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INTERNATIONAL LABOUR OFFICE
... ; I ^ Ä * i A ••.-'•

LABOUR CONDITIONS
IN THE OIL INDUSTRY
IN IRAN
Report of a Mission of the International Labour Office
(January-February 1950)

Prepared for the Information of the
Petroleum Committee of the
International Labour Organisation

GENEVA
1950

S T U D I E S A N D REPORTS
New Series, No. 24

P U B L I S H E D BY T H E I N T E R N A T I O N A L L A B O U R O F F I C E
GENEVA,

SWITZERLAND

Published in the United Kingdom for the INTERNATIONAL
by Staples Press Limited, London

LABOUR OFFICE

PRINTED BY "IMPRIMERIE CENTRALE". LAUSANNE. SWITZERLAND

CONTENTS
Page
INTRODUCTION

CHAPTER I : The Oil Areas

The Abadan Area
The Oilfields
Rapidity of the Industry's Growth
CHAPTER I I : The Labour Force
Composition
Characteristics
CHAPTER III : Recruitment and Training
Recruitment
Training
Abadan
Fields
Training Iranians in the United Kingdom
CHAPTER IV : Conditions of Work
Engagement and Contract of Employment
Wage System
Wage Increments and Promotion
Wages and Prices
Allowances
Hours of Work
Holidays with Pay
Termination of Employment
Disciplinary Code
Turnover
Social Insurance
Safety
Contract Labour
CHAPTER V : Housing

5
7
8
10
11
12
14
14
16
16
19
19
20
20
21
21
23
23
23
24
24
24
24
25
26
28
31

Housing in Abadan
Housing in the Oilfields

31
35

CHAPTER VI : Social Services

Distribution of Food, Clothing and Other Supplies
Organisation of the Scheme
Works Canteens
Stores, Restaurants and Laundry for Staff Employees
Company Agricultural Development Schemes
Health Services
Curative Services in Abadan

36
37
38
38
39
39
40

CONTENTS
Page

Curative Services in the Oilfields
Problems concerning Medical Services
School Medical Service
Preventive Medical Services
Primary and Secondary Education
Education for Adult Workers
Transport
Recreation

40
41
42
42
42
44
44
45

CHAPTER VII : The Trade Union Situation
The Trade Union Movement
Legal Position of Trade Unions
Oil Workers' Unions
Trade Union Activity
Handicaps to Trade Union Development

46
46
48
49
50
52

CHAPTER VIII : Labour-Management Relations
Joint Departmental Committees
Provisions of the Labour Law
Factory Councils
Settlement of Disputes
High Labour Council
Summary

54
54
55
56
57
59
60

CHAPTER IX : The Wider Scene
The Country and its People
Living Conditions
Iranian Industry
Labour Protection
The Country's Needs

62
62
63
65
67
68

CHAPTER X : Conclusions

Recruitment
Training
Wages and Prices
Hours of Work
Working Conditions
Social Insurance
Safety
Contract Labour
Housing
Distribution of Commodities
Health Services
Education
Trade Unions
Labour-Management Relations
General Observations

71
72
72
73
73
74
74
75
76
77
78
79
79
81
83

INTRODUCTION
In November 1948 the Iranian Government, through its delegation
at the second session of the I.L.O. Petroleum Committee, invited the
International Labour Office to send a Mission to south Iran with a view
to preparing a report giving an objective picture of social conditions
in the oil industry and, if necessary, to framing recommendations which
the Iranian Government might take into account in giving effect to the
resolutions adopted by the Petroleum Committee.
The invitation was noted by the Governing Body of the I.L.O. at
its 107th Session (Geneva, December 1948) and the DirectorGeneral appointed as members of the Mission the following officials
of the International Labour Office : Mr. John Price (Chief of the
Industrial Committees Section)—Head of the Mission ; Mr. P. P.
Fano (member of the Industrial Committees Section) ; and Mr. A.
Djamalzadeh (member of the Conditions of Work Section), who also
acted as interpreter.
The Mission left Geneva for Abadan on 9 January 1950. From
11 to 31 January the Mission studied conditions at the refinery in Abadan
and at the oilfields of Masjid-i-Sulaiman and Agha Jari and also paid
a visit to Ahwaz, the capital of the province of Khuzistan. Subsequently
it spent a few days in Isfahan visiting textile factories and other plants,
and went on to Teheran, where it discussed the problems of the oil
industry with representatives of the Government departments concerned
and in the meantime visited other industrial undertakings.
In Teheran the Mission was received by H.I.M. the Shah, by Prince
Abdul Reza, who is in charge of the seven-year plan for the economic
development of Iran, by the Prime Minister, Mr. Saed, and by the
Minister of Finance, Mr. Golshayan.
During the last week of its journey, the Mission spent three days in
Iraq at the invitation of the Government of Iraq, discussed conditions
in the oil industry with Government representatives and representatives
of the oil companies in Baghdad, paid visits to two of the local factories
and visited the installations of the Iraq Petroleum Company at Kirkuk.
The Mission was received in Baghdad by the Minister of Economics,
Mr. Ihsan Rifat, and the Minister of Social Affairs, Mr. Tewfik
Wahbi.
The Mission returned to Geneva on 18 February 1950.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

While in Iran the Mission examined the various problems of the
petroleum industry under the headings (a) conditions of work, (b) social,
community and welfare services, and (c) industrial relations. Under
the first heading it enquired into recruitment, training, wages, hours
of work, rest periods and holidays with pay, procedure for severance of
employment, social insurance schemes, safety and the position of
contract labour. Under the second heading it examined the problems
of housing, food supplies, health services, education, transport services
and recreation facilities. Finally, under the third heading, the Mission
enquired into the legal and de facto conditions of trade union organisation in the country and the development of trade unionism and labourmanagement relations in the oil industry.
The Mission was able to visit all the parts of the installations of the
Anglo-Iranian Oil Company which had any significance for its study
and to examine the various services provided by the Company and the
public authorities for the benefit of the oil workers and their families.
The Mission is glad to say that it was given every facility for making
its enquiries.
Wherever it went the Mission made an effort to consult all the parties
concerned, and to give them an opportunity to explain all the problems
in which they were interested and to express their points of view separately.
Thus the Mission paid several visits to the Abadan refinery accompanied
by officials of the Company and a separate visit with the representatives
of the trade unions of workers in Khuzistan. Similarly, the residential
quarters in Abadan were visited both with officials of the Company and
separately with representatives of the oil workers. The Mission was
conducted through the municipal districts of the town by the municipal
authorities, headed by the Mayor.
The Mission paid visits to the Government labour offices at Abadan,
Masjid-i-Sulaiman, Agha Jari, Ahwaz and Isfahan, and had numerous
discussions with representatives of Government departments in Teheran,
Abadan and the oilfields. In Teheran the Mission visited the Ministry
of Finance, the Ministry of Labour and the offices of the organisation
for the seven-year plan.
The Mission met the general manager of the Anglo-Iranian Oil
Company at Abadan, the general refinery manager, the general manager
of " Fields ", the chief industrial adviser to the Company and
numerous officials of the Company who are in charge of different
services.
Careful consideration was given to the views of the unions of oil
workers in Abadan and the oilfields. In all instances the representatives
of the unions were given an opportunity to express themselves freely to

INTRODUCTION

the Mission and were invited to submit a memorandum concerning
the questions which they wished the Mission to bear particularly
in mind. The opinions of individual unorganised workers on the
problems under consideration were always elicited wherever an opportunity arose.
The Mission felt that in order to form a fair opinion of the conditions
obtaining in the oil industry it was essential to consider these conditions
in the light of the general standard of living of the country as a whole
and, more especially, from the point of view of the level attained in
other modern industrial undertakings in Iran.
It was with this end in view that the Mission visited textile mills and
other plants at Ahwaz and Isfahan and a number of Government-owned
and private industrial concerns at Teheran, including cement works, a
tobacco factory, glass works and chemical works.
Questions concerning conditions of employment and the state of
trade union organisation in the country as a whole were discussed with
representatives of the Federation of Trade Unions of Iranian Workers
(E.S.K.I.) and of the Central Council of Unions of Workers and Peasants
(E.M.K.A.) during the visits which the Mission paid to their offices at
Isfahan and Teheran. Conversations on similar subjects were also held
with individual private employers and with the general secretary of
the Employers' Industrial Council of Iran.
The Mission was invited to attend a meeting of the High Labour
Council at Teheran, at which it met representatives of the various
Government departments and the representatives of the employers
and workers.
The Mission wishes to express its gratitude to H.I.M. the Shah and to
the members of his Government for the personal interest which they
took in its work. The Mission is also greatly obliged to the representatives of the Government departments, to the Anglo-Iranian Oil Company
and to the trade unions for the trouble they took to provide both information and comment. It wishes to mention in particular the great
assistance it received during its stay in Iran from Dr. Naficy, UnderSecretary of State of the Ministry of Labour, Dr. Jalali, Director-General
of the Ministry of Labour, and Mr. Naghavi, the representative of the
Ministry of Finance in Abadan.
It may be useful to mention here that, as is well known, there have
been differences of opinion between the Iranian Government and the
Company for some time past concerning certain questions arising out of
the Concession. During its stay in Iran the Mission observed that
these questions were mainly of an economic and financial nature. The
Mission was concerned primarily, however, with working and living

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

conditions in the petroleum industry and it did not find it possible to go
into the questions mentioned above. The Mission nevertheless recognises the importance of these questions for the petroleum workers and
the Iranian people in general, and it hopes that they will be solved as
soon as possible to the satisfaction of all concerned.

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CHAPTER I
THE OIL AREAS
The operations of the Anglo-Iranian Oil Company in south-west
Iran are carried on partly in Abadan, at the head of the Persian Gulf,
and partly in the foot-hills of the Zagros Mountains, over a hundred
miles away. Between the refinery at Abadan and the oilfields in the
foot-hills lies the desert.
THE ABADAN AREA

Abadan and its refinery stand on Abadan Island, which is flanked
on one side by the Bahmanshir river and on the other by the Shatt-el-Arab
—a combination of the Tigris, Euphrates and Karun rivers. The oil
from the wells is brought to the refinery through pipelines which cross
the desert from the various producing fields and converge upon the
refinery area.
Oil was found in commercial quantities in 1908, though the original
Concession dated from 1901. It was in 1911 that the first pipeline to
the selected site for the refinery at Abadan was completed. The annual
capacity of this pipeline was 400,000 tons, whereas the amount now
being piped to Abadan per annum is 24,000,000 tons.
When prospecting started in the early days of the century the whole
area was mostly uninhabited. There was a scattered nomadic population in the hills and around the Gulf, but there was hardly any cultivation, and the land was largely waste. Abadan Island itself, like the
adjacent districts, was a desert, broken only by a fringe of date palms
near the river. The early refinery was completed in 1912. Since then,
during a period of less than 40 years, Abadan has grown from a tiny
village to a town with a population which is estimated at 173,000 and
which may be as high as 200,000.
Such a rapid growth would have raised serious problems in any
country; in Iran the problems were particularly acute. The absence of
agriculture meant that practically all food had to be brought from long
distances. Machinery, equipment, and construction materials had likewise to be imported. There were no other industries in the area, no

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

centres of population and therefore no public services, such as water
supply, lighting and drainage. There was no railway, the roads were
tracks, and transport was a matter for camels, donkeys and river craft.
In spite of these natural handicaps the refinery at Abadan has become
the largest in the world, and the inhabited area around the plant has
extended over a great part of the island. In addition to the usual
features the refinery possesses its own power station, which also provides
current for lighting and heating the residential areas, an ice plant which
supplies ice for the canteens, restaurants, offices and houses, and a
pumping station through which more water is pumped daily than is
used by the population of London. The residential areas comprise
not only houses and quarters of various types, but also shops and
stores, schools and cinemas, clinics and a hospital. Sports grounds,
swimming pools and clubs have been provided, and a bus service has
been organised.
Outside the Company's area is a growing municipality, with houses,
shops and a bazaar. The housing in this town is mainly of the oldfashioned and primitive type, and the area is seriously overcrowded.
The town is, however, being extended and new houses are being built.
The Company is assisting in the building of some of the houses as well
as of schools and clinics. It also supplies the town's water and electricity.
In the Abadan area the inhabitants are mainly Arabs from the
surrounding districts and from the region of the Persian Gulf, together
with tribesmen—mostly Bakhtiari—from the hill country of Khuzistan.
Few of these had had any previous experience of industry or had lived
a settled life in towns. Most of them had lived in mountain or desert
villages, and many had been accustomed to migrate from place to place
according to the season. The number of inhabitants who moved in
from other industries or from towns and cities was very small. A few
came down from Isfahan and even from Teheran, but these were exceptions. The foreign population of Abadan is a small percentage of the
whole, since it consists in the main of about 3,000 European and Indian
employees of the Company, with their families.
Life is extremely difficult in this part of Iran because of the great
heat in summer, the low rainfall and the absence of vegetation. The
Abadan area is surrounded by a desert, not of sand but of salty earth.
The only trees to be seen in this region, apart from those planted in
Abadan itself, are the date palms which grow in a narrow belt along
the banks of the rivers. The oppressive summer heat necessitates the
provision of fans, air coolers and supplies of ice and raises serious
problems of house construction. Nothing grows in the desert, except

THE OIL AREAS

in small and widely separated patches where the water and soil happen
to be sweet. In such places grain and vegetables are grown.
It is, however, possible to produce crops by irrigation, though the
process of sweetening the soil is slow and costly. Near Abadan and at
Khosrowabad the Company has flooded, drained and sweetened certain
areas and has succeeded in producing substantial quantities of vegetables.
These areas are crossed by irrigation ditches, which are supplied with
fresh water pumped from the nearby rivers. In Abadan itself the
Company has laid out gardens and planted imported trees along the
roads.
THE OILFIELDS

In the oilfield areas—known as " Fields "—the situation is similar
in some respects but more favourable in others. The oilfields are in
various stages of development and therefore present different problems
in regard to employment, housing, and the organisation of community
services. In some parts of the area wells are being drilled and the size
and shape of the field are still unknown, whereas in other parts the
field has been fully explored and has settled down to steady production.
The oilfields are over 100 miles from Abadan. The oil is found in
the hills on the side nearest the plain which extends from the Zagros
range to the coast. Like the plain itself, the hills are arid and bare.
There are no trees to be seen and no vegetation, except in spring, when
the slopes are thick with grass and flowers. Wheat is, however, grown in
sufficient quantity by the local population, who also rear their own cattle.
The oldest field is at Masjid-i-Sulaiman, where the first oil was
struck in large quantities in 1908. This proved to be a large and important field and it subsequently became the headquarters for the whole of
the Fields area. Other important oilfields are to the north of Masjidi-Sulaiman at Lali, and to the south at Naft Safid (White Oil Springs),
Haft Kel and Agha Jari. The industrial and residential development of
Masjid-i-Sulaiman extends over a period of some 40 years, during which
the community has had time to settle down, but in the newer fields the
problems of labour supply, housing and the provision of community
services have to be taken in hand from the beginning. Agha Jari,
which came into production during the war, is still being explored and
developed, but it already produces more than Masjid-i-Sulaiman. The
field at Lali is even newer and may turn out to be more important than
Agha Jari. These areas obviously have many of their community
problems still before them. One of the most pressing of these problems
is the provision of living accommodation, but it is not possible to solve

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

this problem completely until the extent and importance of the field are
known. In Agha Jari, for example, a residential and administrative
centre was chosen in what was thought to be the most advantageous
position, but subsequent drilling showed that the field ran in quite a
different direction and that the projected " centre " was, in fact, near
the end of the field, which extends for 28 miles.
Throughout the Fields area there was an absence of communications
and public services until the Company started its operations. Roads
have been made by the Company to hnk together the various producing
centres and to connect Fields with Abadan and with Ahwaz, the capital
of the province. Ahwaz is on the Iranian State Railway and is the
only place from which there is a rail connection. The railway runs
north to Teheran but does not extend south to Abadan. All transport
between Abadan and Fields is carried on by road or by the Company's
aeroplanes.
As in the case of Abadan, there were no industrial or urban centres
in what is now the Fields area. Accordingly, in addition to making
roads, the Company has had to pump drinking water from the rivers
and to generate electricity for lighting and heating. It has also built
houses and schools, clinics and a hospital. Throughout the area there
are villages in the hills which are inhabited by men of the Bakhtiari
tribe, large numbers of whom now work for the Company. The houses
in the villages are usually made of baked mud, and they frequently
provide shelter not only for the family but also for animals. It is still
customary for the Bakhtiari to follow their flocks to the grass as the
seasons change, and many of the tribesmen who come to the oilfields
from a distance return after a period to their villages and to their traditional life.
It is commonly remarked in the petroleum industry that many of the
industry's labour and social problems arise from the conditions under
which the oil is found. This is well exemplified by the experience of
the oil industry of south Iran, where some of the industry's greatest
difficulties are due to the conditions prevailing in the area; but, as will
be seen in other parts of this report, these difficulties have been seriously
aggravated by the rapidity with which the industry has grown.
RAPIDITY OF THE INDUSTRY'S GROWTH

An indication of the rapidity of growth is given in the following
figures which have been published by the Company. There were two
periods of expansion during and after the first world war, and by 1937
the annual production reached 10,000,000 tons for the first time. When

THE OIL AREAS

the second world war began, production fell from 9,583,000 tons in 1939
to 8,626,000 in 1940 and to 6,605,000 in 1941. But from then onwards
very heavy demands were made upon Abadan for the war effort. In 1942
a large construction programme was undertaken, and the production
figure rose to 13,274,000 tons in 1944, 17,000,000 in 1945 and 19,100,000
in 1946. x
The total employment figures (salaried employees and wage earners)
in Abadan rose from 12,076 at the beginning of 1935 to 22,813 at the
beginning of 1939, while in Fields they rose from 4,907 to 8,689 in the
same period. During the three following years the figures fell as follows
(number at the beginning of each year) :
1940
1941
1942

Abadan

Fields

18,304
16,421
17,175

7,819
4,954
4,638

Subsequently, as will be seen below, the figures rose again.
1943
1944
1945
1946
1947
1948
1949
1

Abadan

Fields

26,157
26,448
32,775
33,241
33,660
36,412
38,812

5,088
5,516
9,499
12,809
12,728
13,981
17,158x

Figures supplied by the Anglo-Iranian Oil Company.

