NATIONAL OIL BARGAINING: ARCHIVES

Transcription

1 NATIONAL OIL BARGAINING: ARCHIVES

2 Disclaimer The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. On this website Shell, Shell group and Royal Dutch Shell are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words we, us and our are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. Subsidiaries, Shell subsidiaries and Shell companies as used on this website refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Companies over which Shell has joint control are generally referred to joint ventures and companies over which Shell has significant influence but neither control nor joint control are referred to as associates. On this website, joint ventures and associates may also be referred to as equity-accounted investments. The term Shell interest is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. This website contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as anticipate, believe, could, estimate, expect, goals, intend, may, objectives, outlook, plan, probably, project, risks, schedule, seek, should, target, will and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included on this website, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained on this website are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell s 20-F for the year ended December 31, 2013 (available at

3 and These risk factors also expressly qualify all forward looking statements contained on this website and should be considered by the reader. Each forward-looking statement speaks only as of the date of the publication mentioned on this website. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained on this website. We may have used certain terms, such as resources, on this website that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No , available on the SEC website You can also obtain these forms from the SEC by calling SEC-0330.

4 SECTION 1: SHELL AND USW NEGOTIATIONS

5 Contents

6 Our commitment to the safe delivery of energy Protecting the health and safety of our workers, our contractors and our neighbors is a top priority for all of our operations. A culture of achieving Goal Zero with no harm and no leaks is good business for Shell and the safe delivery of energy. Shell s aim is to deliver business performance with a focus on Goal Zero, not at the expense of Goal Zero. Goal Zero is important because it goes back to the heart of a fundamental value at Shell, which is respect for people. Shell is committed to operating in a safe and responsible manner while minimizing our impact on the environment. Protecting the health and safety of our workers, our contractors and our neighbors is a top priority for all of our operations. Training and development is a key part of Shell s comprehensive approach to managing safety at our manufacturing sites. All employees are required to complete and stay current on required training. Further, Shell has an expectation that contracting companies who may be working at our facilities have safety standards that meet or exceed Shell s safety standards. Fast Facts When it comes to worker safety, the refining industry injury rate has been improving. According to Bureau of Labor Statistics data, a refinery employee is up to five times less likely to be injured on the job than employees in other manufacturing sectors. The injury rate has steadily decreased including a decline of 40 percent since 2003 for job-related injuries and illnesses. The number of API process safety incidents at Shell represented U.S. Downstream Manufacturing facilities were reduced by 50% between 2009 and Globally, the manufacturing recordable injury case frequency at Shell has fallen by 42% between 2006 and Section 1: Shell and USW Negotiations

7 Our commitment to competitive pay Shell is committed to providing competitive pay and benefits to our employees in an environment where people want to grow, develop and provide for their families. Shell values the contributions of all our employees as essential partners in our mission to provide competitively priced energy products in environmentally and socially responsible ways. We remain committed to providing competitive pay and benefits to our employees in an environment where people want to grow, develop and provide for their families. The company provides a total compensation package intended to attract and retain high caliber employees. This package includes highly competitive wages and bonus opportunity tied to our business performance. The total compensation package for our petroleum employees continues to be in a leadership position compared to other major industries, according to data from the U.S. Bureau of Labor Statistics. 7 Section 1: Shell and USW Negotiations

8 Our commitment to competitive health care coverage Shell is committed to maintaining a competitive health care coverage for employees that promotes and rewards employee/family wellness and prevention. Shell offers a total compensation package intended to attract and retain high caliber employees. This includes health care plans that provide employees and their families with comprehensive health benefits that are competitive within the oil and gas industry. Shell and its employees have a history of shared responsibility toward the cost of health care. The Company subsidizes 80% of the premium cost for both employees and eligible dependents. Employees contribute 20% of the premium cost for themselves and their enrolled family members. Cost sharing arrangements across large U.S. based companies outside our industry typically require a larger employee cost share for family health care. Shell is committed to maintaining a competitive health care coverage for employees that promotes and rewards employee/family wellness and prevention. In accordance with the 2010 Health Care Reform Act (the Patient Protection and Affordable Health Care Act), Shell has updated our medical program to ensure compliance with all aspects of the law. Shell will continue to monitor emerging regulations that impact benefit plans and we will make the necessary changes to ensure continued compliance and a competitive position. It will take time to understand the long term implications and opportunities arising from the Affordable Care Act. Shell will continue to monitor the emerging health care market and evaluate viable alternatives to remain in a competitive position within our industry. 8 Section 1: Shell and USW Negotiations

