Government intervenes to halt offshore oil strike

In late June 2004, the Norwegian government imposed compulsory arbitration to end a week-long industrial dispute in the offshore oil sector, faced with the threat of a total halt in oil production on the Norwegian continental shelf.

Following the breakdown of negotiations and mediation on 18 June 2004, over 200 members of the Federation of Oil Workers' Trade Unions (Oljearbeidernes Fellessammenslutning, OFS) and the Norwegian Organisation for Managers and Supervisors (Lederne) on four offshore oil platforms went out on strike, in response to the refusal of the Norwegian Oil Industry Association (Oljeindustrien Landsforning, OLF) to accept their main demands in negotiations over a new collective agreement.

At the same time, however, the other major oil sector trade union, the Norwegian Oil and Petrochemical Workers’ Union (Norsk Olje og Petrokjemisk Fagforbund, NOPEF) reached an agreement following parallel negotiations with OLF. NOPEF and OFS organise the same type of employees and are very much competitors in the offshore sector. The main points of disagreement between OFS/Lederne and OLF were over the unions’ demands for the incorporation of occupational pension rights into the collective agreements and for tighter restrictions on the use temporary workers. As illustrated by earlier negotiations in other parts of the economy, the pensions issue was expected to be a difficult issue in the 2004 bargaining round, but this seemed to have been resolved when the government intervened in this area during the manufacturing industry negotiations in the spring (NO0404101N). OLF refused to enter into agreements with the other two unions departing significantly from that it had concluded with NOPEF.

Following a decision by OFS and Lederne to escalate the strike, the employers issued a lock-out warning. The effect would have been completely to halt Norway’s daily production of almost 3 million barrels of oil, and this was seen to be sufficient grounds for the government to intervene. On 25 June, it thus imposed compulsory arbitration to end the seven-day industrial dispute in the offshore oil sector. The government based its decision on the serious social implications of a complete halt in production and its effects on the international oil markets.

This is not the first time that strike action by OFS has been stopped by compulsory arbitration. The leader of the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS), to which OFS is affiliated (NO9703106N), criticised the government's action, pointing out that this is the 11th time the national authorities have employed this highly controversial legal mechanism in a dispute on the Norwegian continental shelf. Norway’s compulsory arbitration record has frequently been subject to criticism (NO9704109N and NO9812104F) from International Labour Organisation bodies as being contrary to ILO Conventions Conventions No. 87 (freedom of association and protection of the right to organise) and No. 98 (right to organise and collective bargaining), and although ratified these Conventions have never been fully accepted by Norway (NO0210104F). Compulsory arbitration has in the past been used frequently to halt industrial disputes in the offshore oil sector and in the health and social sector (NO0203103N), but in recent years the Norwegian authorities have exercised more caution with regard to intervention in industrial disputes (NO0210104F).

The offshore dispute will now be settled by the National Wage Board (Rikslønnsnemdna). The Board has traditionally been reluctant to see the introduction of new elements into collective agreements through its decisions, and is unlikely to accept differential treatment of parallel collective agreements (ie that involving NOPEF and that involving OFS and Lederne). Thus the Board's ruling is unlikely to be favourable to OFS and Lederne.