Chevron Bangladesh: Staff benefit dispute could delay its exit

The management of Chevron Bangladesh and its 600 employees are at loggerheads over the workers' profit participation fund (WPPF), which may delay the global energy giant's planned exit from Bangladesh.

The conflict has intensified in recent days as the employees have decided to take the issue before a court getting no responses from Chevron on a legal notice served on November 21.

The Department of Inspection for Factories and Establishments (DIFE) and the Department of Labour have also sent letters to Chevron asking it to deposit the money to the welfare fund as per the Bangladesh labour laws.

“They [Chevron] are within the purview of Bangladesh labour law and there is no way to avoid it,” said Syed Ahmed, inspector general of DIFE.

He said his office was well aware of the issue and ready to extend all sorts of cooperation to Chevron and its employees.

Syed said earlier the management of Meghnaghat and Haripur power plants refused to pay their employees five percent of their net profit as WPPF, and the issue went to court, which gave a verdict in favour of the employees of the two power plants.

According to the Bangladesh Labour Act 2006, any company with a minimum paid-up capital of Tk 1 crore or immoveable assets worth minimum Tk 2 crore will have to pay five percent of its net profit to WPPF. Regulations of the law have been formulated and approved in 2013. Since then, some companies, including Grameenphone, have been paying their employees five percent of their net profit each year.

Eighty percent of the fund goes to the employees, 10 percent to the company's welfare fund and the remaining 10 percent goes to the government's labour welfare fund.

The demand for five percent WPPF came to the fore after Chevron in the middle of October this year announced that it would leave Bangladesh. The second-largest US energy company confirmed that it was in “commercial discussions” regarding sale of its assets in Bangladesh.

Since then, around 600 permanent employees of Chevron Bangladesh became uncertain of their future and careers. The possibility of a takeover by a Chinese company intensified their concerns, as they think the working environment, salaries and benefits would be completely different under the new ownership.

“Even, we are not sure that we would have our jobs under the new management,” said a frustrated employee who joined Chevron more than 10 years ago, leaving a government job.

Many of Chevron Bangladesh's permanent employees are concerned about getting new jobs when they are in their late 30s and 40s. The WPPF could cushion the blow.

An official of Petrobangla, the state-owned oil, gas and mineral exploration corporation, said Chevron has to follow the law of the land as per the production sharing contract (PSC) with the government.

“The business of gas and oil exploration is different. At times, there would be no return even after investing millions of dollars on exploration, but Chevron was not given exemption from the Bangladesh labour laws,” said the official.

Chevron entered the Bangladesh market after buying US oil company Unocal's operation in 2005. It is the largest producer of natural gas in Bangladesh and presently supplies over 50 percent of the country's total supply. Chevron produces natural gas and condensate from three fields -- Bibiyana, Jalalabad and Moulvibazar.

In 2015, Chevron's net daily production averaged 720 million cubic feet of natural gas, which is about a third of the total production in Bangladesh. It also produced 3,000 barrels of condensate, also known as natural gasoline.

“As the management did not respond to our legal notice sent on November 21, we have no option but to go for legal remedy,” said an employee who was one of the representatives at meetings with the Chevron management.

“Filing a case with a court is underway,” he said.

Barrister Omar Sadat, who sent the legal notice on behalf of the employees, confirmed that Chevron did not respond to the legal notice.

The Daily Star called Chevron Bangladesh's President Kevin Lyon, but he neither received the phone call nor responded to the text messages. Later, this correspondent contacted Chevron's communications team and, as per their wish, emailed some queries on December 6.

“Chevron Bangladesh complies with all employment contracts and applicable laws, rules and regulations, including labour laws,” said Sheikh Jahidur Rahman, communications manager of Chevron Bangladesh, on December 8.