Christmas 2022 was a busy time for Altrad, a global labor supplier to the oil and gas industry.
Just two days before the holidays, the Montpellier-based multinational and self-proclaimed “world leader” went on a buying spree in Western Australia.
It bought nine locally registered private companies apparently specializing in oil and gas maintenance. At least five of these appear to have been labor recruitment companies.
Three of those companies are now the subject of a wide-ranging investigation by Australia’s industry regulator, which has found conclusive evidence that one of them was little more than a sham.
Altrad acquired the fake company eight weeks after ratifying a new workplace agreement with its staff which, instead of improving established conditions in the sector, actually weakened them. This deal was the company’s only real asset.
In the extraordinary legal proceedings that would ultimately follow, Altrad’s lawyers insisted that the company had made the acquisition even though it was not in possession of any documents detailing the good faith of the agreement.
Seems strange, doesn’t it? Especially for a “world leader” that brought in over $6 billion last year.
But perhaps we should show some leniency. After all, there was another very good reason why Altrad was having a chaotic time ahead of the 2022 holidays.
Ten days earlier, the owner of Altrad had been sentenced to 18 months in prison and an $83,000 fine by the Paris Central Criminal Court.
The court found that, in order to achieve a huge marketing coup, Mohed Altrad had paid a bribe of €180,000 to the president of the French rugby federationBernard Laporte, to try to have the name of his eponymous company appear on the chests of the French rugby team.
How fossil fuel companies are cutting costs
The fake east Perth company Altrad bought was called Workforce Logistics Pty Ltd.
It was incorporated in August last year and, at the time of writing, is being dismantled. Although her life was short and she met an inglorious demise, she shed light on the obscure ways in which big fossil fuel companies cut costs by any means possible.
The man who created Workforce Logistics is Blake Read, a 48-year-old chartered accountant from Burns Beach, north of Perth, who has since deleted his LinkedIn profile from the internet.
In October, Read formally requested ratification of a new national employment agreement called the Workforce Logistics Pty Ltd Enterprise Agreement. He told the Fair Work Commission that his employees had voted unanimously for the deal, although unions later estimated it would result in a loss of $300 a week for oil and gas workers.
But at the time, the unions did not oppose it (they knew nothing about it) and the application did not seem controversial. It was approved “on paper,” as the courts like to say.
But there was much that Read failed to disclose to Fair Work at the time – including the true status of his six employees.
He did not reveal, for example, that two of them were close associates of his friend Mark Hudston, director of a major Washington human resources firm (Hudston has now been fired), from whom he had never actually saw one. Nor that another, Stephen Biddle, had probably never been to the company’s workplace.
Read also failed to explain that Vincent Ruffino, who he said was the personnel representative, was actually the general manager of his own fencing company and was no longer an employee anyway. He said nothing about the fact that his own brother Mark Read (one of the six alleged employees) was the “commercial director” of Ruffino’s company – nor that his sixth employee, Daniel Walters, was a business director and his business partner.
It was these six men who felt that the enterprise agreement was a fair deal.
It was not until the following May that an Australian Workers Union organizer discovered a Workforce Logistics employee on a Chevron gas rig, and the union began investigating.
Shocking findings revealed
What she discovered was shocking: It was likely that none of the six employees Read had used to make the deal were genuine (and certainly none were employees anymore). But now that it has been ratified as a legal instrument, the Workforce Logistics enterprise agreement could be used to reduce working conditions for workers in one of the most dangerous jobs in the world.
In the Fair Work Commission hearings that followed, Read’s credibility was shredded. The Commission found that the process by which it concluded the industrial agreement was “wrong” and that the instrument itself lacked “authenticity and moral authority”.
Read’s claim that he was genuinely trying to start a new business “cannot be accepted”, and was in fact never his true intention.
“Given that Workforce Logistics had no business, no business property or assets, no employees or goodwill, it is clear that the only value it had was in its approved enterprise agreement,” the FWC said .
On December 20 last year, AGC Group, a Singapore-based labor hire company, acquired Workforce Logistics. Three days later, AGC (then in receivership) sold it and a series of other companies to Altrad.
“Mr Read never seriously intended Workforce Logistics to engage in any legitimate commercial activity while it was under his control,” the Commission found.
“It is relevant, as subsequent events confirm, that AGC held a long-term contract to provide maintenance services to Chevron’s onshore and offshore natural gas and oil production facilities in northwest Australia.”
“The sale of Workforce Logistics to AGC, and then to Altrad, ‘closely followed’ the approval of the deal. The value of the purchase was realized when the deal could be used to apply to employees maintenance personnel working on an offshore Chevron platform.”
Concerns about wider abuse
On the same day that it acquired Workforce Logistics Pty Ltd, Mohed Altrad also acquired two other local companies of interest from AGC: REC Maintenance & Construction Pty Ltd and its parent company, MAS Australasia Pty Ltd.
REC, which also supplied many workers to Chevron’s facilities, had filed an enterprise agreement with Fair Work based on the votes of only five employees. Their negotiating representative was a familiar name: Stephen Biddle.
In total, Biddle, Blake Read and several other characters exposed as part of the Workforce Logistics story are linked in six other companies which have all pursued and ratified Fair Work industrial agreements which are now shrouded in suspicion.
The Commission said: “The circumstances in which the (labor logistics) agreement was concluded merit further investigation… as it appears that a number of people involved in the simulated exercise we described here were also involved in the conclusion of a number of agreements. other corporate agreements in Western Australia.
The industry regulator said it was concerned about “larger-scale abuses” and called the revelations representative of an “important public interest”.
A Chevron Australia spokesperson said: “We require our suppliers and subcontractors to provide accurate and valid documentation when entering into commercial agreements.”
“We also require our suppliers and subcontractors to adopt appropriate industrial relations management plans and demonstrate regulatory and industrial compliance through enterprise agreements approved by the Fair Work Commission, where applicable.”
Altrad’s spokesperson said the company acquired Workforce Logistics after “an extensive period of due diligence” and “after becoming aware of post-acquisition issues…(took) appropriate actions in response to the decision to the Commission “.
“Altrad’s immediate objective and priority was to ensure the well-being and job security of the 1,300 people employed by AGC, who, had the acquisition not been completed, stood to lose their jobs during the end-of-year holidays.”
There is a pattern here
The context here is one of a steady deterioration of adequate and reliable jobs in heavy industries across the country, in favor of bespoke labor hire companies. It’s become a status quo for those working offshore for the big oil and gas majors, motivated to reduce labor costs.
Partly in response to this trend, the Australian Workers Union and the Maritime Union of Australia formed a joint operation called the Offshore Alliance.
The Alliance has had great success in improving wages and conditions at sea. Last month, workers at Chevron’s Wheatstone LNG plant stepped up work stoppages to protest a recent pay offer; strikes were only averted after intervention by the Fair Work Commission, agreed to by both sides 11 days ago.
Last month, I wrote about the $60 billion in infrastructure decommissioning that big oil and gas companies are obligated to complete soon under their contracts with the federal government — and their interest in avoiding that liability .
There is a pattern here of harvesting revenue and shifting the costs elsewhere – in this case, onto the shoulders of the workers who make it all possible.
Australia may be a quarry for the world, and exploiting its natural resources could support our national budget. But we can and must demand better business ethics than that.