Clearly a rate of expansion involving the addition of so many workers
and their families to the population of such an area was bound to leave
a legacy of difficult social problems. 2

1
A Short History of the Anglo-Iranian Oil Company, published by the AngloIranian Oil Company, London, 1948.
2
The Company also has a small field at Naft-i-Shah in north-western Iran. This
field is connected by a pipeline with a refinery at Kermanshah, where petroleum
products for the north and north-west of Iran are refined. The Mission was not asked
to visit these installations, but it made enquiries about conditions in these areas while
in Iran and was informed that the labour and social problems which arise at Naft-iShah and Kermanshah are on a smaller scale and much less acute than those to be
faced in Abadan and Fields.

CHAPTER II
THE LABOUR FORCE
While some of the problems of the industry arise from the nature
of the area in which the oil is found, others are due to the composition
and characteristics of the industry's labour force.
It will have been seen from the last chapter that the main sources
of labour supply for the petroleum industry in south Iran are the Persian
Gulf, with the surrounding deserts, and the hill country of Khuzistan.
The workers drawn from these areas were mainly desert Arabs and
Bakhtiari tribesmen, who had no industrial background and who for
the most part had no experience even of small-scale handicrafts. Their
economy was pastoral, their organisation tribal, and their life for generations had been lived in small villages and tents with the simplest food
and only the barest necessities. Such men were quite unused to the
ways of industry and were at first completely unskilled.
A petroleum industry, however, while requiring unskilled workers,
is also in need of large numbers of men with a great variety of skill,
both in the producing fields and in the refineries. Since skilled labour
was not available on the spot, the Company had to make use of a certain
number of artisans from other countries, such as India, in addition to the
European specialists who were brought in as engineers, chemists and
administrators. It was evident that this could not be a long-term solution, but only a response to an immediate need.
Accordingly, because of the composition and characteristics of the
available labour force, the Company has had to give close attention to
the question of training, coupled with the problems of upgrading and
promotion. It has also been faced with a connected problem—that of
increasing the proportion of Iranians in its employ during a period
when increases were taking place in the labour force as a whole.
These problems have been the more difficult because the situation
of the area and the prevailing conditions discourage many of the better
qualified workers, technicians and supervisory personnel from taking
up jobs in the petroleum industry. Iran is a country of great distances
and inadequate communications, and Abadan and Fields are far removed
from other cities and centres of industry. Moreover, the climate of

THE LABOUR FORCE

south Iran is extremely trying in summer, much more so than on the
central plateau or in the north. Accordingly, artisans with jobs and
homes in other parts of the country are not attracted in any numbers
to Abadan. Similarly, people with qualifications for clerical, administrative, technical and supervisory duties usually find that life in, say,
Teheran or Isfahan has more attractions than life in the south. These
circumstances increase the difficulty of obtaining qualified workers
and of keeping them once they have had experience of the conditions
of the area.
COMPOSITION

By far the greater proportion of the workers in Abadan and Fields
are classed as "labour", a term which includes large numbers of unskilled
workers and also apprentices, trainees, skilled workers and artisans.
Such " labour " is employed in oil production, refinery operations,
maintenance work, pipeline operations, construction work, transport
services, oil loading at the jetties, cargo handling and a host of other
jobs in the industrial and residential areas. In addition, there are
salaried employees—technical, commercial and senior—including supervisory personnel, foremen and office staffs. The " labour ", i.e., the
wage-earning employees, accounted for 33,000 out of a total employment
figure of 38,000 in Abadan at the beginning of 1949, and for 15,000 out
of 17,000 in Fields on the same date. In Abadan all the trainees and
apprentices, all the unskilled workers and all the skilled workers (except
nine out of a total of 9,500) were Iranians. Of the 9,700 artisans, nine
out of 10 were Iranians, while out of 5,800 salaried employees the
number of Iranians was 3,300. In Fields the only foreigners in the wageearning categories were among the artisans (184 out of 3,465), while the
number of Iranian salaried employees was 975 out of a total of 1,830.
Fortunately, the employment of women and children in the industry does not constitute a serious problem. Very little juvenile labour
is employed. The Labour Law forbids the employment of children under 12, but the Company does not accept children under 14. The majority
of the Company's employees under 18 are apprentices and trainees.
Women are employed in small numbers but not on the industrial side.
Out of 783 women employed in Abadan and Fields in 1949 there were 63
non-Iranian salaried employees in the medical services and 449 Iranian
salaried employees in the medical services and on commercial work. There
were also 271 Iranian women wage earners, of whom about half were
learner clerks and the remainder chiefly sanitary and laundry workers.
In addition to the Company's own labour there are some thousands
of workers employed by contractors who carry out jobs for the Company.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

These workers are engaged on plant construction, pipeline laying, road
making, drainage and sewerage work, and building operations in the
residential areas. The number of these workers varies with the work
to be done, and their employment is for the most part casual. The
Company keeps a certain number of construction men on its own books,
but the contractors' men are not regarded as employees of the Company.
Their work is, nevertheless, necessary for the maintenance and development of the Company's operations and their problems have to be taken
into account in any study of conditions in the area.
CHARACTERISTICS

As already indicated, few of those who seek employment at Abadan
and Fields have any industrial background or skill in the use of tools.
The dress of a typical worker at Abadan or Fields is a compromise between
European clothes and Arab or Bakhtiari dress, just as bis Ufe is a compromise between that of large-scale modern industry and that of the
mountain or the desert, between the new ideas of the West and the old
traditions of the East. He may wear the coloured headcloth of the Arab
with a blue boiler suit, or the wide black trousers of the Bakhtiari with a
European jacket. He may have leather shoes or rubber boots, but he is more
likely to walk about in " ghivers "—white canvas-topped shoes which slip
on without straps or laces. It is evident that his habits of thought and beha viour are those of the pastoral tribe rather than of the industrial proletariat.
The man whose forbears were nomads, whose needs were easily
satisfied and who paid little regard to the passage of time, does not take
easily to factory hours, methods or discipline. If he was an artisan in
the town bazaar he did his work sitting or kneeling on the ground and
not standing at a bench. He did not work to exact measurements
but made his copper pots, his brass trays or his wrought iron articles in
traditional shapes and sizes by rule of thumb. He could not read a
blueprint because he could not read at all.
As a consequence of this, practically all the skilled workers and
artisans have to be trained by the Company, and training has also to be
given even for some of the simpler jobs. The Company's training
methods and programmes have had to begin with the most elementary
stages. Both in apprentice training and in the training of adult workers
attention has had to be given to primary education as well as to the
theory and practice of metal working. Before a man can become a
mechanic he must be able to use a ruler and to read thefigureson gauges,
but at the beginning nine workers out of 10 were completely illiterate.
It was therefore necessary to teach them reading and writing in their

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<t.-t¿Yur™t

Views of Abadan

Drilling crew at work, S.W. Iran

Part of refinery,
Abadan

THE LABOUR FORCE

own language and to give them the rudiments of English, at the very
least. Even now trainees can be seen in the plant studying their own
language and at the same time learning to measure in fractions of an
inch, to read the Fahrenheit scale and to recognise such words as
" hammer ", " file ", " distillation ", " superfractionator ", " power
station" and "pipeline". The prevailing illiteracy has also had its
effects on the recruitment of clerks and typists, with the result that
arrangements have been made for the employment of " learner clerks "
and "commercial trainees".
In view of the circumstances outlined above, it is not surprising to
find that there is a relatively high turnover of labour in the industry.
It is true that large numbers of men have settled down in Abadan and
Fields, and that many have been with the Company for periods of 10,
15 and 20 years; but the majority do not yet regard themselves as oil
workers or consider the area as their permanent home. The influence of
tradition and the call of the tribe are strong; it is therefore quite usual
for men to migrate to the hills or to the Gulf from time to time and to
return to the industry after an interval. Many of the men, indeed,
regard their work in the industry as temporary, since they eventually
expect to go back to their native villages and to resume their pastoral
way of fife. Another aspect of this problem is that, because of the shortage of skilled labour throughout Iran and of the unpleasant climatic
conditions in the south, men who have been trained, or even only partially
trained, by the Company as mechanics and motor drivers are easily attracted to other jobs in the area or to other parts of the country.
Enough has already been said in these pages to illustrate the kinds of
problem which arise from the composition and characteristics of the
industry's labour force. Attention may, however, be drawn to one other
group of problems of particular importance—those relating to trade
unionism, collective bargaining and industrial relations. Because of
the nature of the labour force, these are matters of unusual difficulty.
Trade unionism and collective bargaining are conceptions which came
from the West and which until recently found no place in the thoughts and
activities of the workers of Iran. Relations between employers and workers
likewise constitute a new problem. When the employer is no longer a master
craftsman or merchant who works alongside his men, and when the men
find themselves for the first time in large industrial plants, the relations
between them cannot be regulated in the old traditional ways. Accordingly
new approaches have had to be made to this problem, taking account of
the circumstances of the industry and the attitudes of the men concerned.
More will be said about these questions in other parts of this report.
2

CHAPTER III
RECRUITMENT AND TRAINING

RECRUITMENT

As has been pointed out, the operations of the Company are not confined to the production and refining of oil, but include a multitude of
other activities which add greatly to the variety of experience and skills
needed in the performance of the work and to the difficulty of obtaining
suitable personnel. The building up of a staff which includes such a
wide range of occupations as oil drillers, engineers, administrators,
chemists, mechanics, draughtsmen, railwaymen, motor drivers, store
keepers, dockers, doctors, nurses, and many others would in any country
present formidable problems, but in the case of the Anglo-Iranian Oil
Company these problems are magnified by the fact that in Iran basic
industries have not yet developed sufficiently to provide training grounds
for an adequate number of skilled workers and specialists. Moreover,
the problem of recruitment is complicated by the physical conditions and
tropical climate of the area.
It will be remembered that the unskilled workers employed by the
Company, though they are recruited locally, come, in fact, to a large
extent from the pastoral nomadic tribes of Bakhtiari who live on
the hills which emerge many miles north of Abadan, and from the
Arab tribes of the Persian Gulf. Highly qualified and skilled
Iranian employees, on the other hand, come from distant centres of
handicraft and industry and are recruited by the Company's main
recruiting office in Teheran, or in Abadan, Masjid-i-Sulaiman and
Ahwaz. Moreover, all the Company sales offices are in contact with the
main office in Teheran and constitute a veritable recruiting network
throughout the country.
In accordance with the terms of the Concession, the total strength of
the Company's unskilled labour is at present composed entirely of
Iranians. The Concession, on the other hand, also makes it an obligation for the Company to recruit its skilled workers, as well as its technical
and commercial staff, from among Iranian nationals to the extent

RECRUITMENT A N D TRAINING

that it finds in Iran persons who possess the requisite competence and
experience.
Since the supply of salaried employees and skilled labour in Iran is
constantly short of the increasing requirements of the oil industry, the
Company has undertaken to train a large number of young Iranians
within the industry and has employed a number of foreigners, particularly British and Indians.
The statistical information below shows that over the last 15 years
the number of Iranian salaried employees, as well as artisans and skilled
workers, has increased at a greater rate than that of foreigners. However, the number of foreigners has also increased, no doubt as a
result of the increase in the scope of the Company's operations and
the difficulty of finding in Iran all the personnel necessary to fill the
new vacancies.
TABLE I. IRANIAN A N D FOREIGN WORKERS EMPLOYED BY THE A . I . O . C .
AT ABADAN

Salaried employees

1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

Artisans s

Skilled workers

Iranians

Foreigners

Iranians

Foreigners

Iranians

Foreigners

495
505
632
791
1,007
1,008
908
924
908
968
1,061
1,451
1,781
2,386 4
3,368

919
948
869
928
1,260
1,103
1,010
925
1,378
1,714
2,010
2,236
2,186
2,307 s
2,440

2,175
2,435
2,387
3,055
4,924
3,356
2,757
2,954
4,778
4,192
4,832
5,137
5,189
5,234 6
8,738

405
510
460
442
839
701
804
681
1,251
1,399
1,459
1,522
1,275
1,184
989°

2,838
3,017
3,034
3,380
4,452
4,318
4,189
4,661
7,060
7,319
10,214
10,842
12,614
14,077 7
9,568

42
19
2

—
—
—

—
—
—•
—
—
—
—
—

1
The figures given are supplied by the Company and are the only ones available. * 1 Jan. of each
year. a Artisans include foremen (Ostad Kar) and other control grades. Heads of technical
departments
(Sar Ostad Kar) are included among salaried employees. * Including 540 trainees. ö Specialist contractors
included for the first time. • Grade 1 skilled workers included for the first time. ' Grades 2 and 3 only.

The largest proportion of foreigners is still to be found in posts
requiring a very high degree of experience in technical, administrative and
commercial matters ; it should be noted in this connection that some foreigners with high qualifications are also employed by the Iranian Government for its own industrial enterprises.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

TABLE II. IRANIAN AND FOREIGN WORKERS EMPLOYED BY THE A.I.O.C.
AT FIELDS 1
Salaried <¡mployees

Artisans 3

Skilled workers

Year*
Iranians

Foreigners

262
282
386
475
496
515
346
297
266
277
418
513
595
754

434
378
360
410
484
362
202
151
182
212
468
575
569
654
855 B

1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949

975 4

Iranians

Foreigners

Iranians

129
99
95
111
140
107
63
46
53
55
93
187
198
161
184 6

1,386
1,544
1,724
2,022
2,589
2,645
1,819
1,878
2,275
2,559
3,834
4,880
5,884
4,983
5,897'

619
755
936
1,111
1,592
1,538
967
940
1,102
1,170
1,422
2,066
2,158
2,483
3,465 «

Foreigners

—
—
—
—
—
—
—
—
—
—
—
—
—
—

1
Thefiguresgiven are supplied by the Company and are the only ones available. * 1 Jan. of each
year. 8 Includes foremen (Ostad Kar) and other control grades. Heads of technical
departments (Sar
Ostad Kar) are included among
salaried employees. * Including 32 trainees. fi Specialist contractors
included for thefirsttime. 6 Grade 1 skilled workers included for thefirsttime. ' Grades 2 and 3 only.

TABLE III.

IRANIAN AND FOREIGN SALARIED EMPLOYEES EMPLOYED

BY THE A.I.O.C. AT ABADAN AND FIELDS ON 3 0 NOVEMBER 1 9 4 9 X
Class

Graded . .
Non-graded
1

Foreigners

Iranians

2,756
696

765
3,544

Thefiguresgiven are supplied by the Company and are the only ones available.
TRAINING

Abadan
Over a period of 20 years the Company has evolved a system of
training which aims at producing the largest possible number of trained
men from among the youths of the country.
The Company scheme provides facilities for acquiring practically all
the specialised skills which the Company requires, including courses for
the training of graded and non-graded staff, foremen, artisans and skilled
workers in a multitude of trades. All possible opportunities for employment in the Company's service and elsewhere are therefore open to the
young trainees, according to their education, intelligence and vocation.

