Definitive Report - Report No 372, June 2014

1. 434. The complaint is contained in a communication dated 19 August 2013 from Industri Energi (IE), the Norwegian Confederation of Trade Unions (LO), the Confederation of Organised Workers in the Energy Sector (SAFE) and the Confederation of Vocational Unions (YS).
2. 435. The Government sent its observations in a communication dated 19 December 2013.
3. 436. Norway has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), as well as the Collective Bargaining Convention, 1981 (No. 154).

A. The complainants’ allegations

1. 437. In their communication dated 19 August 2013, IE, LO, SAFE and YS allege the breach of ratified Conventions Nos 87 and 98 in 2012 when the Government intervened in collective bargaining and imposed compulsory arbitration, although the conditions for instituting compulsory arbitration were not fulfilled.
2. 438. The complainants indicate that IE is affiliated with LO and SAFE is affiliated to YS. SAFE is Norway’s only pure federation of trade unions for workers in the energy sector and currently has approximately 11,500 members working in operating companies on the Norwegian Shelf, oil service businesses, rig-owning shipping companies, maintenance companies, catering companies and at landing and processing terminals onshore. IE is the fourth largest trade union affiliated to LO and has close to 60,000 members working in the industry and energy sector in Norway, organized vertically in the oil business. LO is Norway’s largest union confederation, and more than 880,000 members are organized in unions that are its affiliates. YS is a politically independent federation for workers and has an affiliation of 21 different unions, with a total of approximately 227,000 members from all sectors of working life.
3. 439. The complainants allege, in connection with wage bargaining in 2012, that they gave notice of termination of their collective wage agreements with the employers’ organization, the Norwegian Oil and Gas Association (OLF). IE terminated its agreements (“The Agreement for Operating Companies (Operatoravtalen)”, “The Catering Agreement (Forpleiningsavtalen)” and “The Drilling Companies’ Agreement (Borebedriftsavtalen)”) on 27 January 2012. SAFE terminated “The Oil Collective Agreement – Shelf (Oljeoverenskomsten sokkel)” on 13 December 2011. All agreements expired on 31 May 2012. The complainants further add that negotiations for new collective wage agreements commenced on 21 May 2012, but that negotiations broke down as early as 22 May.
4. 440. On 24 May 2012, both unions gave notice of collective work stoppage, but only for a limited number of members employed by three employers, involving 610 union members. The complainants allege that the strike would only have affected installations on four fields of all the fields on the Norwegian Shelf. Notice of limited collective work stoppage was given with a view to reducing the impact of the strike, so that it would not provide the authorities with any grounds for compulsory arbitration, while also ensuring that the strike would be effective.
5. 441. On 4 June 2012, the complainants allege that the OLF gave notice of collective lockout, which was to involve all of the unions’ members at all installations on the Norwegian Shelf. According to the complainants, this would have brought all production of oil and gas on the Norwegian Shelf to a halt, resulting in serious financial consequences for both the oil companies and the Norwegian State as the lockout would also have stopped the supply of gas to the European continent. In the complainants’ view, the objective of the notice of lockout was to exert pressure with a view to compulsory arbitration. According to the complainants, the experience from previous instances of compulsory arbitration has shown that in stipulating new collective wage agreements, the National Wage Board has almost invariably regulated the technical supplements to the agreements.
6. 442. Following unsuccessful mediation efforts, the complainants add that, on 19 June 2012, a second notice was given for the final extension of the notice of collective work stoppage for the 610 members who were concerned by the first notice. On 22 June 2012, the parties commenced compulsory mediation in pursuance of the regulations of the Labour Disputes Act, which was interrupted on 24 June 2012, with the strike being initiated on the very same day. On 5 July 2012, the OLF gave a second notice for the final extension of the notice of collective lockout, which was to apply to all installations on the Norwegian Shelf, thus involving a complete stop to all production of oil and gas. The lockout was to take effect on 10 July 2012.
7. 443. The complainants allege that, after completion of a round with voluntary mediation without any positive outcome, the Government announced on 10 July 2012 that a decision would be made stipulating that collective wage bargaining for the contractual issues at stake would be carried out by means of compulsory arbitration. The strike was ended on 10 July 2012, and on 10 August 2012, a royal decree was passed, with a Provisional Ordinance regarding compulsory arbitration for the labour dispute in question. The National Wage Board made its decision regarding the dispute on 11 October 2012, thereby setting out the terms of the new collective wage agreement.
