BREAKING NEWS: EXXONMOBIL SHUTDOWN

EXPATRIATE UTILISATION, TECHNICAL MANPOWER SERVICES AGREEMENT (TMSA) AND
NIGERIA CONTENT DEVELOPMENT ACT

PREAMBLE:
Mobil Producing Nigeria Unlimited is an affiliate of ExxonMobil Corporation, USAs.

The company is registered only under the corporate name of Mobil Producing Nigeria Ultd, MPNU, under Joint Ventures Agreement with the Nigeria Government through Nigeria
National Petroleum Corporation, NNPC.

BACKGROUND
The dwindling oil prices in the international market and its spiraling impact on the International oil companies (IOCs), and the Federal Government of Nigeria is no more news.
Prior to the drop of oil prices from $110 to $50 in mid-2014, MPNU had carried out separation exercise in December 2006 – separating about 140 regular staff. Again in 2015, the company initiated another special separation program and separated about 145 regular staff.

In both cases, the union accepted these programs because the impacted staff
members were allowed the option to accept or opt out of the programs(i.e. the program was made voluntary).
However, in 2016, the company came forward with another separation program and insisted that the program would be involuntary (i.e. the impacted personnel cannot opt out). This was against Company and industry practices. The Union requested that the program be made voluntary.

FACTS
Petroleum & Natural Gas
Senior Staff Association of Nigeria
MOBIL PRODUCING NIGERIA BRANCH

1.Functionalization:
MPNU introduced Functionalization into several departments. This is the transfer of Nigerian jobs to other affiliates outside the country but expenditure on those jobs are retained on the JVO account. This strategy moved jobs that were handled by Nigerians within the JVO out and rendered the departments and personnel redundant. Among the affected departments are IT Services, Operations Technical Surface (OTS), Operations Technical Sub-Surface (OTSS), Procurement,Human Relations (HR) and Global Real Estate Facilities (GREF) etc.
More painfully is that the strategy is purely capital flight and potential for unemployment. With functionalization, the cost of the jobs being transferred abroad became escalated, thereby increasing the company operating Expense, OPEX, particularly Salaries,
Wages and Benefits – SWB.

2. Technical Manpower Services Agreement (TMSA):
To circumvent the Nigerian
Content Development Act, NCDA,the company uses TMSA to bring in huge number of expatriates into the country. This avenue makes it easy for MPNU to bring in expatriates from other affiliates into Nigeria at very high contract amount ranging from 1400-1600USD/day for jobs that can be handled by Nigerians. Using this avenue, the expatriates are rotated or rolled over from one contracts to another to extend the length of stay for the expatriates. Thus, some expatriates have stayed up
to twenty (20) years in the country while Nigerians contract staff are being sacked every three (3) months through a 3-monthly contract tenure by the company – a contract that both Federal Ministry of Labour and NAPIMS have directed a stoppage yet MPNU has refused to implement the directive. This issue is still at the front burner at the Federal Ministry of Labour and Productivity.

3. Expatriates influx:
Sometime in 2016, the company initiated an investigation in the activities of Marine department due to some reported irregularities. Some staffs were invited to a disciplinary hearing and the Union, in line with our Collective Bargaining Agreement (CBA), participated in the process of the disciplinary hearing on behalf of our members that were involved in the investigation.

It is on record that none of our members were indicted by the disciplinary process but the company went ahead and separated most of the people that were involved. Shortly after this, the General Manager of the Logistics Support Department was replaced by an expatriate on a job that had been successfully manned by Nigerians in the past.
Also five new positions were created and the company filled them with expatriates from other affiliates at huge cost to the JV.

Furthermore, to implement their plans of bringing in more expatriates into Nigeria at the expense of National employees and at a huge cost to the Nation, the Company started a similar investigation in the Security department in 2016.

At the end of the investigation, none of the staff was found wanting. Yet the company reassigned three (3) Nigerian employees out of the Security Department to another Departments with a demotion; and then went further to frustrate them out of the company.

