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Mexico’s state oil company hasn’t paid hundreds of workers for months

Business

Mexico’s populist president is trying to reshape the country into an economy with strong worker protections that is driven by oil growth. Yet hundreds of workers at state oil firm Pemex have gone unpaid for months, current and former employees told Quartz.

Even in the midst of the coronavirus pandemic, Pemex has not paid many of the employees it hired on temporary contracts in 2019 and hasn’t provided them with the health insurance, vacation, or other benefits it normally does, the sources said. The contractors work in a division that builds and renovates refineries—and many are assigned to the controversial $8 billion Dos Bocas refinery project in Mexican president Andres Manuel Lopez Obrador’s home state of Tabasco. While most of the unpaid contractors are now working remotely, sources said some are still working at the construction site.

Lopez Obrador, a resource nationalist who wants Pemex to drive the Mexican economy as it did in the 1960s and 1970s, has made Dos Bocas central to his bid (paywall) to revive the firm, which is Latin America’s second-biggest company by revenue. But Pemex is also the world’s most indebted oil company. It lost $35 billion last year and Fitch downgraded the firm’s credit rating even further into “junk” territory earlier this month.

Although the failure to pay workers began long before Lopez Obrador took power, the problem is antithetical to his plans for a “fourth transformation” of Mexico into a worker-friendly country, a former Pemex board member said. “Unfortunately, the current administration’s attitude towards workers is not what I would have hoped from a leftist government,” they said. “It’s a huge level of uncertainty for these people.”

As Mexico’s economy reels from the pandemic, Lopez Obrador has refused to take on more debt to stop it shrinking as much as 10% this year. He also ignored suggestions that he fund an economic stimulus by rerouting money from non-urgent projects like the Dos Bocas refinery. Even before the coronavirus crisis, many analysts said it would be cheaper to import foreign oil than refine it via the costly project, while pointing out that Mexico’s six existing refineries work at less than 30% capacity. “There’s so much cognitive dissonance it makes you dizzy,” said Jeremy Martin, vice president for energy and sustainability at the Institute of the Americas think tank. The president’s coronavirus response plan isn’t “a stimulus as much as a doubling down on commitments he’d made as a candidate and in the early part of his presidency—including Dos Bocas,” Martin said.

Amid plunging prices, global oil producers sought an agreement to cut production last week. But Lopez Obrador—banking his political future on the state oil industry—fought hard against those cuts, and on Sunday struck a deal that allows Mexico to cut production far less than other producers. That could end up costing Pemex, however, if it keeps working on unprofitable oil fields.

For several years, issues with Pemex’s funding and its labyrinthine human resources system have forced contract workers to go months at a time without pay. When their contracts lapse, managers informally ask them to continue working in the hope they will be later remunerated and given a full-time contract, sources said. “As far as the human resources system goes, [they] don’t exist,” said one current Pemex employee, who asked to speak anonymously for fear of losing their job. While the problem predates Lopez Obrador’s administration, the situation has since become “critical” in part due to coronavirus, the source said.

Pemex hasn’t taken adequate measures to protect those working onsite, another employee told Quartz. The firm provides hand sanitizer and a doctor checks people’s temperatures when they enter, but they don’t have masks or gloves and social distancing measures aren’t in place. “There was a certain disdain [toward the virus] in the early days of the pandemic,” the former Pemex board member said. “They have started taking stricter measures…but they’re missing a lot.”

Energy secretary Rocio Nahle tweeted an image from the Dos Bocas site last week, which showed workers without masks who seemingly weren’t keeping to government guidelines of standing 1.5 meters (5 feet) apart.

Lopez Obrador’s cabinet has ordered a month-long shutdown of all non-essential activities. Energy and critical infrastructure projects are allowed to continue, but Dos Bocas shouldn’t fall under that category, said Duncan Wood, director of the Mexico Institute at the Wilson Center think tank. “If you’re talking about refineries already producing fuel for the economy, yes, that’s essential,” he said. “But, no, projects that are being built can be delayed without any problem for the country…if you had a shortage of fuel, you’d import it from the US because the prices are low.”

Since Pemex isn’t covering their healthcare, pregnant women and people with chronic illnesses often pay for private insurance so they can see doctors, said a person working on the Dos Bocas project who sent Quartz files showing they hadn’t been paid since December. “Pemex’s salaries are very attractive. But it is like a bet,” the person wrote in a message. “You may work for free in order to be considered as a ‘loyal asset.’”