8. 444. In the complainants’ view, the Government employed compulsory arbitration firstly due to the financial consequences of a lockout for the Norwegian economy, and, secondly, because of the harmful effects that a halt in production would have for the confidence in Norway as a reliable supplier of oil and gas. The complainants refer to the Royal Decree of 10 August 2012 which cites as grounds for the decision to impose compulsory arbitration that: (i) even a brief halt in the production of oil and gas may have serious consequences for the confidence in Norway as a reliable supplier of those products; and (ii) a full halt to production of oil and gas would have serious consequences for the Norwegian economy, including significant spillover effects on the supplier industry with very serious financial and societal consequences. The Decree further states that the Ministry of Labour concluded that the labour dispute between the workers’ organizations IE, SAFE, and Lederne and the employers’ organization OLF must be resolved without any further industrial action as the parties’ bargaining situation is at a deadlock and that industrial action is likely to be of considerable duration, and therefore considered it necessary to suggest intervention by means of compulsory arbitration. According to the Decree, Norway has ratified several ILO Conventions which protect freedom of association and the right to strike (Conventions Nos 87, 98 and 154) according to which intervention in the right to strike is only permitted subject to stringent conditions, namely if the strike threatens the life, health or personal security of the entire or large parts of the population. Moreover, Article 6, point 4, of the Council of Europe’s Social Charter contains a corresponding provision that protects the right to strike. However, Article 6 must be seen in conjunction with Article G, which allows statutory restrictions on the right to strike that are necessary in a democratic society to protect the rights and freedoms of others or to protect the public interest, national security, or morals in society. The Decree concludes with the view of the Ministry of Labour that the decision to impose compulsory arbitration in the labour dispute at issue is within the scope of the Conventions Norway has ratified and that, if any discrepancy is proven between international conventions and Norway’s use of compulsory arbitration, it feels that it is, in any case, necessary to intervene in the industrial action.
9. 445. The complainants stress that Conventions Nos 87, 98 and 154 have all been ratified by Norway and that Norway has not invoked any exceptions regarding the scope and extent of the Conventions, and is thus bound by this content. The complainants submit that the Norwegian state has breached its obligations following from the Conventions through its decision to implement compulsory arbitration in the labour dispute between IE/SAFE and the OLF in the summer of 2012.
10. 446. The complainants indicate that Norwegian labour legislation recognizes the principle of the right to freedom of association, collective bargaining rights and the right to strike. For workers in the private sector, the procedures for collective bargaining are outlined in the Act relating to Labour Disputes of 27 January 2012 (No. 9) which contains rules regarding collective work stoppage, compulsory mediation and the obligation to keep industrial peace. The complainants state that, in the context of collective wage bargaining, the parties are entitled to engage in means of industrial action in accordance with a fixed procedure which has been followed. Norwegian law does not contain any general rule limiting the right to strike; any legislation limiting the right to strike is adopted for each individual case. According to the Labour Disputes Act, trade unions have an obligation to keep the industrial peace in connection with collective bargaining until compulsory mediation has been completed. If mediation does not produce any results, both parties have a legal right to institute measures of industrial action such as strike, lockout, or other means of industrial action, in order to force the other party into acceptance of a collective wage agreement. In the complainants’ view, through the use of compulsory arbitration, the Government has impeded the use of legal means of industrial action in the labour dispute at hand. Norway has no permanent legislation regarding compulsory arbitration; an act imposing compulsory arbitration is adopted on an ad hoc basis, as in the present case.
11. 447. The complainants allege that, in this case, the situation is peculiar in the sense that IE and SAFE initiated a strike within very circumscribed limits so as to avoid any major harmful financial impact on the Norwegian economy, and so as to prevent gas deliveries to Europe from suffering. The complainant organizations believe that it is evident that this strike alone would not have resulted in the use of compulsory arbitration and that it may be assumed that it was the OLF’s threat to close down production on all installations on the Norwegian Shelf that persuaded the authorities to implement compulsory arbitration. In their opinion, the decision to implement compulsory arbitration is the Government’s response to the lockout notification, which was the employers’ “application” for compulsory arbitration with a view to bringing the strike to an end.
