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From wellhead to wheel

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Page context: Home > Transport International Magazine > Issue 20 July 2005 > From wellhead to wheel

Stuart Howard reports on a global union alliance on oil and gas production and distribution

In September 2000, when independent truck operators launched a three-day protest against fuel price rises in the UK, supermarket shelves became empty with bewildering speed. The US West Coast ports “lock out” in 2003 was declared a matter of national security. Production lines came to a halt not only in the US, but in China and South East Asia within days of the shutdown. The Anderson Economic Group estimates that $1.67 billion was lost to the US economy in just 12 days.

There is no surprise, of course, in the fact that disruption to transport has a knock-on effect on other industries. What appears to have changed is the level of impact.

Global corporations have assembly lines stretching around the world, putting together components sourced from an even greater range of countries. A single product is sold around the world through global brands, from Nike to Microsoft. Vast transnational retail chains dominate where and how things are stocked and sold.

This extraordinary process of globalisation has created a new dependence on complex corporate supply chains.

Supply chain dependency

Their dependence on the efficiency and cost of these supply chains has made global corporations highly interested in transport and the movement of goods. Transport policy is no longer the special sphere of transport industry operators. A whole liberalisation agenda from cargo handling in ports, to rail freight liberalisation, air cargo rules and express road delivery services is being driven by the interests of global corporations. They want to make their global supply chains more extensive, more efficient and more cost-effective.

The well-financed European Shipping Council is a Brussels-based lobbying organisation, which has led corporate backing for the European Commission’s package of liberalising port reforms. This, it says, is because: “With the development of just-in-time and similar distribution techniques, the reliability of ports is of major importance to the future prosperity of European industry”.

The West Coast Waterfront Coalition (WCWC) explains that its whole existence is aimed at ensuring the faster movement of goods through the US west coast ports, through legislation, new technology, or the exertion of political clout. Its reasons are exactly the same: “In today’s global economy, US manufacturers and their workers rely on just-in-time delivery of parts that come from all over the world. These companies depend on reliable and fast port services to keep their assembly lines running.”

These are not purely transport operator lobbying groups, they are supply chain lobbying groups – linking up along the supply chain to protect common supply chain interests. The West Coast Waterfront Coalition (WCWC) has not only shipping and railway operators on its membership list, but global corporations ranging from Toyota to Gap and Walmart.

Trade unions around the world have been hit hard by a restructuring process that has sought to re-engineer national transport systems into regional and global hub and corridor networks. This process has involved the ejection of national regulatory barriers, the opening of national transport systems to transnational ownership and global competition, and the spread of international labour flexibility.

Unions have experienced job losses, cuts in conditions and benefits, frenetic levels of work intensity, and new forms of casualisation and social dumping. They have faced outright union busting. Both the MUA in Australia and the ILWU in the United States experienced (and survived) serious attempts to break port workers’ union organisation.

Oil and transport – a strategic alliance

All of this has left the union movement severely weakened. Yet the ITF believes that this global restructuring of transport and the dependence of corporations on fragile global supply chains may in the end have put transport workers in a much more strategic position in the global economy. Of course, being in a more strategic position does not automatically mean you will be stronger. Moreover if this strategic position derives from new conditions it may require new forms of organisation.

A number of union organisations have not only become interested in their potential new capacity for exerting industrial leverage on employers, but they have also noted the innovation of some employers groups like the West Coast Waterfront Coalition in linking together along the supply chain.

The ITF and the International Chemical Energy and Mining Federation (ICEM) are developing a global union alliance on oil and gas production and transportation. This initiative aims to look at the logic of following a commodity such as oil from the point of production to the point of final distribution or, in the case of oil, “from the wellhead to the wheel”. The concept of two Global Union Federations cooperating is not revolutionary, but a formalised, longterm and structured alliance, such as this will be, is rare. The first initial planning meeting was held at the ITF offices in London in February 2005. A formal launch will take place later in the year.

Fred Higgs, general secretary of the ICEM, writes…

Over recent year the ICEM and the ITF have been successfully cooperating on issues related to the international offshore oil and gas sector. This success has demonstrated that there are uniquely strong synergies in the broader oil and gas sector where our two organisations working together could create for our affiliates a level of power and influence, far greater than that we achieve operating separately.

The formation of this alliance will combine the power of both our great organisations, enabling us more effectively to protect the interest of our members by jointly engaging the world’s most powerful multinational companies who currently control this sector.

On one level the logic of this initiative is simple. The oil industry has been making record worldwide profits. Yet it has been squeezing conditions for many workers. For example, oil tanker drivers, instead of being directly employed by the oil companies, are increasingly outsourced into insecure, low paid contract work. Why are the employees in such a wealthy industry not getting their fair rewards? The goal of the project is also simple enough: to spread union organisation throughout oil production and distribution.

Potential for solidarity

The project comes out of the basic recognition that in many disputes or organising campaigns the workers best placed to assist a group of oil transport workers may not necessarily be other transport workers, but workers involved in oil production.

Similarly a dispute among oil production workers could be greatly assisted by transport workers. The two Global Union Federations see uniquely strong synergies between the different groups of workers they organise in the oil and gas industries, which lend themselves to developing highly effective forms of solidarity.

A joint strategic approach may also identify key targets for union organisation. But the alliance would be more than a solidarity network. The two international union organisations aim to use it to demand a rightful place as key stakeholders in a critical global industry.

Such global union alliances could potentially be reproduced in other industries. One recent industry risk report notes that with just-in-time delivery systems, most car plants now have only a few hours supply of many components. Such a situation calls out for an alliance between transport workers and metalworkers.

For the present, however, the intention is to remain strictly focused on an alliance in oil and gas. The fact that this first alliance is in these industries is not only to do with their strategic nature. It has also come out of the longstanding cooperation between the ITF and ICEM in their offshore campaign, which has been fighting for union rights in the supply services to offshore oil installations. To some degree the ITF-ICEM alliance on oil and gas is an extension of that cooperation. Their practical experience of joint working has convinced the two organisations of the benefits to be had in developing this new project.

Trade unions do not always take to innovation. Genuine solidarities may take many years to build and need to be tested when the going gets tough. But there is a real sense that unions are rediscovering the necessity to find and grab hold of strategic levers, and in fragile global supply chains they may have discovered their most effective lever yet.

Stuart Howard is assistant general secretary of the ITF.

Section home:
Issue 20 July 2005

Other pages for Issue 20 July 2005:
Comment: Fighting Back and Winning | ITF launches new global website | Value for money | Protecting our waterfront | The fight for true democracy | Enter the hit squads | This is why we joined a union | Transport goes transnational | Competition gone mad | Putting the seafarer first | Driving change in Kurdistan | End this railway nightmare | We can help to defeat poverty | Readers’ thoughts on poverty | Working life

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