RECRUITMENT AND TRAINING

A training course for foremen is helping both to open up avenues
of promotion for Iranian personnel and to improve relations between
the workers and their immediate superiors. The scheme is run on
" training within industry " 1 lines and has been in operation in Fields
since the end of 1947 and in Abadan since the beginning of 1948.
At the end of November 1949 there were in Abadan 516 staff trainees
and 2,961 labour trainees, all of whom were Iranians. Though no trainee
is tied to remain in the Company's employ, the Company undertakes on
its part to accept all suitable trainees.
Training is largely carried out on the job, and it is part of the function
of each department in the refinery to provide practical teaching for
trainees ; but training on the job is in all cases supplemented by theoretical instruction and basic training, which are imparted in three different
establishments set up by the Company for this purpose : the Abadan
Technical Institute, the apprentice training shops, and the works training
centre.
All trainees receive pay, leave with pay and medical and sports
facilities.
An apprentices' hostel has been established by the Company in order
to provide adequate accommodation for the apprentices who come to
Abadan for commercial or technical training from other areas, including
the northern provinces. The Company supplies the hostel with all its
requirements and for a modest fee the boys can obtain their meals there.
In 1949 the hostel accommodated 300 boys.
The Abadan Technical Institute, which was opened in 1939, is a
large modern building surrounded by gardens and sports grounds. It
includes a main hall used for examinations, public lectures and other
functions, a reading room, a library and the class rooms and laboratories
of the three technical departments (engineering, science and commerce).
The Institute is entirely financed and administered by the Company
but is academically governed by the Ministry of Education. Its degrees
and certificates are officially recognised, and its teaching forms an integral part of the Iranian national system of education. The Institute
is designed primarily to train pupils in specialised branches of industry
and commerce by means of part-time education. The length and the
curriculum of the courses vary with the degree of education obtained
by the pupils before their enrolment and with the objectives to be attained.
Graduates of Teheran University and Teheran Higher Technical
College are given practical training at the Institute to enable them to
take up senior technical and administrative posts in the Company's
1
Cf. " Training Within Industry in the United States ", in International Labour
Review, Vol. LIV, Nos. 3-4, Sept.-Oct. 1946, pp. 160-178.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

organisations. The length of the course is two years, including six
months' pre-training and six months on the job.
Boys with a secondary school certificate follow a five years' course,
including from four and a half to nine months' full-time academic training
at the Technical Institute. After graduation they may take up senior
posts in engineering and chemistry. Alternatively, they may choose to
be trained to become foremen, junior shift engineers or clerical assistants,
in which case the length of the course is two years, of which part is spent
in theoretical training at the Institute.
Schoolboys who have gone only half way through secondary education are given part-time courses of four years in technical or commercial
subjects, at the end of which they may obtain the ordinary certificate of
the Technical Institute and take up posts as foremen, junior shift engineers,
junior draughtsmen, health inspectors or clerical assistants. Alternatively they may follow a part-time course of two years and qualify
for a low-grade clerk post.
The total number of students attending the Technical Institute in the
school year 1948-1949 was 790.
The apprentice training shops are designed for training boys of about
14 years of age who have spent at least six years at school, i.e., boys who
can read and write in Persian and who know the first rules of arithmetic.
The apprentice training shops cater for two kinds of apprentices :
(1) the artisan apprentice, who spends two years in the shop and another
three years in different departments of the refinery and then becomes a
high-grade fitter, electrical fitter, wireman, turner or machinist; and (2)
the technical apprentice, who spends one year in the shop, at the same
time attending classes in the Technical Institute, and then goes to different
departments in the refinery for three or four years (attending the Technical Institute as before), ultimately becoming a junior foreman, draughtsman or chemical assistant. In the apprentice training shops all trainees
acquire a working knowledge of English, and they are given safety lectures and, once a week, physical training.
In 1949 there were 567 artisan apprentices and 164 technical apprentices, but the demand for apprentices in the refinery was still greater than
the supply.
Admission to the Technical Institute and the apprentice training
shops is always subject to the pupils having previously attained a certain
standard of education, and also in certain instances to a competitive
examination. Youths and young men with little or no instruction, on
the other hand, are given an opportunity to improve their capacity
through the works training centre, which has been set up to select
trainees from among appHcants for work; to determine by process of

RECRUITMENT AND TRATNING

observation and tests, in workshops and class rooms, the type of work
for which they have the greatest aptitude; and to arrange for their training in a selected trade within an appropriate department.
The centre is specially interested in the training of (1) boys between
14 and 17 years of age, who are trained to become skilled artisans after a
period of five years; (2) adults of 20 to 35 years of age, who after three
months in the works training centre and two years in the departments may
become low-grade artisans or unskilled tradesmen; and (3) men between
18 and 35 years of age, who are trained as skilled workers, tank dippers,
locomotive attendants, cooks, drivers and welders.
The most recent development in the Company's training policy has
been the establishment in April 1949 of the Abadan Nursing School,
where practical and theoretical training is imparted to Iranian nurse
trainees in courses which last three years.
Fields
Training schemes are also operated in the Company's oilfields
similar to those in Abadan and under the same conditions, though
owing to the fact that the oilfields are scattered over a vast area and
consist of small units, these schemes are less comprehensive than those in
Abadan, and the number of trainees is smaller.
At the end of November 1949 there were in the oilfields 35 staff
trainees and 400 labour trainees, all Iranians.
Training Iranians in the United Kingdom
Under the terms of the Concession the Company has undertaken to
sponsor and finance schemes for educating and training Iranians in the
United Kingdom. Under these schemes a number of the best students
from the Abadan Technical Institute are selected each year for university
education or for practical engineering courses in Great Britain. In 1949
77 Iranian students were sent to Great Britain for education and training
under the Company's auspices.

CHAPTER IV
CONDITIONS OF WORK
ENGAGEMENT AND CONTRACT OF EMPLOYMENT

Every worker, before being engaged, is medically examined and identified by means of photographs and fingerprints. This is done with a
view to discovering whether he has been in the service of the Company
before and also in order to prevent men unfit for employment from
introducing themselves in the place of persons who have passed the
medical test and have been regularly engaged. After these formalities
a personal card is drawn up for the new recruit, on which a complete
record of his employment history is kept.
Collective agreements have not yet become a common practice in
Iran. In the oil industry salaried employees receive a letter of appointment which specifies the terms under which they serve, whereas the conditions of employment of wage earners are governed by Company regulations and by the provisions of the Labour Law.
The first Labour Law in Iran was enacted in 1946. Its provisions
referred to hours of work, leave and holidays, conditions of work for
women and children, contracts of employment, industrial hygiene, loss of
employment, wages, trade unions, the settlement of disputes, the High
Labour Council and the Aid Fund. From time to time consideration was
given by the High Labour Council to possible revisions of the Law, and
eventually a new Bill was submitted to Parliament in 1948.
On the basis of this Bill a new Labour Law was approved by Parliament in June 1949 for an experimental period of one year and was
brought into force by a Decree published by the Minister of Labour
in January 1950. Regulations made under the terms of the old Law,
however, remain in force until new regulations are made, as prescribed
by the new Law.
Matters dealt with in the new Law include hours of work, holidays
and annual leave, the contract of employment, termination of employment, health and protection of workers, wages, trade unions, the settlement of disputes, the High Labour Council, the Aid Fund, employment
offices and co-operative societies.

CONDITIONS OF WORK

WAGE SYSTEM

The Company's wage policy and the wage categories into which the
Company's labour force is divided are based on the minimum wage
regulations adopted by the Iranian Government in 1946 in connection
with the first Labour Law. The grades and the corresponding statutory
minimum wage scale are shown in table IV.
TABLE IV.

COMPANY WAGE SCALE
Pay

Grade

Unskilled
Grade 3
Grade 2
Grade 1
Head of technical department

Minimum wage
Minimum wage plus 20 per cent.
Minimum wage plus 40 per cent.
Minimum wage plus 70 per cent.
Twice minimum wage
Two and a half times minimum wage

The statutory minimum wage for unskilled workmen is fixed annually
by the local board for the settlement of disputes and is subject to approval
by the High Labour Council. In the province of Khuzistan, which includes Abadan and the oilfields, it was 40 rials x a day in 1949. The
statutory minimum wage is based on the cost of a number of items which
are deemed to be necessary to meet the living requirements of a workman,
his wife and two children. Table V shows these items (or " basket ")
for Abadan and the oilfield areas in 1949.
Wage Increments and Promotion
Unskilled workers who have completed one year of meritorious service
on the minimum basic rate are eligible for an increase of 2 rials a day
and after a further two years of continuous service they may be granted
a further increase of 2 rials. A similar system of increments—but
on a higher scale—for meritorious service is provided for artisans and
skilled workers (grades 3, 2 and 1) and for foremen. Promotion from
one grade to another is subject to a trade test. The Company encourages
its wage earners to pass such tests, and to those who fail the first time a
refresher course is given in order that they may make a second attempt.
Wage earners may also be promoted to the salaried grades by appearing
before a central committee which examines all such nominations for
promotions. A similar committee exists to examine promotions from
non-graded staff to graded staff. The result of the Company's policy of
1

At present official rates of exchange, 1 rial=£0.011 or $0,031.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

wage increments and promotion has been that only a relatively small
number of workers are not paid more than the statutory minimum wage
(see table VI).
TABLE V.

ITEMS USED TO CALCULATE MINIMUM WAGE, ABADAN
AND FIELDS, 1949

Food for one month :
Bread
Sugar
Meat
Ghee
Rice
Tea
Cheese
Peas and beans
Curd
Dates
Fish
Vegetables and fruit . . . .
Fuel, light, etc., for one month :
Charcoal
Matches
Electricity
Ice
Accommodation :
Quarters
. .
Clothing for one year :
Winter suit
Summer suit
Socks
Shoes
Ghivers
Hat
Underpants
Shirts
Family clothing
Miscellaneous

TABLE VI.

67 kg. (or 50 kg. flour)
2 kg.
3 kg.
2 kg.
7 kg.
Va kg.
i y 2 kg.
3 kg.
4 kg.
5 kg.
2 kg.
5 per cent, of total cost of above
items
30
10
6
150

kg. (or 24 litres kerosene)
boxes
kilowatt hours
kg.

1 room, approximately 12 eu. m.
1
1
4 pairs
1 pair
1 pair
1
2 pairs
2
75 per cent, of total cost of above
10 per cent, of the total cost of all the
above items

WAGE EARNERS ON MINIMUM WAGE RATES AND ABOVE

ON 3 1 DECEMBER 1949 IN ABADAN AND FIELDS 1

Grade

Grade 3
Grade 2
Grade 1
Foreman
Total . . .
1

Number of workers
on minimum wage
rates

Number of workers
above minimum
wage rates

1,167
2,353
2,570
1,210
47
7,347

11,996
2,109
7,893
11,050
2,219
35,267

The figures are supplied by the Company and are the only ones available.

CONDITIONS OF WORK

Wages and Prices
In the areas of the Company's operation, speculation on the part of
local traders and inflationary pressure due to the concentration of a large
and comparatively well-paid labour force have caused open market prices
to rise well above the level of the prices upon which the minimum wage
for Khuzistan has been calculated. The minimum wage regulations
provide that in places where such a situation arises the employer is
required to place at the disposal of his workers the commodities included
in the minimum wage basket at the prices on which the minimum wage
is based. However, even before the adoption of this provision the Company was operating its own food and clothing distribution scheme for the
benefit of its employees. Details of this scheme are given in Chapter VII.
It is sufficient to mention here that thanks to this scheme many of the
food and other items consumed by the workers are supplied by the
Company at subsidised prices or at prices below those charged in the
local market.
According to a computation made by the Company, the availability of
Company supplies at controlled prices has made it possible to maintain
the cost of the agreed standard of living, upon which the minimum
statutory wage is based, at 39.13 rials a day (about the amount of the
statutory minimum wage). The same standard of living would have cost
the workers 76.87 rials if they had had to make all their purchases on the
free market. It should be noted that all Company labour, and not only
workers on the lower wage rates, can benefit from the scheme.
Allowances
Allowances exist for workmen working in areas where living accommodation, amenities, etc., are below the normal standard. The amounts
are 30 per cent, of the basic pay (maximum of 20 rials) for the outstation
allowance, 100 per cent, for night allowance for vehicle drivers, 75 per
cent, for pipe construction allowance, and so on. Other allowances
are given for driving, work of an exceptionally dirty nature, work
necessitating the wearing of heavy protective equipment, working at
heights above the ground, etc.
HOURS OF WORK

Under the Labour Law the normal hours of work must not exceed
eight per day or 48 per week. Company employees work 4 3 % hours
per week in summer and 44% in winter. The working week consists
of five and a half days, for which workers receive—in accordance with
the law—seven days' pay.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

The rates for overtime and shift work paid by the Company conform
to the statutory regulations, which fix them at 35 and 10 per cent, of the
basic pay respectively.
HOLIDAYS WITH PAY

In addition to the weekly rest day, which falls on Friday, the workers
are given seven statutory public holidays, seven non-statutory public
holidays and, after one year's continuous service, 10 days' leave per
annum—in all cases without loss of pay.
TERMINATION OF EMPLOYMENT

The Labour Law prescribes that a worker who wishes to leave his
employment must give the employer seven days' written notice and, in
case of dismissal, that the employer must pay the worker one week's pay
for every year of service. The Company pays the amount of the statutory severance allowance also in case of resignation. In case of dismissal
on medical grounds after less than one year's service, the Company
allows three months' pay, and workers who have been with the Company
for a number of years receive one month's pay for every year of service.
DISCIPLINARY CODE

If there is direct evidence of misbehaviour, upon report from the foreman a man may be suspended from work by the job officer for a maximum
of seven days. Suspension for longer periods and in cases which call for
investigation may only be decided by the Company labour officer. There
are three grounds for dismissal : unsatisfactory conduct or work, unsuitability for training and redundancy.
In all cases of suspension or dismissal the person concerned has a
right of appeal. The relative procedure is described in Chapter IX.
TURNOVER

The turnover of Iranian employees as shown in table VII is comparatively large, especially in the lower categories of wage earners.
Labour wastage occurs mostly among the newly recruited unskilled
workers. Thus, of 8,227 Abadan wage earners leaving employment in
1948, 58.96 per cent, had less than one year's service and 28.20 per cent.
less than two years' service.
There are various reasons for these high percentages. One is that
tribesmen seeking employment in the oil industry as unskilled workers

CONDITIONS OF WORK
TABLE VII.

