Frontline News

Vol:26 Iss:03 URL: http://www.flonnet.com/fl2603/stories/20090213260310500.htm Back

OIL SECTOR

Fuelling a crisis T.K. RAJALAKSHMI in New delhi The government crushes a strike by oil sector officers, who demanded a pay hike, and leaves them demoralised. RAMESH SHARMA

The corporate office of ONGC in New Delhi on January 7, the first day of the strike. THE Central government, preoccupied with the aftermath of the Mumbai terror attacks, was oblivious to the tension that was brewing in the oil sector. Therefore, when news broke out on January 7 that officers of 14 public sector undertakings (PSUs) in the sector had struck work, the government was shaken rudely. It was the first major all-India strike by oil officials. The news had a domino effect: petrol pumps across the country put up “closed” or “no stock” signboards and motorists began panic buying as rumours about the possibility of petrol and diesel shortage spread. As the strike, led by the Oil Sector Officers’ Association (OSOA), entered the second day, a large number of petrol pumps across the country went dry and the queues at petrol stations that were open became longer and longer, making one wonder why the government had not made any contingency plans. Above all, no one had any clue as to why the officers had struck work. Retribution was quick and swift. In one stroke, the services of 70 officers, 64 belonging to the Oil and Natural Gas Corporation (ONGC), three from the Indian Oil Corporation (IOC) and three from GAIL (India) Limited, were terminated. The termination letters, which reached the officers on January 10, were backdated. What was surprising was that the termination orders reached the officers after the strike was called off, and the extreme action was taken without conceding a single demand put up by the OSOA. Unions were aghast at the measures taken to crush the strike. They felt termination of service was the harshest form of punishment. Never before had they witnessed such a backlash from the government, backed by a supportive intelligentsia. M.K. Pandhe and Mohammed Amin, president and general secretary respectively of the Centre of Indian Trade Unions (CITU), wrote to Union Petroleum and Natural Gas Minister Murli Deora, reminding him that the government had in the past negotiated with the OSOA and that the demands raised by the association were those recommended by the managements of the oil PSUs and the Ministry.

They said it was shocking that when the strike had been withdrawn unconditionally, the government had embarked on vindictive action instead of ensuring normalcy and fostering healthy industrial relations in the interest of the nation. The action amounted to denial of natural justice, whatever one’s offence, real or notional, they said. In a separate communication, the Petroleum and Gas Workers’ Federation of India reminded the government that the OSOA had participated in protracted bilateral exercises for an amicable settlement and that the strike was imposed on the officers. At another level, hysteria began to be built up largely through the media, with one television channel labelling the striking officers as deshdrohi, or traitors. The overall tenor of the media coverage was against the agitation and there was not an iota of public sympathy for the striking officers. Some newspapers even published the pay scales of the officers on their front pages to prove that the OSOA was unjustified in going on a strike. Around the same time that the oil sector officials struck work, the All India Motor Transport Congress announced a nationwide truckers’ strike, leading to a spurt in the prices of essential items. The government then did something unprecedented. Even as the twin strikes were on, the Petroleum Ministry and the Ministry of Shipping, Road Transport and Highways issued half-page advertisements in newspapers explaining why the strikes were unjustified. Rather than find a way out of the impasse, the government went into campaign mode. One such advertisement, striking an emotive chord, read: “At a time when the nation is going through difficult times, the oil sector officers should have been more responsible and should have responded to the appeal of the government…. The entire nation has taken note of the inconvenience caused by the action of those on strike as the petroleum products supplied by these PSUs touch the daily lives of people.” On the truckers’ strike, even harsher words were used in the advertisement. Titled “On the Truth of the Transporters’ Strike”, the advertisement said that “public opinion should be mobilised against such unjustified strikes”. Referring to oil sector officials, the government advertisement declared that the strike was against the national interest and that the officers were among the highest paid employees, who drew a gross salary in the range of Rs.1 lakh to Rs.3 lakh a month after the pay revision. The advertisement also claimed that a committee was set up by the Prime Minister under the chairmanship of the Home Minister to examine the demands and that a report would be submitted within 30 days. What the Petroleum Ministry failed to mention in the advertisement was that the officers had earlier planned to strike work but called off the plan after they were assured that their demands would be considered favourably, or that the issue had been pending for the past two years, or that the Ministry had not taken up their longstanding demands. RAMESH SHARMA

Murli Deora, Minister for Petroleum and Natural Gas (second from right), flanked by R.S. Pandey, Petroleum Secretary (right); Sarthak Behuria, Chairman of the Indian Oil Corporation; R.S. Sharma,