9 Our commitment to diversity and inclusion Having a diverse workforce is the only way we can accomplish our company objectives. At Shell, working to promote inclusion is not merely a human resources initiative. It is at the very core of how we do business. We embed diversity and inclusion in our culture, through our core values of honesty, integrity and respect for people. We embrace our differences, and rely on differing perspectives to achieve business objectives. Shell s success depends on our ability to attract, motivate, and retain a diverse workforce. Through active recruitment efforts, Shell is succeeding in creating an ever more diverse workplace. Fast Facts Shell in the US has been recognized for achieving a 100 per cent rating in the Corporate Equality Index (CEI), demonstrating our continued commitment to maintaining a fair and equal workplace. 9 Section 1: Shell and USW Negotiations

10 Our commitment to workforce development Shell recognizes that a skilled workforce is essential for safe, productive and sustainable maintenance activities at our facilities. At Shell, we are focused on addressing the workforce needs of our industry and supporting students to consider science, technology and engineering careers. We promote workforce development by building the pipeline to provide access to qualified and diverse talent. By investing Shell s resources in strategic programs, outreach activities and partnerships, we accomplish Shell s objectives and address community needs. Shell recognizes the impact of the emerging national shortage of skilled employees in the US, and we recognize our responsibility in recruiting and developing the next generation of skilled employees. Shell will continue to participate and invest in workforce development initiatives such as ABC Training programs, Community Colleges, Vo-Tech Programs and High School Trade Programs. Fast Facts Shell s Workforce Development Initiative (WDI) was initiated in 2004 by the US senior leadership team as a proactive approach to address the great crew change and shortage of technical talent graduating as engineers, and process technicians. Our WDI is viewed both internally/externally as an integral partner and leader in building a diverse skilled talent pipeline. 10 Section 1: Shell and USW Negotiations

11 SECTION 2: UPDATES & INFORMATION

12 Contents

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14 Update #1: Statement on Expiration of Labor Contract with USW 02/01/2015 Shell and USW have agreed to extend the existing labor contract for at least the next 24 hours while negotiations continue to reach a mutually satisfactory agreement. However, Shell has learned that the USW has given notice to its members at the Shell Deer Park site to begin a strike at 12:01 on February 1, That site has activated its strike contingency plan to continue operations in the normal course of business. Remaining Shell and Motiva sites involved in the contract negotiations (Norco, Convent and Martinez) have received rolling 24 hour extension agreements. We remain committed to resolving our differences with USW at the negotiating table to reach a mutually satisfactory agreement. FAQs What are the outstanding issues? As a matter of company practice, we do not comment on details of pending or ongoing labor negotiations. When will negotiations with USW resume? Shell and USW have agreed to extend the existing labor contract for a rolling 24 hour period at our Norco, Convent and Martinez sites. We remain committed to resolving our differences with USW at the negotiating table and hope to resume negotiations as early as possible. How long do you expect an employee strike to last at Deer Park site? We are unable to speculate. Negotiations continue and our intent is to reach a mutually satisfactory agreement. Who will replace the striking employees at Deer Park site? Are they properly trained? Shell has trained and qualified replacement operators as part of our contingency plan. The replacement operators are primarily Shell employees and the vast majority come from within the site. Are you concerned that workers at your other sites may also decide to strike? It would not be appropriate to speculate. 14 Section 2: Updates & Information

15 Update #2: Note to Deer Park Employees from General Manager 02/01/2015 As you know, USW represented employees at our site were given notice to begin a strike at 12:01 a.m. on February 1, 2015, due to Shell not reaching a mutually satisfactory agreement with the USW at the national level prior to contract expiration. To be frank, we did not expect the USW to give strike notice to our site as we successfully reached a tentative agreement in our local negotiations in July, in record time, with extreme cooperation. However, we had prepared for this possibility and activated our strike contingency plan to continue safe and reliable operations as part of normal business. In the meantime, we remain committed to resolving our differences with the USW and hope to resume negotiations as early as possible to get our employees back to work. I want to recognize and thank all employees that conducted the handover in a safe, respectful and professional manner. It was greatly appreciated and noticed. It is amazing to experience the incredible ownership and caring you all have for our ship and each other! To our USW represented employees please be assured that we care about you and your families. You make a difference in the site journey - we are One Site, One Team, and we look forward to having everyone back here on site. More information will be published on the external Shell Deer Park website ( us/deerpark) as it becomes available. To our folks on site our top priorities are safe and stable operations, so that when our colleagues return, they come back to a site in the same condition as which it was handed over. Thanks for your commitment to our journey. Remember, WE ARE DEER PARK. We hope to be moving forward all together soon. Barry Klein, Shell Deer Park Site General Manager 15 Section 2: Updates & Information