By asking people to work without a contract, Pemex is breaking Mexican employment law, said Adolfo Armas, a labor lawyer at Mexico City law firm Goodrich, Riquelme y Associados. The unpaid employees have the right to take Pemex to court and claim months’ worth of pay and other compensation, but a case normally takes between two and five years in Mexico’s backlogged labor courts, he said. The government, he added, could also inspect and fine Pemex for the breaches.

As of April 2019, there were 356 people across the division working on temporary contracts, according to an internal document seen by Quartz. In January, and again in March, a manager wrote to Pemex’s security division to ask that they give certain workers access to Pemex sites, files seen by Quartz show. People without active contracts can’t access Pemex workplaces without special permission.

The firm is also failing to pay contracting companies on time. “They have not been paying [contracting companies] for many months,” said David Enriquez, an energy lawyer at Goodrich Riquelme. “The amount owed to contractors is really huge and, of course, Dos Bocas is not an exception—even when Dos Bocas is [the president’s] pet project.”

Aside from its costs, Dos Bocas has stirred controversy for environmental abuses linked to the project. Quartz previously reported that Pemex has illegally cut down protected mangrove trees on the project’s site, which was already prone to flooding. Lopez Obrador’s appointee at the federal environment watchdog canceled a fine imposed on a company that earlier chopped down mangroves at Dos Bocas.

Pemex didn’t respond to a request for comment on this story.

qz



11 Comments on "Mexico’s state oil company hasn’t paid hundreds of workers for months"

  1. Antius on Fri, 17th Apr 2020 4:24 am 

    I have been asked some funny questions, but this one takes the cake. I thought I would share my answer with you guys for your amusement. What do you think? Am I on the ball or way off?

    Qu: ‘What does it feel like to break the hymen of a girl? Do guys feel proud?’

    How does it feel to break the hymen of a girl? Do guys feel proud?
    Not sure if I feel proud or not. This is the point where I am supposed to reassure you that virginity is unimportant, that it doesn’t matter, that most men won’t feel the difference. But none of that is true is it? Many men and women have a lot of hang ups about this and for good reason. It can literally make or break a woman. She can only do this once. When she does, she connects with you in a way that can feel like magic, but she burns her bridges with every other man in the world. That can be beautiful and also profoundly ugly. If a woman loses this to the wrong man, other men will never look at her in the same way. There is no way of sugar coating that very unpalatable fact. Some women will break their hymen before they have sex. But this is very unusual. It is actually quite a reliable proof of virginity.

    From my point of view, breaking my girlfriend’s hymen was one of the defining moments of my life and hers. She was a few years older than me and we were both at university. Did it feel good? Oh Yes. You definitely feel the difference. You can feel the membrane stretch and slowly open onto the tip of your penis like a little flower. Hence, deflowering. It is very pleasant in a fleeting sort of way. But it took maybe a few seconds. But yes it did feel wonderful. And it was quite unmistakable. This isn’t something that happens by accident. And it isn’t something that a man will be remotely unsure about. He will know that it has happened! After the initial breaking, there was quite a strong musky smell. That is normal I think. The hymen is like a dam, and usually there is a small amount of ‘stuff’ trapped behind it. Don’t let that or the bleeding freak you out: it is all a normal part of the experience.

    I spent the next ten minutes kissing her, cuddling her, stroking her hair and generally reassuring her as she cried in pain. That sounds awful doesn’t it? It actually built a lot of trust and intimacy between us. It felt like a joining. She became part of me and I became part of her. From that point onward, we belonged to each other. There is nothing quite like that in the world and it is how it is meant to be. It is more an emotional experience than a physical one, but the physical side is part of it.

    I had had other girlfriends before her, but she is the only virgin I ever slept with. I feel connected with her in a way that I never was with the others. The next day, I went out and spent half of all the money I had and bought an engagement ring and proposed to her. Twenty years and three children later, I am still in love with her. Looking after her, protecting her and making her dreams come true is what I live for and I fear anything that might drag us apart.

    If a woman chooses to do this with you, appreciate it for all that it is. From her point of view, it is a complete commitment. As her blood flows into the tip of your penis, she is becoming part of you and you are part of her. It is a commitment to marriage and the physical embodiment of marriage; in every way it is a joining. I appreciate my wife in ways that I never would if I had been the last of many boyfriends. She will be part of me until the day they burn my bones.

