TRINIDAD

Petrotrin  gets go-ahead to fire workers

Flashback: Members of the OWTU  at Beaumont Hill Pointe-a-Pierre after hearing news that the Petrotrin Management is prepared to send home 2500 workers

  SOC Petrotrin can proceed to terminate its 5,000 employees by the end of next month, as the Industrial Court-imposed injunction has been stayed.

The application for the stay, ahead of Petrotrin’s appeal of the injunction, was heard by a judge at a chamber court hearing at the Hall of Justicet.

Petrotrin lawyers sought to convince the judge that the stay was necessary since it is the company’s contention that the Industrial Court made several errors in law when it granted the injunction.

A hearing of the appeal of the injunction is set for next week.

It is also the position of the State, represented by attorneys for the Attorney General, that the injunction is likely to have an adverse effect on public interest.

The Permanent Secretary in the Ministry of Finance in an affidavit in support of the stay, said there are calls for government guarantees with great frequency. As more delay and instability occur, as it has since the injunction was granted, financial institutions seek reassurance from the State to protect their interests in Petrotrin.

“The danger of these increasing calls for guarantees is that it will adversely affect the national debt ratio, which is already more than optimum. The effect of any delay in the urgently needed restructuring of the assets and debts of Petrotrin, as is likely to be occasioned by the grant of injunctive relief, will only increase investor uncertainty and instability. This will result in inevitable calls upon Government for further guarantees and, if these are not forthcoming, will result in adverse creditors’ action.”

In its appeal, among the refinery’s contentions are that the Industrial Court had no jurisdiction to grant injunctive relief in an industrial relations complaint (IRO) or a matter which is criminal in nature, failed to consider the legal effect of its uncontested evidence of fundamentally changed circumstances on the applicability of the April 3 Memorandum of Agreement (MOU), and failed to distinguish between the closure of an employer’s operation with a restructuring plan.

It is also contending that the Industrial Court failed to fully consider the Attorney General’s evidence on the impact the continued operation of the refinery will have on the economy.

Petrotrin, which intends to close operations by no later than November 30, is relying on 15 grounds of appeal in all.

The company’s appeal was filed 24 hours after the ruling was handed down by Industrial Court president and four other judges on an IRO filed by the Oilfield Workers Trade Union representing Petrotrin workers.

The union argued that Petrotrin’s board of directors acted in bad faith when it failed to meet with OWTU representative before meeting with the Cabinet, during which it was decided that it would be in the best interest of Trinidad and Tobago to close the company.

The IRO hearing is set to take place on October 30, 31 and November 1.

In their ruling, the Industrial Court members all agreed Petrotrin was mandated to meet with union officials in accordance with the MOU. They held that the injunction was needed to protect against the potential risk of injustice. “It is our view that there would be a greater injustice if the issues affecting the loss of employment of 5,500 workers are not properly ventilated before the closure of the company.”

GROUNDS OF APPEAL

(a) The Industrial Court erred in law in granting injunctive relief when it had no jurisdiction to do so in an industrial relations complaint and/or a matter which is criminal in nature.

(b) The Industrial Court erred in law by failing to consider the legal effect of the Appellant’s uncontested evidence of fundamentally changed circumstances on the applicability of the Memorandum of Agreement dated the 3rd April, 2018 between the parties entered as an order of the Court.

(c) The Industrial Court erred in law by conflating the closure of an employer’s operations/business with a restructuring of an employer’s operations/business and/ or failing to distinguish between same.

(d) The Industrial Court erred in law by conflating the obligation to meet, treat and enter into negotiations under section 40(1) of the Industrial Relations Act with the obligation to consult under section 5 of the Retrenchment and Severance Benefits Act, neither of which is applicable upon the closure of an employer’s operations/ business.

(e) Having found that an employer has the right to close down its business/operations, the Industrial Court erred in law and/or exceeded its jurisdiction in finding that an employer is obligated to consult with the recognised majority union before deciding to close down its business/operations.

