Variant issue 28    back to issue list

The Fictitious Commodity
Andy Cumbers

“The question is not how men and women can be fitted to the needs of the system – but how the system can be fitted to the needs of men and women.”1
When Tony Benn, Minister for Industry, turned the valve to allow the first oil from the North Sea to come ashore on the 18th June 1975, few would have predicted the shape the industry would take over the next three decades. In economic terms, it was obvious, even at this early stage, that the oil revenues would provide a much needed boost to the UK’s broader economic fortunes and its flagging Balance of Payments position. In the political climate of the mid 1970s – with a strong and growing trade union movement – optimism abounded, that oil might provide the impetus for broader social change. Certainly, for Benn and many on the left of the labour movement, even the young Gordon Brown – who was then making his way as an emerging socialist politician – there was much debate about the prospects for economic democracy and public ownership. One of the key elements of this transformation was the establishment on a nationalised oil company, the British National Oil Corporation, to ensure that the benefits of oil were shared with workers and communities, rather than lining the pockets of the oil companies and their financial backers in the City.
In the fledgling North Sea oil industry itself, working conditions presented a more sobering reality as Tony Benn himself noted at the time:
Wednesday 16 July 1975
“Took the HS-125 to Aberdeen […] We were then flown in a Bristow Helicopter down to the Graythorpe I platform. […] The little community on the platform has its own satellite communication network, a heliport and all the necessary equipment [...] for the pumping of oil which goes 120 miles to Cruden Bay and then right down to Grangemouth. […] In the middle of winter when the conditions are exceptionally rough, it must be absolute hell to work there.
At the Station Hotel in Aberdeen I met the inter-union Oil Committee and the North Sea Action Committee and they raised a number of important points, mainly about unionisation on the rigs. They cannot get union representatives on to the rigs and they are very anxious about safety. They say if they can’t make progress, they are determined to black the rigs.”2
Four years later, the election of Margaret Thatcher’s Conservative Government was to set the scene for a very different kind of social transformation than that envisaged by Benn and the Left. The next two decades were to bring about a shift in the balance of power towards big business whilst at the same time leading to the emasculation of the trade union movement. Not only was there a mass privatisation of publicly owned institutions and assets – including the selling off of BNOC in 1983 – but there was also an assault on union power. The big set-piece battle was the 1984-5 miners’ strike, but this was accompanied by a series of trade union laws which seriously constrained the rights of workers and their unions to organise. As one business commentator put it, somewhat euphemistically at the time, the Thatcher counter-revolution was first and foremost about restoring “the right of management to manage”.

The harsh realities of working life in the North Sea
In the wake of the election of the Conservatives in 1979, the issue of workers’ rights and union representation in the North Sea disappeared from the agenda. As is now well known, the result was an employment environment driven by the interests of multinational corporations, which coincided with the desire of the Government to pump oil out of the seas as fast as possible to prop up the ailing public finances. The broader context of the time was rising unemployment, the haemorrhaging of British industry and a deeply unpopular government. Oil revenues brought the Tories much needed breathing space and, following their re-election in 1983, on the back of the patriotic fervour of the Falklands campaign, they were to pay for the cuts in higher rate taxes (from 63p in the pound to 40p) that ensured two further triumphs at the polls in 1987 and 1992.
Meanwhile in the North Sea, the absence of basic workers’ rights and union representation was to have savage consequences in an appalling health and safety regime – culminating in the Piper Alpha disaster and the loss of 167 lives in 1988, when a fire broke out on a production platform operated by the Occidental oil company. Whilst the safety regime has improved in the wake of Piper Alpha and the subsequent Cullen Inquiry, there continue to be concerns that workers are pressured to cut corners and under-report dangerous incidents.3
Alongside poor safety conditions (reflected in a recent confidential Health and Safety Executive report)4 employment contracts themselves have remained largely unregulated, meaning that workers are prone to casualisation and fluctuating wages and conditions. A lack of basic employment rights means that many workers have little in the way of pension and holiday entitlement or severance pay. Perhaps the most pernicious management tactic has been the use of the NRB (‘Not Required Back’) practice, whereby it is widely held within the industry that ‘troublemakers’, particularly those suspected of being active unionists have been identified and blacklisted by firms. The workforce remains highly fragmented with the oil companies outsourcing much of the work to first and second tier contractors. Whilst the lucky few – working for the oil companies as permanent staff – enjoy a relatively privileged existence, the majority of the offshore workforce are employed as contractors, subject to the whim of oil market fluctuations. For some, this has meant a drop in wages when oil prices fall; as recently as the period 2001-3 wages for associate professional workers fell from £13.08 per hour to £11.40.5
The divide and rule tactics of the employers mean that workers can be paid very different rates for the same job. This was illustrated through two agreements signed by the RMT/TGWU unions, representing Grade 4 catering workers, with the Catering Offshore Trades Association COTA in 1998. Although the Agreements were with the same six employers, the workers on mobile drilling rigs received around £3,000 less in salary than their counterparts on production platforms. Whilst the latter also received a pension scheme with a 5% contribution from the employer, those on the mobile rigs received nothing.

