Union opposes merger of Hellenic Petroleum and Petrola
In May 2003, as part of the demationalisation of Hellenic Petroleum, an agreement was signed to merge it with the Greek private sector oil company, Petrola. The POEPDHV petrochemical workers' trade union opposes the merger on the grounds that it is economically infeasible and furthermore claims that the merger procedure ignored commitments to social dialogue. It called a strike at Hellenic Petroleum in July.
Following negotiations, an agreement was reached on 30 May 2003 to merge Petrola SA Paneuropean Oil and Industrial Holding SA, part of the Latsis group of companies (one of Greece largest private industrial groups), with Hellenic Petroleum (ELPE), the public petrochemicals corporation. The Greek state agreed to sell 16.65% of ELPE for a total price of around EUR 326 million, corresponding to a total of around 43,500,000 shares at EUR 7.50 per share. The agreement was part of the privatisation process of ELPE, in line with the provisions of Laws 2000/1991 and 3049/2002 (GR0108118N), and the merger is expected to be concluded as soon as possible in accordance with the procedure prescribed by law. The financial consultants for the Greek state in this privatisation are the National Bank of Greece and UBS Warburg.
Hellenic Petroleum SA, whose main shareholder is the Greek state, is Greece’s largest and most profitable industrial enterprise, with considerable activity and investment, rapid growth inside and outside the country and a prominent position in the energy sector throughout south-eastern Europe. It has three refineries and storage areas, petrochemical plants, a network of 1,500 outlets and fuel stations, and a natural gas network.
Petrola is one of the three other companies engaged in oil refining, storage and distribution in Greece, with a workforce of 550. It has been operating for over three decades and has 25% of domestic refining capacity. It sells to the Greek domestic market, the market for ship and aircraft fuels, other Greek refineries and the international market.
According to a joint press release, the Ministry of Economy and Finance and the Ministry of Development view the transaction as particularly satisfactory. They feel that the unification of the two companies creates new prospects for refining and distribution in south-eastern Europe, as well as for research and exploitation of hydrocarbons. In their view, it also allows for a more favourable entry into the electricity market and better access to capital markets. The two ministries also believe that this merger will bring about important improvements to the supplies of crude oil and petroleum products, refinery operation, investment programmes and financial robustness.
ELPE workers appear to have reached the opposite conclusions. The Panhellenic Federation of Workers in Petroleum Products Refineries and the Chemical Industry (POEPDHV) (GR0003166F) has expressed its opposition in a series of statements, in which it denounces both the procedure and the terms of ELPE's denationalisation. This specific merger is considered economically inadvisable and detrimental to both the national economy and the workers in the industry. In the union's opinion, the public petroleum sector is capable of operating competitively in a free-market framework, developing according to private economy criteria, playing a regulatory role in the fuel market, protecting consumers and strengthening the national economy. The union also denounces the procedure leading up to the agreement, because it claims that it was not carried out in an open manner and workers’ rights were not respected as provided for by law - as a result, workers were prevented from participating in the procedure. Finally, the union feels that this agreement undermines jobs, workers’ rights and the achievements of the workforce, to which ELPE owes its present market position to a large extent. For these reasons, a 24-hour token strike was called for 4 July 2003. Alongside this, the social partners were invited to a public dialogue beginning on 1 July at the Mediation and Arbitration Service (OMED).
Attempts to privatise ELPE were also made in 1992, but strike action by workers, supported by the then opposition Pan-Hellenic Socialist Movement (Panelinio Socialistiko Kinima, PASOK) - now in government - prevented them from going forward. Similar reactions and industrial action took place in 2001 (GR0108118N). Finally, it should be noted that the Petrola workers have expressed strong reservations: they are mainly concerned about whether and to what extent their jobs will be secure after the merger.