(f) The Industrial Court also erred in law and/or exceeded its jurisdiction by finding that an employer is obligated to consult with a recognised majority union before deciding to close down its business/operations in the absence of any legislative or other requirement to do so.

(g) The Industrial Court exceeded its jurisdiction when it breached the doctrine of separation of powers under the Constitution of Trinidad and Tobago by imposing an obligation on an employer to consult with a recognised majority union before deciding to close down its business/ operations, when Parliament has not seen it fit to impose any such obligation on employers. 

(i) The Industrial Court also erred in law by failing to recognise that even if, which is denied, there was any duty to consult with the Union in relation to any decision to close down, the undisputed evidence before it was that: ( i) There was consultation with the Union at the relevant time; ( ii) That the Appellant, in any event, remained open to further input and/or considerations and/ or proposals and/or submissions from the Union (and took active steps to facilitate same); and ( iii) The Union, despite being afforded by the Appellant repeated opportunities for consultation and/or to submit proposals to the Appellant, failed to make and/ or offer any properly supported submissions and/or proposals in a timely manner or at all.

( j) The Industrial Court erred in law by failing to consider sufficiently or at all: ( i) All relevant factors in determining where the greater risk of injustice lies and/or, ( ii) the uncontested evidence of Wilfred Espinet and Vishnu Dhanpaul of the deleterious effects on the Appellant and the Government of Trinidad and Tobago respectively by the grant of the injunctions sought and/or, ( iii) the national interest and/or the community as a whole.

(k) The Industrial Court erred in law by finding that the balance of convenience, the justice of the case and the public interest were in favour of the grant of the injunction.

(l) The Industrial Court erred in law by failing to consider sufficiently or at all the adequacy of damages and/or the lack of evidence from the Union of its ability to provide an undertaking in damages.

(m) The Industrial Court erred in law by granting orders which are wholly disproportionate and/ or unnecessary in all the circumstances.

(n) The Industrial Court erred in law by arriving at a decision and/ or order which is not supported by the evidence before it and/or on the basis of a false and/or selective construct of the facts on the application before it. In particular, the Industrial Court failed to pay any or any sufficient regard to the evidence, including undisputed evidence adduced on behalf of the Appellant and/or the Attorney General.

(o) The Industrial Court erred in law by arriving at a decision and/ or order which no court acting judicially and properly instructed as to the relevant law would or could arrive at on the application before it.

Chamber supports Petrotrin shutdown

T&T Cham­ber of In­dus­try and Com­merce advised unions and the In­dus­tri­al Court that it is time for over­haul and mod­ernising of labour laws and in­dus­tri­al re­la­tions.

The Cham­ber was re­spond­ing to feud­ing be­tween SOC Petrotrin and the Oil­field Work­ers Trade Union (OW­TU), over the re­cent closure of the re­fin­ery, where 4,700 work­ers are to be ter­mi­nat­ed. Petrotrin won its ap­peal af­ter a court lift­ed the in­junc­tion filed by the OW­TU to halt the ter­mi­na­tion of work­ers.

“The ‘job for life’ con­cept no longer ex­ists: thanks to dig­i­tal trans­for­ma­tion and tech­nol­o­gy changes of every kind, the na­ture and skill set re­quired for jobs is rapid­ly chang­ing, and unions too need to adapt to this re­al­i­ty. “In­sist­ing on main­tain­ing old ways does not serve work­ers in the long run. .. it places them at a dis­ad­van­tage in their ca­pac­i­ty as con­sumers, where they are look­ing for cost-ef­fec­tive and ef­fi­cient mod­ern ser­vices. For us to en­ter this new world as both work­ers and con­sumers, the con­ver­sa­tion needs to change.”

