Investor Brief: ExxonMobil

Investor Brief: ExxonMobil

The Australian Manufacturing Workers’ Union (AMWU) on behalf of the unions that represent the UGL Limited / ExxonMobil (NYSE: XOM) maintenance workers – the Australian Workers Union (AWU) and the Electrical Trades Union (ETU) – have prepared an investor brief on ExxonMobil.

Key workforce issues
An investor brief prepared by the AMWU details the workforce issues surrounding an industrial dispute with maintenance workers at ExxonMobil-UGL facilities in Gippsland, Australia.

In 2010, the workers signed an enterprise agreement with UGL, which had been awarded a maintenance contract for ExxonMobil’s facilities. In 2017, UGL was awarded a new contract by ExxonMobil and terminated the workers’ existing enterprise agreement. It advised the workers that they would be offered a new enterprise agreement through its subsidiary, MTCT Services. This new enterprise agreement:

    • Reduced wages and allowances by up to 30%;
    • Cut annual leaves;
    • Included a stand down clause that would leave workers offshore for days at a time without pay; and
    • Required anti-family shift rosters

    The workers have maintained a picket line at company facilities for over 400 days in Australia’s longest dispute in 40 years.
    Why it matters to investors
    The AMWU investor brief outlines ESG risks for investors to consider, which include the following:

  • Reputational risks generated by extensive negative media attention (examples herehere and here);
  • Regulatory risks arising from scrutiny of the tactics used by companies to undercut collective agreements and existing wages and work conditions in a changing industrial relations landscape;
  • Legal risks arising from a Senate Inquiry that determined that ExxonMobil has not paid corporate tax in Australia since 2013 has no plans to do so until 2021.

Under the OECD Guidelines for MNEs, investors have a responsibility to conduct due diligence to ensure that companies do not violate fundamental rights and principles at work – including respecting workers’ rights to bargain collectively. 

In addition to the risks related to the ongoing industrial dispute, long-term value creation requires the effective management of human capital. ExxonMobil itself states, in its Standards of Business Conduct: "We are committed to maintaining a safe work environment enriched by diversity and characterized by open communication, trust, and fair treatment."

WHAT CAN TRUSTEES DO?

The AMWU request is that ExxonMobil engage in meaningful social dialogue with trade unions to minimise regulatory, legal and reputational risk. For more information and materials to support this engagement, please contact the CWC Secretariat. You may also refer to the trustee brief circulated by the ACTU Superannuation and Workers’ Capital Network. Sample emails are available.
For more information on the issue and ongoing capital stewardship initiatives in Australia, please contact:

  • Glenn Thompson, Assistant National Secretary AMWU, glenn.thompson@amwu.org.au
  • Scott Connolly, Assistant Secretary ACTU, sconnolly@actu.org.au