16 Update #3: Shell and USW bargaining status 02/03/2015 Contract with United Steelworkers union in the U.S. expires as negotiations continue; Shell Deer Park represented employees on strike This past weekend, the United Steelworkers (USW) union in the U.S. rejected a fifth bargaining agreement proposed by the Shell bargaining team, who are leading negotiation efforts aimed at an industry-wide pattern agreement with the USW. This led to a strike at several industry facilities, including Shell Deer Park in Texas. USW-represented employees at the majority of Shell and Motiva sites in the U.S. are continuing to work via rolling contract extensions while discussions continue. In a public statement, Shell said, Our local relationship is strong and we will continue efforts to foster the cooperation at our site to operate safely. We regret that we were unable to reach a mutually satisfactory agreement with USW prior to contract expiration. We remain committed to resolving the remaining issues and are confident that we can do so. While there are areas where Shell and the USW have common interests, it s unfortunate that the union has chosen to use a strike as a means to resolve areas where we differ. One of the issues on the table is the company s right to staff operations according to business needs. Shell is committed to operating in a safe and responsible manner while minimizing impact on the environment. The company statement continued, Protecting the health and safety of our workers, our contractors and our neighbors is a top priority for all of our operations. We remain committed to providing competitive pay and benefits to our employees in an environment where people want to grow, develop and provide for their families. Shell would prefer to reach lasting agreements to allow our manufacturing sites to operate safely, serve the community and maintain a positive relationship with the union and our workforce. 16 Section 2: Updates & Information

17 Update #4: Shell and USW bargaining status 02/03/2015 The dialogue continues with representatives from Shell and the USW to further contract negotiations. Shell continues to be committed to resolving the remaining issues in order to arrive at a mutually satisfactory agreement. Shell is the lead company in a process called national pattern bargaining, under which Shell negotiates with the United Steelworkers (USW) regarding issues that affect the Company on a national level. If Shell and the USW reach an agreement regarding those national terms, that agreement is used as a pattern within the industry. The existing National Oil Bargaining (NOB) agreement with the USW expired Sunday, February 1, 2015, at 12:01 a.m. Shell has been negotiating with USW representatives with the intent of reaching a mutually acceptable agreement. Regrettably, no agreement was reached before the expiration deadline. USW called for a strike at a total of nine manufacturing sites nationwide, including the Shell Deer Park Complex. All other Shell sites affected by the negotiations are under a rolling 24-hour extension. Agreements at the local level have been reached at Shell Deer Park Complex, Motiva Norco Refinery, Shell Norco Chemical, Motiva Convent Refinery, and Motiva Port Arthur Refinery. Shell Martinez Refinery continues discussions. A strike contingency plan has been activated at Shell Deer Park, and we have fully trained and qualified employees that are operating the plant. Our goal is to continue safe operations as part of the normal course of business and provide quality products to our customers. Shell and Motiva respect our workers rights to express themselves in a manner that is legal and safe for themselves and for others. Our focus is on reaching a mutually satisfactory agreement with USW that pays our workers a competitive wage, provides comprehensive healthcare coverage, and promotes a safe and healthy work environment for our employees. The dialogue continues with representatives from Shell and the USW to further contract negotiations. Shell continues to be committed to resolving the remaining issues in order to arrive at a mutually satisfactory agreement. We appreciate the USW keeping our employees working by using rolling extensions at the majority of our sites as we continue discussions. Fast Facts Shell and/or Motiva owns/operates nine (9) U.S. manufacturing sites of which seven (7) of those sites have employees who are represented by the USW. There are approximately 3300 union-represented employees across Shell/Motiva Manufacturing sites. Of these employees approximately 95% are USW-represented. 17 Section 2: Updates & Information

