Rethink Marsden Pt Oil Refinery job losses, union urges

E tū union is calling on Refining NZ to rethink of a proposal to cut 100 jobs by the beginning of next year. Photo / Michael Cunningham

A union is calling on Refining NZ to rethink its proposal to cut jobs from its maintenance and emergency services teams— arguably among the biggest casualties in plans to simplify operations.

The only oil refinery in New Zealand, based at Marsden Pt, will cut 100 jobs and scale back its production from next year following a tough year when fuel demand plummeted due to the global pandemic.

The publicly-listed company will reduce production from 115,000 barrels a day to about 90,000 - the same level as in 1995 - and stop producing bitumen - a residue from petroleum distillation used for road surfacing and roofing.

E tū organiser Annie Tothill said possible cuts would leave about a quarter of small essential-maintenance teams and almost half of the emergency services teams, which she said would increase the risk to workers and the community alike.

The 100 workers, including those from maintenance, instrument technician, electrical, and emergency services teams were given a proposal on October 6 for feedback.

Tothill said there was no evidence so far that maintenance work has reduced and that getting rid of workers would simply place more pressure on those who remained.

She said under the proposal, the refinery would cut E tū members working as maintenance crew from 11 to eight staff, while the number of employees in instruments would halve — from six to three.

"There is a gaping hole for risks if you reduce these already small teams, as workers may suffer fatigue due to excessive hours and increased stress levels."

Tothill said even before the proposal was announced, the number of workers in both areas had been decreasing over the last two to three years.

"The proposal to cut the emergency services team to only one worker per shift is also deeply concerning, as it means they would be mostly working alone, including on a night shift.

"This group not only provides assistance at the refinery but is also a recognised local industrial brigade in the region, and trains volunteers and other Fire and Emergency personnel from around New Zealand."

E tū organiser Annie Tothill is concerned about a shortage of maintenance and fire crews at Refining NZ after its operations are simplified. Photo / John Stone

A Refining NZ spokeswoman said the company was committed to operating the refinery safely and that it was currently seeking feedback from its staff on proposed workforce changes.

"Our simplification proposal would enable our operation to continue in 2021."

Tothill said the refinery was classed as a top-tier, high-hazard facility, therefore the company must consult with the community on proposed changes around health and safety, including emergency functions.

"As long as the refinery continues to operate, we need to continue to invest in the community to ensure decent, safe working conditions, and a top-tier community and national resource, while also considering any future 'just transition' plan for this group of highly skilled workers."

Tothill said the refinery could not make E tu members redundant and hire contractors to do those jobs.

The work that some of the highly skilled workers such as instrument engineers specialised in was unavailable in New Zealand, but their skills were transferable.

A worker, who wished to remain anonymous, said safety was a major concern.

"The company don't seem to realise or care how unsafe [things are] becoming because of a lack of maintenance. The reductions in numbers will make it worse."

The company will reduce its operating expenditure by $20 million, capital expenditure has been forecast at $50m, and the estimated restructuring costs of $5m this year will be funded using proceeds from asset sales.

Falling fuel demand during level 4 lockdown drove the publicly-listed company $186.4m into the red in the six months to June 30.

The interim net loss compares with a $3.5m shortfall in the corresponding period last year.

The bulk of the unionised workers at the refinery belong to First Union. Earlier this month, First Union said the review was an opportunity to re-deploy existing assets and infrastructure at Refining NZ towards a range of cleaner and greener energy proposals like biofuel and green hydrogen.