12. 448. The complainant organizations recall that the basis for the decision to impose compulsory arbitration is, firstly, that the lockout would have had a considerable negative impact on the Norwegian economy with significant spillover effects on the supplier industry, and that such a development would have resulted in serious financial and societal effects, and, secondly, that the shutdown of the production of oil and gas on the Norwegian Shelf would have impaired confidence in Norway as a supplier of oil and gas. This second point applies first and foremost to the security of the gas supply to Europe. The complainants underline that the Government did not indicate that the shutdown of installations would result in security implications that would have necessitated compulsory arbitration. In their view, the grounds that were given are in fact not tenable, and in any case inadequate to justify compulsory arbitration. According to the complainants, a shutdown of all activities on the Norwegian Shelf would of course influence the Norwegian economy through lost income, directly by virtue of the State’s role as owner, and through taxation of the oil companies, but it is primarily the oil companies themselves, which would have been affected through the loss of income. Furthermore, IE and SAFE allege that: (i) a shutdown of certain duration would only have resulted in putting off the income (and the State’s financial position is clearly sound enough to continue to operate without this income for some time); (ii) the lapse of this income would not have put the Norwegian economy at risk. According to the complainants, the income from the country’s oil activities is not directed into the Norwegian economy, but is handled in a special manner so as to avoid any effect on the Norwegian economy. The State has thus, through the income from the oil sector, built up one of the world’s largest fortunes known as the Government Pension Fund Global. In the event of a critical situation, the State would have been able to allocate assets from this fund to its activities; (iii) the supplier industry would not have been hurt seriously by a stop in the petroleum activities of certain duration; neither the employers nor the State have shown that there is any basis for such an assumption; (iv) moreover, it is difficult to imagine that the employers could have tolerated a loss of income of 1.8 billion Norwegian krone (NOK) per day for a long time; the unions’ demands were largely concerned with reallocating a fund owned by the trade unions and managed according to certain guidelines, and had been rejected primarily not for financial reasons but for reasons of principle; and (v) although Norway is a large exporter of oil, a short-term lapse of approximately 5–7 per cent of the total global export would not have had any significance at all for the confidence Norway enjoys as a reliable producer and exporter of oil. As Norway is the second largest exporter of gas in Europe, gas buyers are well aware of the rules that govern collective bargaining between workers and employers in Norway, a system whose general principles are well known in all the countries that are supplied with gas by the operators on the Norwegian Shelf. When entering into the major contracts for gas supply which were agreed on in the 1980s, and which stand for an important part of the overall export volume, allowances were made for gas supplies being affected by industrial action. The gas sellers therefore undertook to build up physical stores of gas so as to secure gas supplies in the event of any interruption to production on the Norwegian Shelf. This illustrates that the gas buyers have been aware of the fact that interruptions to the supply of gas may occur as a result of industrial action, and preparations have been made to remedy such situations. It would rather be the confidence in the employers themselves that would suffer as a result of a meaningless lockout which they have themselves implemented, and which affects their own customers.
13. 449. The complainants indicate that according to Conventions Nos 87 and 98, the Norwegian state has an obligation to ensure the right to free collective bargaining prohibiting circumstances that limit this right, and to ensure that matters that circumscribe the right to freely organize and the right to strike are banned. According to the ILO, the imposition of compulsory arbitration may be permitted in the following circumstances: (1) if the parties themselves request this; (2) if the labour dispute comprehends public services involving public servants acting on behalf of the State; and (3) if the dispute concerns “essential services” in the narrow sense of the term, that is, services whose disruption would expose the life, health or personal security of all or parts of the population. The complainants conclude that none of these conditions were met when, on 10 August 2012, the Government decided to end the industrial action through the use of compulsory arbitration. In their view, the decision to impose compulsory arbitration is, therefore, a plain violation of the Norwegian State’s obligations pursuant to the Conventions referred to above. This violation is all the more serious as the Government should be familiar with the legal position outlined above, and because its reasoning underlying the decision set out in the Decree confirms that the State purposefully set aside its international obligations by disregarding the ILO’s interpretation of when compulsory arbitration may be employed, considering that it is the State itself that decides when it considers it “necessary” to intervene with compulsory arbitration in instances of industrial action.

B. The Government’s reply

1. 450. In its communication dated 19 December 2013, the Government indicates that the 2012 conflict in the oil sector arose in connection with the bargaining rounds for new collective agreements. The negotiations between the OLF and the workers’ organizations IE and Lederne on the revision of the Shelf agreements on the fixed oil installations in the North Sea were unsuccessful. These agreements cover some 7,100 employees on the permanent installations on the Norwegian Shelf and apply to people who work for the oil companies on the permanent installations as operators in drilling and in catering.