18 Glossary of terms 02/04/2015 Glossary of terms relating to the National Oil Bargaining Between Shell and USW Update. Bargaining in Good Faith A characteristic of collective bargaining that is required of labor and management by the National Labor Relations Act. This has been interpreted to occur when the employer and the representative of the employee meet at reasonable times and exhibit both give and take. Collective Bargaining A method of determining conditions of employment resulting from negotiations between an employer and a union. The results are set forth in a collective bargaining agreement. Collective Bargaining Agreement A written agreement or contract that comes from negotiations between an employer and a union. The collective bargaining agreement sets out the conditions of employment such as wages, hours, fringe benefits and ways to settle disputes arising during the term of the contract. Collective bargaining agreements usually run for a set period of time, such as one, two or three years. Impasse The term impasse is the inability of the parties to agree to terms when bargaining. Impasse occurs in labormanagement negotiations when a union and employer determine their differences are irreconcilable. Mandatory Subjects of Bargaining Under the National Labor Relations Act, mandatory subjects of bargaining include any topic that falls under the category of wages, hour, and working conditions. Mandatory subjects of bargaining may be bargained to impasse. National Labor Relations Act (NLRA) Federal legislation passed in 1935 that became the basic law governing private sector collecting bargaining and unions in the United States. The purpose of the act is to promote the orderly and peaceful recognition of unions and the use of collective bargaining as a means for establishing the terms and conditions of employment. Negotiating Committee Members of the union and employer who are selected to negotiate a collective bargaining agreement. Ratification Formal approval of a newly negotiated agreement by a vote of union members. 18 Section 2: Updates & Information

19 Update #5: Negotiations Continued Thursday 02/05/2015 Negotiations continued Thursday and Shell and USW have recessed and agreed to resume talks. Shell s primary focus is for the safety and health of its workers, community and the environment. At this time, we continue to implement our contingency plans utilizing fully trained and qualified employees to operate in a safe and responsible manner. We remain committed to reaching a mutually satisfactory agreement. 19 Section 2: Updates & Information

20 Shell and USW 2015 Oil Bargaining - Just The Facts 02/06/2015 Shell and USW 2015 Oil Bargaining facts in question and answer format Section 2: Updates & Information

21 Shell looks forward to resuming negotiations with USW 02/08/2015 Shell looks forward to resuming negotiations with USW on Tuesday February 10. As part of Shell s contingency plans, we have fully trained and qualified employees who continue to operate our Deer Park plant during the strike. Our goal is to continue operations as part of the normal course of business and provide quality products to our customers. This work can and will be done safely. We expect all employees to work safely. Anyone working on a Shell site has the expectation to intervene and stop work until the job is made safe. 21 Section 2: Updates & Information

22 Shell Staffing and Operational Contingency Plan 02/09/2015 Shell has business continuity plans for events such as work stoppages. Read this fact sheet for more information about the details of Shell s staffing and operational contingency plans. Shell has had a historical practice of creating business continuity plans for our manufacturing sites. Over the past several months, a dedicated team has developed site contingency plans to ensure continued safe operation of our sites in the event of a work stoppage. Our contingency plans cover several key elements including staffing plans, training, site work scheduling employee health, and safety, site security and environmental management. Shell s goal is to safely continue operations as part of the normal course of business and to provide quality products to our customers who depend upon us. Key Facts Dedicated cross-functional contingency planning team Contingency plans updated 12 months in advance of labor contract negotiations All employees must be qualified and trained to meet the same training standards of regular operators We will continue to implement our contingency plans utilizing fully trained and qualified employees to operate in a safe and responsible manner. Safety is the top priority for Shell. Safe operations that protect our employees, the community, and the environment allow us to meet the current and future energy needs of our customers. 22 Section 2: Updates & Information

23 Refining Industry Safety Statistics 02/09/2015 Bureau of Labor Statistics injury/illness comparison chart illustrates Refining industry is safer than other U.S. BLS rates are based on a sample rather a census of the entire population and do not include contractor injury & illnesses numbers in their calculations. The AFPM data is a census of AFPM member companies and contains approximately 97% of the US refining capacity and includes a majority of those site s contractor numbers as well. 23 Section 2: Updates & Information

24 Shell continues negotiations with the USW, focus on safety of operations 02/09/2015 Shell resumes negotiations with the USW this today, committed to working towards a mutually satisfactory agreement. Shell has spent three weeks at the table with the USW s negotiators and continues to discuss a variety of subjects pertaining to a new labor contract. We believe in respectful and professional collective bargaining and have put a number of potential solutions on the table. Shell s primary focus is for the safety and health of its workers, community and the environment. At this time, we continue to implement our contingency plans utilizing fully trained and qualified employees to operate in a safe and responsible manner. 24 Section 2: Updates & Information

25 Worker Safety in the Petrochemical Industry 02/10/2015 Recordable occupational injury and illness incidence rates. Worker safety is a top priority in the chemical industry. Responsible Care companies have an employee safety record nearly six times safer than the average of the U.S. manufacturing sector as a whole, and three times as safe as the business of chemistry overall. From 2009 through 2013, Responsible Care companies averaged less than one OSHA recordable injury or illness per 100 employees. This record-low total recordable injury rate is lower than the retail, agriculture, food store, and general merchandising business sectors. Between 2012 and 2013, the Responsible Care employee recordable safety rate improved by three percent. Together, Responsible Care companies have reduced their recordable injury and illness incidence rates by 80 percent since 1990, making significant progress toward the goal of no accidents, injuries or harm to human health. Information on Decreasing Occupational Injury Rates Injury-and-Illness-Incidence-Rates-General-Merchandise-Stores.pdf Injury-and-Illness-Incidence-Rates.pdf 25 Section 2: Updates & Information