TURNOVER OF IRANIAN EMPLOYEES IN 1948
Per cent.
of monthly strength

Categories

Graded salaried employees
Non-graded technical employees . . . .
Non-graded commercial employees . . .
Wage earners (all grades)
Over-all categories
1

3.93
6.99
10.49
21.09
20.06

The figures are supplied by the Company and are the only ones available.

often do not intend to stay in employment for more than a few months.
They make their way to the oil areas when there is little work to be done
up country, and after they have saved sufficient money they return to
their homes. Conscription is another factor which has an important
effect on wastage; it has been noted that employees, particularly in the
unskilled group, sometimes disappear from employment in order to evade
it. On the other hand, the number of workers who seek re-engagement
is also very high. In 1948, out of 3,977 skilled workers entering the industry in Abadan, 2,067 were re-engagements, and out of 5,154 unskilled
workers entering the industry, the number of re-engagements was 5,136.
SOCIAL INSURANCE

Two forms of compulsory social insurance are in operation under the
Labour Law.
The first covers wage earners against industrial accidents and illness
caused by employment and is financed by contributions totalling 3 per
cent, of the workers' earnings, of which 1 per cent, is paid by the workers
and 2 per cent, by the employers. This scheme is administered by the
Iran Insurance Company but is largely carried out through the hospitals
and clinics established by the Anglo-Iranian Oil Company. The medical
officer of the Iran Insurance Company in Abadan has been given accommodation in the A.I.O.C. hospital, where he has full access to hospital
records and co-operates with the A.I.O.C. medical officers on medical
boards and welfare clinics so as to be able to follow up his patients from
the insurance point of view.
The other form of social insurance operated under the Labour Law
of 1949 covers marriage, pregnancy, support to large families, childbirth,
burial and legal aid.1 According to law, this scheme should be financed
1
The Law also makes provision for assistance to workers and members of their
families in case of accident or illness not caused by employment and for old-age and
disablement benefits. However, the detailed measures for the application of these
provisions have not yet been issued, and at present this section of the scheme is not
in operation anywhere in Iran.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

by a levy of 3 per cent, on the total earnings of the wage earners, of which
1 per cent, should be paid by the workers and 2 per cent, by the employers.
These contributions should be paid into an aid fund controlled by the
board of settlement of the undertaking concerned. In the case of the
A.I.O.C, however, the aid funds, both in Abadan and Fields, are financed
exclusively by the dues of the workers, since the Company, with the
agreement of the Government, retains its contributions in view of the
special benefits which the Company itself has undertaken to provide for
its workers.
These benefits include medical assistance and free hospitalisation in
case of non-industrial accident or illness, the payment of full wages to men
who are absent from work through sickness and until they are certified fit
for work again, and the payment of more generous retirement allowances
than those provided by the law to men who have a long record of service.
SAFETY

The normal planning and supervision of safety measures in the Company's installations is the responsibility of a special Safety Department, the head of which is the chief safety engineer. There is a safety
engineer at the refinery and another at Fields. These officers are supported by a supervisory staff of safety specialists at the job level. When
an accident occurs, an investigation is held by a court of enquiry, an important function of which is the improvement of safety measures. The
court of enquiry meets each month and consists of the manager of the
refinery personnel (chairman), the works manager, the manager of the
general department, the labour superintendent and the chief safety
engineer. The Company has not yet found it practicable to develop joint
safety committees, although it has recognised that the tendency must
be towards the encouragement of the joint consultation method. On
the other hand, suggestions for the improvement of safety are discussed by the joint departmental committees concerned and adopted
if approved.
A very great effort has been made by the Company to develop safety
consciousness among its workers. The Company's safety regulations are
read and explained to all new recruits before they are actually set to work,
and special safety classes are regularly held at Abadan and in the oilfields
for all types of apprentices and trainees and for all types of workmen
engaged in work of a particularly dangerous nature. One of the methods
employed for training machine shop operators and apprentices is the
showing of instructional films. The films illustrate right and wrong
methods of working, and the results of failure to take the necessary care.

CONDITIONS OF WORK

Posters are made and printed by the Company itself and distributed
throughout the works as constant reminders to personnel to become
safety conscious and avoid accidents. These posters relate chiefly to
hand accidents, which are the most frequent.
Mechanical safeguards are provided for the many different types of
machines in use in order to protect the workers against coming into
contact with the moving parts or cutters. Many of these safeguards are
fully automatic and come immediately into operation should a machinist
get his hands, fingers or other parts of his body near to the dangerous
moving parts. Approach platforms, stairways, sumps, buildings, roofs
and other places where there is a possibility of falling are provided with
fixed guards in the form of hand rails.
Many different types of equipment for the personal protection of
workers engaged in the multifarious processes of production and refining
have been adopted or devised. Different types of eye protection are available for men working in the refining units, workshops, engineering and
transport sections. In the acid and production units the employees are
provided with rubber aprons, gauntlet gloves, gum boots and anti-splash
goggles, and respirators are always available for use against the possibility of a concentration of acid fumes. For those men who are working
on sulphur milling and loading, dust respirators and goggles are provided.
Very special precautions are taken for the protection of the workmen
in the final process of blending products with tetra-ethyl-lead. Their
protective equipment is coloured white to enable any splash to be
observed immediately; each man must wear a special respirator during
the time he is working, and on leaving the job he has a bath and a
complete change of clothing to avoid contamination through contact
with lead. These men are also subject to periodic medical inspection
to ensure that they have not become infected by the chemical lead.
Special equipment is also used where it is found necessary to enter a
vessel that has contained acid or acid products, and if the vessel has
not been freed of all gas vapours the Bloman breathing apparatus is
operated in order to ensure a constant supply of fresh air to the man
inside the vessel.
In the provision of all this equipment, consideration has been given
to the abnormal climatic conditions that prevail and, for tropical heat
in summer time, fabrics have been produced that are both light and
durable and, at the same time, afford the fullest possible protection with
a minimum of discomfort to the wearer.
First-aid posts are provided in the refinery and in the oilfields, and
at all strategic points the working areas are dotted with first-aid booths
which, upon being entered, automatically release a shower of water and

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

wash away any poisonous materials which might have splashed the clothing or the body of a worker.
CONTRACT LABOUR

In addition to the workers directly employed by the Company, other
workers are employed within the Company's areas by contractors to
whom the Company assigns certain work which generally falls outside
its normal activities or does not justify the employment of a regular labour
force. Thus, inside the refinery contract labour is employed in navvy
work, building, riveting and tank cleaning, painting and handling
sulphur. Outside the refinery and in the oilfields it is engaged in pipe
track and road construction, building and maintenance work.
The casual or seasonal nature of these occupations causes the number
of workers employed by contractors to fluctuate continuously. Most of
them are engaged for a specific job, and once this is finished they are
laid off and must wait for another opportunity of employment. This
in itself contrasts with the relative security which is enjoyed by the workers
employed by the Company. But there are other reasons which make the
conditions of contract labour far less favourable.
In the first place the almost complete lack of controls favours a disregard of the provisions of the Labour Law by contractors, and especially
by contractors who operate on a small scale—and these are in the
majority. It is generally admitted in Abadan and the oilfields that many
contractors pay their workers less than the legal minimum wage and bypass the statutory regulations concerning the payment of weekly rest days,
the rates for overtime, holidays with pay, and so on.1
The second reason why the position of contract labour is incomparably worse is that it is excluded from all the schemes which the
Company operates for the benefit of its own workers.
This exclusion is particularly serious in the field of health and food
services. For instance, a worker employed by a contractor has no claim
to be admitted to the only hospital in Abadan (which is a Company
hospital) and even if he is received there he does not have the privilege—
which is granted to company workers in case of non-industrial accident
or sickness—of being treated free.2 The contract labourer, moreover,
is not entitled to make purchases in the Company shops, which means
1
This statement does not apply to all contractors. For instance, the Tola Company, which operates bus services in Abadan and the vicinity under a contract from
the Á.I.O.C. and employs in these services about 1,000 people, pays the following
minimum wage rates : drivers, 125 rials for nine hours' service and 150 rials for 10
hours' service; helpers, from 72 to 91 rials.
2
See Chapter VI.

Welding a crude-oil
bucket

A break for tea in the oilfields

¿ !-#^Èp; .

Artisans' houses, Abadan

Power station,
Abadan

CONDITIONS OF WORK

that for him the statutory minimum wage has hardly more than half the
purchasing power that it has for a Company worker.1
The Company has endeavoured to safeguard the interests of contract
labour by inserting in the contracts a clause binding the contractor to
observe all Iranian legislation affecting conditions of employment and in
particular the provisions relating to the minimum wage. In this respect
the main burden of enforcing the Labour Law must, however, rest upon
the Iranian Government and in particular upon the Government labour
offices in Company areas. At present the staff employed in the Government's labour offices is clearly insufficient in numbers and experience
to carry out the duties of labour inspection over such vast areas and for
so many contractors. Again, the Labour Law itself is inadequate in so
far as it provides no sanctions in cases of infringement of its provisions.
In these circumstances, and until legal regulations have been issued to
redress this situation, the only road open to the officials of the Ministry
of Labour when they are confronted with violations of the law is to appeal
to the employer or try to conciliate the issue. Neither method appears
to have been particularly successful.
Workers and certain Government officials showed great concern with
regard to the position of contract labour and were under the impression
that it was the Company's policy to increase the number of operations
farmed out to contractors. In this connection table VIII, based
TABLE VIII. STRENGTH OF CONTRACT LABOUR AND COMPANY LABOUR
Fields

Abadan

Year"

1945
1946
1947
1948
1949

No. of
No. of wage
workers
earners
employed by
employed
contractors
by
Company
(estimate)
6,953
4,869
4,850
5,303
7,694

29,704
29,554
29,693
31,719
33,004

Contract
labour as
percentage
of
Company
labour

No. of
workers
employed
by
contractors
(estimate)

No. of wage
earners
employed
by
Company

23
16
16
16
23

5,190
7,592
6,215
6,886
8,716

8,613
11,721
11,564
12,573
15,328

Contract
labour as
percentage
of
Company
labour
60
64
53
54
56

1
Thefiguresare supplied by the Company and are the only ones available.
• 1 Jan. of each year.

on information supplied by the Company, shows that if the number of
workers employed by contractors has actually somewhat increased in
1

See above p. 23.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

recent years, so also has the number of workers employed by the Company itself and that, on the whole, the proportion of contract labour to
Company labour has not undergone any significant change.
The proportion of contract labour in Fields is higher than in Abadan
because of the greater amount of construction work and because villagers
expect to be employed on roads and pipe tracks passing through their
district.

CHAPTER V
HOUSING
HOUSING IN ABADAN

The small village of a few hundred fishermen and date growers that
was Abadan until about 40 years ago has developed since the establishment of the Anglo-Iranian Oil Company in that area into one of the
largest cities in Iran.
Its population at the end of 1949 was estimated to be about 173,000, of
whom 133,000 were Company employees and their dependants. Most
of the remaining 40,000 were workers employed by contractors, independent craftsmen and merchants and their families. The rate of
increase of this population has been generally irregular, and circumstances, especially in the last eight years, have hardly allowed sufficient
time for this vast number of people to be absorbed in an orderly way.
In fact, the most dramatic increase in the population of Abadan took
place during and after the war when, following the tremendous expansion
of the refinery, the number of Company employees was doubled, and
the population of the town augmented in about the same proportion.
This stream of so many men, women and children flocking into
that desert corner of the earth necessarily created many social problems,
of which perhaps none was so serious as that of providing decent accommodation for all.
Looking objectively and soberly at the manner in which this problem
has been tackled, the observer cannot fail to be impressed by the vast
number of modern houses and amenities which the Company has been
able to provide in a comparatively short time in spite of exceptionally
unfavourable circumstances. On the other hand, it is impossible to
overlook the hardships of those who are still living in tents and huts
or the unwholesome overcrowding and promiscuity of the Abadan
municipal districts where local landlords exploit the workers.
Abadan town can be divided into two sections. The central section,
which lies outside the Company areas, was built mostly by private initiative and is administered by the local authorities. It includes the
market district or bazaar and the adjacent district of Ahmedabad. The

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

other section has been entirely developed by the Company on Company
ground and is administered by Company officials. The two sections
contrast greatly. On the one hand the Company areas resemble a
modern European housing estate, with villas and bungalows neatly
aligned along wide roads planted with trees or parks and open spaces.
On the other hand the municipal districts take after the local type of
urban agglomeration, where there is a great deal of congestion, and
houses are generally of a very inferior type—some are built of mud.
The Company has given considerable assistance to the Abadan
municipality in making improvements to the roads, drainage, the layout
of the town and other municipal amenities.
It has installed street lighting throughout the township and it makes
electricity available to the municipality at a very low cost. The electric
power is distributed through substations maintained by the public
authorities, and the proceeds which are collected from the consumers
are used for municipal development. The Company supplies daily
to the municipality one million gallons of treated drinking water at a
very cheap rate. The reticulation to water points and houses in the
municipal area has been financed in part by the Company and in part
by the municipality.
In considering the problem of housing developments in Abadan
regard must be had to certain local conditions which make it difficult
for large building schemes to be carried out quickly. Most of the
building materials are not available directly on the spot. The Company
has created a cement factory in Abadan, but bricks must be manufactured
in Ahwaz, where the Company is operating a brick kiln, or brought in
from Basra, because Abadan clay has proved unsatisfactory. Even
sand is not available locally, and electrical and sanitary equipment and
most wood fixtures must be imported from abroad. All these circumstances increase the cost of erecting houses out of proportion to that in
other regions, and during the first three years of the war they actually
caused the Company's building programme to be interrupted. Another
factor which must be taken into consideration is that any large increase
of building activities in Abadan requires the inflow of new labour,
which in turn increases the number of those for whom shelter must be
provided.
In the Company housing estates different types of dwellings can be
distinguished. The standard family house for a senior member of the
salaried personnel has four or five bedrooms, two bathrooms, toilets,
servant's room, store and courtyard. The standard family house for
a junior member of the staff at the lowest level has three rooms, one
bathroom with toilet, kitchen and courtyard. Intermediate types exist

3.3

HOUSING

for staff at other levels. Bachelor salaried personnel have bed-sittingrooms with individual or communal bathroom and toilet facilities.
Bachelors usually take their meals in the Company restaurants. The
standard family house for wage-earning personnel is built in terraces
and consists of two or three rooms, a kitchen, a standing ablution place
and toilet. A number of wage-earning bachelors are accommodated
in Nissen huts, and a number of apprentices live in the apprentices'
hostel, which has dormitories and communal dining and living-rooms.
All houses of permanent standard type are built of bricks and are provided with fans, water, electricity and sanitation services.
The development of the Company's housing activities in Abadan
up to the end of 1949 is shown in table IX.
TABLE IX. HOUSES BUILT BY THE COMPANY AT ABADAN
Houses for
Rooms for
married salaried bachelor salaried
staff
staff

Houses for
married wage
earners

Spaces for
bachelor wage
earners
33
709
136
78

956

Before 1934 . . . .
1936-1940
1942-1944
1945-1949
Loss on conversion1

476
875
80
883

774
54
1,229
187

—

28
1,995
1,484
2,271
—199

Total . . .

2,314

2,244

5,579

—

Many of the houses built during the war were of inferior type and were converted to standard type

later.

At the end of 1949 about 90 per cent, of all salaried staff had been
given accommodation in Company houses. On the other hand out
of 31,875 wage earners only 5,298, or 16.6 per cent., were in Company
houses.
Housing is allocated to all personnel according to a formula based
on length of service and basic rate of pay. This latter element, which
in a way measures the value of the men in the eyes of the Company, is,
however, weighted more heavily than length of service. It thus happens
that under this system men with a comparatively short record of service
may be accommodated in Company houses, whereas men who have been
in the service of the Company for a long period of years may not be able
to profit from the many advantages of the Company housing scheme.
This condition is resented particularly by the wage earners, since
they have to compete for a proportionately much smaller number of
houses. It may be pointed out in this connection that of the 5,580
houses for married wage earners which had been made available by the

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

Company up to 1949 only 3,998 were actually thus occupied at the end
of that year, the balance being made up as follows : allocated to salaried
staff, 750 houses ; taken over for use by non-employees, 388 ; in use
as service shops and offices, 325 ; undergoing repair, 319.
Wage earners pay 8 rials per day for a two-roomed house and
10 for a three-roomed house. (This charge, which includes the cost of
maintenance and the supply of water and electricity, corresponds to one
tenth of the artisan's basic minimum wage for a wage earner's tworoomed house and to one eighth of the artisan's basic minimum wage for
a three-roomed house of the same type.)
Tenure of Company houses being dependent upon employment, the
tenant is obliged to move out of the premises when his employment
ceases. Similarly his heirs are liable to be given notice in case of the
tenant's death. In view of the acute housing shortage, the Company
must obviously exercise a certain amount of discretion in making use
of its rights in connection with termination of tenancy.
Wage earners for whom accommodation is not provided by the
Company receive 2 rials per day as a special allowance. Most of the
wage earners who have not been allocated Company houses Uve in the
municipal districts. There, if their wages are high enough, they may be
able to rent one of the 290 houses in the new housing estate which has been
built by the Karun Engineering Company in the Ahmedabad district. The
roads, the sewerage system and water points serving this estate have been
built at the expense of the Anglo-Iranian Oil Company, and the Karun
Company has undertaken in return to let these houses to oil workers at
controlled rents. Though there is no electricity or water inside the buildings, this estate is perhaps the best in the city outside the Company area.
The great majority of the oil workers however, live in the older overcrowded sections of the municipal districts, where more often than not
the entire family or three or four bachelors occupy a single room. Rents
are very high, and an attempt made by the Government to fix a ceiling
to rents in relation to the statutory minimum wage has utterly failed.
Finally, another group of workers lives in mud houses or huts made of
all sorts of materials, or in the 360 tents which the Company put up in
1949 as an emergency measure to accommodate homeless workers.
The Anglo-Iranian Oil Company is alive to the seriousness of both the
human and social problems arising from this situation, and while in
Abadan the Mission was invited by it to visit a new prototype of houses
for lower-paid wage earners which was then under consideration and for
which the necessary building materials were already on the spot. The
Mission was later informed that the Company had decided to go ahead
immediately with the construction of about 1,000 of these dwellings.