The Cham­ber cit­ed three in­stances where the ‘prim­i­tive’ ac­tions of unions and In­dus­tri­al Court rul­ings brought fur­ther damna­tion to work­ers rather than helped them. The win two years ago by the union from an em­ploy­er for a pay in­crease, af­ter threats of in­dus­tri­al ac­tion and the shut down of Petrotrin. The in­crease was grant­ed even af­ter the em­ploy­er was un­able to af­ford the pre­vi­ous wages in an over­staffed op­er­a­tion. When the OW­TU told BP to take its plat­form and go, this re­sult­ed in the trans­fer of lo­cal job op­por­tu­ni­ties and a pos­si­ble boost­ing of the lo­cal econ­o­my to for­eign mar­kets. The In­dus­tri­al Court’s rul­ing in favour of the Steel Work­ers Union re­sult­ed in the closure of Arcelor­Mit­tal op­er­a­tions and the com­pa­ny went in­to liq­ui­da­tion, be­ing in­sol­vent, and em­ploy­ees went home with­out sev­er­ance pay.

The so-called win­nings by unions over the years placed em­ploy­ees in fur­ther de­pri­va­tion when they were sup­posed to be the in­tend­ed grantees. “In the view of the T&T Cham­ber, these events il­lus­trate the ur­gent need for the re­form of our in­dus­tri­al re­la­tions en­vi­ron­ment. We need to re­vis­it the role and func­tion­ing of the In­dus­tri­al Court, our labour laws, and our en­tire ap­proach to re­solv­ing dis­putes. “The Cham­ber be­lieves that this goes well be­yond in­di­vid­ual in­dus­tri­al dis­putes. The en­tire trans­for­ma­tion of the lo­cal econ­o­my, an im­por­tant part of our di­ver­si­fi­ca­tion ef­forts, de­pends on these changes tak­ing place.”

The Petrotrin ‘chron­i­cle’ should serve as a teacher that the labour forc can­not con­tin­ue to treat in­dus­tri­al dis­putes with ar­cha­ic so­lu­tions that ben­e­fit no one.

“Trinidad and To­ba­go is in need of ma­jor in­vest­ment and ex­port-dri­ven growth, which can­not hap­pen in a bro­ken in­dus­tri­al re­la­tions cli­mate. Fix­ing this in­volves much more than work eth­ic -it ex­tends far be­yond the labour ef­fi­cien­cy of the work­force to the le­gal en­vi­ron­ment in which in­dus­tri­al re­la­tions takes place. Our cur­rent re­al­i­ty, in which un­em­ploy­ment ex­ists along­side job want­ed signs, speaks to a low pro­duc­tiv­i­ty labour en­vi­ron­ment, where labour and in­dus­tri­al re­la­tions laws seem more ap­pro­pri­ate to a time long gone.”

The con­tem­po­rary in­dus­tri­al re­la­tions cli­mate has been dri­ving away in­vest­ments at a time when the pop­u­la­tion is seek­ing new job cre­ation ini­tia­tives. The Cham­ber ap­pealed to the na­tion to take heed as the Gov­ern­ment was well past the time when it could ‘solve’ the prob­lem with ‘patch-up-styled’ job op­por­tu­ni­ties that have con­tin­u­al­ly proven un­sus­tain­able.

Petrotrin is the latest casualty, joining 12 bureaucratic failures of management of the economy- CARONI LTD, BWIA, ISCOTT, Workers’ Bank, National Commercial Bank, Lake Asphalt, PTSC, Port Authority, Sea Bridge, Caribbean Airlines, WASA, T&TEC

Government has little hope of state enterprises making a profit, with square pegs in round holes. since independence and taxpayers bear the brunt of the cost.

Morality in public affairs disappeared with economic nationalism as party hacks and misfits filled positions of authority, lacking scientific management skills.

Fuel trade, refinery shutdown

As it starts closing its 168,000 b/d refinery, designed to produce gasoline, LPG, diesel, aviation fuel and fuel oil, Trinidad and Tobago issued a request for proposals from 13 oil traders to purchase 25,000 b/d of refined products. As the phased shutdown of the century-old refinery starts, Petrotrin will have 20 days of inventory to meet domestic needs when closure is completed at the end of October. “The requests for proposals are currently out, and we do not foresee any disruption in supply. Fuel is an internationally traded commodity and is well available on the international market,” the energy minister said. SOC Petrotrin said on 28 August the plant’s shutdown is a consequence of mounting losses and high debts, The company was forced to import increasing volumes of feedstock as domestic crude production has declined steadily since 2006.

