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Deep Disappointment at Result of Divers' Pay Referendum

19 November 2012

The Signatory Group to the UK Offshore Diving Industry Agreement (ODIA) is deeply disappointed by the result of the National Union of Rail, Maritime and Transport Workers (RMT) referendum on a final offer on pay and conditions for divers and support crews working in the UK North Sea.

The new three-year deal offered an increase of 4% in Year 1 and RPI +1% in Years 2 and 3 (with a floor and ceiling of 1.5% and 4% respectively) on standard minimum rates of pay and established bonuses, as well as other key benefits designed to improve working conditions.

Speaking on behalf of the Signatory Group, Hamish Petersen said: "We are deeply disappointed by the result of this referendum. We recognise and appreciate the hard work done by our diving teams. A new three-year agreement is important for them, and for the companies who engage them, and is regrettable that we have not been able to achieve this to date. "We feel that a period of ‘time out’ might be the best response, now, to give all parties time to reflect, regroup and consider options,” he added. "The Signatories still wish to secure an Agreement which will enable us, together, to get on with winning work; providing excellent quality diving services in these challenging economic times; and to move forward to achieve common goals.”

Negotiations started in November 2011, and the current Agreement on minimum pay and conditions for North Sea diving personnel expired at the end of October this year. The ODIA came into existence during the early 1980s. Its value in preserving the earning potential of the workforce and providing a stable reference for all its stakeholders is acknowledged by the RMT and Signatories. Signatory members to the agreement are Bibby Offshore, Helix Well Ops, Integrated Subsea Services, KD Marine, Stork Technical Services, Subsea 7 and Technip.

Economic situation
"The four economic factors which drive demand for diving services (oil price, oil demand, exchange rate fluctuations and availability/price of credit) remain critical and, at best, unpredictable,” says Hamish Petersen.

"All the signatories of the ODIA seek to recruit and retain a workforce with the skills and competence they need to meet business demands, and want to ensure that their workforce receives pay rises in line with a number of market comparables – including earnings in the broader economy, settlements within the industry and pay relativities within their own organisations.”

Signatory companies recognise that diving personnel have specialist skills in a niche market and believed that the offer reflected this, both in financial terms, and in the commitment to improve working conditions further as was clearly set out in the offer made to RMT members.

Business impact
ODIA signatory companies report the following impact on their business of the current economic factors, which they have shared with the RMT and Company Representatives:

• Alternative business opportunities are increasing all the time elsewhere in the world
• Operators are 50:50 split on a small rise and no rise in UKCS activity for 2012-2013
• UKCS is an expensive place to do business due to government legislation, taxes, labour costs and inflation
• People see the headline profits but many of these are not being made from the business in the UKCS
• Long term the UK sector is sound but short/medium term economic uncertainty is high
• Operators are cautious and want stability and cost control from the supply chain
• Big pay rises ahead of other groups offshore, create unrest and upsets the equilibrium

On the back of these points ODIA signatory companies want to ensure that the UKCS is where operators want to do business. This means the need to manage the challenges of skills supply and labour cost by supporting a cost regime which promotes investment in new and continuing production and understand the economic reality of the supply chain. The companies want to show the industry that ODIA is the forum which does this. Pay rises which are out of step with what the UKCS can support are not sustainable. The signatory companies believe that ODIA is good for all and trust that there is general agreement on this point, believing it would be a shame to lose it at this stage in its history. "Increased business in the UKCS and the good living we all have will only continue if we manage things properly and keep the cost base reasonable,” they add.

ODIA signatory objective
Set against this background, the ODIA signatories’ aim remains securing an agreement for 2012-2015 that is fair for all stakeholders and promotes the long-term sustainability of the industry in the North Sea.