An expatriate was used to replace the General Manager, GM) – a position
which hitherto was assigned to Nigerians. It might equally interest you to note that in the wake of this investigation, 28 new expats were brought into the Security department to replace the 3 reassigned Nationals. 14 of this 28 work on a twenty (28) days back to back rotation with attendant huge logistics cost.

Out these 28 expats, 22 on contract are paid about $1600 per day (excluding logistics and other benefits). This translates to about NGN16 Million naira per month at the current exchange rate of NGN356/USD.

It is therefore disturbing and to bring to your attention that no Nigerian worker earns this kind of salary. This amounts to capital flight as some of these people do not even pay tax to Nigerian Government.

It is also instrumental to let you know that the responsibility of the security department rests with the Lead Country Manager who is the chairman of the security steering committee for ExxonMobil affiliates in Nigeria and he was not investigated alongside others for mismanagement of security.

4. Expatriates utilization cost: At a time like this when there is a high level of unemployment and the country is equally in need of revenue to meet up her budget MPNU, continues to bring in high cost expatriates into the country. Each expatriate spending could pay the salaries and wages of, on the average, close to 20 Nigerians doing the same job. Even more worrisome is the fact that these are the jobs that can be done by Nigerians.

In most cases, some of the contracts are over bloated with more expatriates than are needed for the project.

CURRENT ISSUES
1. 2015 Company initiated Special Separation Program: Following the irresponsible spending on expatriate utilization and Functionalization, the company started emphasizing on the option of cost cutting in all areas of operations. This was a welcome development to the union as it was believed that would help to lower the
operational expense (OPEX) in the company.

The option equally afforded the union
opportunity to undertake serious study in areas of wasteful spending; and came up with a document that was submitted to the Company Leadership. The areas of
wasteful spending identified by the Union included expatriate cost especially in hiring, accommodation and other logistics. It was very surprising that management refused to look into this area but decided to implement a special separation program for the Nigerian employees, arguing that the program would help to lower OPEX.

The union on the other hand refused to accept the program with the view that
management of MPNU was responsible for the high cost through the expat influx.
Following a long negotiation, both company and union (Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), agreed that the program be
implemented on a voluntary basis. The union equally accepted the program as a way forward in the light of the challenges in the oil and gas industry coupled with low crude oil price. At the end of the separation exercise, 145 personnel were separated from the Company; but shortly thereafter, the company filled up those vacant positions with expatriates.

Available record confirmed that no less than 50 expatriates were brought into the country as replacement for those Nigerians who were separated in 2015 despite the huge cost to the Joint Venture, mostly borne by the Nigerian Government. Worthy of note is the fact that after the separation program in December 2015, most of the vacated jobs given to expatriates were, in some cases, packaged as service contract to foreign companies, which have proven to be more expensive to the Company. This aroused the union doubt on Management sincerity in implementation of the cost cutting initiative.

2. July 2016 Company initiated Sacking of Nigerian Contract staff: Between May and July 2016, the company severed most of the Nigerian contract staff and this was purportedly based on same cost cutting initiative and in response to the unfavorable business environment within the industry. After the severance of these Nigerian contract staffs more expatriates were brought in to take up those positions.
In the wake of July 2015, following an attack by insurgence on the export line, the company eased out additional 300 Nigerian contract staff; this was under the pretext that it was because of safety of asset and personnel. As we write those contract staff are still at home. This has created issues within the host community and its environs, including safety threat to both Company and personnel.

3. 2016 Company initiated Special Separation Program: Sometime in November 2016, Company notified the Union of another planned Special Separation Program for 2016. The Union in the meeting called by management expressed their worry and concern on the numerous and frequent sacks and separation of nationals, especially as they are being replaced by expats. The union’s fear became worsened when management insisted that the separation program must be involuntary against the industry practice and precedence within Company.

