Tuesday, June 7, 2011

The State of Labor in Iran’s Oil and Petrochemical Industry

Translator’s note: On May 24, a massive explosion and fire at a newly inaugurated oil refinery in Abadan led to the deaths and injuries of an unknown number of workers. The explosion, caused by technical problems, occurred during a facility inauguration ceremony that had prompted President Mahmoud Ahmadinejad to boast of Iran's growing capacity to refine oil. According to Hamid Reza Katouzian, head of the Energy Commission of the Majles, Iran's parliament, "experts had forewarned that the Abadan refinery was not ready to be inaugurated."
The explosion underscored once again the lack of safe working conditions in Iran's oil and petrochemical industry. In addition, recent labor strikes have challenged the industry's reliance on temporary contracts for its labor force. In March, 1,800 contract workers at the Tabriz Petrochemical Complex demanded that they be hired directly in order to receive the benefits and job security provisions to which permanent employees are entitled. In April, 1,500 striking workers at the Imam Khomeini Port Petrochemical Complex located in Khuzestan near the Gulf made similar demands.
Most recently, factional conflicts within the Majles over control of the income generated from oil production have led to leadership changes in the Oil Ministry. First, Ahmadinejad dismissed the oil minister and appointed himself "caretaker for the Oil Ministry." When parliament deputies and the Guardian Council called this act illegal, he appointed one of his allies, Mohammad Ali Abadi, as the new temporary "caretaker." Below are excerpts from a recent interview with Iranian economist Mohammad Maljoo in which he addresses the state of labor in the oil industry. It was published in the May 2011 issue of the Tehran-based journal Mehrnameh. This translation was originally published by Tehran Bureau on June 5, 2011. http://to.pbs.org/iqcYcl

Author: Mohmmad Maljoo
Source: http://www.akhbar-rooz.com/article.jsp?essayId=37715
Date: May 2011
Translated by Frieda Afary

Mehrnameh: In the years after the Iran-Iraq War, how did the method used for resolving the problem of [the low rate of] accumulation of capital, affect the abilities of the labor force?

Maljoo: In order to be precise, I will focus solely on the labor force in the oil industry… In the period after the Iran-Iraq War, and under the administrations known as “Reconstruction and Reform” [those, respectively, of Akbar Hashemi Rafsanjani and Mohammad Khatami], one of the most important components of the effort to increase the rate of accumulation of capital was the cheapening of labor power. Within the oil industry, the realization of this goal was made possible in four phases.

The first phase consisted of the “clericalization” process, a plan to raise the wages and benefits of workers to the level of office workers. Hence, promotions for oil industry workers were facilitated under the presidency of Hashemi Rafsanjani. Workers were allowed to be promoted to office worker status without changing their job description. At the same time, a variety of cash and non-cash benefits for workers were cut. These benefits were kept for office workers. The majority of workers filled out the new employment forms and were turned into office workers while maintaining their old job description.

The workers who were aware and did not succumb to this arrangement were legally entitled to protest in face of the financial difficulties which had gripped them. However, they could not do so because they were now a minority. These workers either had to voluntarily resign in exchange for receiving their severance pay, or join the ranks of the office workers. The majority of them opted for the severance pay. Ultimately, the fate of the majority of the workers who had become office workers was the same [as those who had been terminated with severance pay]. However, this happened through a different route.

As a rule, office workers in the oil industry are in some ways considered managers. Unlike workers who follow the regulations of the Labor Ministry, office workers follow the regulations of the Oil Ministry. Hence they do not have the right to strike or the right to form labor unions. The “clericalization” project of the oil industry in fact legally deprived the workers who had now become office workers from any right to protest or complain to the Labor Ministry.

Although the workers who had now become office workers were many, they had no right to protest when their clerk classification benefits were gradually eliminated over the course of two years and when they faced financial pressures imposed by their managers. This sector of the labor force only had two choices: Early retirement or termination with severance pay.

The second phase [of the plan to increase the rate of accumulation of capital] was put on the agenda concomitant with the clericalization process. This phase consisted of throwing an avalanche of outsourcing projects on the oil industry. By creating contract- work agreements, the National Iranian Oil Company (NIOC) avoided its responsibility for defending the rights of office workers.

The method was as follows: NIOC would ask for bids from contractors. The contractor whose bid was accepted would sign a contract with NIOC and receive funds from it. NIOC would then introduce its personnel to the contractor. Ultimately, all services such as payment of wages, insurance, benefits, etc. were put in the hands of the contractor. NIOC had rid itself of its responsibility toward workers.

However, during the years after the Iran-Iraq War, the level of production in the oil and gas industry was more or less increasing, and required hiring a new cadre of skilled workers. The third phase addressed this need. The mushrooming of contractors which provided human resources was in fact responding to this need. However, it is interesting to note that the bulk of the labor force hired by these contractors, consisted of the personnel who had retired early or had been terminated with severance pay.

The distinguishing feature of the type of employment offered by contractors was the temporary character of the employment contracts. Whether the agreement was a contract which employed workers for a little less than one year, or a temporary agreement which employed workers for one to six months, the common feature of all these employment agreements was that they deprived workers of job protection.

The fourth phase consisted of preparing the legal basis for such contracts, a legal basis which the 1990 Labor Code had provided years ago. According to the second amendment of Article Seven of the Labor Code, “If the nature of the work is continuous, and if no length of time is stated in the contract, the contract shall be considered permanent.” Another way of stating the above is that if the nature of the work is continuous, the employer can determine a set amount of time in his/her contract with workers, and employ them on a temporary basis in types of work that are continuous. The Labor Code not only legitimized temporary contracts, but also legally facilitated the expulsion of workers who had temporary contracts.

