Grangemouth refinery 'to stay shut'

Grangemouth Unite members had been due to begin a 48-hour strike on Sunday morning

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The Grangemouth oil refinery and petrochemical plant is "shut and will remain shut" until at least Tuesday, operator Ineos has said.

The company described the facility as "financially distressed" and said it would put a proposal to its workforce on Thursday.

Ineos said it expected a response to the proposal on Monday.

The move followed the Unite union calling off a 48-hour strike which had been due to begin at 07:00 on Sunday.

Unite claimed Ineos representatives had "walked away" after 16 hours of talks at the Acas conciliation service in Glasgow.

Start Quote

We needed an assurance that there would not be another strike this winter”

End Quote Ineos spokesman

The union said it had cancelled the strike to protect the facility in central Scotland from its owner's "scandalous behaviour".

Ineos has previously warned that Grangemouth is losing £10m a month and will close in 2017 without investment and cost-cutting.

A spokesman for the company told the BBC that, without an assurance that there would be no further industrial action this winter, it was continuing to shut down the plant.

The spokesman said: "The dispute is not resolved. We needed an assurance that there would not be another strike this winter.

"We can't keep turning it off and on again. It is not safe or responsible."

A statement released by Ineos earlier on Wednesday afternoon said: "Grangemouth is shut down and will remain shut down.

"Grangemouth is financially distressed. The industrial action called by Unite the Union has inflicted significant further damage on the company.

"Ineos will put a proposal to the workforce tomorrow and expects a response on Monday, after the weekend. The company will review its position with its shareholders on Tuesday."

The dispute has centred on the treatment of union convenor Stephen Deans.

Analysis

This dispute is now about much more than the fate of one union official.

Grangemouth is of significant strategic importance.

It provides 70% of Scotland's filling stations with fuel, accounts for 13.4% of the UK's oil refining capacity, and its steam powers the system that brings oil and gas ashore from the North Sea.

But the shutdown of the refinery should not have an impact at the pumps, according to petrol retailers.

They say that most filling stations have between four and eight days of stock, and even if that runs out fuel can be brought into Scotland by tankers from other refineries.

The key is consumer confidence, which is why both the UK and Scottish governments are insisting that motorists need not panic-buy

A marathon session of talks between the two sides, which began on Tuesday afternoon, had broken up at 05:00 after failing to resolve the bitter row.

Responding to the announcement that that plant would remain shut for the time being at least, Unite's Scottish secretary Pat Rafferty accused Ineos of committing "economic vandalism".

He added: "There is absolutely no reason for the site to remain shut - the company is holding Scotland to ransom.

"The Scottish and Westminster governments must now act without further delay. It is time for (Scottish First Minister) Alex Salmond to pick up the phone and demand that (Ineos chairman) Jim Ratcliffe gets the site back up and running.

Start Quote

There is absolutely no reason for the site to remain shut - the company is holding Scotland to ransom”

End Quote Pat Rafferty Unite

"Unite acted in the national interest by calling off the strike because Ineos had no right to initiate a cold shutdown; a shutdown against the wishes of the Health and Safety Executive, and against the economic interests of the country.

"Unite is calling for the Health and Safety Executive to visit the site urgently as we believe this is reckless behaviour."

Mr Salmond said he had discussed the Grangemouth dispute with UK Prime Minister David Cameron during a Joint Ministerial Committee meeting in Downing Street.

He added: "While governments of course can't themselves bring management and unions to agreement, we can impress of both sides the importance of this facility to Scotland.

"What is really at stake now is the future of Grangemouth as a chemical complex and a refinery, and that is hugely important.

"That matter can only be settled through management and unions, and it can only be settled if there is good will on both sides."

Mr Salmond said Scotland would be able to import sufficient fuel supplies to ensure there were no shortages during the shutdown of Grangemouth.

Alex Salmond: "The matter can only be settled if there is good will on both sides"

He added: "People should not be concerned about that. The contingency plans are very strong indeed".

UK Energy Secretary Ed Davey said: "I am pleased that Unite have called off this weekend's strike.

"I would urge both parties to continue to talk with the help of Acas in order to reach a fair, sustainable resolution of their differences and ensure the long-term future of the Grangemouth complex.

"We have been working closely with the fuel industry and Scottish government to put robust alternative fuel supply routes in place in case the refinery is forced to close."

Mr Deans - the man at the centre of the dispute - was involved in the row over the selection of a Labour candidate in Falkirk, where he is chairman of the constituency party.

He was suspended by Ineos and later reinstated, but is facing an internal investigation by the company over issues linked to the Falkirk affair.

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