfson
• Marie Curie Chair
• EuroFaculty
• University of Latvia

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My co-ordinates

• E mail woolfson_at_eurofaculty.lv
• Web http//www.eurofaculty.lv/MarieCurie
• Link Student Resources
• Password Student
• Login Info

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North Sea Oil Industry The attempt to create a
union-free world

• Employment relations in the UK offshore oil
  industry have been characterised by a marked
  hostility of employers towards collective
  bargaining and trade union recognition.
• Evolution of union avoidance strategies since
  the establishment of the offshore oil and gas
  industry in the UK sector of the North Sea.

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Evolution of offshore industrial relations

• Oil exploration and development on the UK
  continental shelf commenced during the late 1960s
  and early 1970s problems in the Middle East.
• Led by a combination of powerful US and British
  companies, commonly referred to as the oil
  operators (or majors).
• Insufficient financial and technological
  resources in the UK necessitated a reliance on US
  oil operators,
• A specific production regime in UK waters and
  with this regime came an industry ethos hostile
  to organised trade unionism and collective
  bargaining.

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The political economy of speed

• For the oil and gas operators output was the
  key concern and collective employee
  representation a potential obstacle.
• The UK government needed the tax revenues from
  the oil industry for its economy
• Safety considerations in the industry were
  secondary to meeting output targets
• A high-investment and high-stakes frontier
  industry
• Accidents and injuries, especially in the
  drilling sector, were frequent - kicking ass
  if you cant do it you cant stay on the rig!

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Problems in union organisation

• Remote location of the offshore exploration rigs
  and production platforms, and limited access to
  platforms for trade union officials without oil
  company permission
• The trade unions were locked in competitive
  rivalry between themselves and unable to develop
  a common strategy for recruiting the workforce
  offshore
• Many of the workers were themselves not
  interested in trade unions or too afraid to join
• A culture of fear and victimisation the NRB
  for trouble-makers

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Strategies of union avoidance

• Many oil operators actively attempted to limit
  what they saw as trade union third party
  intrusion through consultative committees, a
  classical union-avoidance strategy.
• unitarist management
• Workers did not need a third party such as a
  broad-based trade union and would naturally
  benefit from ... management-created structures
  because modern business acted on the sincere
  belief that the interests of the employer and
  employee are mutual and at bottom identical

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Mobil Oil North Sea

• It remains our aim to institute an employee
  relations environment offshore, which is second
  to none. Our employees have been fully involved
  in the review of future needs, and in-depth
  consultation with them will continue. An
  increasing number has indicated trade union
  representation is not wanted and expressed the
  desire to see formal internal consultative
  machinery established. The feeling is that
  further union visits should be suspended until
  our discussions are completed.

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The Piper Alpha Disaster Causes and consequences

• Case Study

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Industrial Disasters

• Accidents - rarely individual isolated
  unforeseeable events.
• They are more often the result of long term
  underlying patterns of (mis)behaviour.
• Management must carry primary ethical, legal and
  practical responsibility for safety and health of
  employees.
• Corporate Social Responsibility

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The disaster

• July 6th 1988 Occidental Petroleums Piper Alpha
  platform exploded
• One of the largest original offshore oil
  platforms in the UK North Sea
• The worst industrial accident in the global
  offshore oil industry
• A turning point in safety in the global offshore
  oil industry from which important lessons were
  learned

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Immediate causes of the disaster

• Need to distinguish immediate and underlying
  causes of safety failure.
• Routine maintenance operation of pressure valve
  for a gas condensation module
• Poor management of Permit-to-work system
• Relief crew unaware of second permit indicating
  the non-replacement of the valve
• Second pump (pump B) trips out
• Night shift starts relief pump A unaware that
  there is only a metal flange seal but no valve.

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The sequence of events in the disaster

• Gas release from pump A finds a source of
  ignition
• The initial explosion resulted in a large crude
  oil fire engulfing the north end of the platform
  in dense black smoke.
• The fire was spread by oil leaking from the main
  oil pipeline to shore and from ruptured pipelines
  carrying oil and gas from the linked Claymore and
  Tartan platforms.
• Between 22.00 and 23.20 hours there were two
  further cataclysmic explosions caused by pipeline
  ruptures and, at this time, large sections of
  Piper Alphas topsides began to disintegrate and
  fall into the sea.

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• Despite the visible conflagration on Piper Alpha,
  the linked oil platforms continued to export oil
  and gas to Piper Alpha thus feeding the inferno,
  because, in the words of the official inquiry the
  responsible managers were reluctant to take
  responsibility for shutting down oil production.
• Survivor - The Piper did not burn us it was the
  other rigs that burnt us.

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• Platform emergency systems proved to be
  inadequate. The initial explosion knocked out
  the control room and disabled power supplies and
  communications. Survivors spoke of an eerie
  silence that descended on the platform, as the
  familiar background noise of generators and plant
  abruptly ceased.
• The fire-water deluge system had been out of
  commission for several months and was inoperable.
  Those that did operate, did so only with the
  remnants of water left in the system.