26 USW makes extensive information request regarding Shell business practices 02/10/2015 Negotiations resumed Tuesday between Shell and the USW. Shell is working to provide the latest information the USW has requested. On Saturday afternoon, the USW made an extensive information request regarding Shell s staffing and business practices, including a request for confidential business information. Tuesday, the parties engaged in discussions to clarify the scope of the Union s request; and, we are in the process of collecting relevant information. We continue to discuss issues and negotiate with the USW in the hopes of agreeing on a mutually satisfactory agreement. 26 Section 2: Updates & Information

27 Shell and Industry s Commitment to Safety 02/11/2015 Shell and the refining industry are committed to workplace and process safety as a key value. National Oil Bargaining Our goal at the facility where the USW work stoppage occurred is to continue safe operations by implementing our contingency plans utilizing trained employees to operate the facilities. General Safety/Process Safety Shell is committed to operating in a safe, healthy and environmentally responsible manner, while working to meet the current and future energy needs of our country. The number of API process safety incidents reported at Shell represented U.S. Downstream Manufacturing facilities were reduced by 50 percent between 2009 and Globally, the manufacturing recordable injury case frequency at Shell has fallen by 42 percent between 2006 and In 2013, alone Shell invested around $750 million in the safety and reliability of our refineries, chemical plants and distribution facilities. Shell s refineries operate 24 hours a day and 7 days a week to help meet the current and future energy need. Industry Commitment to Safety The refining industry is committed to workplace and process safety as a key value. According to the Bureau of Labor Statistics data, a refinery employee is up to five times less likely to be injured on the job than employees in other manufacturing sectors. The injury rate has steadily decreased including a decline of 40 percent since 2003 for job-related injuries and illnesses. The industry has invested significant resources on process safety. Community Shell is committed to operating in a safe and environmentally responsible manner. Shell strives to be a responsible and valued neighbor in the communities where it operates. 27 Section 2: Updates & Information

28 Fatigue Prevention Guidelines 02/11/2015 Fatigue Prevention Guidelines for the Refining and Petrochemical Industries 28 Section 2: Updates & Information

29 Shell Deer Park refinery continues to operate safely at planned production rates 02/11/2015 Shell Deer Park continues to operate safely at planned production rates. Lines of communication remain open with USW. While not formally at the negotiating table, the lines of communication remain open. Shell remains hopeful that both parties will reach a mutually satisfactory agreement. 29 Section 2: Updates & Information

30 Shell works to gather extensive information requested by USW 02/11/2015 Shell works to gather extensive information requested by USW 20 days into talks. Lines of communication remain open. Formal negotiations were not held today as Shell continues to work on collecting information requested by USW. Shell remains hopeful that both parties will reach a mutually satisfactory agreement. 30 Section 2: Updates & Information

31 Shell Deer Park refinery remains focused on safety and continues to operate as part of the normal course of business 02/12/2015 Shell Deer Park continues to operate safely at planned production rates. Lines of communication remain open with USW. Shell Deer Park continues to safely operate at planned production rates. While not formally at the negotiating table, the lines of communication remain open. Shell remains hopeful that both parties will reach a mutually satisfactory agreement. 31 Section 2: Updates & Information

32 Face-to-face negotiations to resume next week with USW 02/13/2015 Closing out week three of negotiations, Shell remains committed to safe operations and providing quality products We are continuing to work diligently to collect the extensive information requested by the USW and look forward to resuming face-to-face discussions next week. As we close out the third week of negotiations with the USW, we remain committed to maintaining safe operations as part of the normal course of business and to providing quality products to our customers who depend upon us. We continue to implement our contingency plans at the Shell Deer Park Site utilizing fully trained and qualified Shell employees to operate in a safe and responsible manner. 32 Section 2: Updates & Information

33 Shell looks forward to resuming discussion with USW 02/17/2015 Shell looks forward to resuming discussion with USW, goal remains reaching a mutually satisfactory agreement. Shell expects to resume face-to-face discussions with the USW on Wednesday, Feb. 18, in hopes of reaching a mutually satisfactory agreement. Since initiating negotiations with the USW on Jan. 21, Shell has presented six proposals. However, we remain committed to reaching a mutually beneficial agreement with the USW that will ensure that our employees continue to earn wages that are among the highest in the industry, will enable the company to maintain its position as a leader in the U.S. oil industry, and sets a standard that will keep the U.S. oil industry competitive in the global marketplace. 33 Section 2: Updates & Information