    My advice to girls: be cautious. If a man wants to go this far with you, make sure he has put at least an expensive engagement ring on your finger. Your virginity is something you should put a very high price upon, because it is a one time deal. It is your opening night and your moment of bonding. There is no getting it back. And it will be very obvious whether you are or not. There is no faking it. In the weeks leading up to the event, don’t be afraid to let your vagina get smelly. It cannot really get ‘too smelly’ and it will never be unpleasant for your man; it is like a musky little flower. Sex is a biochemical as much as a physical event. When you do it, you want as much of your pheromones to end up in the mans bloodstream as possible. That is part of the whole bonding thing – he needs to become physically addicted to you. Leave off the condoms. And hold his penis still inside your body for as long as possible, preferably all night. You want your blood and pheromones to get inside of him, just as he will be inside of you. The first time is all about bonding. The more you can become part of him, the more likely the whole thing will work out.

    My advice to men: This is the ultimate act of joining with a woman. Take your time and savour every moment. The first time a woman has sex is profoundly special, but it needs to be all about her. Women enjoy being dominated, and this is one occasion where you really have to take the lead. But you cannot fuck her too hard. Be firm, but gentle. Make sure you are clean. A woman should be quite smelly down below, but a man should always be clean. Let her leave her scent on you and not the other way around. Be prepared for her to scream and cry a little. Don’t be frightened by that. You will spend a lot of time cuddling her and telling her how much you love her. Once the hymen breaks and you are past it, do not try and move. Sex will if anything take longer than usual, but you lay very still and gently with the tip of your penis just inside of her. As her blood enters the tip of your penis, it will start to feel numb. Don’t be afraid to let that happen. There is nothing disgusting about allowing her to become part of you. If you do this right , your dating days will be over and she will be the last woman you sleep with and your wife until you both die from old age. Make sure your apartment is clean and the beds are fresh. Women are like birds. You need to make a nest that is good enough for her to lay in. She will bleed all over your sheets and all over you. Let her and make nothing of it.

    Propose to her after you finish, if you haven’t already. You will want to anyway and have the ring ready. It works well if you bring her breakfast in bed and propose after you have both eaten.

    Can’t think of anything else. Happy humping!

  2. Abraham van Helsing on Fri, 17th Apr 2020 4:39 am 

    That’s quite an interesting take on Mexican oil workers not being paid.

  3. Antius on Fri, 17th Apr 2020 4:57 am 

    Yeah. No one else on this board sticks to the topic, so why the heck should I? I think lockdown is doing bad things to my brain.

    In the meantime, here is an interesting link for Cloggie.
    https://gridwatch.co.uk/

    It should help you think about the most practical means of energy storage in a renewables dominated system.

  4. Abraham van Helsing on Fri, 17th Apr 2020 5:35 am 

    I know, just kidding.

  5. Davy on Fri, 17th Apr 2020 5:54 am 

    “Global Food Supply Chains Beginning To Erode As Crisis Looms”
    https://tinyurl.com/ybsddtuy gold telegraph

    Smithfield Foods Inc. will halt its pork-processing facility in South Dakota, which accounts for 4% to 5% of U.S pork production. The company also warned that closures across the country are taking American meat supplies “perilously close to the edge” of shortfalls. This is just one of the latest examples of the coronavirus beginning to disrupt food chains at a more significant scale rapidly. We anticipated this, as we reported on April 1 that food supply chains were in the early stages of being strained. Many countries were preparing many weeks ago by cutting back on exports to begin stockpiling. Surprisingly, dairy farmers in the United States are starting to dump milk because there was no place for them to go as the marketplace for dairy products has been affected by the closures of restaurants, schools, hotels, and food service businesses…However, there is a dramatic difference today. Prices are not dropping; in fact, grocery bills are getting more expensive by the day. Supply chains are being disrupted due to the transportation and of course processing of a vast selection of foods. As we are beginning to learn, the country where the coronavirus started, China, may now be facing a food crisis…

  6. Davy on Fri, 17th Apr 2020 6:36 am 

    “Wuhan Coronavirus Death Toll Revised 50% Higher, Chicago Remdesivir Trial Revives Hopes For ‘Miracle Drug’: Live Updates”
    https://tinyurl.com/ybv9u4ua zero hedge

    “Twitter’s Melissa Chen jokingly compared China’s ‘50%’ revision to when a student purposefully marks wrong answers on their homework to cover up the fact that they’ve been cheating. When you realize that the teacher would be suspicious because you did too good of a job cheating on your homework, so you threw in some errors:https://t.co/tlHASEudVV — Melissa Chen (@MsMelChen) April 17, 2020 But Wuhan is slightly larger than NYC population-wise, and the outbreak in Wuhan was even more vicious than the outbreak in NYC, which has reported more than 10k deaths. So imagine what that must mean for Wuhan, where the hospital system was completely overwhelmed during the early weeks of the outbreak, leaving some elderly patients to drop dead on the street (something that, as far as we know, hasn’t happened in the US).”