HOUSING

The Majlis (Parliament), with a view to improving the housing conditions of the industrial workers throughout the country, introduced in the
Agricultural Bank Act of 9 March 1949 and in the Budget Bill of
1949 provisions making it obligatory for Government and private
factories employing 100 or more workers to commence at once building
living quarters for their workers according to Government regulations.
But since these regulations have not been issued, the provisions referred
to above do not seem to have been applied yet.
HOUSING IN THE OILFIELDS

In the oilfield areas the Company had built, up to the end of 1949,
793 houses for married staff, 356 rooms for bachelor salaried staff and
5,591 houses for married wage earners. Accommodation was thus provided for 62.5 per cent, of the salaried staff and a little over 36 per cent.
of the wage earners.
From the abovefiguresit appears that, considering the Fields area as
a whole, the proportion of salaried staff to whom Company houses have
been allocated is less than in Abadan, whereas the proportion of wage
earners accommodated by the Company is higher. Within the latter
category 48.22 per cent, of the artisans, 49.19 per cent, of the skilled
and 10.53 per cent, of the unskilled workers were, in 1949, living in Company quarters. At the same time 175 salaried employees and 1,034 wage
earners were living in tents.
The same difficulties regarding availability of building materials and
high costs of construction which have been noted for Abadan exist also
in the Fields area, except that in some of the oilfields local stone
is used quite successfully instead of bricks. On the other hand, the construction of permanent houses in any Fields area can only be undertaken
when it is certain that the area will be in production for a number of
years. A test area, for instance, is provided only with temporary buildings until it is proved to be an oilfield.
The houses built by the Company in Fields are similar to those of
Abadan and the system of allocation is the same. Wage earners who have
not obtained Company quarters are given an allowance of 1 rial a day.
They usually live in mud villages more or less near the oilfield or build
themselves a shelter near the place where they work, often with the help
of building materials supplied free by the Company. A few houses
erected by local enterprise are also available to the better-paid workers.

CHAPTER VI
SOCIAL SERVICES

DISTRIBUTION OF FOOD, CLOTHING AND OTHER SUPPLIES

The inadequacy of local farm produce and the insignificance of
manufacturing industries in the neighbourhood make the population
of Abadan and the oilfields dependent upon imports from distant
provinces and from abroad for most of its needs in food, clothing and
other commodities. This situation constantly creates new supply
problems and, in any crisis, makes the conditions of the oil workers
particularly vulnerable.
Thus, when in 1941 an acute shortage of wheat manifested itself in
Iran and at the same time all essential commodities were scarce throughout the world, supplies from local merchants broke down and speculation and profiteering at the expense of labour became intolerable.
It was then that, in order to assure the continuance of refinery operations
and to avoid starvation, the Company undertook for the first time to
import wheat from India and to distribute bread to its personnel.
It soon became apparent, however, that this limited scheme was
insufficient to put a stop to the race between prices and wages, and the
Company was almost forced to make itself responsible for the supply and
distribution of a very wide range of goods of first necessity at subsidised
prices or at prices lower than those of the local market.
This vast commitment undertaken by the Company has enabled all
its wage earners to buy a large proportion of essential commodities at reasonable prices.
The great disadvantage of this system is that it tends to make the
life of the workers even more dependent upon the Company.
It seems, however, that the Company has repeatedly tried to shake
off this financial and administrative burden, but that the circumstances
which first prompted the introduction of the food and clothing distribution scheme have never sufficiently improved. The abolition of the
scheme now would undoubtedly constitute a major catastrophe.
The only alternative appears to be the creation of a co-operative
movement, strong enough to enable the workers to take over the organ-

SOCIAL SERVICES

isation established by the Company. But although encouraged by
the Company, this co-operative movement has not yet made sufficient
progress. Without powerful financial resources a workers' co-operative
movement would hardly be in a position to carry out an undertaking
of this magnitude.1 Not the least of the difficulties encountered has
been, it seems, the high rate of interest on loans charged by Iranian
banks.
Organisation of the Scheme
In Abadan there are eight Company shops for wage earners, open
daily and located in the main districts so as to enable employees to make
all the purchases to which they are entitled without having to go too far
from home. In Fields and other outstations, shops are open on certain
days of the month according to the number of employees to be catered
TABLE X. MONTHLY RATIONS AVAILABLE AT COMPANY
SHOPS AT THE END OF 1949
Abadan

Fields areas

Workers

Flour
Tea
Sugar
Rice
Ghee
Pulses (peas, beans and lentils)
Kerosene

Soap . .
Charcoal
Ice . . .

20
280
1,700
7
2
3
12

kg.
gm.
gm.
kg.
kg.
kg.
litres

500 gm.
3 kg.
190 k g . 1

20 kg.
240 gm.
1,600 gm.
7 kg.
2 kg.
3 kg.
Free issue 20 litres or
less, depending on
lighting facilities in
the employee's house
500 gm.
190 kg. !

Dependants

Flour

Tea
. .
Sugar . .
Kerosene
1

10 kg. per adult (over
7 years)
5 kg. per child (under
7 years)
490 gm. per family
1,400 gm. per family
12 litres per family

10 kg. for each of first
three dependants
5 kg. for each subsequent dependant
480 gm. per family
1,200 gm. per family

During period June-Sept, inclusive.

1
The extent of the Company's scheme may be seen from the following approximate
total quantities of major items retailed to labour per year: flour, 27,000 tons; tea,
420 tons; sugar, 1,050 tons; rice, 5,000 tons; ghee, 1,200 tons; winter suits, 50,000;
white drill, 300,000 metres; shoes, 50,000 pairs.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

for. Since goods in the Company shops are sold at prices lower than
those in the open market, purchases are made against a ration card,
which covers the workman and his dependants. Rationed items are
issued against squares on the ration card, unrationed items on presentation of the card. 1 All sales are for cash. Workmen's representatives
are on duty in the shops to help deal with any complaints on the spot.
Table X shows the monthly rations available at the end of 1949 in the
Company shops.
Mutton, fish, cigarettes, tooth powder, corned beef, dates and
insecticide sprayers can be purchased off the ration in Abadan labour
shops. In the oilfields the items off the ration are cigarettes, corned
beef and insecticide sprayers.
The following items are available annually :
(a) to workers (all areas) : one winter suit ; one summer suit length ;
one pair of shoes ; two shirts.
(b) to dependants (all areas) : 18 metres of printed cotton ; five and
a half metres of white cotton cambric ; four and a half metres of black
twill.
Besides these main items, there are occasional extra issues of readymade clothing.
Works Canteens
A canteen for wage earners is operated inside the Abadan refinery
by a contractor under the control of the Company's catering superintendent. The canteen is equipped to provide 2,000 hot meals a day.
To respond to the demand of those workers who cannot at present be
accommodated, the construction of a second works canteen is being
planned by the Company.
Stores, Restaurants and Laundry for Staff Employees
In each residential area in Abadan there are Company stores for the
sale of such commodities as groceries, meat, milk, bread, liquor and
tobacco to the Company staff employees. Certain items which are
still in short supply are rationed, but a considerable number of commodities are on general sale. In addition, there are Company stores for
the sale of clothing and household goods to the staff. The issues of
clothing are made on a points system and cover a variety of items,
including shoes and materials.
1
Goods bought by the workers from Company shops are sometimes resold to
local merchants and can be seen on sale in the bazaars for higher prices.

SOCIAL SERVICES

Eight restaurants capable of accommodating 1,140 patrons have
been provided by the Company for the benefit of staff employees. All
senior staff may avail themselves of the services of an outside catering
station either for club functions or for private parties. A laundry
equipped with the most modern machinery for washing and pressing
linen and clothing is operated by the Company for the benefit of all staff
employees.
COMPANY AGRICULTURAL DEVELOPMENT SCHEMES

With a view to increasing the supply of fresh farm produce, the
Company has encouraged local cultivators by installing and maintaining
irrigation pumps free of charge and by ploughing land in the initial
stages, constructing drainage ditches and supplying vegetable seeds.
As a result of these efforts it is estimated that some 200 acres of
hitherto barren land have been made productive ; this has led to a
marked increase in the supply of vegetables to the people of Abadan.
In addition the Company itself has reclaimed some 175 acres of
desert tracts by washing the salt from the soil, constructing drainage
ditches and installing irrigation pumps.
On one of these reclaimed areas, about five miles north of Abadan,
the Company has established a dairy farm and is raising a herd of cows
which, it is hoped, will meet all the needs of staff employees in the next
few years.
Elsewhere the Company maintains a poultry farm and a piggery and
is growing fresh vegetables, which are made available to the staff and
wage-earning employees.
HEALTH SERVICES

The responsibility for the planning and operation of health services
in Abadan and the oilfields is shouldered almost entirely by the Company.
The Company's health scheme is organised in two main branches, curative and preventive, and is directed by a chief medical officer, responsible
to the Company's general management, assisted by two doctors, who
are in charge of all the curative and preventive facilities in Abadan and
the oilfields respectively.
The only hospitals in Abadan and the oilfields, as well as the great
majority of doctors, are provided by the Company. Medical attendance
and hospitalisation are free for all salaried employees and wage earners.
Dependants of salaried employees are also entitled to free medical treatment and hospitalisation. Dependants of wage earners and certain

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

non-employees are only entitled to full out-patient treatment and emergency in-patient treatment. Limited dental service and full pharmaceutical service are rendered free to all Company employees. Financially,
the costs of the Company's medical services, in so far as industrial
accidents and industrial sickness are concerned, are covered under the
provisions of the Labour Law by the national social insurance scheme
operated by the Iran Insurance Company.1 On the other hand, the
costs of hospitalisation and treatment of wage earners for accidents
and illness not caused by employment appear to be matched, at least in
part, by the exemption obtained by the Company from the payment of
its share of contributions into the Company Aid Fund.2
Curative Services in Abadan
The main hospital in Abadan has 450 beds, of which 137 are reserved
for the salaried staff and 313 for wage earners.
There is also an isolation hospital with 150 beds (16 for salaried staff
and 134 for wage earners) for various kinds of infectious diseases. Inside
the compound of the refinery there are four works clinics, where the men
can receive first aid and advice, and in the workers' residential quarters
there are eight labour clinics which were built by the Company and are
operated by the municipality. The main hospital includes three operating theatres, two maternity wards and two children's wards, and is
provided with the most modern equipment, including X-ray rooms and
a physiotherapy department.
The medical staff of the hospital is composed of 61 specialists and
medical officers, of whom 41 are Iranians. The specialists are qualified
in surgery, medicine, tropical diseases, industrial hygiene, pathology,
ophthalmology, venereal diseases and midwifery. In addition there
are 67 nurses, 27 dressers, and a number of dispensers, laboratory
assistants, health inspectors and clerical personnel.
Curative Services in the Oilfields
There is one hospital at Masjid-i-Sulaiman with 20 beds for salaried
staff and 73 for wage earners, and one hospital at Agha Jari with 12 beds
for salaried staff and 35 for wage earners. Both hospitals are provided
with operating theatres, laboratories, X-ray rooms and maternity wards.
In Masjid-i-Sulaiman an isolation hospital with 60 beds for infectious
cases serves the whole area of the oilfields.
1
2

S e e above, p. 25.
See above, p. 26.

SOCIAL SERVICES

In the smaller fields there are small detention wards. The medical
staff is composed of 22 doctors, 24 nurses, 21 dressers and a number
of auxiliary personnel.
Problems concerning Medical Services
In advanced European countries it is assumed that the number of
beds which should be available in hospitals should be between 10 and
15 per 1,000 of population. In Abadan the Company provides about
24 beds per 1,000 salaried employees and about 14 beds per 1,000 wage
earners, and in the oilfields about 15 beds per 1,000 salaried employees
and 7 beds per 1,000 wage earners. It would thus appear that, at least
in Abadan, the number of beds available to Company employees
compares favourably with that in advanced European countries ; in
Abadan, however, the need for hospital beds may be greater, in view
of the higher morbidity and of the bad housing conditions, which make it
undesirable for sick people to stay at home, where more often than not
they would have to lie on a carpet or mattress in unhealthy rooms shared
with many other people. But apart from the Company employees to
whom the above considerations apply, there are the dependants of wage
earners—numbering about three times as many as the employees—who
normally can only obtain out-patient treatment, and 40,000 other people
who are neither employed by the Company nor dependants of Company
employees, and to whom, except in an emergency, the doors
of the hospitals in Abadan and Fields might remain closed
altogether.
It is true that Company hospitals do their best to accommodate as
many as they can of those who are not strictly entitled to hospitalisation.
It is true that the Company doctors work very long hours in order to be
able to attend all patients without much discrimination. It is true
that about 15 miles north of Abadan, in Khorramshahr, there is a
State hospital which may be in a position to accept a certain number
of people from Abadan. However, it appears that the need for more
medical facilities, especially in Abadan, is still very great.
In this situation it is encouraging to hear that the Company is prepared
to give support in the establishment of a municipal hospital in Abadan,
which would be operated entirely by the municipality, and that an extension of the Company's main hospital has been planned to include about
103 beds, further operating theatres and X-ray rooms, an electrocardiography department, a main sterilising system, lecture rooms, etc.
Moreover, the Company is planning to build additional medical clinics
in the Fields areas.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

School Medical Service
The Company has provided school dispensaries in municipal schools
at Abadan and Masjid-i-Sulaiman, where the schoolchildren are medically examined at the beginning of each year and are regularly treated
for trachoma. The dispensaries are controlled by two doctors and
35 assistants, all of whom are on the staff of the Company.
Preventive Medical Services
The Company has taken active measures to prevent and combat
infectious diseases in all its areas as well as in the municipal districts
of Abadan.
Such measures include preventive inoculation on a large scale (in
1949, 36,389 vaccinations were carried out), quarantine treatment,
provision of treated water supply, rat and dog destruction, inspection
of food and slaughterhouses, and the construction of numerous bath
houses for all employees and their dependants.
As malaria is widespread in south Iran, a special section of the
Company's health service deals solely with anti-malaria measures,
including cleansing of ditches, the oiling of collections of water to kill
larvae, and D.D.T. spraying.
Disinfestation and sterilisation of instruments is carried out on a
large scale in the bath houses, and all houses in Abadan are sprayed
with D.D.T. every six weeks or two months.
Finally, the Company's health department is responsible for the
cleansing and incineration of refuse in its own areas and on behalf of
the Abadan municipality. This is a very important measure in keeping
down the breeding of flies, which in turn cuts down many diseases. The
Company contributes half the expenses of the municipal district's
cleansing scheme.
PRIMARY AND SECONDARY EDUCATION

" In 1935, 8 per cent, of labour was literate ; in 1948, 14 per cent.
was literate. It is hoped that by 1955 at least 40 per cent, of labour
will be literate. Illiteracy definitely holds back the various training
schemes of the Company. Illiterate or semi-literate men can only with
great difficulty learn the instructions and methods of handling complicated machines in modern industry."
This significant statement, which can be read in a pamphlet prepared
by the Company concerning the Company's educational and training
schemes, illustrates only too well the need for improving the standard

SOCIAL SERVICES

of education in south Iran not only from the point of view of the
Company's interest but also and primarily in order to further the advancement of the whole population in that region.
Elementary education has recently been made compulsory in Iran
and is the responsibility of the Government, but lack of school buildings
and of teachers has so far prevented the provision of more than a fraction
of the educational facilities which would be necessary to fulfil the
requirements of the Education Act. Thanks, however, to the outstanding contributions made by the Company towards meeting these
requirements, Abadan ranks today among the cities of Iran where the
proportion of children attending primary schools is highest.1 There
are 43 primary schools in the areas of the Company's operations (20 in
Abadan and 23 in Fields) and, of these, 29 were built and equipped
entirely by the Company and three were built by the Company but
paid for by the Government. The other schools were built and
equipped either by the Government or by the local population. The
number of children receiving primary education in 1949 was 9,500 in
Abadan and 5,000 in the oilfields. In addition, the three secondary
schools in the Company's areas have been built by the Company.
Many of the schools in Abadan are housed in new permanent
buildings designed and erected as schools, which compare not unfavourably with modern European school buildings ; but classes are generally
overcrowded to the point that children must attend lessons in turn and
even so they are often seated three and four at desks which are designed
to accommodate only two.
All primary and secondary schools in the area carry out exclusively
the official Iranian teaching programme and are staffed by the Government. Government expenditure on public education has increased
threefold from 1945 to 1949, but in order to attract and retain teachers
in the area the Company has found it necessary to provide free quarters
for the majority of them and to pay to all locally engaged teachers an
allowance of up to 90 per cent, of their basic salary, as they are not entitled
to draw the corresponding outstation allowance which is paid by the
Government to teachers coming from other provinces. Again, with a
view to attracting teachers, the Company pays to all those who are stationed
in Abadan, an additional 25 per cent, as a " bad climate " allowance.
A description has already been given in another part of this report
of the most important technical educational institution in south Iran,
the Abadan Technical Institute.2
1
Out of an estimated number of 18,000 children within the compulsory primary
school age, the number of children attending school in Abadan in 1949 was 9,500.
2
See Chapter III.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN
EDUCATION FOR ADULT WORKERS

