Esso hits back at union claims of tax avoidance

Esso has hit back at claims by unions that it does not pay tax, saying it has paid more than $12 billion in Petroleum Resource Rent Tax, as well as corporate income tax.

Esso has hit back at claims by unions that it does not pay tax, saying it has paid more than $12 billion in Petroleum Resource Rent Tax, as well as corporate income tax.

THE Australian head of Esso's production operations has defended the oil giant's commitment to the Gippsland community, against a sea of union "misinformation" and claims that it pays no tax.

Andre Kostelnik has told the Gippsland Times that strong resistance from some union members had come at a time when Esso Australia was transforming its Gippsland operations into an efficient, competitive gas producer.

He said he was "deeply disappointed" at union claims that the company was hurting workers and the local community.

The unions have been running a strong campaign protesting changes to maintenance contracts for hundreds of workers in the oil and gas industry, including a prime time television advertisement which ran during Saturday's AFL Grand Final match between Richmond and the Adelaide Crows, and reached hundreds of thousands of viewers.

But Mr Kostelnik said unionists had been actively spreading misinformation in the community.

"We have worked hard over many decades to be a dependable, valued contributor to our community so I feel it is important to respond to some of these unfounded claims," he said.

Mr Kostelnik said Esso Australia had provided Gippsland employees with long term careers, and supported about 200 community groups each year though its community contributions program.

In the past seven years, it had contributed more than $7 million to community organisations, an average of $1 million per year.

"This includes support for Gippsland schools through our Bright Future Grants program and environmental projects such as the Sale wetlands program with Conservation Volunteers Australia," he said.

He disputed union claims of mass dismissals and pay cuts.

"Rather, we reached agreement earlier this year with our Longford employees providing an-above CPI pay increase," he said.

"Our business and the investments we make has also contributed to thousands of high paying jobs over the years in the Gippsland community through suppliers and service providers who support our industry."

Mr Kostelnik said the re-tendering of the maintenance contract was in compliance with all labour laws under the Fair Work Act.

He also denied that the offshore roster was unfair to families, and claimed the 14 days on, 14 days off roster resulted in the same time spent at work each year, but offered 13 fewer crew changes per year.

"This leaves more time available for family and less days travelling to and from work," he said.

This meant an "industry standard" offshore roster of 14 days on, 14 days off, instead of the seven on, seven off.

"It is an important productivity improvement which Esso is also seeking to introduce for its own offshore employees, and which can help prolong the operating life of our operations and the associated high-quality jobs."

Currently, more than 50 per cent of the offshore workforce are working a 14 days on, 14 days off roster.

Mr Kostelnik said Esso was one of Australia's largest tax contributors.

"Since the Petroleum Resource Rent Tax (PRRT) was first applied to the Gippsland Basin Joint Venture's operations in 1990, Esso has paid more than $12 billion in PRRT alone to the Federal Government," he said.

"When combined with corporate income tax over the last decade, this equates to more than 50 cents in the dollar tax paid.

"As one of the largest and longest standing employers in the region, we're proud to support the local community by providing skilled employment, utilising local services and suppliers and assisting many community groups and schools through our community contributions programs."

Meanwhile the unions' 'UGLY' protest continues at Longford.

Workers have now been at the site for more than 100 days in a makeshift camp that has cooking facilities and a recreation room.

Gippsland Senior
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