NIGERIA: UNIONS MAY EXPAND WORK ACTIONS OVER FEAR

C O N F I D E N T I A L LAGOS 001899 SIPDIS LONDON FOR GURNEY, PARIS FOR NEARY DOE FOR CAROLYN GAY AND GEORGE PERSON USDOL WASDC FOR ROBERT YOUNG PRIORITY E.O. 12958: DECL: 09/09/2013 TAGS: ELAB EPET KDEM NI PGOV PREL SUBJECT: NIGERIA: UNIONS MAY EXPAND WORK ACTIONS OVER FEAR OF JOB LOSS IN THE OIL INDUSTRY ¶1. Leaders from the National Union of Petroleum and Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) are meeting in Benin City to discuss cooperative action amid reports that the Nigerian National Petroleum Corporation (NNPC), ChevronTexaco, and Shell plan to reorganize their respective operations. Workers fear the reorganizations will lead to substantial layoffs and reduce promotion prospects for Nigerian employees. ¶2. Through its "Exploration and Production Globalization Project" Shell has already begun restructuring to promote greater efficiency. This has led to an on-going lockout of offices by its white-collar union employees in Lagos, Port Harcourt, and Warri. Production has not been affected. While the NNPC has confirmed its federally mandated plans to reorganize, it contends that there are no plans to layoff workers. Union leaders, however, allege that NNPC plans to layoff approximately 2000 employees. ¶3. ChevronTexaco is reportedly meeting with PENGASSAN and NUPENG representatives to ensure that the strike at Shell does not spread to ChevronTexaco workers, who have already called on the company's management to review its restructuring plans or face industrial action. Although Chevron has not officially announced plans to reorganize, sources within the company said privately that they are reviewing possible actions to streamline their operation and increase efficiency. ¶4. COMMENT: Averting a widespread strike may be difficult given the seemingly hard-line positions of the major players. In addition to the concerns about massive layoffs, the Nigeria Labor Congress (NLC) last week warned the GON that it would not tolerate another increase in the price of petroleum products, which President Obasanjo has publicly suggested is forthcoming. A significant hike in government-set fuel prices resulted in an eight-day nationwide strike in late June and early July. Ultimately, the GON relented and reduced the amount of the fuel price increase. Obasanjo is now hinting at recouping the amount cut back earlier, as refined petroleum products are still under-priced. Increased tensions were evident when a scheduled tour of Shell facilities in the Port Harcourt and Warri areas for Lagos diplomats was suddenly canceled last week. Shell's Managing Director of External Affairs confirmed to EconOff that Shell is in the process of "downsizing" and considered the situation at its facilities too volatile to continue with the planned tour, although violent ethnic clashes in Warri recently would also have given Shell reason to cancel VIP tours there. END COMMENT. HINSON-JONES