The Union expressed this concern and therefore insisted that the exercise was not justifiable, given the issues
regarding functionalization, high expatriates’ costs and previous backfilling of vacant positions with expats. The union added that if the program must be implemented, then it has to be voluntary. Management insisted that the program would be implemented as “involuntary” program where the impacted employees would not have options. While the discussions were still ongoing, management unilaterally and without recourse to CBA, principles of bargaining and other best practices,went ahead and implemented the separation program on December 14, 2016. Union felt
that Management has shown no respect to the sanctity of agreement reached (CBA),
and established protocols, and such apparent disregard resulted in industrial crisis, which is lingering till date.

4. The Industrial Crisis between Union and MPNU Management: While discussion on the separation program was still ongoing between union and Management,management took adjournment on December 9, 2016. Whereas the union was expecting the meeting to reconvene the following week management, in the wake of December 14, 2016, unilaterally, without reconvening the adjourned meeting, went ahead and implemented the program, issuing letters of termination of appointment to the impacted employees. And in the process activated its Business Continuity Plan – a plan which is intended to lock the employees out and continue production, upon the reaction of the workers’ union.

At that point the union realized that management was only negotiating in bad faith. This led to the union calling out
her members and withdrawing services, which led to shutdown of production.

THE UNION PRAYERS
It has become a tradition and a recurrent decimal for the International Oil Companies to fire Nigerian employees and replace them with expatriates who have no special skill set than Nigerians. It is also clear that most of these expatriates are mentored by Nigerians upon their arrival here, instead of the reverse.

It is even more worrisome that the cost of bringing in these expatriates are very high and are borne by the JV account. Situation where the cost of one expatriate worker is enough to pay the salaries of about twenty (20) Nigerian workers cannot be explained. It equally calls for greater concern why Nigerian jobs are being taken abroad in the name of “Functionalization” and leaving behind threat of unemployment even when the expense is carried by JV account,hence the Nigerian Budget.

It is on the basis of the aforementioned that we request your intervention as follows:

1. That a comprehensive audit of expatriate utilization and quota be conducted in MPNU,
2. That the eighty-three (83) Nigerians unjustifiably sacked in the 2016 Separation Program be reinstated immediately.
3. Immediate reversal of the suspension of our members and to stop any form of
harassment to them, including the use of Department of State Security (DSS)
operatives.
4. All the middle and Senior management positions previously occupied by Nigerians but currently seconded to expatriate reversed.
5. That “Functionalization” of Nigerian jobs be stopped immediately and affected
departments be reinstated to provide additional employment to qualified Nigerians

Yours truly,
For: PETROLEUM AND NATURAL GAS SENIOR STAFF ASSOCIATION OF NIGERIA (PENGASSAN)
MPN BRANCH
Comrade Anietie David Udoh
Secretary, PENGASSAN MPN Branch
Cc: Chairman – MPN Branch, PENGASSAN

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2 thoughts on “BREAKING NEWS: EXXONMOBIL SHUTDOWN

  1. These IOCs are really taking advantage of the unpatrotic leaders and poor government of Nigeria. Can this happen in Angola? I hope PENGASSAN will leave no stone unturned to bring this inhumane companies to their knees. Kudos to the union for a good job!

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  2. While am concerned about the exparts influx at the expense of Nigerians; it is pertinent to note that, you are only concerned about yourself.You analysed your plight and that of Contract Staff; what about other Nigerians working in the Security Department whom the ex-General Manager and others have been feeding the Management with wrong information about their Status in the Company; whose salaries have not been increased for past 16 years, with no medical allowances,no leave bonuses or other benefits etc.The so-called ex-General Manager(GM) and others wicked elements in the system have been blocking everything that belongs to these men while collecting their own or is the Union not aware?
    These inhumane treatments made the matter to go to court which is currently at the Apex Court. Where were the so-called Union fighting for Nigerians, when so many of these Security men have died for lack of medical care and most of them are living in penury presently in the midst of plenty in the same company?….You all turned blind eyes because it does not hurt you; until now when you just felt a pinch of hell these people have been going through all these years of neglect.Let your fight be all encompassing for ALL NIGERIANS in the Company; until then your fight is not just!

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