Economy

Norwegian oil company, DNO, refuses to pay workers in Yemen

 

(SANA’A, YEMEN) DNO, founded in Oslo, Norway in the year 1991 is an oil and gas company listed on the Oslo Stock Exchange that holds stakes in various oil and gas blocks in the Middle East including the Kurdistan region of Iraq, the Republic of Yemen, the Sultanate of Oman, the United Arab Emirates, the Tunisian Republic, and Somaliland. The company’s first exploration in the Middle East was when they entered into Yemen in 1998. With nearly 1,000 employees and a net profit of 127 (NOK million) as of 2013, they are reporting record numbers of production. Their 2013 annual report states that “DNO International ASA (DNO) reported record levels of operating revenue and operating cash flow in 2013, driven by strong production performance at the Company’s assets in the Kurdistan region of Iraq, Oman and Yemen.” While DNO continues to announce record growth and profits, especially relying on entitlements to gas and oil blocks in the Kurdistan region of Iraq, their operations in Yemen have now ceased and they are refusing to pay their employees.

According to the very same 2013 report, “The security situation in Yemen remained
fragile and unpredictable during 2013. A deteriorating situation may impact our ability to sustain operations in the country in the long term.” DNO had been deliberating on whether or not to pull out of Yemen for quite some time, as the potential security risks in Yemen were (and still are) ever increasing, no doubt exacerbated by the Saudi-led siege on Yemen which has impeded every facet of life. This provided the primary legal argument by which DNO planned to cease its operations, while growing ties and increasing entitlements to gas and oil blocks in the Kurdistan region of Iraq have allowed DNO to slowly phase out their Yemen operations, which at 2013 represented around 9% of the company’s gross profits.

A host of international oil companies have also operated in Yemen including Hunt, Total, Nexen, Oxy, OMV, Calvalley, Dove, and Sinopec. While some have remained in Yemen during the crisis, most of them have left due to “expiration of contract” or “the crisis in Yemen” in a legal manner and have initiated proper handover to the Ministry of Oil and Minerals of Yemen. However, DNO has deflected all legal obligations to their workers and to the Yemeni authorities.

The DNO Yemen Union

In 2006, DNO’s local staff in Yemen had attempted to establish a labor union. However, DNO fought hard for 8 years to try and abort the union with the eventual creation of the DNO Yemen Union in 2014. The union was established as an affiliate of the General Union of Petroleum, Mineral, and Chemical workers in Yemen under the IndustriALL Global Union to give worker’s leverage in advocating against what they described as “imperious attitude and behavior against staff.” The initial demands of the union were wage and salary reviews. DNO had at one point paid the lowest wages in Yemen for an oil company as compared to other oil companies operating in Yemen. Following a string of attempts to intimidate union leaders, DNO issued a letter to the union threatening the dismissal of all striking workers, banning salaries and food of all workers, which is a direct violation of Yemeni labor law.

Following this strike that lasted from November 29th to December 8th of 2014, the Ministry of Oil and Minerals interfered in the conflict. DNO conceded and promised to implement the strike demands at the beginning of 2015. Once the strike was lifted, it was back to business as usual for DNO as they terminated their operations on April 27, 2015 and fired over 200 employees via email or text message. Along with this, DNO paid no redundancy money or gave any compensation to its staff and left them jobless and broke in a nation with no viable social safety net that stands on the verge of total collapse. The security situation has been DNO’s primary legal basis for closing operations in Yemen so abruptly, yet they have failed to comply with Production Sharing Agreements and Labor Law procedures. The law in Yemen states that if a company is granted a license to operate an oil field, it must pay wages and social obligations for as long it has the license. DNO deliberately used the war and political situation in Yemen to avoid paying its workers.

Not soon after DNO’s departure, the DNO Yemen Union had appointed an attorney and sued DNO in the Yemeni labor court. During a grueling 6 month long court battle, the court ruled in favor of the workers. It did not take long for DNO to claim that the judgement committee was unreliable; DNO appealed the decision of the labor court and lost once again. This time the court of appeals had ruled to seize DNO’s property and assets.

The court ruled that:

  1. There will be a continuity of contracts
  2. The company must pay 75% of salaries from June 2015, including the 2015 Ramadhan bonus. Medical fees are excluded.
  3. The company must pay 50,000 Yemeni Riyals (US $200) per employee in legal fees.    DNO has around 260 workers in Yemen and a license to operate six oilfields. The company has extracted over 100 million barrels of oil since it began operation in Yemen in 2000. Norwegian unions, international unions, and the DNO Yemen Union launched a campaign through LabourStart on January 11th, 2017 to pressure DNO to follow the ruling of the court. To this day DNO has not made good on its commitments. AMN

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