2. 451. The Government adds that the mediation was concluded without result on 24 June 2012 at 3.30 a.m., and the unions then initiated a strike involving 708 of their members. This was a limited strike and led to the Oseberg Field Centre, the Heidrun and Skarv fields and Floatel Superior being shut down. Statoil then also shut down the Veslefrikk, Huldra, Brage and Oseberg C platforms, as they were dependent on being able to transport oil and gas via the Oseberg Field Centre. The production loss was some 15 per cent of Norwegian oil production and 7 per cent of the gas production, and the costs of the production loss were about NOK150 million per day in deferred revenues. On 5 July 2012, the employers gave notice of a lockout for the rest of the employees covered by the Shelf agreement (some 6,500 employees), effective from the early hours of Tuesday, 10 July. If the lockout were initiated, this would entail a full shutdown of all oil and gas production on the Norwegian Shelf.
3. 452. The Government states that, to avoid such a dramatic course of events, both the National Mediator as well as the Minister of Labour made attempts to bring the parties back to the negotiating table. The parties did meet, but the meetings were unsuccessful. The situation was perceived as deadlocked. On this background, the Minister of Labour summoned the parties to a meeting on Monday, 9 July at 11.30 p.m., informing them that in order to prevent the notified lockout from taking effect, the Government would intervene in the conflict imposing compulsory arbitration. Following the Minister’s request, the employees agreed to end the ongoing strike, and the employers agreed not to implement the notified lockout. The Government further adds that, as Parliament (Stortinget) was not in session at this time, the intervention was made by the Government by Provisional Ordinance on 10 August 2012 pursuant to article 17 of the Norwegian Constitution. According to the Provisional Ordinance, the disputes were to be solved by the National Wage Board (nine members, of which three neutral, two from the largest workers’ and employers’ organizations and two from each of the conflicting parties). The Board’s decision, which would have the effect of a collective agreement between the parties, was made on 11 October 2012.
4. 453. According to the Government, an escalation of the conflict through the OLF’s notified full lockout from 10 July 2012 would have entailed a full shutdown of all oil and gas production on the Norwegian Shelf. On 8 July, the Ministry of Labour received an impact assessment of a total shutdown from the Ministry of Finance and the Ministry of Petroleum and Energy, which is quoted in the Provisional Ordinance of 10 August 2012. Accordingly, a labour dispute affecting the reliability of supply to Europe would have serious consequences both for Norway’s standing as a reliable supplier and the reputation of gas as a safe energy source (it supplies about 20 per cent of European gas). It would also have serious economic consequences, as it is estimated that a labour dispute affecting the entire Norwegian Shelf will entail a reduction of NOK55 billion per month in the production value of oil, at current oil prices and that, as most of the production is exported, the estimates in the Revised National Budget 2012 indicate that a full shutdown will have a negative impact of almost NOK50 billion per month on the international trade balance. Moreover, the Federation of Norwegian Industries had indicated that the supplier industry would also suffer greatly from a lockout on the shelf and that oil industry suppliers would probably have to lay off 10–15,000 employees.
5. 454. The Government states that it thus concluded that even a short interruption to all oil and gas production would be highly detrimental to the view of Norway as a credible supplier of oil and gas. Furthermore, a full shutdown of production would have a serious impact on the Norwegian economy, including major ripple effects on the supplier industry. The Government therefore decided that the labour disputes between IE, SAFE and Lederne and the OLF must be resolved without further industrial action, and imposed that the disputes be solved by the National Wage Board. The status of the negotiations between the parties was a deadlock, and thus there were prospects of a long-term conflict.
6. 455. According to the Government, the right to industrial action is not expressly embraced by the Articles of Conventions Nos 87 and 98 (ratified by Norway), but is considered as part of the principles of freedom of association. The Government asserts that, according to the ILO standards as interpreted by the ILO bodies, the consequences of a labour conflict may become so serious that interventions in or restrictions on the right to strike are compatible with the principles of freedom of association. Limitations or prohibitions against strikes are thus accepted when the strike involves: (1) public servants engaged in the administration of the State; and (2) essential services in the strict sense of the term, that is to say services the interruption of which would endanger the life, personal safety or health of the whole or part of the population. According to the ILO interpretation, these damaging effects must, in addition, be clear and imminent.
