OIL REFINERIES (Capital investment and employee establishment)

Mr Bernard Rodrigues asked the Minister for Finance if he will ascertain and inform the House (a) the total amount of capital invested to-date by the oil refineries which were given pioneer status and various incentive benefits; and (b) breakdown figures of (i) the number of employees newly recruited, locally and from abroad, by the various oil companies for the refineries; and (ii) the number of employees transferred from the various departments of the oil companies to the refineries.

Dr Goh Keng Swee: The total fixed capital investment of the oil refineries which were given pioneer status to date amounts to $124,814,575.00. To date the employment of the oil refineries given pioneer status numbers 398, and of these 56 were transferred from other departments and trained for the refineries. The local employees number 378 and foreign employees 20.

Mr Bernard Rodrigues (Telok Blangah): Is the Minister aware that despite the pioneer status given to the Shell Group, they are preparing early retirement for some 400 employees which may ultimately lead to their retrenchment?

Dr Goh Keng Swee: Sir, I am not aware of that. The fact that a company is given pioneer status does not mean that it is not entitled to reduce its staff if it finds that it has excessive staff for the work and for the market that it has to serve.

Mr Ho See Beng: Will the Minister support the Shell Company in the event that there is a manpower exercise which leads to the dismissal or retrenchment of 400 or so employees? And in the event that the company is willing to compensate all those affected employees, will the Minister support the Company's policy for this retrenchment, if the company can pay sufficient compensation to the employees?

Dr Goh Keng Swee: I am not quite sure what the supplementary question is. I do not think I am called upon to support or oppose any action taken by a private firm in respect of its own staff. All private firms have the right under the law to increase or to reduce their staff according to what they think is in the interest of their business. One hopes, of course, that employers will not retrench staff unless there are over-riding reasons for so doing. In the case of Shell Company, I have always known them to be very good employers paying good wages, and in the event that they find it regrettably necessary to reduce or retrench staff, they have always paid very handsome retrenchment terms.

Mr Bernard Rodrigues: Sir, I thought pioneer status was given to companies to help reduce the unemployment market?

Dr Goh Keng Swee: No, Sir. Pioneer certificates are given to companies for producing pioneer products. And when they produce a new product or establish a factory, it follows that they will give more employment to people. In the case of Shell Company, it could well be that they have found that they have got an excessive number on their establishment. If this is the case, then in the interest of efficiency and higher productivity, it is quite open to them and it is only right that they reduce their staff to the number that they think they need to carry out their work efficiently.