Chairman and Managing Director of ONGC; and U.D. Choubey, CMD of GAIL, at a press conference in New Delhi on January 5. It was not that the government did not know that the association would call a strike. Strike notice had been given two months in advance. “We did not want to go on strike. We were forced to,” said an officer, requesting anonymity. A delegation of the officers said that the government had used the media to spread disinformation about their salaries. In fact, after a newspaper reported the correct picture in respect of the officers’ actual salary after the revision of pay scales, the Ministry did not come up with a response. “We work in extremely adverse conditions. The officers working on offshore rigs do not get to see their families for months together, and contrary to media reports, hardly 10 per cent of the officers sit in airconditioned rooms,” an ONGC officer said, in response to reports about their pay scales. The issue goes back to January 2006 when the officers demanded a 50 per cent dearness allowance merger with effect from January 1, 2005, as recommended by the Justice S. Mohan Committee in 1998, as had been done in the case of Central government employees. The government did not respond. (The Mohan Committee was set up in 1996 to look into the pay scales of the employees of PSUs.) On February 21, 2006, Petroleum Secretary M.R. Srinivasan wrote to the Secretary, Department of Public Enterprises (DPE), that the non-redress of grievances of the executives of the oil sector enterprises caused serious dissatisfaction. His missive, marked “Most Immediate”, said: “This could result in repercussions of industrial unrest leading to disruption of production and supplies of petroleum and natural gas products, besides an exodus of talent from the oil PSEs to the private sector…. It would be appropriate if the grievances are addressed at the earliest. A strike notice given by them earlier in March 2005 was withdrawn on the assurance that their issues would be recommended to the DPE for sympathetic consideration.” He added that the “problem of stagnation among the executives was acute as many of them have not earned any annual increment after 2002. The officers of oil PSEs are feeling a sense of dismay and frustration over the issue…”. The senior officer went on to point out that the entry of the private sector, both domestic and foreign, in a big way into the oil and gas sector posed a serious threat of migration of trained personnel to the private sector where the emoluments were much higher. “The exodus of officers from oil and gas PSEs has been on the increase in recent years. This could lead to an overall deterioration of their performance in the immediate future. It is imperative for us to help PSEs with suitable emoluments structure for their manpower so that they are able to recruit and retain talent,” he wrote. High attrition rate In May 2006, the association gave a call for a strike but postponed the plan after it received a verbal assurance from the Ministry. Oil PSU officers told Frontline that one of the main reasons for demanding a higher pay was the high degree of attrition in the public sector. Apprehensive of an adverse reaction from the government, the officers were reluctant to give their names. They said that even the Justice M.J. Rao Committee, set up in 2006 to suggest a pay package for employees of the Central public sector enterprises (CPSEs), had admitted that there was serious erosion of specialised and scarce manpower from public sector oil companies to the private sector. While recommending a new sectoral classification for the CPSEs, the committee noted: “Once the CPSEs achieve performance standards prevailing in private companies and MNCs in their respective sectors, they should be able to align the compensation packages with such private companies and MNCs.” The report of the committee was forwarded to the Ministry for action.

In March 2008, the Sixth Pay Commission, headed by Justice B.N. Srikrishna, recommended a 40 per cent hike in salaries to the employees of the CPSEs. The employees found this inadequate in the face of the growing competition from the private sector. The average gross salary earned by an executive in the ONGC ranged between Rs.40,000 and Rs.50,000 while his counterpart in a private oil company drew five to six times the amount. The Rao Committee submitted its recommendations in May 2008. In August, the OSOA formed its own pay review committee, disagreeing with some elements in the Rao Committee report. The officers representing the oil companies said that the government even did away with the strategic categorisation recommended by the Rao Committee for “A” plus companies, which made maximum contribution to the government exchequer and operated in inhospitable terrain. The entire pay structure for this category was whittled down. The officers said they had made several representations to the government but they had been ignored. On August 8, 2008, the OSOA wrote to Murli Deora seeking expeditious implementation of the pay revision. It received no response. On September 3, the association’s leaders met Sontosh Mohan Dev, the Minister for Heavy Industries and Public Enterprises, and apprised him of their grievances. They also placed a request for a hearing with Murli Deora. They waited until September 29 and as they did not hear from the Ministry, the association issued notice for a strike, which was to begin on October 21. On October 15, S. Sunderashan, the Additional Secretary in the Petroleum Ministry, invited the OSOA representatives for talks. But no progress was made on the assurance given at that meeting. On October 17, Sunderashan wrote to the Secretary, DPE, requesting that the concerns of the oil PSUs and the OSOA with regard to the recommendations of the M.J. Rao Committee be viewed sympathetically and an appropriate

decision taken in the matter at the earliest. On November 17, he again referred the matter to the DPE for consideration after a meeting with the Petroleum Ministry, the chairmen of oil sector companies and representatives of the OSOA. The same day, the OSOA delegation met Murli Deora, Sontosh Mohan Dev, and the Minister of State for Commerce Jairam Ramesh, and got an assurance that their demand would be approved at the Cabinet meeting on November 20. Once again the OSOA deferred the strike. However, on November 26, what emerged was a set of guidelines that did not address any of the issues raised by the OSOA. It was then decided that a call for an indefinite strike beginning December 2 was the only option left. The agitation programme was again withdrawn following the Mumbai terror attacks. Finally, the officers struck work on January 7. On January 9, in the face of police harassment, growing public and media criticism and the government’s indifference, the OSOA called off the strike. The strike may have ended but the core issues remain. The oil PSU officers are a demoralised lot. Their demands need to be addressed for two reasons. One, to strengthen the hands of the oil PSUs in the face of growing competition from the emerging private sector and two, to have a strong and committed PSU workforce in the national interest.