Venezuelan Oil Workers Reach Collective Contract

The United Federation of Venezuelan Oil Workers (FUTPV), and Venezuela’s state-owned oil company, PDVSA have finally reached agreement for a collective contract after factional disputes over union elections delayed negotiations for almost a year.
FUTPV representative Eudis Girot (El Tiempo)

Caracas, January 20th, 2009 ( – The United Federation of Venezuelan Oil Workers (FUTPV), and Venezuela’s state-owned oil company, PDVSA have finally reached agreement for a collective contract after factional disputes over union elections delayed negotiations for almost a year.

Under the terms of the new agreement oil workers will receive a two-stage 80 percent daily salary increase of 35 bolivars, with an immediate raise of 25 bolivars per day, and a further increase of 10 bolivars to kick in from January 1, 2011. This will bring oil worker’s salaries up to 2370 bolivars per month.

In addition to the base salary all oil workers receive an electronic food card, which will increase in value  from 1300 bolivars to 1700 bolivars per month, as well as 85 percent coverage of all healthcare related costs, special assistance in home purchasing and preferential access to public housing.

A clause in the agreement also commits PDVSA to construct 14 000 new houses for oil workers and other residents in the operational areas of the oil company who don’t own houses.

Under the “Bolivarian revolution”, as the process of social change in Venezuela led by President Hugo Chavez is known, oil workers are encouraged to do community work for which they will receive an additional payment of 1000 bolivars.

Oil workers will also receive increases in seniority related bonuses. FUTPV representative Eudis Girot said under the new contract workers with seniority of 1 to 3 years will receive an increase of 3000 bolivars in annual wage every two years, workers from 4 to 7 years will receive 4000 bolivars, from 8 to 11 years, 5000 bolivars, from 12 to 16 years, 6000 bolivars, from 17 to 20 years 7000, while workers with 30 years seniority or more will receive an increase of 10 000 bolivars.

The contract will be retroactive from October 1, 2009 and will be valid until October 1, 2011. Workers will also receive a compensation payment of 8000 bolivars for the delay since their previous contract expired on January 21 last year.

Overall, Girot said oil workers are 112 percent better off under the new contract.

Shortly after the agreement the government announced a dual devaluation of the Bolivar currency, of 17 percent (2.6 bolivars per dollar) for priority imports and 100 percent (4.3 bolivars per dollar) for “non-essential” imports.

Following the devaluation, negotiations were reopened and PDVSA management agreed on increases to the electronic food card as well as pensions to 1700 a month to compensate workers, but rejected further increases to salaries and compensation payments for the delay of the contract.

The government argues that prices should not automatically increase as the majority of importers previously imported at the unofficial or parallel rate averaging between 5-6 bolivars per dollar and will now have greater access to dollars at the cheaper 4.3 rate.

The government has also implemented a range of measures to combat speculation, including fines, temporary closures and nationalisations of businesses that speculate, and is expanding access to subsidised goods in an attempt to put downward pressure on inflation.

The agreement was negotiated by the pro-government majority faction of the FUTPV, the Socialist Worker’s Vanguard (VOS), and the minority Platform 9 faction, who blocked together to exclude the United Revolutionary Autonomous Class Current (C-CURA) faction, after PDVSA management reiterated its position, that it would not negotiate a collective contract with “enemies of the revolution.”

VOS, which won 54.27 percent of the vote in the union elections, holds 6 positions on the FUTPV executive committee, C-CURA, which focused its campaign on anti-government rhetoric and economic demands, won 27 percent granting it 3 positions on the executive and Platform 9 won 9.75 percent and one position on the executive.

C-CURA employs a militant far-left discourse but has formed a national union coalition called “Labor Solidarity” with right-wing opposition sectors aligned with the largely discredited Confederation of Venezuelan Workers (CTV). The CTV backed the 2002 military coup against the democratically elected Chavez government and a December 2002 – January 2003 bosses lockout of the oil industry.

C-CURA leader Jose Bodas argued that due to inflation (of 25.1 percent last year), the devaluation and the delay in negotiations, the new contract was a “fraud” and said that workers should have got a pay rise of 193 percent instead.

The new contract has a total value of 17 billion bolivars and covers 67 000 permanent workers, an increase from the 42 000 workers covered in the previous agreement.

The union also negotiated for a monthly increase of 700 bolivars for contract workers and a further monthly increase of 300 bolivars from January 1, 2011.

Last Monday 520 contract workers in Monagas state went on strike, paralyzing thirteen drilling rigs in protest at the “humiliations” by companies such as the Chinese-owned CNPC and US-owned companies Petrex, HP, Slumberger and Weatherford, who operate PDVSA concessions in Venezuela.

Girot said the workers decided to end their strike after PDVSA agreed to appoint a commission to monitor the compliance of these companies with the provisions for contract workers under the collective agreement.

PDVSA management said it was studying the incorporation of the contract workers into permanent positions.