7. 456. The Government states that Norway put great effort in being in compliance with its obligations according to the ILO Conventions. Industrial action is a means intended to put pressure on the opposite party. A country acknowledging the right to industrial action has to endure the inconveniences and damaging consequences entailed by such actions. The Government believes, however, that there must be limits as to how extensive consequences society has to bear: the oil conflict in the summer of 2012 is an example of a conflict where these limits are reached. There are long traditions in Norway for collective bargaining and collective agreements, across the labour market. The right to organize and the right to collective bargaining are fundamental parts of Norwegian law, and are supported by legislation with procedural rules and institutions for resolving disputes. There are no legal restrictions as to who can form and join unions and organizations, and there is no interference from the authorities concerning the constitution and rules of the trade unions and organizations and their activities. The right to industrial action is part of the right to free collective bargaining. No prohibition against strike or lockouts exists, except for the armed forces and senior civil servants, even if these groups nevertheless enjoy the right to organize and the right to collective bargaining. However, according to the Government, to balance this wide, unrestricted freedom of association and collective bargaining, including the right to industrial action, there is a broad consensus developed in Norway that the Government has an ultimate responsibility for preventing labour conflicts from causing serious damage. If the Government finds that a conflict can have so damaging effects that life, personal safety, health or vital public interest are endangered, it submits a separate bill to the Parliament, proposing the industrial action in question to be forbidden, and that the conflict is to be solved by the National Wage Board.
8. 457. The Government confirms the assertion of the complainants that the limited strike initiated by IE and SAFE only affecting a few installations would not alone have resulted in compulsory arbitration, as opposed to a total closedown. The Government underlines that its attention was attached to the damaging effects of the conflict, and not to whether the damaging effects were caused by a strike or a lockout. When the employers announced this dramatic extension of the conflict, the Government had to consider the subsequent damaging effects, which were of such dimensions that they could not be disregarded. The evaluation the Government must make is the same, regardless of whether these effects are caused by a strike or a lockout.
9. 458. As regards the complainants’ indication that, unlike in the past, no security implications have been invoked to justify the intervention, the Government affirms that a shutdown of oil installations at sea always entails challenges but that the parties engaged in the oil activity on the Shelf have gained experience over the years and improved procedures and routines as well as regulations on safety crew. These factors have reduced the safety implications attached to close down processes. The Government maintains, however, that a total closedown of all oil and gas production would have had economic consequences of vast dimensions as well as severely impaired confidence in Norway as a supplier of oil and gas. For the Government, it is not correct to say that the employers would have suffered the largest losses. Due to diverse factors, including tax regulations, the employers’ losses would have been small compared to those of the Norwegian State, and consequently Norwegian society. Moreover, the Government reminds that although economic consequences brought upon third parties at the outset are not considered relevant as to justify interventions, it is rather difficult to acknowledge this to be the case regardless of the size of the losses. To the Government, the limit was reached at the imminent prospect of a total closedown of all Norwegian oil and gas production. With respect to the contested consequences for the supplier industry, the Government states that there was no reason to mistrust the Federation of Norwegian Industries, the largest and most dominant employers’ organization, when they warned about a substantial number of layoffs (10–15,000 workers) in the supplier industry. The Norwegian supplier industry competes on a challenging international market. Lastly, Norway’s credibility as a large and reliable supplier of oil and gas, as well as consideration for oil and gas deliveries to its trading partners in Europe, were of great importance in the Governments’ assessment of the situation. A full stop in production would have an impact on the world market, and, according to the Government, the mere prospect of a total halt in the Norwegian oil and gas production would bring about a rise in oil and gas prices. The Government reiterates that it is vital to Norway to maintain its reputation as a reliable supplier, and a total halt in production could put it at risk. Moreover, concerning the reference made by the complainants about European gas buyers’ knowledge of the Norwegian collective bargaining system, the Government affirms that buyers of oil and gas are far more on the alert than alleged by the claimants. The Government had been contacted at an early stage for information regarding developments in the labour dispute. A total close down of all Norwegian oil and gas production would entail consequences to the Norwegian society of such a magnitude that was impossible to disregard, and an intervention should be regarded as being within the scope of the ILO Conventions.
10. 459. As regards the quotation of the Provisional Ordinance which reads: “If a contradiction should be identified between international conventions and Norway’s use of compulsory arbitration, the Ministry of Labour believes that it is necessary in any event to intervene in the conflicts”, the Government rejects that this passage can be interpreted in the manner suggested by the claimants. This passage is included in all bills proposing compulsory arbitration due to internal legal conditions, and is necessary due to technical legal interpretation reasons because of the position of international law in the Norwegian legal system. The Government reiterates that, in its opinion, the intervention in this conflict was in conformity with the principles of freedom of association as protected by the ILO Conventions Nos 87 and 98.