The rogue traders of the labour movement
Offshore workers have become used to the callous indifference of oil companies and their suppliers. Two recent variants of the old “divide and rule” principle have included a growing tendency for contractors to register their workforce in “ghost” companies in offshore tax havens, as far away as Singapore, to avoid paying National Insurance contributions6 and the increased use of low wage workers from the Third World to undermine the conditions of the existing workforce. Such tactics can fan the flames of racism and xenophobia, alongside perpetuating divisions among workers. Disgracefully, some union activists who have protested about the employment of foreign workers in such conditions have been accused by employers of racism, when the goal has been to secure workers the same rate for the job, independent of the colour of your skin or nationality.
What may come as a shock to some has been the connivance of the trade union establishment in the oil companies’ nefarious practices. The election of the Labour Government in 1997 was heralded as a new dawn for trade unions and their workers, with promise of a new Employment Relations Act to provide basic rights long denied under the Tories. To the casual observer, two collective bargaining agreements between the AEEU (now Amicus), GMB and the offshore employers in 2000 appeared to confirm the mood shift in industrial relations. However, more seasoned campaigners rightly viewed these agreements with suspicion. Wasn’t one of these unions – the AEEU – the self same organisation that was prepared to “undercut” other unions to sign “sweetheart” deals, guaranteeing no-strike agreements, with Japanese inward investing firms during the 1980s? Some of the phrases in the agreements sounded eerily familiar. For example, “union acceptance of management’s right to manage”, whilst others, such as the guarantee of a “Total Non-disruption Factor”, represented a new spin on an old theme. Another older tendency at work was the total absence of any workforce consultation before the signing of these “voluntary” agreements.
Whilst the General Secretary of the TUC at the time, John Monks, lauded these new spirit of partnership abroad in the North Sea oil industry, as far as the workers themselves were concerned these Agreements were not fit for purpose. The no-strike clause and the lack of freedom to be represented by a union of your choice both infringed basic UN recognised human rights.7
The desire of union professionals for power and influence with employers and the government has won out over what should be the primary task of trade unions: providing independent representation for workers. Such machinations prompt the question: when does a trade union shift from representing workers to managing industrial relations?

The nirvana of the “Norwegian model”
For many in the UK, Norway has often been looked to as a more humane and decent model of oil development. They do things differently there. They have strong unions and good employment conditions. Wages are high and the ‘two weeks on - two weeks off’ system, of British rig life contrasts poorly with the recent Norwegian deal of ‘two weeks on - four weeks off’. Norway has pursued a more sensible and balanced approach to oil development where corporate interests have been countered by a social dimension to oil. A nationalised oil company, Statoil, and a social fund to use oil revenues for welfare and infrastructure spending have been acclaimed by many on the British and Scottish left as the model to emulate.
Norway has also had a better health and safety record than the UK with more trade union representation in safety procedures from the outset. However, Norway also had its own Piper Alpha, when 123 oil workers were killed after a floating hotel collapsed off the coast of Stavanger in March 1980. Nevertheless, it prides itself as the “gold standard” of the international oil industry and has developed considerable kudos for its social and environmental standards. Statoil, for example, was one of the first multinationals to sign a worldwide collective agreement with a trade union.
