Chevron challenged by unions over Gorgon claims

Chevron is telling analysts that everything is under control on the Gorgon LNG projects, despite costs ballooning and it being late. The ITF and MUA have challenged the company to come clean.

ITF: ‘Time For an Honest Conversation from Chevron’

The International Transport Workers’ Federation (ITF) and Maritime Union of Australia (MUA) are urging Chevron to have an honest conversation with workers, shareholders and consumers on the state of the Gorgon project located off the coast of Western Australia.

This week, Chevron reported to its shareholders that the multi-billion dollar gas project was “just fine”.

The Australian Financial Review reported that: “Chevron chief executive John Watson has voiced confidence in the economics of the severely over-budget Gorgon ­liquefied natural gas project.”

ITF president Paddy Crumlin said this insistence by Chevron management that the project was ‘fine’ was misleading.

“The ITF has evidence to suggest that the Gorgon project is far from fine,” Mr Crumlin said.

“In fact, published research by University of Sydney Business School Professor Bradon Ellem contends that the Gorgon Project has been the subject of severe mismanagement.

“The union movement is very keen for there to be future investment in Australia’s oil and gas industry because it creates jobs for our members. 

“To ensure that investment continues we need to have an honest conversation about where things are currently going wrong.

“We’ve been inundated with so much information challenging Chevron’s position from those who have worked closely with the Gorgon Project that we’ve had to set up a dedicated website for people to submit Chevron’s stuff ups.”

The website - www.wedontagree.net - is a joint project of the International Transport Workers’ Federation (ITF) and the Maritime Union of Australia (MUA). 

It is a part of an ongoing global campaign to build awareness of management errors that have caused delays and cost overruns on Gorgon.

Local Chevron management and industry group, the Australian Mines and Metals Association (AMMA), have unfairly blamed the MUA for problems on the Gorgon project, as the union has sought to negotiate a new Enterprise Bargaining Agreement for maritime workers working in the offshore oil and gas sector.

MUA WA branch secretary Christy Cain said maritime workers had been used as scapegoats by Chevron Australia.

“Research undertaken by BIS Shrapnel found that the wages of maritime workers make up less than one percent of the US$54 billion cost of building Gorgon,” Mr Cain said.

“Despite the negligible impact of maritime wages on the total construction cost of Gorgon, the MUA and our members are portrayed by the industry and their henchmen as being responsible for all of the problems facing the Gorgon project and the LNG sector as a whole.

- See more at: http://www.mua.org.au/itf_time_for_an_honest_conversation_from_chevron#sthash.XHudlbkK.dpuf

Chevron latest: Barrow Island could be declared Port of Convenience

As some of you may be aware, Chevron is in a bit of a mess with its Gorgon LNG project off the North West coast of Australia. The project is late and over budget already. Local management have tried to blame employment law and organised labour for their own mismanagement - but this has been thoroughly debunked by a report on the project. The ITF recently wrote to the SEC to raise concerns about some of the disclosures Chevron has made about the project.

However, that doesn't look to be the end of it. At the ITF congress this week, Paddy Crumlin warned that Barrow Island could be declared a port of convenience.

From the MUA website:

Speaking from the ITF congress in Bulgaria today, International Transport Workers' Federation (ITF) president Paddy Crumlin said Australia’s Barrow Island could be declared a ‘port of convenience’ unless Chevron tempers its union-busting efforts in the offshore oil and gas sector.

Chevron’s Gorgon LNG project off Australia’s north-west coast has overrun from USD37 billion to USD54 billion due to the company’s ongoing mismanagement.

But rather than take responsibility for its poor performance, parts of the company insist unions were to blame, said Paddy Crumlin, who is also national secretary of the Maritime Union of Australia (MUA).

“If Chevron continues to seek to exclude my union from an Australian island which will export natural gas then it will have to be declared a port of convenience,” Crumlin told the 43rd ITF congress in Sofia, Bulgaria.

“They are suing the MUA for no more reason than workers on the job ensuring that occupational health and safety standards are met.

"We have made attempts to reach out to Chevron, we travelled to their shareholder meeting in Midland, Texas, earlier this year."

It was there the MUA received an assurance from Chevron chief executive John Watson that unions were not to blame for cost blowouts on the Gorgon project.

Watson said he had "no intention of blaming organised labour for cost overruns or delays at Gorgon."

"Employers need to clearly decide whether they want to work with unions – and we’ll be there – or against unions – and we’ll be there as well,” Crumlin said.

The 43rd ITF congress in Sofia brings together almost 2,000 participants from 379 unions in 116 countries.

Workers's capital in action

A very quick round-up of union shareholder activism just from this week.

Yesterday, Bruce Hamilton from the Amalgamated Transit Union attended the First Group AGM to highlight the conditions of workers in Greyhound bus terminals. The ATU wants Greyhound to negotiate a national contract covering terminal workers. The AGM was hit by a big vote against the rem report due to increased awards for the chief exec, something the ATU picked up on.

There's an interesting initiative at McKesson, where the Teamsters have filed a shareholder proposal targeting accelerated vesting of equity awards. This is also a company where union-led shareholder activism last year contributed to a say-on-pay defeat. 

The ITF has written to the SEC calling on the regulator to scrutinise the claims that Chevron has made about the development of its LNG project Gorgon off the North West coast of Australia. This follows an earlier union briefing to investors on cost over-runs.