Petrotrin plans to convert the Pointe-a-Pierre refinery into a storage terminal and bunkering facility. Local fuel retailers are concerned about the impact of the shutdown on supplies. “Our concerns include the reliability and consistency of supply,” fuel retailer’s federation FDA said, claiming it had not been consulted by Petrotrin and was uncertain how it would continue to meet the daily needs of 400,000 clients. Petrotrin may have to import additional products to meet supply contracts for diesel, gasoline, aviation fuel and LPG with countries in the eastern and northeastern Caribbean. Petrotrin’s fuel exports to members of Caricom, a regional free trade group, had a tariff advantage. The options include Petrotrin importing and re-exporting the products, or the countries sourcing the products themselves, with assistance from Petrotrin.

The closure will result in 1,700 layoffs. Petrotrin has rejected a proposal by union OWTU to lease the refinery and keep it open. “The proposal failed to address critical issues regarding financing and profitability and there was insufficient information to give us an understanding of how the plan would work,” chairman Wilfred Espinet said. The refinery will be segregated from Petrotrin and treated as a stand-alone asset that will allow the government to consider future indications of interest, including new proposals from OWTU.

Petrotrin supplies refined products such as gasoline, diesel and aviation fuel to countries in the region and beyond, including Jamaica, Barbados, Grenada and St Lucia.

Exports to regional states amount to 25,000 barrels per day, 38,000 to extra-regional countries and 6,000 to other regional countries. Any decision on an alternative source outside Caricom would incur a cost, namely the Common External Tariff (CET).

Archipelagic Epic  

US$100 M more needed for GTL plant 

It planned to raise the mon­ey at no cost to tax­pay­ers. Com­pa­ny rep­re­sen­ta­tive Mal­colm Wells said the plant will now be com­plet­ed and made op­er­a­tional en­tire­ly at the ex­pense of Ni­Quan En­er­gy and with Ni­Quan En­er­gy tak­ing on all of the as­so­ci­at­ed risks. This will re­quire a fur­ther in­vest­ment in ex­cess of US$100 mil­lion which will be pro­vid­ed en­tire­ly by Ni­Quan En­er­gy with­out any need for pub­lic mon­ey. With­out any fur­ther in­vest­ment by the tax­pay­er, Trinidad and To­ba­go will fi­nal­ly ben­e­fit in terms of jobs, rev­enue and the avail­abil­i­ty of the clean­est diesel in the Caribbean re­gion and pos­si­bly any­where in the west­ern hemi­sphere.

Ni­Quan En­er­gy dis­tanced it­self from the clo­sure of the Petrotrin re­fin­ery. The shut­down and the fu­ture of the re­fin­ery is a mat­ter for Petrotrin. Ni­Quan En­er­gy is a ten­ant at the re­fin­ery and is en­tire­ly fo­cused on the com­ple­tion and suc­cess­ful op­er­a­tion of the Ni­QUAN GTL Plant, which will pro­duce pre­mi­um GTL prod­ucts.

Wells said the neg­a­tive di­a­logue in the pub­lic do­main about the role the GTL plant played in the shut down of Petrotrin is not im­pact­ing on Ni­Quan’s progress. “Ni­Quan En­er­gy was nev­er in­volved in the orig­i­nal project…Ni­QUAN GTL is not WGTL. We are not mov­ing WGTL for­ward. The plant we are com­plet­ing is Ni­QUAN GTL. Ni­Quan En­er­gy is an en­tire­ly dif­fer­ent com­pa­ny,.

He dis­missed re­ports that the com­pa­ny was un­able to re­pay a mil­lion-dol­lar loan at the time it was due as “me­dia spec­u­la­tion”.

In terms of job cre­ation, Ni­Quan said the plant will cre­ate some 65 per­ma­nent jobs and about 700 dur­ing the con­struc­tion phase. The com­pa­ny will not favour for­mer Petrotrin em­ploy­ees.

