Brace for fallout

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It is, of course, a story with two clear sides — perhaps even three sides. Perhaps even more. First, there’s a company, Vale Newfoundland and Labrador Ltd., trying to complete one of the largest projects underway in this province. The company has a signed no-strike agreement, yet it is watching as some of its workers stand outside the gates.

Second, there are those workers themselves, who walked off the job over complaints that the company planned to bring in crane operators from outside the country and pay those new workers more than those on site were receiving. (The inciting incident, for sure, but something the workers say was only the straw that broke the camel’s back — they also talk about rates of pay, housing allowances left unpaid and grievances left undealt with.)

Then, there are the workers’ unions, left in the uncomfortable position of siding with the company — a no-strike deal is a no-strike deal, signed, sealed and delivered.

On top of that, there are those who would love to be working for the wages that the Vale employees have simply walked away from, people who are not shy to say they’d be delighted to be working on the site in an instant — along with more than a few workers who have not crossed the lines, but don’t want to be outside the gates anymore either.

It’s one big mess, and getting worse by the day. Vale has an injunction ordering the employees back to work and the unions have told their members to go back, but for days, nothing has happened.

The provincial government has said very little about what it can do — Terry French, the minister responsible for labour relations, said Friday, “I’m hoping cooler heads will prevail and they’ll go back to work.” Otherwise, cabinet ministers are setting about their usual summer tasks, travelling around the province and announcing government funding as if it were their own wallets they were opening. Vale says the delay is costing millions of dollars, workers aren’t being paid and the stalemate, court order or not, showed no signs of fading on Monday.

Even if the walkout is settled, there are going to be lingering issues. Heck, there were lingering issues before it started, issues that weren’t being dealt with and that were clearly chafing with workers. The clear fact, though, is nothing is going to be solved as long as the sides are staring at each other and doing little more than restating their own positions. Until the workers go back, the only thing that’s getting clearer is the amount of damage being done.

The timing couldn’t be worse, at least in one way.

The irony is that all this is happening at a time when the provincial government is arguing that this province is ready, willing and able to build an offshore module here, while the Hebron consortium argues that there aren’t enough skilled workers to do the job.

This can’t be helping the province’s cause.

Organizations: Vale Newfoundland and Labrador

Geographic location: Hebron

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Recent comments

  • COx
    July 18, 2012 - 01:43

    Route cause is not enough local skilled labour for all the economic activity planned by a government who has no long term plan other than to get themselves re-elected on delusional visions. And, pray tell, what is the labour peace plan to work in the wilds of Labrador for its mining and hydro developments in the near future? A work force from what corners of the globe?

    July 17, 2012 - 23:24

    A number of the local media, including the Telegram and CBC, have mistakenly linked the walkout at Long Harbour with the issue of the third Hebron module.The suggestion is that the Vale strike could, and perhaps should, weigh into Exxon's final decision on whether the DES module will be built in the province. This reasoning is shallow, faulty and damaging to the province's interests. The agreement between the province and Exxon stipulates that the DES is among those project components that must be executed locally unless the operator can provide convincing evidence that the province lacks the necessary capacity to do so. Labor relations are not among the criteria which can be cited as a reason for reneging on that commitment. The province assures labour stability through its special projects designation and, the Vale situation notwithstanding, this has worked very well in the past. There are circumstances at play in the Vale work stoppage that are unlikely to be replicated during the Hebron project. For example, the RDC Hebron agreement for Bull Arm provides a significant wage premium over Long Harbour and, unlike Vale (deserved or otherwise), operators in the offshore oil sector do not have a reputation for interpreting contracts in a way that alienates their workers. Exxon, for example, is known to be a hard bargainer (through its intermediaries) but once the deal is struck they are more concerned with getting the job done than nickelling and dimeing the union membership. The Newfoundland government and Exxon have a different opinion on whether there is adequate local capacity for the third module. The province's assessment is probably the correct one, given particularly that Exxon had more than enough time since the negotiation of that agreement to address any specific constraint on its ability to deliver on its commitments. In that context, the Telegram, CBC and others do a great disservice to the province by implying that the Vale work stoppage provides any defence whatsoever to Exxon for failing to do so. The decision by Exxon to source the third module outside the province was made long before the Vale incident and, in all probability, Exxon has never veered from that decision despite the government's protestations. There is a small chance it will find some other piece of work to re-assign to local industry by way of a compromise (as it did with the barge contracts for Marystown). More likely however is that this dispute will be dealt with by the mechanism prescribed in the agreement. If so, the province is likely to win a settlement in the 'tens of millions' range it has publicly cited. Exxon will be more than happy to pay such a small fee for what it expects will be a lower cost of fabrication elsewhere and a greater assurance that its timelines will not be adversely impacted (even though Hebron already faces a minimum one year delay). Indeed, a cash award of that magnitude could never compensate the province to the full value of the lost module. Beyond the immediate, direct economic benefits, there is a far more enduring value associated with the knowledge and experience gained locally from undertaking such complex industrial projects.

  • Dale Rodway
    July 17, 2012 - 15:32

    poor old Gary Hicky must be rolloing over in is grave, we went throught the same thing when we were building come bye chance refinery in the seventy,s Unversial Pipe brought in workers from Quebec and payed them more then the local person and we when on strike at that time to get it sorted out. Same thing again it happens everytime a outside contractor comes to town. if my memory severs me right i think not that long ago in st. john,s you had that problem building a water facilty with a quebec company. good old government does nothing, but stand around and watch. GO UNIONS GO , we fought years ago and won now its your turn.

  • Whining, entitled, work-ethically bankrupt worker
    July 17, 2012 - 14:19

    Please tell us, David, how we can be more like you. Can I take night classes at CONA on how to be a pompous, self-important blow-hard, or is that the sort of thing you're just born with? One other question, Your Wonderfulness, shouldn’t you be working right now rather than spending your time casting judgement on us lowly plebes? Not that I’m questioning your work ethic...

    • David
      July 17, 2012 - 14:59

      Don't like the comment? Go wildcat --- walk out on your computer. Solves everything, no?

  • Derrick
    July 17, 2012 - 11:56

    Vale does not care about the labour costs just lower Mgr, the real deal will be the hydro price charged compared to regular customers. The people will carry the loan interest for hydro, Vale will carry the margin back to Brazil.

  • Skeptical Cynic
    July 17, 2012 - 11:08

    If these unionized rabble-rousers are willfully breaching their contract they should be fired immediately. If they're breaking the law they should be arrested and thrown in jail.

  • David
    July 17, 2012 - 08:53

    LOng Harbour is precisely why there has never been, nor will lthere ever be, any economic activity in Newfoundland except resource extraction. Who else in their right mind would ever even consider coming to this place, with it's whining, entitled, work-ethically bankrupt workforce, if they could possibly do business somewhere....anywhere....else?

    • Igmond
      July 17, 2012 - 12:49

      "... since Cher's daughter [...] I understand and care." I don't even know where I was going with this.... @ANNA, so your advice is to shut up, and hide to appease the bigots. I think right there, you demonstrated percisely why we need events such as these, even if it means frightening those like The Whole Truth with chicken costumes. By the way, we don't need your acceptance; it's worthless.

    • Chantal
      July 17, 2012 - 14:19

      But... but Joe, they have chicken costumes! THEY'RE CHICKENS MAN! But seriously, you're right on.