BiFab goes into administration

Yesterday the Scottish Parliament Voted by 61 Votes to 60 to condemn the government’s failure to save BiFaband calling for specific actions to save the yards.  The motion is reproduced below.  Today the firm was put into administration.

A joint statement by trade unions GMB Scotland and Unite said BiFab’s administration exposed the “myth of Scotland’s renewables revolution as well as a decade of political hypocrisy and failure, in Scotland and the rest of the UK.”

GMB Scotland secretary Gary Smith and Unite Scotland secretary Pat Rafferty added that the workers and communities dependent on the yards had “fought so hard for a future”.

The Scottish Parliament vote calls on the government to take a number of actions – including that the government produces a report by January that sets out steps to ensure future renewable work comes to Scottish fabrication yards.  If BiFab is lost it’s a tragedy for the workforce and for workers in the sector more generally.  It’s also a major setback on the path to a sustainable economy.  Transition requires skilled workers and infrastructure.  BiFab should be part of that.  

Scot.E3 has argued consistently that the only effective way to develop a serious plan for transition is through public planning and public control.  Taking BiFab into public ownership could be a first step.  One thing is clear that to get the Scottish Government to take this seriously and to respond to the motion extra parliamentary pressure is required.  A new UN report shows how the big energy companies are doubling down on fossil fuel extraction.  It’s time to turn the tide – if not now when!

See recent articles on BiFab here and here.

Photo by Pete Cannell CC0

The motion

That the Parliament believes that Scotland has the potential to lead Europe’s green energy revolution over the coming decades; further believes that, in the context of the COVID-19 pandemic and job losses, green jobs will be central to creating new employment and training opportunities across Scotland; considers that, with the support of the workforce and their trades unions, the maximum effort has to be made to secure wind farm contracts for Scottish manufacturing companies; notes that, in open competition, BiFab won a £30 million contract to build turbine jackets for the NnG North Sea wind farm, work that could have started in January 2021, but has been prevented from going ahead with this; condemns the Scottish Government’s decision to withdraw the financial guarantee that was needed to enable this work to go ahead, thus risking Scotland’s reputation as a new green investment hub, and further condemns the Scottish Government’s failure to produce any legal opinion to justify its claim that support for BiFab was against the law; calls on it to act now to secure the future of the Burntisland Methil and Arnish yards, and the jobs that depend on them; further calls on it to talk to the workforce’s representatives and to ask for the help of the UK Government through the joint working party to urgently negotiate with EDF and Saipem to find a solution that ensures that the NnG contract for eight wind turbine platforms is carried out in the yards, and, with Glasgow being the venue of the COP26 summit in December 2021, calls for a concrete plan to be published in January by the Scottish Government that ensures that future work on renewables comes to Scottish yards, and further calls on the Scottish Government to ensure that these policy commitments on renewables are part of a coherent industrial strategy for the post-COVID-19 era.

Time to divest

The non-profit organisation, Platform, commissioned Transition Economics to conduct an analysis of investments by Scottish local government pension funds in fossil fuel companies. The analysis reveals that £194 million was wiped off Scottish council pension funds due to their oil and gas investments crashing over the past three years. This post summarising the Platform report is reprinted from a press release by Friends of the Earth Scotland.

The largest losers were Strathclyde Pension Fund which lost £46,374,450, Lothian Pension Fund which lost £36,077,023 and Falkirk Council’s Pension Fund which saw losses of £34,769,723. These amount to losses of £626 per member of the Strathclyde Fund and £429 per member of the Lothian Fund.

In March this year, Strathclyde Pension Fund (SPF) managers argued that they should be allowed to keep investing over £700 million of their members’ pensions in fossil fuel companies such as Shell, BP, Exxon, and Chevron – despite major concerns about the climate impact of these companies and despite Glasgow City Council’s declaration of a Climate Emergency in 2019.

This analysis concluded that, across the UK, local authority pension funds could have lost at least £1.75 billion in value over the past three years as a result of retaining their investments in just nine oil & gas companies.

In 2018 the advisory board for Scotland’s local government pensions began investigating major reform. A full merger was being considered and could improve transparency and make it easier to pursue ethical investments. As this would require legislative change it could be an issue in the 2021 Scottish elections.

Divest Strathclyde is a Glasgow-based campaign for fossil-free local government pensions. Sally Clark from Divest Strathclyde said:

“We have repeatedly presented the Strathclyde Pension Fund with evidence demonstrating the dangers of continued fossil fuel investments and the need to rapidly decarbonise the fund. This loss is the direct result of a conscious failure to act, causing harm to the finances of pension holders by continuing to invest in fossil fuel extraction companies that are poor investments and endanger all our futures through exacerbating climate change.”

“This news is a further demonstration that fossil fuel investments are neither good for the planet nor our pensions. Forward looking pension funds can instead support the transition to a more sustainable Scotland, investing in sectors that will enhance the wellbeing of citizens while ensuring good returns for pensions holders.”

Robert Noyes, Platform, responsible for the data said:
“It is well past time for pension funds to drop oil and gas stocks, both for the climate and their future valuation. Funds like Strathclyde, Lothian and Falkirk lost tens of millions by sticking with BP and Shell. They should have listened to divest campaigners. Instead, the burden is being dumped on the public, pensioners and the Global South.”

Losses of Scottish local government funds

Strathclyde Pension Fund: £46,374,450
Lothian Pension Fund: £36,077,023
Falkirk Council Pension Fund: £34,769,723
Tayside Pension Fund: £30,005,131
North East Scotland Pension Fund: £15,780,431
Dumfries and Galloway Pension Fund: £13,506,338
Highland Council Pension Fund: £11,650,109
Fife Council Pension Fund: £2,356,219
Scottish Borders Pension Fund: £1,968,406
Orkney Islands Council Pension Fund: £1,625,133

Total: 194,112,963

Shetland Islands Pension Fund were excluded from analysis due to lack of data on direct equity holdings in oil & gas companies

Notes to Editors

Original report:
http://transitioneconomics.net/wp-content/uploads/2020/11/TransitionEconomics_Local-Gov-Pension-losses-from-oil-investments.pdf

Scottish losses by percentage value of the total pension fund:
Falkirk Council Pension Fund 1.69 %
Dumfries and Galloway Pension Fund 1.62 %
Tayside Pension Fund 0.88%
Highland Council Pension Fund 0.66 %
Lothian Pension Fund 0.49 %
Orkney Islands Council Pension Fund 0.48 %
North East Scotland Pension Fund 0.39 %
Scottish Borders Pension Fund 0.30 %
Strathclyde Pension Fund 0.24 %
Fife Council Pension Fund 0.11 %

Divest Strathclyde campaign for the Strathclyde Pension Fund to divest from the fossil fuel industry and invest in environmentally and financially sustainable alternatives.

Platform London is a research and advocacy organisation with a focus on energy system change, that supports campaigns to divest local government pension funds out of fossil fuels.

Friends of the Earth Scotland is:
* Scotland’s leading environmental campaigning organisation
* An independent Scottish charity with a network of thousands of supporters and active local groups across Scotland
* Part of the largest grassroots environmental network in the world, uniting over 2 million supporters, 75 national member groups, and 5,000 local activist groups.