A great effort is being made by the Government throughout Iran to
counteract illiteracy among adult workers. In Abadan and the oilfields the Government scheme for adult education has been generously
supported by the Company and has found a prompt and wide response
amongst the oil workers v/ho realise that literacy will open to them new
opportunities for advancement.
The local education authorities provide facilities for Company wage
earners to obtain the Government literacy certificate for adults, and the
Company pays the fees of teachers at evening classes run in the Government schools. More than 6,000 workers were attending these classes
in 1949. The Company, on the other hand, runs English classes for
its workers. In the 1948-1949 session, 1,326 employees took part in the
final examination of these classes.
TRANSPORT

A regular bus service is operated in Abadan and the oilfields to
transport wage earners and staff employees to and from work, to collect
school children and for social purposes.
In Abadan there are two different types of buses, one, provided with
seating accommodation, for staff employees and the other, with standing
accommodation only, for wage earners. The bus fleets servicing Company areas are owned and maintained by the Company, but the service
in Abadan is operated by a contractor.
All passengers pay fares, but in Abadan (though not in the oilfields)
wage earners receive an allowance equivalent to the fare to and from.
work for each day they are present at work. The transport system in
all areas of the Company's operations has been planned to serve the
vast majority of those who have a need for it. A small number of
workers living at the periphery of Abadan complain of a certain irregularity in the service, which is the cause of their being penalised for
being late at work, and in the oilfields a number of workers living in
villages which are too far from the production centres or which cannot
be reached by road must walk or cycle to their place of work. Bicycles
have been sold by the Company to its employees at reduced prices and
are used by a great number of workers as their regular means of transport,
especially where the country is flat, as in Abadan.
Communications in Khuzistan owe much to the extensive system of
roads, bridges and ferries which the Company has built there as part
of its own operations. Although maintained and operated at the
Company's expense, these facilities are available to the general public.

Company shops at Ferahabad

»•wat

» •

. .ff

Workers' children at play, Masjid-i-Sulaiman.
company-built

The houses are

Scene at
trachoma clinic

Building a workers' house at Agha J ari

f\j ¡fi;;;

- i. - * - * .

SOCIAL SERVICES

RECREATION

Recreation facilities of many kinds which the Company has provided for
its employees help in no small measure to brighten life in the Company areas.
For the European and non-European staff employees, social life is
closely associated with the activities of the four clubs which the Company
has built, equipped and put at their disposal in Abadan. The largest
of these, with about 3,000 members, is the " Bashgah Iran ", which has
tennis courts, billiards, a winter and summer bar, badminton, table
tennis and volley ball as well as football and hockey grounds. It also
has a library and an outdoor cinema for the summer months.
Besides the Bashgah Iran there are the " Bawarda Club ", which has a
main hall, reading room, library, bar, restaurant, billiards and table tennis,
the "Bawarda Tennis Club "and the "Golestan Club", which has a limited
membership of 300, 160 of whom are Iranians and 140 non-Iranians.
There are numerous social activities during the course of each season
and entertainments take the form of dances, fairs, concerts, and so on.
In the field of sports, the Bashgah Iran has established a very
good reputation not only locally but also at the All-Iran Games. The
two swimming pools which are available in Abadan to staff employees
and their families are frequented by hundreds of bathers during the
warmer months. Clubs and swimming pools for staff employees are
also provided in the larger and older oilfields.
Recreation facilities for wage earners have not been developed to
the same extent as those for staff employees, but it should be realised
that in view of the thousands of persons involved such a scheme would
entail a stupendous organisation. However, a great deal has been
achieved by the Labour Sports Organisation, particularly among the
younger element. Sports, and especially football, have taken a great hold on
the young workers, and the 16 football fields provided by the Company
in Abadan and those in the oilfields are fully occupied over the weekends.
Athletics, hockey, volley ball, basket ball and table tennis are among
other sports that are being keenly played by the Company workmen and
their sons. A swimming pool for wage earners and members of their
families has been recently completed in Abadan. In Masjid-i-Sulaiman
the Company has built a workers' club which has a hall, a dining room,
a bar and a kitchen as well as a cinema and a swimming pool. In
Abadan the Company has built and operates a chain of 35 cinemas
with a total seating accommodation for about 16,000. Of these cinemas
two are for training, 11 for labour, 10 for labour and staff, 10 for staff
only and two for seamen.

CHAPTER VII
THE TRADE UNION SITUATION
Trade unionism is of recent growth in Iran. The need for it was not
felt until factory industries began to develop in the country, and such
industries have grown up only in the last 25 years. Unfortunately the
trade union movement has been disturbed during its short period of
existence by political influences, and its organisation has been handicapped by personal rivalries. In any case, such a movement could only
take root with difficulty in view of the characteristics of the people and
the conditions of the country.
THE TRADE UNION MOVEMENT

Before the second world war, trade unionism in Iran was suppressed.
From 1921 to 1941 the country was ruled by Reza Shah, whose authority
was absolute. In 1941 the Shah was deposed by the Allies and his place
was taken by bis son, who has encouraged the spread of democratic
ideas and institutions. After the fall of Reza Shah, trade unions were
formed openly, and, as was to be expected, various organisations grew
up in different parts of the country.
During the war little was known about the workers' organisations
in Iran, but in 1945 they appeared upon the international scene at the
first congress of the new World Federation of Trade Unions in Paris
in September and at the 27th Session of the International Labour
Conference which followed in October-November. Prominent among
them was the Federated Trade Unions of Iranian Workers, headed by
a Central Council and formed by agreement between a certain number
of the unions on 1 May 1943. This organisation was received into
affiliation by the W.F.T.U. at the Paris Congress.
At that time there were four main trade union organisations in Iran»
namely, the Central Council of Federated Trade Unions of Iranian
Workers, which claimed to have 200,000 members ; the Central Council
of Workers and Agricultural Workers of Iran, which claimed 153,000
members ; the Trade Union of Workers and Handicraftsmen of Iran
(35,000) ; and the Trade Union of Workers and Peasants (10,000). All
these organisations were represented at the 27th Session of the

THE TRADE UNION SITUATION

International Labour Conference (Paris, 1945). In accordance with the
Constitution of the I.L.O., the Iranian Government had been called upon
to appoint one workers' delegate to the Conference and an appropriate
number of advisers, in agreement with the most representative organisation of workers in the country, and it appointed Mr. Chams Sadri of
the Central Council of Workers and Agricultural Workers as the delegate, Mr. Youssef Eftekhari of the Trade Union of Workers and Peasants
as adviser and substitute delegate, and several other advisers, including
Mr. Hosseine Tadjbakhch of the Trade Union of Workers and Handicraftsmen and Mr. Ezatollah Atighehtchi of the Central Council of Federated Trade Unions. The Central Council lodged a protest, however,
against the composition of the delegation, claiming that the Iranian
Government should not appoint as representatives of the Iranian
workers persons other than delegates of the Central Council, and asserting that some members of the workers' delegation were not workers'
representatives but Government officiais or representatives of
employers.1
This situation illustrated the confusion and uncertainty which prevailed in regard to the Iranian trade union movement at the time. In
its report to the Conference the Credentials Committee outlined the
facts as submitted by the representatives of the various organisations
and by the delegates of the Iranian Government and indicated that the
Central Council of Federated Trade Unions seemed to be at that time
the only organisation of a national character which had secured official
recognition by the new World Federation of Trade Unions, that the
four organisations in question apparently had marked political tendencies
varying widely from one another, and that trade union organisation in
Iran was certainly very rudimentary.1 The Credentials Committee did
not, however, recommend that the Iranian workers' delegate and advisers
be refused admission to the Conference.
It will no doubt be remembered that the Central Council of
Federated Trade Unions was closely associated with the Tudeh Party,
a political movement which was believed by the Government to have
come under communist influence, as also was the Central Council itself,
whose General Secretary, Reza Rousta, was arrested and charged with
being a communist organiser. During 1946 the Tudeh Party was accused
of supporting the separatist movement in Azerbaidjan and was also held
responsible for disturbances which occurred in Isfahan and among the
oil workers in Khuzistan. Most of the Tudeh leaders were arrested
1
International Labour Conference, 27th Session, Paris, 1945 : Record of
Proceedings, pp. 317-321.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

and the party became disorganised. The Central Council continued its
activity, however, though it lost much of its support.
To counteract the influence of Tudeh and the Central Council,
encouragement was given by the Government to the formation of a new
organisation called the Federation of Trade Unions of Iranian Workers,
which is known by the abbreviation of its Persian name as E.S.K.I.
This organisation was recognised by the Iranian Government as the
most representative organisation in the country, and in 1947 one of its
representatives was appointed workers' delegate to the 30th Session of
the International Labour Conference in Geneva. Two advisers were
also appointed from the same organisation.1 The delegates to the 1948
and 1949 Sessions of the Conference were likewise representatives of
the E.S.K.I. At the end of 1949, E.S.K.I. secured representation in the
new International Confederation of Free Trade Unions which was
formed after the withdrawal of a number of organisations from the
W.F.T.U.

LEGAL POSITION OF TRADE UNIONS

Under the first Labour Law in Iran, which came into force in May
1946, provision was made for trade unions to be recognised. The
articles of this Act which related to the trade unions dealt with the
following subjects : formation of trade unions (Article 21) ; penalties
against persons causing individuals by force or menace to join unions
or preventing them from joining unions (Article 22) ; and action to be
taken if a union were established in contravention of Article 21, or if it
exceeded its prescribed rights or limits, or if it disturbed public order
(Article 23).
The new Labour Law contains provisions relating to the trade unions
which may be summarised as follows :
Workers and employers in the same occupation or belonging to the same
undertaking may form trade unions for the defence of their occupational
interests. Such unions are to be registered in accordance with special regulations.
The members of the council of a trade union must be of Iranian nationality.
The use of intimidation or victimisation with a view to compelling workers
to join a trade union or to prevent them joining a trade union is prohibited.
Trade unions in the same profession may form federations or amalgamations which will be subject to the legal provisions relating to trade unions
and will enjoy the rights and privileges of such unions.
1
International Labour Conference, 30th Session, Geneva, 1947 : Record of
Proceedings, pp. 361-362.

THE TRADE UNION SITUATION

The regulations made under the Act of 1946 remain in force until
further notice. They prescribe the conditions under which trade unions
may be established, registered, suspended and dissolved.1
OIL WORKERS' UNIONS

It would appear that the principal trade union organisations in Iran
at the present time are the Federation of Trade Unions of Iranian Workers
(E.S.K.I.), the Central Council of Unions of Workers and Peasants
(E.M.K.A.)—which, like E.S.K.I., includes unions in the various industries—and the unions in the petroleum industry. There are also a certain
number of small so-called " independent " unions. This is not the place
for a complete account of the trade union movement in Iran ; suffice it to
say that the main centres of trade union activity are Teheran, Isfahan,
Abadan, and to a lesser extent, Masandaran. Of the two general organisations—E.S.K.I. and E.M.K.A.—it would appear that E.S.K.I. is the
stronger in point of numbers. The oil workers' unions were formed as
completely separate bodies and until recently had little contact with the
trade union movement in the other parts of the country.
Organisation was first developed among petroleum workers, as in
other industries, during the war. For a time the petroleum workers were
much influenced by the Tudeh Party and by the Central Council of Federated Trade Unions, but their organisation broke down after the strike
and the disturbances which occurred in the industry in 1946. In Abadan
a new start was made in 1947, since when there have been two separate
unions, both with roots in the organisation which existed before the strike.
One of them—which would seem to be the stronger—is known as the
Trade Union of Workers of Khuzistan. This union has been duly
registered under the Labour Law. In spite of the general character of its
title, and in spite of its claim to be a union for the whole province, it is
primarily an oil workers' organisation centred in Abadan, and it is hardly
1
These regulations, which were issued in February 1947, relate to the definition
of a union, the conditions for the formation of a union, approval of its constitution by
the Ministry of Labour, the efforts to be made to prevent a plurality of unions with
the same objectives in one place, right of appeal if permission to form a union is
refused, procedure for the registration and recognition of unions, amendments to
union rules, federation or amalgamation, provisions to be included in union rules,
prohibition of foreign nationals from holding office in unions, publication of balance
sheets every six months and examination of balance sheets by the Ministry of Labour,
discussion of the balance sheet at the general meeting of the union and submission
of accounts to the Ministry of Labour, dissolution or suspension of unions, withdrawal
of recognition if the union remains in voluntary abeyance for a period of two years,
prohibition of discrimination by employers in regard to membership of a particular
union, prohibition of force or threats to induce persons to join or refrain from joining
a union, and advice and assistance to be given by the Ministry of Labour in regard
to the formation of unions.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

likely to have many members in other industries. The adviser to this
union, Mr. A. G. Mohammadi, was one of the workers' delegates to the
second session of the Petroleum Committee of the I.L.O. in 1948. The
other organisation is the Trade Union of Petroleum Workers, which
likewise is based upon Abadan. This organisation was dissolved
in 1948 but has since applied to be re-registered. The Mission was
informed by the Company that both organisations are recognised by
the Company.
The only other unions in Abadan—all of which are in process of
registration—are a union for contract workers employed by private firms,
a union for contractors, and a bakers' union.
Contacts between the workers in Abadan and those in Fields are
slight. In Masjid-i-Sulaiman—the oldest field—there is a small union
which was formed early in 1949 and which is known as the Union of
Workers in the Petroleum Area. This union is in process of registration
and is quite independent of those in Abadan. One of the principal
members of the Central Committee of the union, Mr. Abdollah Parvizi,
was a workers' delegate to the second session of the Petroleum Committee. As far as the Mission was able to ascertain, there are no other unions
of oil workers in the Fields area.
TRADE UNION ACTIVITY

Although trade unions exist among the oil workers, it cannot yet be
said that their organisation is sound or that their activities are fully
developed. It is, indeed, difficult to obtain a clear idea of the extent of
their organisation, the nature of their activities or the policies that they
pursue. The unions in Abadan and Fields claim to have several thousand
members between them, and it is probable that they are in fact supported
by large numbers of the workers. Contributions are collected and
registers kept, but it was impossible for the Mission to ascertain how many
members pay their contributions regularly and how many are simply
counted as members because they have at some time or another indicated
their support for the union. Clearly, however, whatever their actual
membership, the unions represent large bodies of the men and are entitled
to speak on their behalf.
In regard to the activities of the unions, it would seem that less attention is paid than in the highly industrialised countries to the organisation
of meetings, the formulation of policy, the dissemination of information
and the settlement of problems by way of negotiation with the employers
or with the Government authorities. Much of the work of the unions'
representatives is concerned with the grievances of individual workers—

THB TRADE UNION SITUATION

not only grievances which relate to their working conditions but also
complaints in regard to housing, medical treatment, clothing, and other
problems of a general and domestic character. Much of this kind of
work arises in connection with the administration of the Aid Fund, out
of which grants are made to workers to assist them in meeting their expenses in case of marriage, births, large families, accidents, invalidity and
funerals. It is significant that the general approach seems to be to take up
individual complaints rather than to deal with problems on behalf of
large categories of workers or of the labour force as a whole.
It was difficult to discern clearly what policies have been laid down by
the three unions in Abadan and Fields and what specific programmes they
are following at the moment. The two unions in Abadan do not seem
to be separated by any differences in outlook or policy, e.g., in regard to
the problem of craft and industrial unionism, or to the attitude to be
adopted towards political parties. Their separation would appear to
be due more to accidental causes and to personal rivalries. The Mission
was not able to compare the policies of the unions by reference to published
reports of conferences or of trade union journals, since such material is
not available. Nor could it examine copies of resolutions or statements
of policy adopted by meetings or demonstrations, for the same reason.
However, as an indication of the problems with which the three unions are
concerned, the following is a list of subjects to which one or other of
them drew attention during their interviews with the Mission : housing,
health and medical services, educational and training facilities, the provision of canteens, clubs and libraries, transport services, the level of the
minimum wage, freedom of association, dismissals and the problem of
contract labour.
Of the above subjects, it would probably be true to say that those which
are uppermost in the workers' minds and in the preoccupations of the
unions are housing, medical treatment, the cost of living, the fear of dismissal and the problem of contract labour.
One clearly marked form of activity carried on by the unions is the
representation of the workers on the various joint and tripartite committees that have been established. These include the joint departmental
committees set up in the plant, the factory councils, the boards for the
settlement of disputes, and the High Labour Council.1 The joint
departmental committees are voluntary bodies set up on the initiative of
the Company, while the other forms of machinery are provided for by the
Labour Law. The work of the joint departmental committees is a matter
for arrangement between the Company and the workers' representatives,
1