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• Most of the persons on board the installation
  were in the accommodation area, many in the
  cinema room. Others, who were on duty, made
  their way to the galley area in accordance with
  installation emergency procedures. However, the
  smoke and flames enveloping made evacuation by
  helicopter or lifeboat impossible.
• After some minutes, the lighting in the galley
  area failed and panic began to set in. Within
  another fifteen minutes, dense smoke began to
  penetrate the galley area. Men were forced to
  crawl along the floor to escape the smoke, using
  wet towels to assist in breathing. Others were
  quickly overcome.

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• some of the men decided individually, or as a
  group, to ignore the company advice to wait in
  the accommodation area for rescue. They realised
  that to remain on the platform was to face
  certain death.
• There was no systematic attempt to lead the men
  out. Those who survived did so because of their
  familiarity with the platform layout. The entire
  eighteen man catering crew, whose knowledge of
  the platform outside the accommodation area was
  minimal, died, as did the 81 personnel who
  remained in the accommodation area.

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• Of those who left the area, 28 survived. Among
  the total of 61 survivors, some had jumped into
  the sea from heights of 175 feet. Many of those
  who escaped were horribly burned on their hands
  and feet as the platform literally melted under
  them. For those who made it to the water their
  grim struggle for survival was by no means over.
  With the platform disintegrating above them, and
  the sea on fire around them, the only hope for
  survival was to be plucked from the water
  quickly.

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• Glen Shurtz, chairman of Occidental Petroleum
  (Caledonia) We have always practised the
  management of safety. Offshore its our number
  one priority.
• What happened on Piper Alpha, could have happened
  on any of the platforms in the UK offshore
  sector. Piper Alpha was a disaster that many had
  predicted and yet their warnings had not been
  heeded.

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Key points

• Interconnection between safety and industrial
  relations
• regulatory capture
• The contrasting onshore safety regime
• industry response corporate social
  responsibility?

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Regulatory Capture

• process whereby a regulatory agency comes to
  wholly identify the public good with the
  interests of the industry it is supposed to
  regulate
• relationship between the Department of Energy and
  the offshore oil industry - conflict between
  production (tax revenues) and safety
• institutionalised tolerance of non-compliance
  (Carson)

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The contrasting onshore safety regime

• The Onshore Safety is a different regime
• Safety regulation moves away from prescriptive
  rules towards a goal-setting regime
• implies the systematic assessment of risk in an
  overall sense and a shift from externally-policed
  regulation towards industry self-regulation

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Onshore Health and Safety at Work Act

• A single unifying agency to govern safety and
  health at work separate from sponsoring
  ministries
• trade unions given exclusive powers to appoint
  safety representatives and safety committees

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Offshore Industrial Relations

• Few safety committees and little consultation
  with the workforce
• Industrial relations climate hostile to trade
  unionism US style management regime
• attempt to create union-free environment and
  consultative committees
• Intimidation and victimisation of employees,
  especially contractor workforce NRB blacklist
  troublemakers choppered off.

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After Piper Alpha The Cullen Report

• Department of Energy - overconservatism,
  insularity and a lack of ability to look at the
  regime and themselves in a critical way. Little
  had been learned from the more modern onshore
  approach to hazard characteristic of the HSWA or
  from the more forward-looking regime in Norway
• Occidental Petroleum criticised for failure to
  operate a safe system of work despite previous
  incidents - lessons not learned

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The Cullen Report - Occidental Petroleum

• Failed to operate an effective permit-to-work
  system
• Disregarded written procedures
• Provided inadequate and misleading safety
  induction materials
• Ignored previous concerns over the permit-to-work
  system
• Failed to learn the lessons from previous
  incidents (included a fatality and a
  near-disaster evacuation)

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• Lord Cullen -
• It appears to me that there were significant
  flaws in the quality of Occidentals management
  of safety which affected the circumstances of the
  event of the disaster . . . They (senior
  management) adopted a superficial response when
  issues of safety were raised by others . . .
  Platform personnel and management were not
  prepared for a major emergency as they should
  have been

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Workforce participation in safety

• Lord Cullen
• It is essential that the whole workforce is
  committed to and involved in safe operations. The
  first-line supervisors are a key link in
  achieving that, as each is personally responsible
  for ensuring that all employees, whether the
  companys own or contractors, are trained to and
  do work safely and that they not only know how to
  perform their jobs safely but are convinced that
  they have a responsibility to do so. Possibly the
  most visible instrument for the involvement of
  the workforce in safety is a safety committee
  system

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The industrial relations consequences of the
Piper Alpha disaster

• We heard what was happening on the radio on a
  platform a few miles away with horror and a
  degree of shame too, because we knew that by our
  silence we had contributed to that tragedy (
  offshore trade unionist).

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Useful bargaining The Hook-up agreement

• The exception that proves the rule
• The oil majors in the North relied heavily on a
  dependent layer of specialized sub-contractors
  who followed the industry globally.
• Only a quarter to a third of the total workforce
  were direct employees of the oil companies, the
  clients. The majority were employed by
  contractors.

