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Oil Company Layoffs - Honor & Ethics during Downturns?
Oil and Ethics?
When the price of oil dropped below $60/ barrel many worried. When it dropped below 50 and then below 40, many lost their jobs and it has been getting worse ever since - especially in the upstream area. Even now, more layoffs are occurring even after oil recovered above 40/bbl in mid 2016! The layoffs are not expected to stop for another 1 to 3 years depending on who you talk to. So what has this crash done to the operators, the suppliers, and their workers, contractors and management staff? ... Well major cutbacks on investments, stopping projects and of course major LAYoffs!
Oil Brent prices 2012-2016
"Among times of strife, the laws fall silent"
The common story regarding layoffs is that the “bottom performing” employees aka “deadwood” are let go during lean times and during crashes such as this 2015/ 2016 are the only times that “muscle “ is let go as well. It is also said that cost cutting and saving are paramount to all staff of oil companies.
The “rest of the story” is that “Bad times mean bad ethics”. “Silent enim leges inter arma” is Latin from Cicero in his published Ancient Rome oration Pro Milone meaning “For among times of war, the laws fall silent”. This theory applies not just to the oil industry with the many, many examples shared by others recently during the 2016 OTC.
For example during the USA’s Civil War President Lincoln tried to officially suspend habeas corpus noting “in truth, the bill of rights are all peace provisions of the Constitution and, like all other conventional and legislative laws and enactments, are silent amidst arms, and when the safety of the people becomes the supreme law. During World War 2, the USA government DID uphold the application of curfews against members of a minority group (Japanese) were constitutional when the nation was at war with Japan.
In 2015/ 2016, we can see how this end justifies the means or survival of the fittest within a corrupt environment” maxim is really implemented by oil companies during down times.
What has been witnessed and shared so far during the great 2015-2016+ oil crash? ... How have businesses and management conducted themselves?
Cover Ups do they never stop? ("Macondo"- the 2010 spill name that BP still wont allow staff to speak in the office)
Real World - Real Company's- Real People
In general, the 2015-2017 oil crash layoffs have targeted the weakest, highest cost center areas such as upstream drilling and deep water development projects. Specific worker type targeted for pay cut &/or termination include:
- 3rd party contractors (disappointing but understood)
- Poor performers (removing dead wood is logical)
- Complainers/whistle blowers (firing those that do not comply when asked to do illegal things or cover up illegal actions by their bosses)
I would like to focus on the corruption area since most of us work in Texas which is a right to work state. A company had the right to let you go for any reason save illegal ones such a race, gender discrimination or for whistle blower issues.
At the recent Offshore Technology Conference many stories regarding inappropriate practices by many companies were shared. They include:
- Bullying service businesses: Thousands of long term contracts were illegally renegotiated by big oil with smaller firms. In most cases the small firms had to accept it or lose the client. They cannot enforce the original legal contract since the large oil company threatened to tie it up in court and stop all payments. I have spoken with 3 smaller biz owners in Houston that went through this issue.
- Extorting free OT: Upstream focused organizations are illegally not paying required overtime to qualified in-house staff and contractors. Extortion and examples firing are used to keep workers in line. Contractors normally paid overtime for hours over 40 / week are now working between 50 to 90 hour weeks and allowed to bill for 40. I have seen many dozens of examples of engineers, drafters and others putting in well over 60 hours per week under orders to keep their mouth shut and bill 40 hour weeks or be forced like the others that complained. (One younger colleague of mine spoke with me at the office at 8:30pm Thursday night scared to death to complain about what his boss was seen doing or his long hours. He stated he was grateful for his terrible 80 hour/ week job since he was at least paid for 40 hours with benefits)
- Multi group conspiracy: HR (human resources) in many firms is complicit with the illegally mandated long, uncompensated hours as well as other crimes by staff that are protected. They are also instrumental in limiting lawsuit by extorting witnesses into silence. Not complying with the company’s illegal demands brings not only threat of firing but of being black balled throughout the industry as a trouble maker.
- Looking the other way: This ethical and legal break down has spread into other areas such as protected sexual harassment, protected bullying, protected corporate sabotage, and allowed bribery. The sabotage issues shared even include major Quality and safety violations that were extorted into nonevents. Video tape surveillance proof of wrongdoing was deleted with multiple witnesses in multiple cases. Even the government appears to be "keeping silent" by ignoring these criminal activities due to low commodity pricing.
Who is trying to do the right thing?
Some government regulatory bodies are at least aware of the risks this poorly managed mass talent reduction by polling companies to NOT “cut corners” on field related HSE. They also noted a greater need for 3rd party vigilance to mitigate expected increases in spills, injury and death in the field.
Ladies and gentlemen this downturn layoff reality is “survival of the sleaziest” not "the fittest".
Layoffs have targeted:
- Elderly workers. Staff well over 40 years of age.
- Men. Surprisingly the layoffs have been very limited to protected minorities such as women ;), and homosexuals :(
- Potential whistle blowers ( even those loyal but unfortunately saw or commented on inappropriate business activity)
These cases seem to illustrate the real word management was not concerned with ethics or company stockholders. Corrupted employees willing to blackmail their corrupt bosses appear to have the most job security. Employees that announce themselves as homosexual or transgender candidates pick up significant layoff protection. Many younger staff are learning horrible lessons regarding cover ups and protection of the guilty during offshore accidents and incidents. Staff members that follow the normal rules and have nothing to hide tend to have the least job security.
Makes one wonder if law, order, honor and integrity ever held any real world value? - Other than as an illusion to control the masses during the good times.