See also Chapter IX.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

while the powers and duties of the other bodies are outlined in the Labour
Law and prescribed in more detail in regulations made thereunder.
Except in the case of the joint departmental committees, provision is
made that the workers' representatives on these various bodies shall be
nominated by the unions where unions exist. This recognition of the
trade unions in legal instruments is significant in a country in which both
industry and trade unionism are relatively new.
HANDICAPS TO TRADE UNION DEVELOPMENT

Trade unionism in Iran—as in many other industrially underdeveloped
countries—labours under difficulties which are not always known and
understood in the countries where industry and trade unionism are well
established. In Iran it is difficult for trade unions to collect contributions
regularly and to maintain exact records of their membership. As a
result of the widespread illiteracy, only a small percentage of the workers
are able to read announcements and publications, and a still smaller
percentage are capable of keeping books and accounts and conducting
correspondence. These factors naturally complicate the administrative
work of the unions and also the organisation of meetings and conferences
and the conduct of trade union elections. They affect the oil workers'
unions, of course, as well as the unions in other industries.
Moreover, the general attitude of the people seems to be to regard
public questions primarily from the point of view of the individual and
family. It is therefore customary for the workers to treat the problems
arising out of their work as personal grievances rather than as matters
with which other workers may also be concerned and which should therefore be settled according to common rules. In other words, the sense of
solidarity and mutual help which lies behind all trade union activity is
not yet sufficiently developed to enable the unions to function with full
efficiency.
However, the relative immaturity of the Iranian trade union movement is not due merely to difficulties arising from the outlook, the traditions and the comparative illiteracy of the Iranian workers. There are
other influences which in various ways affect circles much wider than the
working class, and these influences can be readily appreciated if the historical background of the country is borne in mind. The institutions of
freedom and democracy are too recent in Iran for the whole population
to have realised the rights and duties which they entail. It should also be
remembered that the country's internal and external situation has not
yet been sufficiently consolidated to allow the executive power to refrain
from resorting from time to time to exceptional security measures or to

THE TRADE UNION SITUATION

abandon all forms of intervention in fields which in older democracies
would be left entirely free from political influences.
In short, the Iranian workers have only a brief experience of trade
union activities in a country in which democratic forms of government
are relatively new. It is to be hoped that the development of responsible
trade unionism in Iran will go hand in hand with the extension of democratic institutions generally.
Finally, whereas the Anglo-Iranian Oil Company has been in a position to avail itself of the experience gathered in the most advanced
industrial countries, not all the other employers in Iran have yet had sufficient time to grasp and master the problems of labour-management collaboration which are involved in the operation of large-scale industry.
In these circumstances it is not yet possible for workers to bring to
their trade union activities an experience acquired in other fields, e.g.,
in local government, while even in the industrial sphere such democratic
practices as collective bargaining and joint consultation are still in their
early infancy. It may therefore be concluded that before the handicaps
in the way of trade unionism in Iran can be overcome there will need to
be both a development within the unions themselves and an improvement
in the external circumstances by which the unions are affected.

CHAPTER Vin
LABOUR-MANAGEMENT RELATIONS
Relations between the Anglo-Iranian Oil Company and its workers
are regulated partly by means of voluntary arrangements and partly
through machinery established under the provisions of the Labour Law.
The voluntary arrangements find their expression in joint departmental
committees, while the statutory machinery takes the form of works
councils, arbitration boards and boards for the settlement of disputes.
The Company has accepted the view that relations between employers
and employed cannot be conducted in the long run on an individualistic
basis. It feels that the regulation of employment relations on such a
basis is unsatisfactory to management and workers alike and that it
must eventually be replaced by methods and procedures for dealing
with problems collectively. Accordingly the Company has considered
how it may best facilitate the development of collective interests and
aspirations on the part of the workers without interfering with the
spontaneous growth of their organisations.
JOINT DEPARTMENTAL COMMITTEES

One of the steps which it has taken in this direction is to arrange for
the participation of workers' representatives in the management of
sports activities, clubs and welfare facilities. Another is to encourage
the formation of joint departmental committees containing representatives of the workers and management. The early joint departmental
committees were set up for the discussion of questions between the
management and members of the staff, and the first of them began to
function in 1943. Other committees were subsequently formed with
a view to extending the principle of joint consultation to all sections
of the staff and also to the wage earners in the different departments
of the plant. It will be noted that the beginnings of this development
preceded the passage of the first Labour Law in Iran, which came into
force in 1946.
A number of joint departmental committees were actually in operation in Abadan before the machinery provided for by the Labour Law
could be put into effect. By the end of 1948 there were 34 joint

LABOUR-MANAGEMENT RELATIONS

departmental committees in existence in Abadan. In the Fields area there
were seven such committees in Agha Jari and two at Gach Saran and
23 factory councils in the other centres, of which 14 are at Masjid-iSulaiman, two at Lali, three at Haft Kel and one at Naft Safid. The
factory councils in the Fields area, however, are akin to joint departmental
committees and are not identical with the factory councils set up under
the Labour Law.
Joint departmental committees consist of not more than five representatives of the Company and not more than five workers' representatives, with the departmental manager as chairman. The workers'
representatives are elected by the workers employed in the department
concerned. One representative of the Company and one representative
of the workers act as joint secretaries of each committee. The functions
of the committees are to consider questions aflecting the persons
employed in the department except those which are dealt with at a
higher level or which come under the Labour Law; to consider proposals
by the workers or the Company in regard to the promotion of industrial
relations, improved production and efficiency ; to provide a channel
of communication between the Company and the workers ; and to
advise the factory councils on matters which the councils may refer
to them.
A feature of the joint departmental committees is that they promote
the principles of joint discussion and labour-management co-operation
at the lowest level—the department in which the worker is actually
employed. Meetings of the joint departmental committees are held
at regular intervals to discuss complaints and suggestions made by the
workers and matters brought forward by the management. The
subjects discussed include food supplies, accommodation, welfare
amenities, the Aid Fund, promotion and discipline. Information is
given by the Company on such matters as production, the medical
facilities and other services available, and co-operation is asked for
in regard to labour efficiency, safety organisation, the observance of
regulations and so on. Matters not disposed of at one meeting are
brought up again at later meetings when further information has been
obtained.
PROVISIONS OF THE LABOUR LAW

Statutory provision for the establishment of industrial relations
machinery is contained, as already stated, in the Labour Law. From
the point of view of industrial relations the Labour Law is of considerable
importance. It makes provision for the establishment of works councils,

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

arbitration boards and boards of settlement of disputes, and it also
provides for the setting up of a High Labour Council. The regulations
made under the Labour Law include those relating to factory councils
(August 1946), the High Labour Council (August 1946), the internal
organisation and procedure of the High Labour Council (September
1946) and the establishment and procedure of the arbitration boards
and the boards of settlement of disputes (June 1947).
In the provisions concerning the composition and procedure of these
various bodies emphasis is laid throughout upon the tripartite principle,
i.e., the participation of representatives of the employers, the workers
and the Government. Outside the petroleum industry there is little
experience of the working of joint machinery set up by agreement
between the employers and workers, and it was therefore necessary for
the Government to promote the formation of statutory bodies and to
take part in their activities.

FACTORY COUNCILS

Under the Labour Law of 1946 provision was made for the establishment at each factory of a factory council composed of one representative
of the workers, one representative of the employer and one representative of the Ministry of Labour. The workers' representative on the
factory council was to be nominated by the union if the majority of the
workers belonged to a union, otherwise he was to be selected by the
workers themselves by a majority vote and under the supervision of the
representative of the Ministry of Labour.
The duties of the factory councils, as prescribed by the regulations
made in August 1946, were to investigate individual disputes arising
between a worker and his employer ; to investigate collective disputes
between workmen and their employer ; to control the operations of
the Aid Fund provided for by the Labour Law ; to create good understanding between workers and employers and to use special efforts to
ensure the greatest efficiency in the work of the factory ; and to draft
plans for accelerating work, economising time and materials and increasing production and output.
Such councils were to be compulsory in factories with over 20 workers ; in smaller factories their formation was to be at the discretion of
the Ministry of Labour. Meetings were to be held at least once a week
on the premises of the factory.
In the revised Labour Law which was passed in June 1949 and which
came into force in June 1950, the provisions concerning factory councils

LABOUR-MANAGEMENT RELATIONS

are replaced by a section providing that where a dispute arises between
a worker or a number of workers in a factory and the employer, the
disputes shall be referred in the first place to a factory conciliation board
(in effect, the factory council) composed of the representative of the
workers and the representative of the employers. This committee
is to examine the question and attempt to bring the two parties to an
agreement. So far, however, there has been no change in the regulations, and the factory councils continue to operate for the time being
on the lines originally laid down.
Factory councils have been set up in the areas of the Anglo-Iranian
Oil Company—both in Abadan and in Fields. Owing to the size and
complexity of the operations in Abadan there are several factory councils
attached to this one undertaking, and there is also a central factory
council to administer the Aid Fund from which grants are made to
workers in certain contingencies. Factory councils also exist in various
other industries—textiles, tobacco, cement, railways, etc.—but they are
not very numerous, as industrial activity in Iran is not extensive. It would
seem, however, that the emphasis in their work is placed in the main
upon the administration of the Aid Fund and the investigation of
disputes. It is doubtful whether they have developed to any great
extent their functions in regard to the promotion of production, efficiency and economy.
SETTLEMENT OF DISPUTES

Under the first Labour Law individual disputes are settled by the
factory council, whose decision is final and binding upon employer and
worker alike. Collective disputes, however, if not settled by the factory
council, are referred to an arbitration board consisting of one arbitrator
nominated by the workers and one nominated by the employers.
Provision is made for the appointment of an umpire or neutral chairman
or, failing that, for a representative of the Ministry of Labour or the
Department of Justice to act as umpire. If the majority of workers
concerned belong to a trade union, the workers' arbitrator is to be
nominated by that union. Disputes not satisfactorily settled by the
arbitration board are to be referred to the local board for the settlement
of disputes. In practice, however, few cases have been taken on appeal
to these boards from an arbitration board.
In the revised Labour Law it is provided that if the factory conciliation
board referred to above does not bring the two parties into agreement
the dispute is to be referred to a reconciliation committee (in effect, the
former arbitration board) composed of representatives of the workers

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

and of the employer in the factory in question, together with a representative of the Ministry of Labour. A decision of the reconciliation
committee, if unanimous, is final and binding. However, in the case
of a dismissed worker, and in cases in which the plaintiff does not
agree with the decision, the matter is to be referred to the board for the
settlement of disputes.
Provisions concerning the boards for the settlement of disputes are
contained in both the original Labour Law and the new Law. Under
the Law of 1946 it was provided that the boards should be composed
of the local Governor or his representative, the chief of the local office
of the Department of Justice or his representative, the local representative of the Ministry of Labour, two representatives of the workers and
two of the employers. The board is presided over by the Governor.
Similar provisions regarding the boards are contained in the revised
Law. By virtue of regulations made under the Law of 1946 the workers'
representatives (and those of the employers) are to be nominated by
their union where a union is in existence. The board is required to meet
at least once a week, or oftener at its discretion, in the Office of the
Governor.
The duties of the boards were defined in the regulations and may be
summarised as follows : to deal with disputes not settled by the factory
council and the arbitration board ; to deal with complaints from workers
concerning their dismissal from employment ; to make a recommendation to the High Labour Council at the beginning of each year regarding the minimum wage to be paid during the year ; to revise this rate
during the year in special circumstances ; and to prepare a list of the
workers' minimum living requirements within the district concerned.
It will be noted that the functions of the board for the settlement of
disputes go beyond the settlement of disputes and that these bodies
constitute, with the High Labour Council, the machinery for fixing
minimum wages.
Boards for the settlement of disputes are, of course, in operation in
the petroleum industry in both Abadan and Fields.
Under the original Law it was provided that no strike or lockout
should take place before the expiration of the periods fixed for the
operation of the machinery of conciliation and arbitration. Strikes
were not to result in any wounding, beating, destruction, disturbance
of public order and security or other misdemeanour. Persons contravening these provisions were to be liable to punishment under
the penal laws. A similar provision has been included in the revised
Law.

LABOUR-MANAGEMENT RELATIONS

HIGH LABOUR COUNCIL

At the apex of this system of committees and boards is the High
Labour Council, which was set up under the Law of 1946 and which
consists of three representatives of the employers and three of the
workers, together with a number of representatives and advisers from
various Government departments. The three workers' representatives
were to be nominated by the trade union with the largest membership
and the three employers' representatives by the union of private factory
owners with the largest membership.
The duties of the High Labour Council, as defined in the Law and in
the regulations made in August 1946, may be summarised thus : to
prepare Bills concerning labour questions and to prepare rules and regulations as provided for in the Labour Law; to supervise the application
of labour legislation and of the Workmen's Insurance Act; to study all
labour questions and to draw up schemes for creating employment, preventing unemployment, and obviating economic crises; to settle such disputes as are not settled by the authorities provided for in the Labour Law;
to approve minimum wages for various categories of labour in the different
parts of the country; and to supervise the administration of the Co-operative Fund and the Unemployment and Workers' Hygiene Fund. Meetings of the High Labour Council are to be held at least once a week at
the Ministry of Labour in Teheran.
An important change affecting the High Labour Council has been
made in the revised Labour Law of 1949. Under this Law the composition of the High Labour Council remains substantially the same, though
the list of Government representatives has been slightly varied. It is,
however, provided that instead of being nominated by the strongest organisations the three workers' representatives and the three employers'
representatives shall be elected at specially convened conferences.
In the case of the three employers' representatives it is provided that
the Ministry of Labour shall convene at Teheran, once a year, a conference
of representatives of the employers and of the non-governmental
employers' organisations registered under the Labour Law and employing not less than 500 workers each. Every employer and employers'
organisation shall be entitled to one representative at the conference.
The Ministry is also required to convene at Teheran, once a year, a
conference of representatives of trade unions registered under the Labour
Law and having not less than 100 members. Each union is allowed one
representative at the conference. At their respective conferences the
employers' and workers' delegates elect their representatives on the High
Labour Council.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

Such conferences were held at Teheran at the end of 1949. The
employers' conference elected one representative from the north, one from
Isfahan and one from the south—who was an official of the AngloIranian Oil Company. The three representatives elected by the workers
were all delegates of E.S.K.I., which held a majority of the votes, since
the voting was on the basis of one vote per union and most of the unions
formed part of E.S.K.I. This result caused a certain amount of
dissatisfaction among the oil workers' delegates, who felt that one
of the three workers' representatives should have been an oil worker,
in view of the fact that the petroleum industry is the most important in
the country and employs the largest number of workers. Subsequently
one of the E.S.K.I. representatives withdrew from the High Labour Council and his seat was offered to a representative of the Trade Union of
Workers of Khuzistan which has its main membership among the oil
workers in Abadan. The seat was, however, refused on the grounds
that a representative of the oil workers should have been elected in proper
form by the conference.
It would appear that the acitivites of the High Labour Council have
been mainly centred upon the examination of draft Bills and regulations,
the fixing of minimum wages and the problems connected with the effective application of labour legislation, including the administration of the
various funds. There can be no doubt that it has performed a most useful function by bringing together representatives of employers and
workers to discuss with representatives of the Government at a high level
the application and extension of labour legislation, the avoidance of disputes in industry, and the general problem of promoting satisfactory
conditions of work.
SUMMARY

When the foregoing principles, practices and forms of machinery are
examined in relation to the petroleum industry, it is clear that much useful experience in the development of industrial relations has already been
gained, despite the fact that trade unionism and labour legislation in
Iran are of such recent growth. The trade unions in Iran are still immature and inexperienced. The workers are inarticulate and unused
to democratic methods. Only a small percentage of them are organised
in trade unions and very few of them take an active and effective part in
trade union activity. Largely because of these factors there is little
genuine collective bargaining in Iran. The only reference to collective
bargaining in the Labour Law is a provision that collective contracts
shall be in writing and shall not be inconsistent with the labour legislation.