34 Shell resumed negotiations with USW today 02/18/2015 Shell resumed negotiations with USW today and continued to work towards reaching a mutually satisfactory agreement. Shell believes in respectful and professional collective bargaining. Shell is dedicated to the safety and health of its workers. Our fully trained and qualified employees continue to safely operate the Deer Park Refinery. 34 Section 2: Updates & Information

35 Shell continues to work toward mutually satisfactory agreement with USW 02/19/2015 Shell continues its dialogue with USW for the second straight day Shell continues its dialogue with USW for the second straight day in hopes of reaching a mutually satisfactory agreement. 35 Section 2: Updates & Information

36 Frequently Asked Questions about the USW strike and negotiations 02/19/2015 Learn more about the ongoing strike and negotiations with the USW. Health and Safety Q. What is Shell doing to address health and safety, fatigue, staffing levels, contracting out of daily maintenance jobs and healthcare? A. The company continues to bargain in good faith with the union regarding several issues. It is important to note that the subject of health & safety and fatigue were addressed in the 2012 negotiations and subsequent contract agreement. This agreement included provisions to strengthen and improve process safety and fatigue management. Q. Are the current negotiating issues really about safety versus wage and benefits? A. We are negotiating several issues with the USW including wages, benefits and their concerns surrounding safety and contract labor. One of the issues being discussed is the company s fundamental right to staff operations according to business needs. Shell s need for flexibility is consistent with our commitment to safety. Shell is committed to operating in a safe and responsible manner while minimizing our impact on the environment. The health and safety of all employees and neighbors is a top priority for our operations. Q. What is Shell s position regarding provisions to prevent workers fatigue at refineries/chemical plants? A. Shell is currently bargaining with the union to address the issue and we are committed to operating in a safe and responsible manner. Q. Does each refinery/chemical plant have required safety training programs that employees must complete to be employed full-time? A. Training and development is a key part of our comprehensive approach to managing safety at our manufacturing sites. All employees are required to complete and stay current on required training. Further, Shell has an expectation that contracting companies working at our facilities have safety requirements that meet or exceed Shell s safety requirements. Wages Q. Under the existing labor agreement, what is the average wage at Shell refineries? A. Union represented workers earn, on average, $37 per hour, additionally, employees have the opportunity to receive overtime and shift premiums and a comprehensive benefits package. Shell remains committed to providing competitive pay and benefits to our employees in an environment where people can grow, develop and provide for their families. 36 Section 2: Updates & Information

37 Production / Supply Q. Are the striking Shell refineries and chemical plants operating at capacity? A. All Shell facilities are currently operating at full capacity. Our goal is to continue operations as part of the normal course of business and provide quality products to our customers. Q. How long can operations at the Shell Deer Park complex be sustained during the strike? A. As part of our contingency plans, we have fully trained and qualified Shell employees operating the Shell Deer Park complex. Our goal is to continue operations as part of the normal course of business and provide quality products to our customers. Q. Are Shell s other facilities operating? A. Shell s other U.S. manufacturing sites have not been impacted by the strike called at the Deer Park Complex and continue safe operations as part of the normal course of business. Negotiations Q. Why is Shell negotiating with the United Steelworkers (USW)? A. Shell is the lead company in the National Oil Bargaining process. Under this process, Shell negotiates with the USW regarding issues that affect the company on a national level (wages, term of the agreement, etc.) If Shell and the USW reach an agreement regarding those national terms, that agreement is used as a pattern within the industry. Q. How does the contract and negotiation process work? A. Under the National Labor Relations Act, Shell and the USW have a duty to bargain in good faith regarding terms and conditions of employment. Q. Are contracts typically extended past the expiration? A. It is not unusual for contract extensions to be given past their expiration date. Q. Will the no-retrogression language that refers to acceptance of previous agreements with the industry, be included in the settlement? A. With respect to the process, we will not discuss individual bargaining items. Q. Has the use of a third-party mediator been considered? A. We remain committed to bargaining in good faith with the union through the National Oil Bargaining process. Q. When can an agreement expect to be reached? A. We are not able to speculate on the timing of when an agreement can be reached. We would prefer to reach lasting agreements and remain committed to working through the bargaining process. 37 Section 2: Updates & Information