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Limited union recognition an advantage for the
oil companies

• Temporary and limited union recognition was
  granted to unions by the contracting employers
  but only with the approval of the oil company
  clients
• In order to pump first oil it was necessary to
  'hook-up' the complex system of pipes and
  attendant drilling plant on the rig.
• Any labor stoppage could be highly expensive.
• Construction workers could inflict hugely
  expensive delays on the operators by engaging in
  official or, more often, unofficial strike
  action.

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No post-construction agreement with the unions

• Unions unable to extend the terms of the Hook-up
  agreement into periods of post-construction
  ongoing maintenance work.
• With the commencement of first oil the Hook-up
  agreement, and with it union recognition,ended.
• Workers who were employed on maintenance work on
  the same platforms experienced de-recognition and
  a drop in their levels of pay.
• Attempts to widen the sphere of collective
  bargaining were met with consistent resistance by
  the oil major clients and their dependent
  contractors.
• Contractors which wished to concede to union
  demands risked subsequent exclusion by the oil
  majors in the system of competitive contract
  bidding.

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The workforce is mobilised

• Trade union activists began to organize onshore
  mass meetings. These mass meetings called for
  union recognition, the broadening of collective
  agreements and a new role for trade unions in
  safety offshore.
• In the summer of 1989, and then on a much larger
  scale in the summer of 1990, a wave of
  occupations of offshore installations by striking
  contract workers took place.

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The OILC

• These occupations challenged the legitimacy of
  offshore management.
• The strike actions were led by the Offshore
  Industry Liaison Committee (OILC), an unofficial
  union activist committee drawn from different
  installations and different trades among the
  contractor workforce across the North Sea.

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The tactics of union struggle

• OILC's planned industrial action was designed to
  hit the oil operators at their most vulnerable
  point, when the platforms were shut down for
  summer maintenance work
• Platforms could not be started up again without
  the co-operation of the contractor workforce.
• It was hoped that this pressure would drive the
  oil companies into conceding a comprehensive
  industry collective agreement for contractor
  employees.

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Official and unofficial trade unions

• The rigorous legal requirements of Conservative
  anti-strike legislation and the scattered nature
  of the offshore workforce, working a system of
  two-week shifts with replacement crews, made the
  organization of official, legally balloted,
  industrial action very difficult.
• Unofficial industrial action therefore was a much
  more potent weapon with which to confront the oil
  operators
• The official unions agreed to pursue this
  approach with the unofficial OILC committee

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The company response

• In response to these strikes offshore, contractor
  companies employed a combination of stick and
  carrot.
• One the one hand some contractors offered pay
  rises amounting to as much as 40 per cent.
• On the other hand, court action to expel the
  occupying workforce from the offshore
  installations, together with mass dismissals of
  up to 1,000 strikers, served to the post-Piper
  Alpha workforce insurrection.

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Recent developments

• OILC becomes a breakaway trade union
• The Employment Relations Act and the development
  of Partnership agreements as the latest form of
  union-avoidance

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Regulatory Reconstruction

• D of En powers removed and given to HSE in a new
  Offshore Safety Division
• New concept of safety management proposed
• The Safety Case regime -the identification and
  assessment of hazards over the whole life cycle
  of a project through all its stages of
  development to final decommissioning and
  abandonment

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Problems with new Regime

• Oil company hostility and resistance to new
  regulation, especially any prescriptive
  requirements too costly
• Initial hostility to new regulatory authority
  under the HSE dont understand our industry
• Failure to address the outstanding issue of
  industrial relations offshore dont need
  unions
• New accommodation between regulator and target
  industry

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Positive elements of new regime

• Introduced modern safety thinking into the oil
  industry
• Elected Platform Safety representative system in
  place
• New sensitivity to issues of corporate reputation
  (safety and environmental issues)
• Greater degree of regulatory scrutiny
• No similar disaster to Piper Alpha, so far,
  although a number of near disasters

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Negative elements of the new regime

• No significant increase in safety performance
  measured by accident data
• Danger of a gradual erosion scenario
• Issue of workforce empowerment still to be fully
  addressed trade unions?
• Step Change Programme an inadequate response to
  failure to improve safety performance in line
  with goals

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Accident Underreporting Revealing the hidden
transcript Voices from below

• My accident happened on the A installation and
  resulted in my having ... to wear a surgical
  collar. On the A (2 days later) the company
  phoned me up asking if I would come into the
  office when I was due to go offshore which I was
  due to ... (1 week later), and do some light
  duties. The company obviously tried to avoid a
  Lost Time Injury. I refused. A few days later X
  suggested to me about getting some letters and
  forms sent over to the house and to do some paper
  work with the help of my wife. Once again
  avoiding a Lost Time Injury.

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Corporate Social Responsibility?

• Even Occidental has its own social
  responsibility and health, safety and
  environment web pages claiming that health and
  safety has been its number one priority for the
  past twenty years. Occidentals web site makes
  no mention of the Piper Alpha disaster.

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Conclusions

• Need to recognise tensions between profits and
  safety
• Business will not always do the right thing
• Need for credible compliance incentives
• Empowerment of stakeholders (the workforce)
  must be real not token or superficial
• Management must carry primary ethical, legal and
  practical responsibility for safety and health of
  employees.
• A poor system of industrial relations will result
  in a poor safety system