Strike ends at Shell Moerdijk complex

Author: Tom Brown

2019/04/26

LONDON (ICIS)--Unions and employee representatives of Shell’s Moerdijk, Netherlands, petrochemicals complex have agreed to end strike action at the site, a spokesperson for trade group Federatie Nederlandse Vakbeweging (FNV) said on Friday.

Moerdijk site in The Netherlands. Source: Shell

An action committee convened on Friday agreed to allow Shell to temporarily take control at the site from 15:00 BST onward, after company management offered an improved salary offer at a meeting with unions on 25 April.

Unions backed the new offer, issued after nearly three weeks of industrial action at Moerdijk and the nearby Pernis refinery, which have delayed a long-planned turnaround for the cracker at Moerdijk, one of the largest in Europe.

In what a Shell spokesperson termed an “ultimate” offer, the company has increased its wage hike offer for Pernis and Moerdijk employees to 3% this year, 2% in 2020 and 2.5% in 2021, plus a 1.5% annual merit pot.

The offer, which an FNV representative described as “a result, [but] not a great result” will also involve the extension of the collective labour agreement (CLA) underpinning it from two years to three, Shell said.

While the move allows for normal operations to resume at the site after production was stifled and employees declined to work overtime, FNV will schedule meetings with members on 7-8 May to present the results and formally vote on the proposals.

“The action committee agreed to temporarily end actions this afternoon, Shell will take over control again at Moerdijk,” a spokesperson for FNV told ICIS.

Action at the sites has reduced output at the Pernis refinery to 65% of capacity, according to union estimates, and considerably slowed a turnaround at Moerdijk.

The moves to reduce capacity also initially prevented the start of shutdown preparation, and a refusal to work overtime slowing the process once employees agreed to begin the turnaround.

The work, which heralds the beginning of a crowded turnaround season in Europe through the summer, was expected to begin on 16 April and last through 21 June, according to market sources.

The company has not provided an updated schedule for the turnaround.

In documentation submitted as part of summary legal proceedings against the unions initiated by Shell late last week, and subsequently overturned in court, Shell estimated that that first nine days of the action had resulted in €14.5m in costs.

Shell's Moerdijk site produces ethylene, propylene, benzene, butadiene, crude C4, ethylbenzene, ethylene glycols, surfactants, and ethylene oxide, among others, according to ICIS data.

(Update re-leads, adds latest developments in negotiations between Shell and unions)