It is difficult to estimate the absolute and relative size of the temporary labor force in the oil industry in the years after the Iran-Iraq War. Depending on the industry sector and the geographical location, the size fluctuates between 60 and 90 percent of the workforce.

Please note that the plan to turn the labor force into a temporary labor force, did not only lead to a lowering of all wages. It also gravely affected the other components which determine the conditions of labor and the subsistence level of the labor force. These components include housing, the employment process, the length of the working day, the annual vacation time, job security, workplace safety, the extent to which benefits authorized by the Labor Code were applied or excluded.

In the years after the Iran-Iraq war, the mushrooming of contractors which provided personnel, the extended outsourcing as well as the massive increase in temporary workers, and hence the cheapening of the labor force, have led to a decline in job security and a decline in the individual and collective bargaining power of the labor force. Hiring temporary contract workers allows employers to circumvent labor laws and pay workers the lowest salaries. The temporary character of labor and the lack of job security, decreases solidarity among workers, especially given the continuously high unemployment rate. . .

This translation was originally published by Tehran Bureau on June 5, 2011

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Thoughts on the Plan for Targeted Monetary Subsidies

Translator’s note: Last March, The Tehran-based Center for the Defense of Labor Rights held a roundtable at which various left-wing Iranian economists and labor activists commented on the Plan for Targeted Monetary Subsidies. Below are excerpts from comments made by Mohsen Hakimi, labor activist and translator of Georg Lukacs’s Young Hegel.

Author: Mohsen Hakimi
Source: http://www.akhbar-rooz.com/article.jsp?essayId=36814
Date: January 28, 2011
Translated by Frieda Afary

. . . Attempting to explain the introduction or elimination of subsidies on the basis of the needs of global organizations such as the World Bank, the International Monetary Fund and the World Trade Organization which represent capital, still does not display an anti-capitalist approach. In my opinion, the necessity for introducing or eliminating subsidies in Iran is far more connected to the capital relation inside Iran than the needs of the above mentioned organizations.

The philosophy underlying the existence of the subsidies is to keep the labor force cheap for the extraction of ever more profit. The government distributes part of the wealth which workers have created (gross domestic product) among the producers in order for them to produce workers’ means of consumption at a lower cost of production. In this way, workers will reproduce their labor power by subsisting on cheaper commodities, and the price of labor power will remain low.

The impression might be created that the elimination of the subsidies (which is the main goal of the Plan for Targeted Monetary Subsidies) will lead to a rise in the price of labor power. . . However what distinguishes the elimination of subsidies at this juncture is an increase in the prices of workers’ means of consumption without an increase in the price of labor. For example, the price of petroleum which was sold at 10 cents per liter was raised to 40 cents per liter and then 70 cents per liter.

The prices of staple commodities have risen without an increase in wages. It is obvious that the meager sums paid as cash subsidies (which may not continue in the future) will not make up for the increase in the prices of commodities in any way. These cash subsidies cannot be considered an increase in wages. Therefore, the essence of the Plan for Targeted Monetary Subsidies is nothing but an intensification of the exploitation of the working class for the purpose of preventing the collapse of Iran’s crisis-ridden capitalist society. . .

One of the manifestations of crisis in capitalism is the problem of budget deficits. I will explain this problem on the basis of the Law of the Tendential Fall in the Rate of Profit. I consider the government a capitalist, that is society’s largest capitalist. If we accept this assumption, the tendential fall in the rate of profit for the government means that on the one hand the government will invest; on the other hand, the profit generated by this investment will not be enough to make the accumulation of capital possible. . .

One of the reasons for eliminating the subsidies in Iran was to make up for the budget deficit by intensifying the exploitation of labor. In this way, the government’s income will be increased. If you remember, Ahmadinejad first announced that the government needs to generate 40 billion dollars in income from the Plan for Targeted Monetary Subsidies. The parliament halved this amount and reduced it to 20 billion dollars. . . The parliament was telling the government to increase prices at a lower speed.

Regardless of the conflict between the government and the parliament on this issue, both sides had no doubt that the final aim of this plan was to increase the government’s income. What does this mean? It means that a worker who received let’s say 80 dollars in subsidies through the subsidies on fuel and other staple commodities such as bread, cooking oil and rice, now receives half this amount. The $80 dollars will be reduced to $40. The other $40 will go to the government’s coffers. In the absence of a struggle for increased wages, this reality signifies nothing but increased pressure on the working class.

As far as the history of this plan is concerned, I think it is correct to argue that the administration of Hashemi Rafsanjani and Khatami raised this plan before Ahmadinejad’s administration supported it...

In conclusion, I would like to raise another issue. Sometimes our critique of the neo-liberal discussions of structural adjustments, may create the false impression that we are defending a statist economy in our opposition to the private sector. I do not believe that a statist economy is in the interest of the working class or that we should defend state capitalism in opposition to neo-liberal privatization.

In societies like ours where the government is itself the biggest capitalist, it is obvious that the government can never do anything in the interest of the workers. In societies which once advocated the welfare state, the government now steals from the workers to give to the capitalists, in order to save capitalism from crisis. Look at the United States, the birthplace of neo-liberalism and of economists such as Milton Friedman. During the 2008 crisis, we saw how the government stuffed the mouths of the banks and private corporations with billions of dollars to prevent them from collapsing and to help them recover from the crisis. The fact that a faction of ungrateful capitalists accuses the Obama administration of being “socialist”, does not prevent this administration from selflessly paying to preserve capitalism in the U.S.

January 28, 2011

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