IT IS incredible that the situation at State-owned Petrotrin is so dire that the company is making annual losses of $800 million. It is even more incredible to learn that about half of this figure is likely due to expenses which the company could avoid, including the payment of salaries to top managers.
The stunning disclosures made by Petrotrin chairman Wilfred Espinet on Sunday call for serious action. They also underline the need for greater transparency and accountability at all State enterprises to ensure situations such as this are not allowed to develop and fester for years or, as is likely the case with Petrotrin, decades.
Before any change in the strategic direction of the company, management must get to grips with the haemorrhaging of funds. Where there are unnecessary expenses then the board and management of Petrotrin have a fiduciary duty to shareholders — and ultimately the people of Trinidad and Tobago — to protect the viability of an entity such as this which has an important role to play in the local economy.
In this regard, the chairman’s stated policy intention of focusing first on restructuring top management, even to the extent of making some vice presidents redundant, is to be welcomed. If hard decisions need to be taken to reduce waste, then upper management needs to lead by example. Not only must there be redundancies but cuts on exorbitant salaries enjoyed by top officials must also occur.
While there is a need to ensure the company attracts talent, there is also a corresponding need for such investment to bear dividends. And that has certainly not been the case for some time now.
At the same time, we are not calling for an all-out cull of labour from the organisation. And redundancies in the lower levels of employment of the firm (there are approximately 3,000 employees) need to be handled with care. Adequate notice must be given and, given the potential for widespread and negative systemic effects, efforts at streamlining must be balanced with the needs of society as a whole.
What is more, long-standing employees should be given transferable skills that will allow them to be absorbed in other sectors, as well as counselling and support from the Ministry of Labour. It is important that the trade union movement be brought to the table in this regard so that hard decisions are understood in a national context and not just as another reason for stridency.
The default position we must adopt as a society must be that jobs have to be protected as far as possible. However, at what cost?
If such protectionism simply encourages unsustainable levels of spending and damages the State’s ability to serve all citizens, not only the thousands employed at Petrotrin, then it must be reconsidered.