Unregulated increase in contractors is leading the oil industry to its death

According to Energy Press, Iran’s oil industry has witnessed a significant increase in the use of contractors in various operational and project sectors in recent years. As Shahram Ahmadi, Director General of Health, Safety and Environment at the Ministry of Oil, revealed: Contractors now make up 48 percent of the oil industry’s workforce; while this share was limited to temporary projects until two decades ago, and the bulk of ongoing duties in production and operational facilities were the responsibility of official oil industry personnel. He warned that the root of the recurrence of accidents is the serious weakness of contractors in observing safety principles and training; from incomplete issuance of work permits to ignoring safety instructions. Recently, a fire at the Shiraz refinery has led to further discussions about workplace safety and the implementation of regulations by contractors.

Outsourcing activities to contractors is the main problem of the oil industry
Although the increase in the number of contractors in the oil industry may lead to a reduction in operating costs in the short term, it has created serious challenges in the long term. One of the most important of these challenges is the gradual reduction of the specialized workforce in the main body of the oil industry, because with the transfer of tasks to contractors, the motivation and possibility of retaining experienced workers in the main companies have decreased. On the other hand, many contractors, due to financial and competitive pressures, do not pay enough attention to safety issues and quality standards, which has led to an increase in the risk of accidents and a decrease in the quality of project implementation. Shahriar Aghaei, a member of the board of directors of the Oil Pension Fund, said in an exclusive interview with this media outlet: “One of the problems we face in the oil industry is the outsourcing of activities to external contractors. Contractors who seemingly agree to comply with environmental and health safety standards and guidelines, but unfortunately, due to the lack of adequate supervision and the nature of the contractor who seeks greater economic gain, they are less likely to comply with these safety issues.”
Referring to the fire at the Tehran Refinery in 2005 to explain the effects of outsourcing and hiring temporary workers by contractors, he said: “In examining the causes of the accident, the errors of various units were evaluated and a detailed expert report was presented to the then minister. The key point was that at the beginning of this accident, fire brigades were stationed at the site, but because the fire brigade had been handed over to the private sector since the time of the previous minister and had in fact been outsourced, the relevant contractor had also used 90-day workers. These dear people were stationed at the site, but a worker who has been working for 90 days and has no connection to that organization or industry would never put himself in danger or start a fire. Therefore, by the time the fire brigade arrived, unfortunately the unit was hit by a heavy fire and caused deep damage. After this accident, all the fire brigade positions that had previously been eliminated were reinstated by order of the minister.”