38 Q. Is Shell bargaining in good faith? A. Shell is bargaining in good faith and is committed to working through the collective bargaining process. We regret that we have been unable to reach a mutually satisfactory agreement with the USW prior to contract expiration; however, we are committed to resolving the remaining issues. Q. Has Shell had unfair labor practice charges filed against them? A. We are not aware of any unfair labor practice charges filed against Shell. Q. Has there been an occurrence of retaliation against striking workers? A. We respect the right of our employees to engage in protected activity; and, we have not, and would not, retaliate against any employees who exercise that right. Q. What is Shell s stance on picketing and protests? A. Shell respects the right for people to peacefully and safely picket and protest. We also remain committed to continuing negotiations with the USW with the ultimate goal of reaching a mutual agreement for both parties. Q. Have other strike notices been issued at any of the company s refineries or chemical plants? A. At this time, we are not aware of any such action. 38 Section 2: Updates & Information

39 Negotiations continue today 02/20/2015 Shell remains committed to reaching a mutually-satisfactory agreement Shell continued negotiations yesterday and proposed a seventh offer to the USW. We remain committed to the negotiations and to reaching a mutually-satisfactory agreement. 39 Section 2: Updates & Information

40 No agreement reached today 02/20/2015 Discussions with the United Steelworkers concluded for this evening. Discussions with the United Steelworkers concluded for this evening with no agreement in place. 40 Section 2: Updates & Information

41 Shell extremely disappointed with new USW strike notices 02/21/2015 We remain committed to continued safe operations and productive negotiations. We are extremely disappointed that the USW has issued additional strike notices for Motiva Port Arthur Refinery beginning at midnight Friday, and Motiva Convent, Motiva Norco and Shell Chemicals Norco, beginning at midnight Saturday. We believe this move sets the wrong tone for both parties to move forward and reach an agreement. We remain committed to continued safe operations and productive negotiations. 41 Section 2: Updates & Information

42 Current status of the negotiations as provided to employees on February 21, /21/2015 Shell offers update on current status of negotiations Below are excerpts from an internal employee communication providing an update on the current status of the negotiations with the United Steelworkers International Union: One month ago, Shell Oil Company sat down at the bargaining table with a negotiating team representing national leaders of the United Steelworkers International Union (USW). Our goals were and still are to reach an agreement that respects the needs and interests of our employees and ensures the ongoing safety as well as economic health of Shell refineries and chemical plants. To that end, we have put seven offers on the negotiating table. The USW International Union leaders have rejected all seven of them. In addition to striking at our Deer Park refinery, chemical plant and lab, the USW on Friday, called for strikes at Motiva s Port Arthur Refinery, Motiva Convent, Motiva Norco and Shell Chemicals Norco. In total, 14 facilities across multiple industry companies are facing strikes. As these strikes occur, we re grateful for the strong relationships we have maintained with employees at our sites, which was demonstrated through the care and respect given during the handover to replacement workers thus far. We re extremely disappointed that the USW International Union has seemed unwilling to achieve a timely and reasonable agreement, particularly since we have fostered strong cooperation with local members as evidenced by the productive outcome at many local negotiating tables. Indeed, we re seeing little evidence that the USW s leaders are interested in a meaningful settlement any time in the foreseeable future. We note, also, that it is not clear that the USW International Union leaders share our commitment to bargain respectfully at the negotiating table preferring, instead, to misrepresent the facts in the media. With that in mind, I d like to share with you more information about the position we have taken during the course of bargaining and the issues we are attempting to resolve. The central issue standing in the way of a settlement is not safety or fatigue, nor is it even about healthcare or wages, as the union claims. Those things are important to all of us, and it s important to share that we have engaged in productive negotiations regarding each of these issues. The central issue of the USW s national leaders is their continued demand that Shell replace routine maintenance contractors with USW-represented employees. 42 Section 2: Updates & Information

43 It s unreasonable for the USW to demand that Shell agree to their position. Our established practice of utilizing contractors supports the need for flexibility in hiring to accommodate economic cycles and maintenance schedules. And we re open to a variety of ways to maintain a strong roster of skilled craftsmen available to each of our locations. But hiring flexibility is a proven way to protect our core Shell workforce and the long-term economic viability of our business. It is the most effective way to keep our sites running safely, efficiently and reliably. This strategy has served us well as we have not had to conduct any layoff in decades. Despite our disappointment, we will continue to negotiate in good faith. These strikes are unfortunate in light of Shell s commitment to our employees and our diligent focus on safety and training, as well as our highly competitive compensation and benefits package. For more information about National Oil Bargaining, please visit the Shell National Oil Bargaining website ( 43 Section 2: Updates & Information