The Norwegian model did not arise because of some natural predisposition of the country towards humane and egalitarian development, but was shaped by one of the world’s strongest and most militant labour movements in the period before the Second World War. In the period 1927-37, the International Labor Office in Geneva noted that the three Scandinavian democracies had the highest number of days lost to strike activity in the industrialised world.8 Such labour strength underpinned the more human capitalism that emerged in Norway under North Sea oil. But, the oil industry is still fundamentally the same creature as it is in the UK. The bottom line is profit and, in the context of an increasingly competitive global environment, even left-leaning national governments and strong trade unions can be cowed by the threat of multinationals to invest elsewhere if labour costs are not kept down. In Norway, the desire to protect the reputation of its “social model” has led to some more insidious abuses of workers rights as two recent cases have shown.

The unsung heroes of North Sea oil
Few in the UK will have heard the name Rolf Engebretsen, but, along with a friend, his private investigation of a government cover-up in the Norwegian sector has been one of the most remarkable stories in North Sea oil history. Rolf, now 53, is a “retired” diver. Retired in the sense that he was forced out of the industry by brain damage and a disorder of the nervous system which meant that he failed his medical in 1992. Because of severe memory loss and the inability to concentrate, Rolf was unable to find another job. Even worse, Rolf’s condition had not been officially diagnosed at the time so he did not qualify for any insurance or compensation from his employer. Rolf was not alone. Almost no diver in the Norwegian sector is fit enough to carry on working beyond their mid-forties. More seriously, 23 divers have committed suicide over the last decade whilst the death toll from accidents across the UK and Norwegian sectors is estimated at over 60.
Rolf and the association he formed to fight his campaign, the North Sea Divers Alliance, have shown that the state, oil companies and the divers’ trade union at the time, NOPEF, colluded in the 1980s in the setting up of a diving standards regime that was fundamentally unsafe. Indeed, it was based upon US military standards during warfare rather than under normal commercial circumstances. Collapsing oil prices and the imperative to explore in ever greater depths in the North Sea produced an unholy coalition of the willing. In this case, those willing to sacrifice a few divers to keep the oil flowing and revenues coming in to the Norwegian state coffers. Divers were encouraged to go down to depths of over 300 metres for up to 10 hours – when respected medical opinion is that depths of 180m alone causes High Pressure Nervous Syndrome (HPNS) and fundamental long term health problems.9 Subsequently, the Government has been forced to make an official apology and admit liability; legal proceedings have now been started to agree compensation for divers and their families.
If Rolf and the divers’ story is a tragic one, that of another victim of the “Norwegian model” is equally heart-rending and horrifying in revealing the depths that state and corporate complicity can reach. In 1976, Ingunn Vier Gabrielsen was a twenty-one year old mother of two, when she heard that her husband, Axel, had died with six others in an accident aboard a life boat after the drilling rig they had been working on had itself capsized. For over twenty years, the incident was hushed up by Odfjell Drilling (the Norwegian company involved) and the state authorities. Ingunn and other relatives were told the accident was due to the negligence of the skipper of the vessel, so there was no possibility of a compensation claim. Attempts to meet with other relatives were frustrated by the company who refused to give out names on the basis that the bereaved did not wish to be contacted.
Left with no support and a wall of secrecy from officialdom, Ingunn spent the next twenty- five years bringing up two children on her own with little financial support. Traumatised by the experience, the accident was never talked about in the household. Until, that is, a chance article in a Norwegian men’s magazine about one of the survivors of the accident. One of Ingunn’s daughters saw the article and asked her mother for the first time, what had really happened to her father? The family began to investigate and were able to contact other families by adverts and the use of the internet. The family of the captain of the boat had also never discussed the incident. They had been told their father’s negligence was responsible for the deaths of six people. As the families began to gather evidence of what really happened, it became clear that nothing could have been further from the truth.
When the Odfjell rig capsized off the Norwegian coast – less than one kilometre from the shore – the wintry conditions made it difficult for the lifeboat to navigate, resulting in it being overturned. The subsequent investigation revealed that the navigation equipment on board the boat was faulty; the battery powering the navigation system hadn’t worked. Worse, an inspection weeks before had revealed this to the company but no replacement was ordered. The six men who lost their lives – including Axel – were sitting on top of the lifeboat to help the captain steer through the dangerous conditions. Not only was the lifeboat faulty but the capsizing of the rig itself could have been avoided. Further investigation revealed that, given the appalling weather conditions, the captain of the drilling rig had earlier asked for a pilot to be flown out to the rig to help guide it in to port. The company refused on the grounds of cost; later revealed at NOK 10,000 (about £1,000).