  7. Davy on Fri, 17th Apr 2020 6:43 am 

    “USDA Wants To Purchase Farm Products To Support Food Banks”
    https://tinyurl.com/yboyapk2 zero hedge

    “Coronavirus shutdowns have completely disrupted food supply chains from restaurants to supermarkets to distributors to processors, all the way down to farmers. Why is this? Well, America is under government-enforced lockdowns to flatten the pandemic curve, is preventing consumers from eating at restaurants and bars, which has shifted how they source food products to supermarkets entirely. Basically, what happened is that farm products for commercial clients that have yet to be packaged for consumers are being dumped as the restaurant industry folds, which has forced the Trump administration to intervene…the likely end destination will be food banks that are experiencing the most significant demand surge ever as 17 million people have just filed for unemployment claims. The Trump administration understands that if food shortages appear at food banks, people will become hangry, and that is one trigger of where social unrest could be sparked. As part of the coronavirus relief bill, Congress has allocated $23.5 billion in aid for farmers. And of that, it appears around $15.5 billion could be used to purchase milk and meat products that will likely be sent to food banks to support the working poor.”

  8. Davy on Fri, 17th Apr 2020 7:06 am 

    “A Bad Global Precedent” – Chinese GDP Collapses More Than Expected, Worst Since At Least 1992”
    https://tinyurl.com/yalbqvce zero hedge

    “Source: Bloomberg Of course the big one tonight is Chinese GDP growth. The median forecast of economists surveyed by Bloomberg was for a 6% contraction in the first three months of the year, when the coronavirus outbreak forced an unprecedented lockdown of factories, stores and schools across the country (ING Bank saw a +3.6% print and at the other end of the spectrum, Capital Economics forecast a 16.0% contraction in GDP). “China’s economy is going to recover only gradually,” said Scott Kennedy, senior adviser and trustee chair in Chinese business and economics at the Center for Strategic & International Studies. “If the government over-stimulates, the only result will be a lot of wasted spending and greater debt. And that won’t help resolve the core problem of China’s economy: low productivity. Additionally, the government will also release data for retail sales, fixed asset investment and industrial output for March, offering the most complete picture yet of the economic destruction since the virus outbreak (but we have already seen the collapse in this monthly data for February and expectations are for a rebound or slowdown in the collapse). And so here we go… the magic number for tonight is… a miss – Chinese GDP shrank by 6.8% from a year ago (considerably worse than the 6.0% drop expected) and the worst drop on record (since 1992)”

  9. Davy on Fri, 17th Apr 2020 7:22 am 

    “WHO expert warns of four deadly waves”
    https://tinyurl.com/yblddt24 asia times

    “Covid-19 is about to march through sub-Saharan Africa and perhaps the Indian subcontinent like an avalanche”

  10. lol guyes and supertard eat with kim is my fav mukbang show girl on Fri, 17th Apr 2020 7:40 am 

    i love watching mukbang shows
    and i love supremacist muzzies

  11. Abraham van Helsing on Fri, 17th Apr 2020 8:09 am 

    Another WHO expert has “up to 10 waves” in store for Britain:

    “Britain could have 40,000 deaths in first coronavirus outbreak and may be hit by up to TEN waves of the infection before population achieves herd immunity, former WHO official warns MPs”

    https://www.dailymail.co.uk/news/article-8229009/Britain-faces-TEN-waves-coronavirus-population-achieves-herd-immunity.html

    If a young starter would ask me for career advice, I should say: “Go South, young man, go South”, meaning pick up undertaking, that is digging someone else his grave:

    https://www.mooie-zinnen.nl/wp-content/uploads/2017/05/spreekwoord-op-tegeltje-de-een-zijn-dood-is-de-ander-zijn-brood.png

    (Dutch proverb: “the one his deadth is the other his bread”. In Dutch it rimes).

    If you want to be really cynical, you could conclude that British (or every other) pension funds will have resources in abundance to fund the energy transition after corona:

    10 x 40,000 dead x 2 year less life expectancy x 15,000 GBP = 12 billion GBP

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