44 Shell remains committed to continued safe operations and productive negotiations 02/23/2015 Negotiations with the USW concluded February 20 after the seventh offer presented by Shell was rejected by the union. As of today, no date has been set to resume talks. Shell looks forward to working towards reaching a mutually satisfactory agreement. We continue to enact our contingency plans, utilizing trained and qualified Shell employees to operate in a safe, responsible manner. We remain committed to providing the quality products that our customers depend upon. 44 Section 2: Updates & Information

45 Shell and USW 2015 Oil Bargaining - Just The Facts: Update 02/26/2015 An update to Shell and USW 2015 Oil Bargaining facts in question and answer format Section 2: Updates & Information

46 Shell shares reminder of what s at stake in 2015 labor negotiations 02/27/2015 The issues explained, along with details of what Shell has offered the USW pdf One month ago, Shell negotiators sat down at the bargaining table with the United Steelworkers International Union (USW). Our goals were and still are to reach an agreement that respects the needs and interests of our employees and ensures the ongoing safety as well as economic health of Shell refineries and chemical plants. Shell has made seven offers to the USW, each of which has been rejected by the USW. We re extremely disappointed that the USW International Union has seemed unwilling to achieve a timely and reasonable agreement. Below you will see each of these issues explained, along with details of what Shell has offered the USW. The central issue standing in the way of a settlement is not safety or fatigue, nor is it even about healthcare, wages or no retrogression as the union claims. The central issue is the USW s demand that Shell replace routine maintenance contractors with USW-represented employees. Shell s most recent proposal covers the four key areas which have been the focus of our negotiations with the USW and continue to be reported by the news media in terms that lack clarity and fail to represent their true meaning: fatigue, use of contractors, healthcare and wages. USE OF ROUTINE MAINTENANCE CONTRACTORS The use of routine maintenance contractors is the central issue of the negotiation. The USW is demanding Shell replace routine maintenance contractors with USW-represented employees a demand the company deems unreasonable. Our established practice of utilizing contractors supports the need for flexibility in hiring to accommodate economic cycles and maintenance schedules. We re open to a variety of ways to maintain a strong roster of skilled craftsmen available to each of our locations. But hiring flexibility is a proven way to protect our core Shell workforce and the long-term economic viability of our business. We believe it is the most effective way to keep our sites running safely,efficiently and reliably. This strategy has served us all well,as we have not had to conduct any layoffs at our manufacturing sites in decades. 46 Section 2: Updates & Information

47 OUR OFFER: Shell retains the flexibility to use routine maintenance contractors in our business which enables us to operate safely and adapt to a dynamic business landscape. We have offered a willingness to jointly discuss opportunities related to craft employee recruitment and development, and routine maintenance staffing needs. FATIGUE The American Petroleum Institute (API) issued its recommended practice entitled Fatigue Risk Management for Personnel in the Refining and Petrochemical Industries known as API RP-755 in Fatigue risk management was already a part of Shell s safety culture Downstream Manufacturing had developed and implemented global manufacturing overtime guidelines in OUR OFFER: We have proposed a workload balance assessment, along with an annual review of local practices and the protection of lost wages in connection with mandatory rest periods within an employee s regular schedule. HEALTHCARE Healthcare refers to the health benefits that are part of Shell s Employee Value Proposition, and only one part of Shell s health and wellness benefits package. Shell also offers wellness programs for employees and their families to proactively manage their health, encourage healthy lifestyles and provide incentives that reward prevention. Shell s healthcare benefits remain competitive. OUR OFFER: Shell has offered to renew its current contributions toward premiums for the Shell medical plan, based on an employer contribution rate of 80%. Importantly, these are the same benefits Shell provides to all of its U.S. employees. WAGES Wages refers to the annual increase in the hourly rates of pay for the term established by the contract currently under negotiation. It does not reflect the wealth component that is a part of Shell s benefits package, which also includes a pension, a company 401K contribution, an employee stock purchase plan and annual business performance bonuses. At Shell refineries, union represented workers earn, on average, $37 per hour. Additionally, employees have the opportunity to receive overtime and shift premiums and a comprehensive benefits package. Shell remains committed to providing competitive pay and benefits to our employees in an environment where people can grow, develop and provide for their families. The total value of Shell s total compensation and benefits package is in excess of $150,000. OUR OFFER: Shell has proposed a three-year increase of 2%, 2% and 2.5%, respectively. This proposal is slightly lower than the increase we settled in 2012, when the energy market was stable and much stronger. 47 Section 2: Updates & Information