As reported earlier by EnergyReview.net, 68% of the company’s union members opted for a strike when their demands for a 10.5% pay hike and less working hours with no cut in benefits was rejected by the management. Currently, around 1,100 out of the refinery’s 2,700 employees are union members.
In a statement LG-Caltex spokesperson Lee Sang-Hun said, “We held talks overnight but couldn’t reach an agreement," said Lee Sang-Hun, an official at LG Caltex. We asked the union to first compromise on working conditions and hours, then move to the wage issue. But the union abruptly walked out after only four rounds of talks.”
“But our operation won’t be hurt by the strike because the government has ordered workers responsible for core operations to stay on the job,” added Lee.
Under South Korean law, the government has the right to limit industrial action if it harms the “public interest”. The government can also intervene in any disputes between management and the workforce, if it so wishes.
LG-Caltex union leaders were not available for comment. However, its representatives the Korean Confederation of Trade Unions (KCTU), the umbrella labour group which represents the petrochemical industry unions in Yeosu (and who were handling the negotiations), have said collective negotiations with the LG-Caltex will happen this year.
“The union pledged to stage a full-scale strike from today, but the extent of industrial action will depend on the result of future talks with the management,” said the KCTU.
In related news, LG-Caltex has announced it will apply for government approval to import LNG for its own use. If it gets the nod, it will be the third company after POSCO and SK Corp to bypass the Korea Gas Corp (KOGAS) monopoly on gas imports.
The South Korean government allows private firms to import LNG on the proviso the companies have their own LNG terminal and the LNG is used only for the companies’ own power plants.
In a statement company spokesman Lee Young-won said, “LG-Caltex might import some 1.5 million tonnes of the super-cooled natural gas annually after 2008 for its own requirements and its two unlisted power generating affiliates, LG Energy and LG Power. We’ve asked the energy ministry if they would allow us to import LNG, and they said they would approve our plan if we met regulatory conditions.”
“[LG-Caltex will] start working on a detailed proposal to meet the necessary conditions including the construction of an LNG terminal and storage tanks, and picking suppliers of the fuel,” added Lee.
LG-Caltex is a 50-50 JV between South Korea’s LG Group and US giant ChevronTexaco Corp and has a daily refining capacity of 650,000 barrels.