11. 460. The Government indicates that the Provisional Ordinance referred the dispute for resolution by the National Wage Board, a permanent voluntary arbitration body appointed pursuant to the National Wage Board Act (Act No. 10 of 27 January 2012). The Board is at the disposal of the workers’ and employers’ organizations if they wish to have recourse to it in order to settle labour conflicts. In each case, the board has nine members, of whom five are appointed by the Government for a period of three years. Three of the permanent members are neutral, that is independent of the Government and of the employers’ and workers’ organizations. Two members represent the interests of the employers and employees, respectively. These members of the board, however, act in a more advisory capacity and have no right to vote. The parties in the individual dispute each nominate two members of the board. It is only one of the members from each party and the three neutral members of the board who are entitled to vote. The National Wage Board Act has comprehensive provisions as to how the board is to deal with the disputes submitted to it. The provisions aim at ensuring that the proceedings shall be as thorough and conducted as properly as possible. The parties appear with authorized representatives as spokesmen and are entitled to present to the board all the information they believe to be of significance for the dispute. The board itself can obtain all necessary additional information.
12. 461. The Government emphasizes that, in its capacity as an arbitration body, the National Wage Board is a free-standing and independent body which deals with and resolves the conflicts submitted to it against the background of the material presented by the parties in the individual conflict. Thus, the Board has many features in common with a court of justice. Accordingly, it is not bound by the Government’s incomes policy. It decides the disputes brought before it on an independent basis and applies its own discretion. According to the Government, the complainants in this case are strong and influential organizations, and the workers on the Shelf are among the best paid workers in Norway. They are part of the Norwegian system of collective bargaining, cooperation and co determination. When the Government intervened in the present case, the parties to the Shelf agreements had carried out collective bargaining for revised agreements, they had finished compulsory mediation with the National Mediator, and the unions had been on strike for 16 days to put pressure behind their demands. After the intervention, the dispute was settled by the National Wage Board, where the conflicting parties also were represented, with two members each. Thus, the workers’ organizations have had good opportunities to protect their interests both before and after the ban on industrial action.
13. 462. Finally, the Government indicates that it is of the opinion that the intervention in the conflict in the oil sector in the summer of 2012 was in conformity with the principles of freedom of association. The decision of imposing compulsory arbitration was in compliance with ILO Conventions Nos 87 and 98 and the workers’ organizations have also had a wide range of opportunities to safeguard their occupational interests.
14. 463. The Government also transmits the comments made by the Norwegian Oil Industry Association in a letter dated 21 October 2013 according to which Norway has ratified several ILO Conventions that protect freedom of association and the right to strike (Conventions Nos 87, 98 and 154), and following the interpretation of the Conventions by the bodies of the ILO, strict requirements govern intervention in the right to strike, but intervention is nevertheless allowed if the strike puts life, health and personal safety at risk for the whole or part of the population. Moreover, Article 6, point 4, of the Council of Europe’s Social Charter contains a corresponding provision that protects the right to strike. However, Article 6 must be seen in conjunction with Article G, which allows statutory restrictions on the right to strike that are necessary in a democratic society to protect the rights and freedoms of others or to protect the public interest, national security, or morals in society. Furthermore, the OLF adds that, in a decision dated 10 April 1997 (Supreme Court Report Rt. 1997/580), the Norwegian Supreme Court considered the validity of a provisional arrangement of 1 July 1994 regarding a ban on strikes in the oil industry. In the decision, the Supreme Court confirmed that the practice of compulsory arbitration to resolve labour disputes when indicated by weighty public interests, is not in violation of the general constitutional principles of law. In relation to the ILO Conventions and the European Social Pact, the Supreme Court pointed out that the interpretation of the Conventions as regards the right to strike has not been resolved with binding effect, and that Norway has never accepted that use of compulsory arbitration – when indicated by weighty public interests – would be in violation of the Conventions. The Supreme Court also did not find that Article 11 in the European Human Rights Convention constituted an obstacle to the use of compulsory arbitration. The matter was subsequently appealed to the European Court of Human Rights which, in a decision of 27 June 2002, rejected the appeal as clearly baseless, that is to say with reference to the serious impacts the strike would have on society. There was also a reference made to the fact that the oil sector is in a unique position wherein stopping of deliveries could have an immediate and serious impact on many countries, particularly in Europe.

C. The Committee’s conclusions

1. 464. The Committee notes that, in the present case, the complainant organizations allege that the Government intervened in collective bargaining and imposed compulsory arbitration via the enactment of the Royal Decree containing a Provisional Ordinance on 10 August 2012, thereby ending strike action in the oil sector.