Not only did the company manage to avoid all responsibility at the time – the Government was asked to re-open the case in 2003 – but, in a macabre post-script to the story, they actually made money from the accident twice over. In the first instance they were able to make an insurance claim running into millions of dollars from the salvage of the vessel. Then, in a bizare twist, the damaged rig was sold to the offshore construction firm, Aker Verdal, to be converted into a floating production vessel.

The “fictitious” commodity and the “double movement”
The Hungarian economist, Karl Polanyi, once referred to labour as the “fictitious” commodity. Free market economists like to think of labour as a commodity like any other, to be sold on the market at whatever is the going price. When Margaret Thatcher famously proclaimed that there was no such thing as society, her indoctrination in free market thinking was laid bare. Such a “logic” has long been the justification for companies to exploit and abuse workers and their families in pursuit of profit maximisation.
Polanyi, in his most influential work, The Great Transformation10, reminds us of the basic humanity of labour; the dignity, respect and rights that all workers are entitled to, which goes beyond a market logic. Workers are also part of families and communities. If the economic logic becomes “disembedded” from this social reality, society falls apart, the law of the jungle takes over, with the kind of tragic consequences that have occurred in both the UK and the Norwegian sectors of the North Sea over the past three decades. Polanyi’s insight and the cases of Rolf and Ingunn also help us to understand why the exploitation of workers can happen in “so-called” social democratic capitalist economies such as Norway, as well as more free-market oriented ones such as the UK, when a market logic prevails over respect for human beings.
One of Polanyi’s other great insights was what he termed the “double movement”. He recognised that whilst free market forces will lead to the destruction of society, resistance will arise to these forces as people “refuse to act like lemmings marching over a cliff to their own destruction”11 Thus there is a movement against the unfettered market as individuals and groups attempt to reign in the forces of capital. Not only is this expressed in the form of courageous individuals such as Rolf and Ingunn but in the North Sea this has given rise to new collective movements. In both the UK and Norway, grassroots unions have emerged to fill the void left by their increasingly market-friendly counterparts.

Back from the depths: the “double movement” in the North Sea
A critical element in the campaigns of both Rolf and Ingunn was the support of the Stavanger based offshore workers union, SAFE. Although a relatively small union, with just over 7,000 members, its willingness to fight for individual rights against powerful vested interests sets it apart from more established unions who have either been subjugated by the might of international capital or are wary of surrendering influence with political actors in national governments. Two aspects of SAFE’s organisation are critical in this respect. First, it is independent of any political party influence, and second, “we are a union of grassroots workers,” in the words of one of its elected officers.12 All the union’s leadership is elected from the offshore workforce and subject to re-election every three years. In the early years the commitment to democracy bred a certain element of instability. As one member noted wryly to us in an interview ,“They used to say that the former organisation OFS eats its leaders because they kicked them out quickly.”13 The union also operates with the minimum of committees, with the key decision-making forum being the Annual Congress, at which anybody can be put forward for election from the Conference floor.
The democratic and participatory essence of the union – as an organisation both “for” and “of” offshore workers – drives both its desire for independence and its willingness to stand against established hierarchies. Indeed its small size and the integrity this lends it as a genuine voice for the grassroots, might be seen as its strength, rather than a weakness. This differentiates it from many larger trade unions in the oil sector and beyond, where a union bureaucracy with little attachment to the grassroots or knowledge of the realities of the workplace is emerging. Declining memberships have encouraged mergers to create even larger “super-unions” whose leaderships and officials become even further distanced from the workers they are supposed to represent. NOPEF, for example, recently merged with the NKIF (chemical workers union) to create Norway’s fifth largest union with 46,000 members. On a grander scale, in the UK, the planned merger between Amicus and the Transport and General Workers Union will have over 2 million members; roughly a third of all unionised workers.
