Ghanaians working for Eni Ghana Exploration and Production Ltd., an Italian oil and gas giant are lamenting over the deliberate decision by their employer to breach the Local Content Law by paying them salaries far below their colleague expatriates.
They have described this and other forms of racial recrimination as a “modern day form of slavery” introduced by the management of the Ghana subsidiary.
The workers numbering over 300 are at loggerheads with the management of the Eni Ghana Exploration and Production Ghana Limited over unfair labour practices.
Letters in the possession of this paper indicate that Eni Ghana which is operator of the biggest integrated oil and gas field in Ghana is breaching aspects of the country’s labour laws.
A letter written by the General Transport , Petroleum and Chemical Workers union of TUC, Ghana accused ENI of paying far lower than the oil and gas market in Ghana.it accused ENI of demonstrating bad faith and no commitment to the issue and thus called on the Petroleum Commission to intervene
The genesis of the labour crisis
The General Transport, Petroleum & Chemical Workers’ Union of Trades Union Congress Ghana (GTPCWU) received complaints from the employees of Eni Ghana Exploration and Production Limited about unfair treatment when it comes to job appraisal, recognition and rewards. They also complained bitterly that, Eni Ghanaians employees do not have job descriptions and salary/job role structure for the past 10 years.
The Acting General Secretary of GTPCWU), Francis Sallah in a letter addressed to the CEO of the Petroleum Commission, said: “We have engaged management of Eni Ghana at several scheduled salary negotiation meetings from 4th May 2018 till date to agree and establish a fair level of salaries for the employees amicably and in good faith”.
The employer has unfortunately demonstrated bad faith and no commitment to this cause. The employer is introducing a modern day form of slavery by discriminating against the Ghanaian employees in terms of unfair remuneration.
For instance, it was shocking to note that, the least cost of monthly rent of expatriates in Eni Ghana are more than the monthly gross salaries of Ghanaian 1st line managers. The annual school fees of their colleagues expatriate’s child in Ghana are more than the annual gross salaries of senior engineers. Our research team report done last year on Eni Ghana compensations and benefits reveals that about 300 Ghanaian employees (permanent & contractors) annual total labour costs is not up to 5% of the total labour costs of the expatriate colleagues who are just a little over 100. This is unacceptable and affront to the laws of Ghana.
The Union therefore has no option than to call on the Petroleum Commission, the regulator to be part of the next Standing Negotiating Committee.
It is extremely sad and disheartening to note that the Ghanaian workers of Eni are woefully underpaid compared to their expatriate colleagues on the same job in the same company as well as competitors in the industry such as Tullow and Aker.
This is in clear violation of Eni’s own global policy on compensation and benefits that states that: “Our compensation package is complemented by a benefits programme in line with our competitors and consistent with local regulations. It aims at to enhance overall compensation with benefits which support our people’s current and long term physical and financial welfare”.
Because of relatively low salary of the Ghanaian employees of Eni Ghana, some of the experienced employees have resigned to other competitors in the industries, which has adversely affected the localization policy which is being championed by the Petroleum Commission of Ghana, according to Mr Sallah.
“We believe this does not augur well for the young petroleum industry in Ghana to train and develop competent and experience Ghanaian workforce to take over the management of the resources in the near future”.
The Union understands the strategic importance of the Sankofa and Gye Nyame Integrated Oil and Gas project to the partners and the Republic of Ghana, and does not want to take unfavourable industrial actions that will affect the success of the project.
Therefore, the GTPCWU implores the Petroleum Commission to use its regulatory mandates provided under Section 3(a) of the Petroleum Commission Act, 2011 (Act 821) and Local Content and Local Participation Regulation, 2013 (Legislative Instrument 2204) to enforce Article 17 (2) of the 1992 Constitution of Ghana and Section 68 of the Labour Act, 2003 (Act 651) with the Ministry of Energy as the supervising ministry to ensure Ghanaian nationals and employees working in Eni receive fair and equal pay for equal work without distinction of any kind.
At meeting held on Monday 15, October 2018 ended in “DEAD LOCKED” as both parties could not reach agreement because the employer again has unfortunately demonstrated bad faith and no commitment to this cause.
This paper gathered that that records over the years indicate that management of Eni always gives inflation as salary increase but because the workers are now in a Union, they offered 4% as normal salary increase. A figure which was far less than the 2018 inflation.
The Union therefore petitioned the Petroleum Commission to use its regulatory authority to make sure that utilization of petroleum resources in the shores of Ghana benefits Ghanaian citizens.
“We are willing and ready to work together to improve the wellbeing of our Ghanaian citizens working in oil and gas industry in Ghana”, portions of Mr Sallah’s letter dated 16th October 2019 reads.
Negotiation on the level of salaries
The GTPCWU wrote to the Petroleum Commission dated 14th October to inform it that the Meir Global, a consultant has concluded its Salary Structure and Pay Survey and submitted report to management of Eni Ghana and same has been shared with the GTPCWU.
The Standing Negotiation Committee (SNC) resumed negotiation on Tuesday, 8, October, 2019. Both management and the Union accepted the report of the consultant and confirmed that the outcomes reasonably reflect the market expectations.
It was obvious that Eni Ghana was paying far lower than the oil and gas market in Ghana.
Therefore, to continue to enjoy the prevailing industrial harmony, the Union implored the Petroleum Commission to use its regulatory powers to ensure fairness.
In view of this, they want Eni to take the following immediate actions by using the outcomes of the Meir’s Salary Structure and Pay Survey report:
(a) Place all employees on their respective job grades by 25th October, 2019;
(b) Define a remuneration policy and salary grades by 29th October 2019, thus a remuneration policy to pay at least upper quartile (75%) across all salary grades of the oil and gas market in Ghana;
(c) Place all employees on their respective salary grades by 31st October, 2019;
(d) Give all employees a copy of their respective job descriptions; and
(e) Pay all salary arrears from January 2019 to October 2019 to respective employees by 27th November, 2019.
Considering that Eni Ghana is the operator of the biggest integrated oil and gas field in Ghana and having good operational and financial performance since inception of this project, the position of the Union is that the company should adopt a remuneration policy to pay at least the upper quartile.
Given the average monthly revenue (inflow) of $123 million, which Eni Ghana and its partners have been achieving during the period January to September 2019, the total monthly labour cost estimate of our proposal for Eni to pay at least 75% of the oil and gas market constitute only 0.5545% of this revenue value.
“Thus, the total labour cost estimate of this proposal is less than 0.9%, if we are to include other contract workers. Moreover, Eni Ghana will bear only 44.444% of this cost while the rest is cut back to partners (Vitol and GNPC)”, Mr Sallah noted,
The Union has been very mindful of its demand and actions on this strategic project in the energy sector in Ghana and, it is evident that, what it is asking the Eni Ghana to pay to its faithful Ghanaian workers who have been playing a key role in the success story of the Sankofa and Gye Nyame oil and gas field is of goodwill but not anything just conjured.
The Union will henceforth not tolerate this poor treatment of the Ghanaian workers should Eni fail to adhere to the fair demands and achieved this within the stated timelines stated above.