The exit of multinational British Petroleum from the Tanzania market faces stiff opposition from its workers who want to know their fate before any transfer of assets is made.

According to sources in the petroleum sector, workers are up in arms accusing management of ignoring their pleas for a negotiated settlement.

“Surprisingly even the government which is a shareholder with a 51 per cent shareholding in BP Tanzania Ltd is keeping quiet while the workers’ plight is still unknown and management has been dilly- dallying on many pertinent issues that workers have raised,” a source told The EastAfrican.

The problems at the company are similar to those that arose after NBC Bank was split to create National Microfinance Bank (NMB), Consolidated Holdings Corporation and NBC. It took workers of National Microfinance Bank to threaten industrial action before the government started engaging them seriously.

Similar problems arose at the National Insurance Corporation, Oryx, Agip, TIPPER and Tanzania Railways Corporation where the government was recently forced to pay workers’ salaries.

“These people want to transfer workers without their consent, it is like in the colonial days’ Manamba system,” said a source. Manamba was a system whereby workers were sold together with farm property because they were considered part of the possessions of the former owner.

Information obtained by The EastAfrican shows that the government even after receiving the notice from BP, that it was exiting the Tanzania market, it (government) kept mum and after the workers representatives raised the issue, pretended it hadn’t received the notice.

“Last June the government received our letter where we raised several issues that existed between us and management, and the government promised to work on the workers’ grievances but later we came to learn that the government was at this time already in possession of the notice from BP Tanzania Ltd and hence we feel that the government isn’t treating this issue with the seriousness it deserves,” said a source at BP.

It was at this point that the workers decided to engage the management of BP more vigorously. BP is the managing partner of the company, despite the fact that the Tanzanian government owns half of the shares in the petroleum company.

“Nonetheless, the bargaining process with management has also failed and the workers decided to seek the help or engage the services of the Commission for Mediation and Arbitration (CMA), but as things stand the employer doesn’t want to honour any form of golden handshake for the workers, which is one of the demands of the workers,” The East African was told.

The government had set a precedent of giving a “golden handshake” to workers of firms that are being divested or taken over by new owners.

According to correspondence seen by The EastAfrican, workers have escalated the issue by writing to the Tanzania Petroleum Development Company (TPDC), Treasury Registrar, Chief Secretary (President’s Office) and the Ministry of Energy and Minerals, wanting to know their fate.

The workers want management to sign a memorandum of understanding which will bind management to disclose employee benefits to the new owners and shareholders; BP set aside shares in the company for sale to workers (with some coming from the other shareholder-Tanzania Government); and want the golden handshake to be part of the deal.

Other conditions by the workers are that if the business is to be sold as a going concern then certain issues needed to be attended to before the business is transferred.

Demands

This includes the transferrable leave pay accrued by each employee; severance pay that would be payable in the event of a retrenchment or retirement; any other payments that have accrued to the employees but which haven’t yet been paid including leave bonuses.

Taking into consideration workers’ worries and concerns due to BP Africa pull out from BP Tanzania Ltd, the workers want management “to deal with their plight in a desired way that will secure employee benefits and dues before concluding the sale agreement.

They say that sale of shares by the managing partner from BP Tanzania Ltd is synonymous with the sale of operating assets which would result into a formation of a new legal entity.

According to the workers there is no guarantee that the new owners will retain the BP brand or expertise “thus our future is uncertain and we like assurances from all concerned before the sale is put into effect.”

“In actual fact the whole or total package for the workers will involve an estimated $3 million and this is nothing compared with what BP Africa will generate by selling the 50 per cent it holds in BP Tanzania Ltd,” sources said.

Adding that the cost or “safety risk” in case there was a strike would be enormous “and I don’t think BP has forgotten what happened in the Gulf of Mexico where it was made to pay billions in compensation.”

However, the management has remained adamant that it won’t honour a golden handshake deal.
BP in Tanzania can trace its roots back to 1900 when Smith MacKenzie started importing kerosene to the island of Zanzibar as a Shell agent.

A bulk tank and kerosene-can filling plant was established in 1901, and for a while Zanzibar supplied the oil needs of much of the East coast of Africa and the Indian Ocean islands.

Shell expanded to the mainland and, with the formation of the Consolidated Petroleum Corporation in the late 1920s, BP acquired an interest in the company.

In 1970 the government of Tanzania bought a 50 per cent interest in what was then Shell and BP Tanzania Ltd. In March 1982, BP bought out Shell’s interest and the company became BP Tanzania Ltd.

Today, BP’s commercial customers include Portland cement, Coca-Cola, the breweries, sisal and wattle estates, the cotton industry, shipping and the spice trade in Zanzibar. BP supplies the Trans Africa Railways Corporation Ltd and a number of transport operations and construction companies.