2. 465. The Committee notes from the brief chronology provided by both the complainant organizations and the Government that: (i) the 2012 bargaining rounds for new collective wages agreements between the unions and the OLF were unsuccessful, and mediation was interrupted on 24 June 2012; (ii) a limited strike was called by the complainants on the same day involving 600–700 union members and partially affecting the installations on the Norwegian Shelf; (iii) on 5 July 2012, the OLF gave notice of a total lockout (effective on 10 July 2012), which was to apply to over 6,500 employees and all installations on the Norwegian Shelf, thus involving a complete stoppage of all production of oil and gas; (iv) following unsuccessful mediation, the Government announced on 10 July 2012 its decision to intervene in the conflict by imposing compulsory arbitration; (v) thereafter, the unions agreed to end the ongoing strike and the employers agreed not to implement the notified lockout; and (vi) on 10 August 2012, a royal Decree containing a Provisional Ordinance was adopted which referred the dispute to the National Wage Board for resolution.
3. 466. The Committee notes, however, that the complainants and the Government differ in the interpretation of the necessity for such government intervention. The Committee notes that the Government considers its decision to refer the dispute to compulsory arbitration to be entirely consistent with ILO standards and puts forward several arguments to justify it, stating that a full shutdown of all oil and gas production on the Norwegian Shelf would have had serious economic consequences, such as: (i) a reduction of NOK55 billion per month in the production value and a negative impact of almost NOK50 billion per month on the international trade balance; (ii) it would have affected the reliability of gas supply to Europe; (iii) it would have been highly detrimental for the reputation and trust of other countries in Norway as a reliable supplier of oil and gas; and (iv) it would have had major ripple effects on the supplier industry (for example, probable layoff of 10–15,000 employees). The Government adds that, in order to balance the wide, unrestricted rights to freedom of organization and collective bargaining in Norway, if it finds that a conflict has so damaging effects that life, personal safety, health or vital public interest are endangered, it usually submits a separate bill to the Parliament proposing the strike or lockout in question to be forbidden and the conflict to be solved by the National Wage Board. In the present case, a total shutdown of all Norwegian oil and gas production would, in the Government’s view, entail consequences to the Norwegian society of such a magnitude that an intervention should be regarded as being within the scope of the ILO Conventions.
4. 467. In contrast, the Committee notes that the complainants submit that: (i) the strike called on 24 June 2012 only involved a limited number of union members (610) and affected installations on four fields of all the fields on the Norwegian Shelf; (ii) notice of a circumscribed collective work stoppage was given with a view to reducing the impact of the strike, so that it would not provide the authorities with any grounds for compulsory arbitration, while also ensuring that the strike would be effective; (iii) the notification of a full lockout by the OLF in response to the strike notice constituted the employers’ “application” for compulsory arbitration, which was almost immediately accepted by the Government; (iv) the grounds given by the Government for imposing compulsory arbitration are not tenable because it is mainly the oil companies which would have been affected through the loss of income, as a close down would have merely resulted for the State in suspension of income without putting the Norwegian economy at risk, and because the confidence Norway enjoys as a producer and exporter would not have been damaged as oil and gas buyers are well aware of the rules that govern collective bargaining between workers and employers in Norway; and (v) the grounds given are in any case inadequate to justify compulsory arbitration. The Committee also observes that both parties concede that the argument of safety implications in case of a close down of installations was not invoked in the present case.
5. 468. The Committee recalls that on multiple occasions in the past it has dealt with cases concerning compulsory arbitration in Norway, which was imposed in non-essential sectors through legislative intervention in the collective bargaining process thereby ending strike action (see in particular Case No. 1255 (234th Report), Case No. 1389 (251st Report) and Case No. 1576 (279th Report concerning the oil sector). The Committee observes that the Provisional Ordinance of 10 August 2012 prohibits the start or continuation of the work stoppage in the oil and gas sector and refers the dispute to the National Wage Board for compulsory arbitration (no information has been provided as to the outcome of this procedure). When considering the imposition of compulsory arbitration in the finance sector in Norway [see Case No. 2545, 349th Report, para. 1149], the Committee recalled that it was difficult to reconcile arbitration imposed by the authorities at their own initiative with both the right to strike and the principle of voluntary negotiation. It is bound to recall that compulsory arbitration to end a collective labour dispute and a strike is acceptable if it is at the request of both parties involved in a dispute, or if the strike in question may be restricted, even banned, that is, in the case of disputes in the public service involving public servants exercising authority in the name of the State or in essential services in the strict sense of the term, namely those services whose interruption would endanger the life, personal safety or health of the whole or part of the population. [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 564].