The opposing argument, made by mainstream union leaders, is that size provides power and the ability to influence political leaders. But the meek surrender of Labour Parties throughout Europe to market-driven politics over the past twenty years suggests otherwise. As one former General Secretary of an international union federation noted in an interview:
“Time and time again, the unions have put their back into electing a Labour Government and every time they have been sold down the river so my view has been largely ‘forget about the politics and get on with the industrial logic and the politics will take care of itself.’ Because the politics follows power and power at the moment is entirely in the hands of the multinational bankers and economists and that’s why whatever government is in power, it can’t deliver. And unless labour can find a means of confronting and dealing with power at the real level of its operation there’s no way it will really survive in the long term.”14
Unions that follow the logic of closer political liaison and sever their links with the grassroots membership do so at their peril.
SAFE’s counterpart in the British sector of the North Sea is the Offshore Industry Liaison Committee (OILC). Despite being banned from the TUC and shunned by employers, the OILC has established itself in the industry as an independent voice for the workers. Like SAFE, it is a relatively small union with only 2,000 members in a workforce of around 15,000. Whilst it lacks the resources of the other unions, it does arguably have greater legitimacy among the workforce as the only specialist oil union. With the exception of the RMT, oil-related activities are a relatively minor part of the other official unions’ activities. Thus, the OILC is the one employee organisation that is fully committed and embedded within the industry. It can also claim to be the union that is most activist-centred. This is reflected in its organisational structure which comprises an executive committee of one full time official, elected every three years, and six members who work full-time offshore. This contrasts with most of the other unions for whom the officials in charge of offshore operations seldom have any knowledge or experience of directly working in the industry.15
Since its inception, the OILC has developed a role for itself on health and safety issues with many of its members being elected as safety representatives on their rigs.16 The OILC has used this route as a means to exert influence by voicing concerns about workplace issues which would otherwise carry the threat of dismissal. Additionally, through being more rooted in day-to-day operations in the industry, it is in a better position than other unions to ‘blow the whistle’ on industry malpractice and has consistently punched above its weight in drawing media attention to key issues. For example, it played a key role in exposing the failings of Shell to repair a hole on a corroded pipeline on its Bravo platform in 2003 which led to the deaths of two workers.
Despite the advances made by OILC and SAFE, they remain relatively fragile organisations dependent upon key activists who are prepared to put the time and energy into organising and campaigning beyond the workplace. In interviews, union officials and leaders have raised concerns about where the next generation of activists might come from. As one current activist noted:
“I think in the future we will have problems to find people who are ready to become leaders, working 2 weeks on and 4 weeks off and then during these 4 weeks sitting here in Stavanager and leaving the family maybe in the middle of nowhere in Norway and going forward and back every Friday and seeing the family only 2 days a week.”17
An irony of the grassroots nature of the movement is that it has in the past relied upon the kind of sacrifices and conflicts with family life that many may increasingly question. There is also an issue of whether a younger generation, less steeped in collectivist traditions, will be prepared to tolerate such sacrifices. Developing an new activist consciousness, therefore, becomes a critical issue if grassroots unionism is to continue to thrive in the North Sea.

Spaces of hope and alternative visions
It is fitting that one of the most significant victories for workers rights in the North Sea in recent years was won by a group of North Sea divers, when in November last year over 900 divers and support staff undertook an unprecedented strike action in the UK sector of the North Sea, winning a forty per cent pay rise over two years in addition to extra holiday pay. Backed by their union, the RMT, the divers’ success shows the potential for a more independent and militant unionism in making real improvements to working conditions, as well as in forging a more active union culture in the offshore workforce. In the context of the UK sector, it also embarrassed the “official” unions whose partnership approach and no strike policy have so far yielded little significant gain for the workers they purport to represent.18
Beyond winning such victories however, unions need to have greater ambitions. The well known Marxist geographer, David Harvey, once wrote that the point of utopias is “not to provide a blueprint for some future but to hold up for inspection the ridiculous waste and foolishness of our times, to insist that things can and must be better.”19 When the trade union movements first created political parties to campaign for workers’ rights in the late nineteenth and early twentieth centuries the idea was that such Labour parties would help – to use a phrase of Polanyi’s – to “embed” markets within more regulated and fairer societies. Increasingly, in the context of the early 21st century, relations seem to have been reversed. Union actions, despite protestations to the contrary, through pressure from governing Labour Parties, often end up “managing resistance” in the workplace in the interests of employers and the all powerful free market ideology. One trade union leader in NOPEF once boasted to me of the key role he had played in persuading the Norwegian Labour Party and union activists of the merits of the part- privatisation of Statoil. The same individual was shocked and angry when, a few months later, one of the first acts of the new board was to sell off a large part of the downstream operation, making hundreds of his members redundant.
