Petrochina sparks protests after tightening rules on hiring workers' children

'Automatic guarantee' of employment no longer applies, as workers' degree-holding children must fit certain criteria and training

PUBLISHED : Wednesday, 30 April, 2014, 5:34pm
UPDATED : Wednesday, 30 April, 2014, 5:37pm

Thousands of Daqing Oilfield workers and their families railed against parent company Petrochina’s decision to change a policy that guaranteed jobs for all workers’ children who graduate from university.

The protesters recently gathered at the oilfield company’s base in Heilongjiang province, China Newsweek reported.

Petrochina, the country’s biggest oil producer which owns the nation’s largest oilfield in Daqing, has been trying to cut costs and stay lean for shareholders.

Many parents spent tens of thousands of yuan sending their kids to school so they can have a stable job. Now they don’t want workers anymore

“Staff costs are rising fast, it has become a very important issue, causing great concern for investors,” said Wang Guohui, Petrochina’s former chief accountant.

Petrochina automatically guaranteed employment for their workers’ degree-holding children. However, such recruitment policies are synonymous with state-owned enterprises, not publicly listed enterprises.

Established in 1999 under the state-owned China National Petroleum Corporation, the largest energy company in China, Petrochina was listed on the New York Stock Exchange in 2000.

Petrochina has proposed narrowing the rules to make it more “merit-based”. Starting this year, those from second-tier schools who did not major in energy, along with third-tier university graduates, will be required to go through a year of training.

“These third-tier university grads are already not very good at school. Many parents spent tens of thousands of yuan sending their kids to school so they can have a stable job. Now they don’t want workers anymore,” one protesting employee was quoted as saying.

“China’s population is so big, and one simply cannot find jobs in this market, that is the reality of the problem,” the worker said.

“Daqing belongs to the central government, so we can only [complain to] Beijing, to the CNPC and [the State-owned Assets Supervision and Administration Commission]” to seek justice, the worker added.

China has experienced massive overcapacity in state-owned heavy industries in the past decade. As they attempt to transition towards a consumption-driven, people-centred economy, state-owned firms and other large investment-oriented entities have had to cut costs to stay competitive.

The capital-expenditure-heavy Petrochina promised to make a significant reduction in spending after it delayed refinery projects and expansion plans due to overcapacity.

Its spending for this year dropped 7 per cent year-on-year to 296.5 billion yuan (HK$339 billion). Transport and gas distribution received the heaviest cuts.

This was after it had already reduced its spending for production capacity for the first time since 1999 to improve efficiency.