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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They said it was shocking that when the strike had been withdrawn unconditionally, the government had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 long-
standing 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 air-
conditioned 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.