6. 469. As to what is meant by essential services in the strict sense of the term depends to a large extent on the particular circumstances prevailing in the country. Moreover, this concept is not absolute, in the sense that a non-essential service may become essential if a strike lasts beyond a certain time or extends beyond a certain scope, thus endangering the life, personal safety or health of the whole or part of the population [see Digest op. cit., para. 582]. The Committee further notes that by linking restrictions on strike action to interference with trade and commerce, a broad range of legitimate strike action could effectively be impeded and that while the economic impact of industrial action and its effect on trade and commerce may be regrettable, such consequences in and of themselves do not render a service essential and thus the right to strike should be maintained [see Digest op. cit., para. 592]. Noting that regard must be had to the particular circumstances prevailing in a country, it is recalled that in other cases the Committee has not considered the petroleum sector to constitute an essential service within the strict sense of the term [see Digest op. cit., para. 587].
7. 470. The Committee is sensitive to the arguments provided by the Government in the present case to justify its decision to refer the dispute to compulsory arbitration, in particular the estimated negative impact on the Norwegian economy, on the oil and gas supply to Norway’s trade partners, on employment in the supplier industry and on Norway’s reputation as a reliable supplier. The Committee further observes that, according to both the complainants and the Government, the limited strike action alone would not have resulted in the use of compulsory arbitration and that it was the OLF’s threat to close down production on all installations on the Norwegian Shelf that persuaded the authorities to implement compulsory arbitration. As it has in a previous case concerning Norway [see Case No. 2545, 349th Report, para. 1151], the Committee expresses its concern at the complainants’ statement that the notification of a full lockout by the OLF in response to the strike notice constituted the employers’ “application” for compulsory arbitration, which was almost immediately accepted by the Government. While the impact which the declaration of a full lockout in the oil and gas sector may have had upon the assessment of the vast consequences upon daily life in Norway expected by the industrial action is no doubt a relevant national circumstance to be taken into account by the Committee, it is necessary for such impacts to go beyond mere interference with trade and commerce and to have endangered the life, personal safety or health of the whole or part of the population for resort to compulsory arbitration to have been warranted. The Committee notes that at the time of the government-imposed compulsory arbitration, the industrial action by the union was occurring but that the full lockout by employers, albeit of uncertain duration, had not yet commenced. On the material before it the Committee cannot conclude that, at the time of the Government’s decision, the necessary broader impacts beyond trade and commerce had materialized such as to justify a preventative resort to compulsory arbitration banning the right to strike. Absent any further information from the Government, the Committee concludes that the legislative action taken by the Government at that time, which stipulated in its section 4 the prohibition of starting or continuing a work stoppage to resolve the dispute, thus applying both to the ongoing strike and the notified lockout, was inconsistent with the principles of freedom of association.
8. 471. The Committee is further of the opinion that, with a view to addressing the Government’s concerns, it would be desirable if, in cases of industrial action like the one before it, which would have brought a service that is not essential in the strict sense of the term but a very important sector in the country to a standstill, the concerned parties, with the participation of the Government if necessary, could reach an agreement on minimum services sufficient to address the concerns of the Government about the consequences of a full shutdown of the oil and gas sector, while preserving respect for the principles of the right to strike and the voluntary nature of collective bargaining [see Case No. 1576, 279th Report, para. 114]. The Committee recalls that a minimum service may be set up in the event of a strike, the extent and duration of which might be such as to result in an acute national crisis endangering the normal living conditions of the population; such a minimum service should be confined to operations that are strictly necessary to avoid endangering the life or normal living conditions of the whole or part of the population; in addition, workers’ organizations should be able to participate in defining such a service in the same way as employers and the public authorities [see Digest, op. cit., para. 610]. In the present case, the Committee regrets that, despite the recommendations it has previously and repeatedly made in this regard in similar cases concerning Norway, the Government has failed to negotiate a minimum service in the sector with the parties concerned or, in the event of a disagreement as to the number and duties of the workers concerned, to refer the matter for determination by an independent body.
9. 472. In light of the principles enounced above and convinced that an advance agreement as to what constitutes minimum service to be maintained in the event of industrial action would be more conducive to harmonious industrial relations in the oil and gas sector, the Committee firmly expects that, in the future, the Government will make every effort to refrain from having recourse to legislation imposing compulsory arbitration with the effect of bringing to an end all industrial action in a sector unless it is objectively established that at the time of such action the sector is essential, and that in any event it will endeavour to promote and give priority to free and voluntary collective bargaining as the means of determining employment conditions in the oil and gas sector. In this respect, the Committee encourages the Government to examine the possibility of introducing a minimum service in the oil and gas sector in the event of industrial action, the scope or duration of which may result in irreversible damages [see Case No. 2545, 349th Report, para. 1152].