25 August 2008

The Untouchables

Oil worker

Even with energy reform on political agenda, few dare address a core issue: Pemex's union

The News

Omar Toledo Aburto normally mans one of the offshore rigs pumping crude from the Campeche Sound. But these days, he's in charge of a protest camp outside the Labor Secretariat, where he sleeps in the cab of a pickup truck parked alongside one of the capital's busiest thoroughfares.

But his current discomfort has nothing on the possible consequences of confronting the powerful oil workers union, which represents more than 90,000 Pemex employees nationwide, and is run by a group that "rules through terrorism," as Toledo Aburto puts it. "If you don't agree with their rules, you'll automatically be fired," he said.

Or, worse, subjected to death threats and harassment.

Mere hours after the 24-year-veteran petroleum worker set up camp in Mexico City on July 28, his wife and children were threatened by "union toughs," he said. But even though he expressed concern for his family's safety, he remains defiant.

"I'm not scared," he said, pointing to a property line marking the limits of the guarded federal land that he's currently occupying.

With the nation's political parties immersed in debates over proposed reforms to the nation's oil industry, Toledo and a band of about a dozen current and former Pemex workers are calling for changes in the oil workers union, an organization that wields enormous influence over the state-owned petroleum concern, Pemex, and dominates the political sphere in many oil-producing parts of the country.

But such is the union's clout that neither the governing National Action Party, or PAN, nor the Institutional Revolutionary Party, or PRI, has dared propose altering the union's relationship with Pemex in their energy reform proposals. Interior Secretary Juan Camilo Mouriño recently said that dealing with the union "is a different discussion," while PRI senators approved a measure last week saying that they would only support an energy reform package that omits union changes. "People pay tremendous prices for fooling with the union," said George Baker, a Houston-based energy consultant and expert on the Mexican oil industry.

Only the Democratic Revolution Party, or PRD, which plans to unveil its own energy reform initiative on Monday, has dared to challenge the union, which some analysts say is a foe of the left-wing party.

"For the PRD, the oil workers union is a political enemy," said Aldo Muñoz, a union expert at the Universidad Iberoamericana. "The Pemex union supports the PRI and, if it suits them, PAN candidates against the PRD."

PRD Sen. Carlos Navarrete last week warned that the PRD would recommend stripping power from the union in its energy reform proposal.

"In what part of the world does the union have almost half of the [seats on the] board of directors in the most important company in its country?" Navarrete told the newspaper Excélsior. "It's absolutely anachronistic."

Former PRD presidential candidate López Obrador has gone even further, accusing the government and the oil workers of brokering an unseemly, but mutually beneficial, deal.

"There's an agreement between [oil workers union leader] Carlos Romero Deschamps and [President] Felipe Calderón to keep corruption in the union in exchange for supporting the Calderón reform," he said recently.

Some analysts, meanwhile, question whether tackling the union issue - however worthwhile an objective - is appropriate during the early phases of a politically difficult reform process.

"You're trying to get some initial traction [on reform]," Baker said. "Getting traction on the union question probably isn't at the top of the list."

The union, too, has remained silent on the government's energy reform proposals - which would allow increased private sector participation in the exploration and exploitation of oil reserves - a move that Muñoz said was symbolic of just how "pragmatic" the syndicate is.

"It publicly supports the PAN in terms of energy reform, because its interests are never touched," he said.


The origin of the oil union's power goes back decades. It initially gained authority after the 1938 expropriation of the petroleum industry, as then-President Lázaro Cárdenas proposed having the government and workers co-manage Pemex. That arrangement established conditions for the union leader to play an important role on the national stage, while his subordinates dominated the affairs of regional petroleum centers, where they funded public works projects, held sway over municipal governments and often ran local businesses.

Even to this day, section leaders control hiring and firing decisions. Nepotism is said to be rife, and positions are reputedly sold for as much as 50,000 pesos. (Pemex could not be reached for comment on these allegations, but has denied them in the past.)

Union leaders often manage side businesses that provide Pemex with employee transportation services, construction crews and basic supplies, according to the dissidents protesting in Mexico City. The union also holds five of the 11 seats on the Pemex board of directors.

Oil workers are now some of the best-paid employees in the country, as the union has consistently won generous wage and benefits packages that include gasoline subsidies, a series of worker-only hospitals and Christmas bonuses worth nearly two-months' pay.

The wealth and influence of the union leaders and members - "the real sheiks" of the oil industry, as Alan Riding called them in his 1985 book on Mexico, "Distant Neighbors" - are far-reaching, too. Successive governments have yielded to the union's hardball negotiating tactics, which have included the trump card of threatening to shut down the entire petroleum sector - the source of 40 percent of the federal budget.


Allegations of thuggery - denied by the company - are also common. Toledo said that at least 80 dissident members have disappeared over the past eight years.

The union dissident is calling for Romero Deschamps to be deposed by the Labor Secretariat, arguing that the date of the last internal election was improperly moved ahead.

"He's interested in nothing more than keeping himself in power," Toledo Aburto said. "This man, in every sense of the word, has hijacked the union."

In spite of the threats, the union protesters plan to stay put - partly out of principle, but also due to the potentially uncomfortable situation that awaits some of them upon returning to their hometowns and workplaces.

"I can't go back," Toldeo Aburto said. "They've already stripped me of my job."

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