“There is no spe­cial treat­ment for any­one. It is fun­da­men­tal to our phi­los­o­phy that every­one is treat­ed equal­ly and fair­ly,” he said.

Af­ter the WGTL project was put in­to re­ceiver­ship, the WGTL fa­cil­i­ty at Pointe-a-Pierre was sub­ject to an open bid­ding process man­aged by Price­wa­ter­house­C­oop­ers (PwC).

Ni­Quan En­er­gy was cho­sen as the pre­ferred bid­der be­cause it sub­mit­ted the on­ly pro­pos­al which en­vis­aged op­er­at­ing the plant as a com­mer­cial en­ter­prise rather than sim­ply scrap­ping it. It was on­ly af­ter ex­ten­sive due dili­gence by the Re­ceiv­er, mul­ti­ple gov­ern­ments and Petrotrin boards, Ni­Quan En­er­gy was al­lowed to ac­quire the plant.

In June, the Min­is­ter of En­er­gy Franklin Khan in a state­ment on the sta­tus of the project, said then that the joint ven­ture was put in­to re­ceiver­ship nine years ago on Sep­tem­ber 25, 2009. He said that by that time, the bud­get for the project had in­creased from US$165 M to in ex­cess of US$399 M.

Ni­Quan En­er­gy is led by Ains­ley Gill and lists its di­rec­tors as sen­a­tor David Small and Al­li­son Lewis, who re­signed as chair­man of the Port Au­thor­i­ty in March amid the col­lapse of the sea bridge and the re­peat­ed fail­ing of the fer­ries to ser­vice the is­lands.

In 2018 the Gov­ern­ment ful­ly sup­port­ed Ni­Quan En­er­gy. The deal was ex­pect­ed to pro­vide Petrotrin with a US$35 mil­lion in­jec­tion, a fur­ther cap­i­tal in­jec­tion of US$125 mil­lion in the econ­o­my and some $ 2 bil­lion in tax­es and statu­to­ry pay­ments over the life of the project.

In 2005 World GTL and Petrotrin agreed on a joint ven­ture for the Gas-To-Liq­uids plant. By Jan­u­ary 2006 both com­pa­nies en­tered a Share­hold­ers Agree­ment, giv­ing WGTL 51 per cent eq­ui­ty and re­tain­ing 49 per cent for Petrotrin. One year lat­er, the bud­get and req­ui­site fund­ing was com­plet­ed and was pegged at US $165 mil­lion, fund­ed by a loan of US125 mil­lion from Cred­it Su­isse, US $30 mil­lion in pref­er­ence shares from lo­cal in­vestors and $US 10 mil­lion in eq­ui­ty from Petrotrin.

In sum­ma­riz­ing the failed mega-project, the Min­istry of En­er­gy said that the cred­it agree­ment with the Swiss bank stip­u­lat­ed that the plant should be pro­duc­ing by Ju­ly 2009, enough to make re­pay­ments on the loan. By this time, the project had al­ready cost twice the bud­get that it was al­lowed.

In 2009 when the plant was ex­pect­ed to be com­plet­ed enough to pro­duce, it was be­hind the de­liv­ery dead­line and the cost mush­roomed from the US$165 mil­lion to more than US$ 399 mil­lion. WGTL was un­able to fund its por­tion of the re­pay­ments and Petrotrin bought out the en­tire Cred­it Su­isse loan. The project was placed in re­ceiver­ship that year. By 2010, when the Gov­ern­ment changed, Petrotrin stopped all fund­ing to com­plete the project and by 2012, Ni­Quan En­er­gy emerged as the com­pa­ny in­ter­est­ed in pur­chas­ing the idle and in­com­plete GTL plant. Ni­Quan was able to pur­chase the US$399 mil­lion project for US$35 mil­lion which in­clud­ed an ini­tial pay­ment of US$10 mil­lion and pref­er­ence shares val­ued at US$ 25 mil­lion to be paid in two tranch­es.