Talks Fail to Settle Chevron Australia Strike with Friday Hearing Scheduled

Singapore freight forwarders – Star Concord
20-Sep-2023

Talks to resolve the ongoing strikes at Chevron Australia’s LNG operations that are threatening the global energy market again failed today. While both sides said there was some progress, the talks ended without an agreement setting the stage for the next round in the contentious collective bargaining process.

Chevron Australia accounts for as much as seven percent of global LNG production, serving both western Australia’s needs and as a major exporter primarily to Asia. Energy markets fear as the strike stretches on that Asian buyers will be forced into the European and American markets to make up the shortfall, driving up global prices.

So far, the company contends that it has been able to maintain production and shipments despite the various job actions by union members which began on September 8 and continue to escalate. Over the weekend, union members struck for two 24-hour periods.

Output at the Wheatstone LNG facility was down by as much as 20 percent for three days last week, but Chevron issued a statement that they had restored full operations using its contingency staffing. The Offshore Alliance, which represents the approximately 500 members of the Australian Workers’ Union and the Maritime Union of Australia employed at Chevron’s three primary facilities, doubts the reports. They cite a four-hour shipment last Friday as well as flaring in the fields. They also predict that a larger failure is inevitable. 

Australia’s Fair Work Commission is attempting to settle the dispute. Last week, they ordered both sides to begin three days of mediated negotiations that ended today, September 20. A spokesperson for Chevron Australia called the negotiations “meaningful,” while a spokesperson for the Offshore Alliance confirmed that there had been some concessions from both sides. 

They are arguing over “industry standard terms and conditions,” which the Offshore Alliance says is the focus of the enterprise agreement. The union contends Chevron’s offers are below standards while the company argues that the unions are demanding terms above the industry standard. The union cites the precedent set in its prior agreements with Inpex, Shell, and recently Woodside.

Chevron Australia has petitioned the Fair Work Commission to intervene arguing that it has become an “intractable situation.” They reference that the talks for Wheatstone have been going on for three years with no resolution. A Chevron spokesperson says “There is no reasonable prospect of agreement,” while the Offshore Alliance counters that it remains open to compromise but Chevron has to provide an offer comparable to other sector employers.

The Fair Work Commission has scheduled one day of hearings for Friday, September 22, and it could rule that day or is expected to render its decision very quickly. The commission can order both sides back to the negotiations if they believe there is a prospect of an agreement or it can order final talks. The commission could also agree with Chevron and proceed to an immediate ruling to settle the dispute. 

The union has vowed to hold out similar to its 71-day strike against Shell in 2022. They have announced plans to continue to escalate the work stoppages while saying they are hopeful the Fair Work Commission will issue a favorable decision after this latest hearing.
 

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