In this respect, labour and trade union politics have always had what Marxist academic John Holloway terms a “schizoid” character, whereby:
“the class antagonism traverses us all, differences in the degree to which it is possible for us to suppress that antagonism. For those who benefit materially from the process of accumulation it is relatively easy to repress anything that points beyond [commodity] fetishism. It is those who are most brutally subjugated whether through the endless repetition in meaningless jobs or through poverty that excludes anything but the fight for survival in whom the tension is most tightly coiled.”20
Living in a capitalist society, we are all compromised by the need to commodify our labour, whilst struggling for a better future. At the same time, trade unions cannot always be in opposition. The most successful union leaders are those that know when to fight their battles and when to seek compromise.
But, to be effective, a labour politics needs an alternative vision and surely one that continues to aspire to a form of society and economic system that, as the young Gordon Brown admirably put it “fits the needs of men and women” rather than the other way around. We might also add here, the needs of the environment. For, in embracing alternative visions, the grassroots unions of the North Sea need to confront some important dilemmas, such as integrating the continuing concerns of their members with the broader issues facing society. Climate change, the phasing out of fossil fuels and the transition to a low carbon economy are clearly paramount here, and oil unions are strategically placed to make a difference. Organisations such as SAFE and OILC can be rightly proud of their past achievements in developing independent voices and offering alternative visions, but the real battles lie ahead.

1 Brown G., 1975, Introduction: the socialist challenge in Brown G. (Ed) The Red Paper on Scotland, EUSB, Edinburgh, p. 19.
2 Benn T., 1989 Against the Tide: Diaries 1973-6. Arrow, London, p.419.
3 See for example a recent report for the International Labour Office: Forde C et al, 2005, Good Industrial Relations in the Oil Industry. Leeds University Business School, Work and Employment Research Division.
4 See Forde et al, 2005, 42.
5 Forde et al, 2005, p. 12. See also Cumbers A (2005) ‘Genuine renewal or pyrrhic victory? The scale politics of trade union recognition in the UK’. Antipode: a Journal of Radical Geography 37 (1), 116-138 and Woolfson C and Beck M (2004) ‘Union recognition in Britain’s offshore oil and gas industry: implications of the Employment Relations Act 1999’. Industrial Relations Journal 35 (4), pp.344-358.
6 See The Big Issue, May 16-22, 2002, p.7.
7 Forde et al, 2005, p.41
8 See Childs M., 1938, This is Democracy: Collective Bargaining in Scandinavia. New Haven, Yalue University Press. Thanks to Owen Logan for drawing this study to my attention.
9 Todnem K., 2003, ‘Stop deep diving’ (translation from Norwegian). Dagbladet 30th October.
10 Polanyi K., 2001, The Great Transformation. Beacon Press, Boston, new edition.
11 Block F., 2001 Introduction. In Polanyi 2001, p. 9.
12 Interview, 17th August 2005.
13 Interview, 17th July 2006.
14 Interviewed on 29th March 2005 as part of ESRC project on Global Justice Networks. See, research pages.
15 Graham Tran, for example, the main organiser for Amicus/GMB in the North Sea comes from a defence industry background, having worked at the Faslane nuclear submarine base in the west of Scotland. See Cumbers (2007).
16 The legal requirement for the workforce to elect independent safety representatives on each offshore installation was the most significant recommendation of the Cullen Inquiry on the Piper Alpha tragedy from an organising point of view (Woolfson et al 1997).
17 Interview, 18th July 2006.
18 See Forde et al, 2005, and also Cumbers, 2007, ‘Employment relations and union recognition in the North Sea oil industry’, Northern Scotland.
19 Harvey D., 2000, Spaces of Hope, Edinburgh University Press, p.281.
20 Holloway J., 2005, Change the World Without Taking Power: the Meaning of Revolution Today. Pluto, London.