Bakhtiari apprentice
at Lali

Coffee shop built by Company at Lali

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9 « H .'.2

Drilling at Lali

Applicants for work at labour office, Abadan

LABOUR-MANAGEMENT RELATIONS

In the petroleum industry itself the problem of industrial relations is
constantly overshadowed by the fact that the employer is a foreign
company. Political and national feeling may therefore easily creep
into the relations between the Company and its personnel. It would,
however, appear from observations on the spot that relations between
the workers and their immediate chiefs are good, and that most of the
difficulties which arise are those which might be expected in view of the
conditions of the job and of the area concerned. The solution of these
difficulties is rendered more difficult by the widespread ilhteracy of the
workers, by their lack of experience in consultation and negotiation and
by the backwardness of their organisation. Difficulties no doubt arise
also on the side of the Company, whose industrial relations policy has
to be formulated at the top and carried out at various levels by a large
number of foremen, instructors, job officers, managers, industrial relations
officers and others. Clearly, in such a large organisation mistakes can
be made both in the formulating and in the carrying out of an industrial
relations policy. Individual officials of the Company may be just as likely
to cause differences and misunderstandings as the workers themselves.
It may nevertheless be affirmed that the Company has given clear evidence
of its desire to promote satisfactory industrial relations by its initiative
in forming the joint departmental committees, by its full participation
in the work of the factory councils and other statutory bodies, and by
its scrupulous observance of the provisions of the Labour Law.

CHAPTER IX
THE WIDER SCENE
When considering the problems of the petroleum industry in Iran,
some regard must be paid to the conditions which apply in other industries,
in other parts of the country and in other countries of the Near and Middle
East.
The problems of the petroleum industry, as of other industries, have
to be dealt with in the light of the general circumstances and possibilities
of the individual countries; it is therefore necessary to ask what standards
it would be reasonable to expect in this industry—not in the world in
general but in Iran in particular. It is also advisable to know how the
situation compares with that in other industries of the country and in
the same industry in neighbouring countries. One of the Mission's
desires, therefore, was to ascertain whether the standards of the petroleum
industry in Iran were typical of the country or whether they were exceptional, and how the methods adopted for dealing with the industry's
industrial and social problems compared with those adopted elsewhere
in the area.
It is impossible to see the industry in its true perspective unless it is
realised that the gigantic plant at Abadan and the installations in the oilfields—which are characteristic of the most modern developments in
industrial organisation, science and technique—have been set down in
a non-industrial country, far removed from other main centres of population. The industry represents something new in the country's experience,
and the conditions of life and work of those employed in it are unknown
to the great majority of the country's inhabitants.
THE COUNTRY AND ITS PEOPLE

Iran is a vast territory, as big as France, Italy, Norway and Spain
combined. It is not on one of the world's great highways or crossroads
but lies to one side of the routes connecting Europe and the Far East.
It is therefore untouched by many of the influences which affect countries
on the main lines of communication. Distances within the country are
great and communications difficult. The few large cities, Teheran,
Meshed, Tabriz and Isfahan, are widely separated, and the other populous

THE WIDER SCENE

centres are more or less isolated by distances or by the difficulties in the
way of travelling. In winter there are only three trains per week in each
direction between Teheran and the industrial centres on the Caspian.
Isfahan, the former capital of the country and one of its three biggest
centres of industry, is not served by a railway at all. A telegram from
Teheran to Abadan may take three days; a letter may take a week.
About 70 per cent, of the country's area is made up of mountains,
salt deserts and forests. Some districts, therefore, have very limited
food supplies, which are supplemented, if at all, by supplies brought
from other districts with great difficulty and at great expense. The
climate shows considerable variations. In the north the mountain passes
and railway tracks may be blocked in winter by heavy falls of snow,
while in the south the tropical heat in summer may be almost unbearable,
especially when the wind brings in humidity from the Persian Gulf.
Iran's population is estimated to be in the neighbourhood of 17 million,
whereas the combined population of the four European countries mentioned above is over 110 million. About two and a half million people
live in 15 towns of 50,000 and upwards, the remaining fourteen and a
half million being scattered over wide areas in smaller towns and villages.
The great majority of the active population make their living from agriculture and stock raising; and only a few hundred thousand are employed
in industry. It is probable that the factory workers are considerably
outnumbered by the artisans and craftsmen who carry on their trades in
their homes and in small workshops. Women and girls are employed
in certain industries, e.g., in textile factories and in carpet weaving.
There is also a good deal of child labour in factories and particularly in
the workshops and bazaars.
Agriculture is mainly carried on by the old-fashioned methods which
have served from time immemorial. The primitive wooden plough
drawn by oxen is a common feature of the countryside. There is little
farm machinery, fertiUsers are scarce, and cultivation is made exceedingly
difficult in most areas by the shortage of water. However, wheat and
barley are grown in favourable districts, as well as rice, tea, sugar beet,
fruit and vegetables. Other important crops include cotton and tobacco.
Sheep, which are reared for their meat and wool, are the most numerous
animals, and there are also large numbers of goats. Cows, horses,
donkeys, oxen, camels and mules are important as suppliers of meat and
milk or as draught animals and beasts of burden.
LIVING CONDITIONS

It is common knowledge that the living standards of the general
population in Iran are seriously inadequate. As in other countries in

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

this region, there is a large amount of dire poverty, disease and misery,
and this is to be borne in mind when the conditions of the petroleum
workers are being considered. Owing in part to the circumstances
already described, the nutrition standards of the mass of the people
are low. Clothing, too, seems to be inadequate, at least in winter.
Housing standards are likewise in great need of improvement. Although
a good deal of new building is going on in the principal centres, the
mass of the people live in primitive houses of baked mud, especially in
the villages, while many of the townspeople find accommodation in
single rooms. There is a great deal of overcrowding, both because of
the smallness of the buildings and because the number of houses is
insufficient. It is quite common for more than one family to share a
small house and for a family to occupy a single room.
Judged by modern housing standards, the houses themselves are for
the most part deficient in the conveniences and amenities necessary for
a hygienic and healthy Ufe. Except in the modern houses there is a
lack of window space and ventilation. Only the larger houses in the
main towns are lit by electricity or gas. Rooms are usually heated by
small charcoal braziers or by kerosene stoves, for coal fires and central
heating are rare.
In the poorer houses there is an almost complete absence of the
furniture that is known in the West. Tables and chairs are to be seen,
but it is customary for the family to sit on matting and carpets on the
floor. Other articles, such as bedsteads and clothes cupboards, are less
usual. In winter the beds are generally made up on the floor ; in
summer the family sleeps in the courtyard or on the roof. Clothes and
valuables are kept in painted chests. Cooking is done as a rule in the
open or in a special alcove of the courtyard ; cooking utensils are few
and kitchen equipment simple.
There is, as in other countries of this region, a wide gap between
the well-to-do and the poor. A few people are very rich; the vast mass
of the population is very poor; and there is no large and solid middle
class between the two extremes.
Health conditions are on a low level. There is a great deal of sickness and disease resulting from the climate and the inadequate standards
of living. Trachoma, malaria and tropical diseases generally are
common; tuberculosis is giving increased cause for concern; and much
illness is brought about by malnutrition. Families are large in spite of
the extremely high rate of infant mortality, and the pressure on accommodation and food supplies is therefore severe. There is no adequate
national health service, while the health facilities in the municipalities
are undeveloped as regards both prevention and treatment. Water

THE WIDER SCENE

supplies, sanitation and sewage disposal leave much to be desired.
There is a serious shortage of doctors : it would appear that about half
the doctors are in Teheran and most of the remainder in the other large
centres. The medical services fall far short of the requirements : there
are few voluntary or public hospitals and there is a great need for more
clinics of all kinds.
Educational facilities are insufficient for the country's needs. By far
the greater part of the population is illiterate. Efforts are being made
to extend the educational system, and compulsory education for children
has been provided for by law, but the majority of children do not yet
attend school at all. Progress in education is slow because of the lack
of school buildings and the shortage of teachers. Increased budgetary
provision has recently been made for educational purposes, and a number
of new schools have been opened. It will, however, take a considerable
time to provide all the schools that are needed. The problem of securing enough teachers is also likely to cause difficulty, especially in the
remote areas, not only because of the time taken for training teachers but
also because the salaries and conditions of service are not sufficiently
attractive. An intense effort to extend the educational services will be
required for some years to come. Meantime it would appear that the
facilities already provided are taken up with enthusiasm. The elementary schools are crowded—overcrowded, in fact—and still it is impossible
to accommodate all who wish to attend; there is a growing demand for
places in secondary schools; the number of university students has
increased; and there is a keen desire among adult workers to attend the
evening classes in which they can be educated up to elementary school
standards.
IRANIAN INDUSTRY

Industry in Iran is neither extensive nor highly developed. The
country is deficient in some of the most important raw materials for
industry, though supplies of certain products, such as cotton and wool,
are available. Minerals for heavy industry are either absent or unexploited, and only small quantities of some of them, such as copper ore,
are produced. A little coal is obtained with great difficulty, and water
power is negligible. The development of industry has also been
hampered by transport difficulties, which increase the cost of both
raw materials and finished products. On the other hand, the country
possesses a considerable asset in its plentiful supply of oil.
Some of the principal industries of Iran are old-established and traditional. These, however, are carried on for the most part in small
workshops set up in the homes or in the bazaars. Factory industries

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

are of recent date. All the industrial plants, as distinct from the workshops, have in fact been established within the last quarter of a century.
The principal centres of industry are the Teheran area and the
province of Masandaran in the north, Isfahan on the central plateau
and Abadan and Fields in the south. The most important industries,
apart from petroleum, are the manufacture of textiles and carpets, the
tobacco and sugar industries and the railways. Other industries are the
manufacture of cement, chemicals, glass and various food products.
Textile manufactures include cotton, wool, silk and jute, and textile
factories of various kinds are found in Isfahan and in places as far apart
as Meshed, Tabriz, Ahwaz and Shiraz. There is also a fair amount
of handloom weaving. Carpets are traditionally hand made, and the
work is carried on mainly by women and girls in small weaving sheds
in such famous centres as Kashan, Kerman, Isfahan, Hamadan, Shiraz
and Tabriz. Many carpets, however, are made in the mountain villages.
Some of the industries are carried on in State-owned factories, which
manufacture such products as sugar, textiles (cotton, wool, silk and jute),
tobacco, glycerine, soap and cement. The Iranian State Railway is also
a Government-owned enterprise.
Most of the industrial establishments are small. The Abadan refineiy
is, of course, by far the biggest. Apart from this there are a few factories employing several hundred workers and various other factories of
medium size. Such plants, however, are not numerous. The predominating type of industrial establishment is the small workshop in which
fewer than 10 workers are employed in making and repairing articles
without the use of power-driven machinery. Most of these small establishments are run either by a single family or by a master craftsman
with one or two journeymen and apprentices. It is usual for the goods
to be sold direct to the customer by the craftsmen, who are manufacturers
and merchants at the same time. Apart from the Government factories
already mentioned, the principal factories of any size are the spinning
and weaving mills in the cotton and woollen industries. These mills,
since they are of modern construction, are usually light and roomy and
are equipped in the main with British and German machinery dating
from the 1930's.
Factory industries have been introduced in Iran so recently that
there has been no time for well-established industrial traditions and
practices to grow up. There is no true industrial population, composed
of working-class families, divorced from agricultural and pastoral pursuits and fully adapted to the ways of industry. Nor are there any
industrial firms of long standing or old industrial families with deep.rooted experience of industrial methods, organisation and finance.

THE WIDER SCENE

Accordingly, the characteristics of the petroleum workers which
were described in Chapter H are broadly typical of the workers in
other modern industries of the country. The lack of an industrial
background, and the attachment to the old ways of Ufe, must obviously
raise a whole series of problems of recruitment, labour turnover,
vocational training, labour productivity, factory discipline and industrial
relations. So far, the greater part of the labour force consists of first
generation industrial workers; it is only now that the second generation
is beginning to take its place in the various factories.
The industrial employers have also had their problems, since they
are relatively new to the industrial field. The oldest factories had only
been in existence 10 or 15 years when the war broke out, so for about
half of the period since they were opened they have had to meet the
challenge of wartime and post-war conditions. Moreover, both private
employers and those in charge of the Government factories have had
much to learn regarding manufacturing processes, the upkeep of plant
and machinery, and the conduct of industrial relations. In the textile
industry, for example, as well as in other industries, the machinery,
though modern, is in need of repairs and replacements. Many repairs
to plants and machines have been carried out by Iranian mechanics,
who have shown a great capacity for work of this kind, but the more
extensive repairs and replacements cannot be performed without the
aid of the makers. It would appear also that, while a high degree of
mechanical skill has been developed in Iran, there is a great need of
technicians possessing a thorough knowledge of manufacturing processes.
As a result of these drawbacks, the various industries are faced with a
serious problem of maintaining productive efficiency and holding their
own against the competition of more experienced producers in some
of the highly developed industrial countries. There is a great deal of
unemployment in Iran, and this has led among other things to the
retention of a certain amount of redundant labour in the factories
with a view to avoiding further increases in the number of unemployed.
LABOUR PROTECTION

Legislation for the protection of labour is of recent date. References
have already been made to the Labour Law which was enacted in 1946
and revised during 1949, and it is therefore unnecessary to summarise
its provisions here. It might, however, be pointed out that the Law is
by no means exhaustive and that it could well be extended in a number of
directions. Some of its provisions, moreover, still need to be given
their full implications by the issue of regulations. Far-reaching regu-

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

lations have already been made on certain of the matters covered by the
Law, but the intentions of the Law will not be fully realised until all the
outstanding regulations have been published. No less important is the
question of the machinery for the enforcement of the Law. The factory
inspectors and other officials charged with the supervision of the execution of the Law are too few in number and insufficiently trained, and are not
equipped with adequate powers. It would also appear that the Law
and the regulations made thereunder do not in all cases provide the
requisite penalties for non-observance. The result is that the officials
of the Ministry of Labour are sometimes powerless to secure the effective
application of the legal provisions.
The Ministry of Labour itself, which was not formed until August
1946, has lived through a trying period. There have already been
several Ministers of Labour and there have also been times when no
Minister of Labour was appointed. In these circumstances it has been
difficult to develop and carry out a consistent policy. Furthermore the
Ministry has been seriously understaffed, both at headquarters and in the
provinces. Until the staff of the Ministry of Labour is reinforced and
the legal provisions strengthened it is unlikely that the workers will
receive the full protection which the Law was intended to provide.
Here it might be mentioned that at the time of the Mission's visit
Iran had not yet ratified any of the Conventions adopted by the International Labour Conference during the last 30 years. It is understood,
however, that consideration is being given to the possibihty of ratifying
some of the Conventions in the near future.
THE COUNTRY'S NEEDS

From the foregoing brief survey it will be seen that Iran has many
heavy and pressing needs to meet. The situation of the petroleum
workers cannot be divorced from that of their fellow workers in other
industries. There is an all-round need for improvements on behalf
of the workers in industry generally, of their families and of the population as a whole. Health services, medical facilities, housing and
educational facilities urgently call for extension. Social security schemes
are required to provide adequate benefits and allowances for the sick,
the aged and the unemployed. Action is also required for the development of such public services as sanitation, sewage disposal, the supply
of drinking water and the provision of gas or electricity for the homes.
The extension of roads and railways, the development of transport
services for passengers and goods, the improvement of communications
and the provision of cheaper fuel for industry and the home—all these

Students at adult training establishment, Abadan

5
Control room in a production
unit, Gach Saran

cRiiont*

Iranian apprentices at Abadan workshops

THE WIDER SCENE

urgently need attention. To do all these things will involve considerable
expense and will call for the provision of technical assistance by other
countries. It is encouraging to note that the needs have been recognised
by the country's authorities and that proposals for tackling them are
included in the seven-year plan, for which a special organisation with
substantial funds has been established.1
Reverting to the petroleum industry, there is one other point to be
borne in mind, namely, that many of the problems encountered by the
petroleum industry in Iran are also met with in other countries of the
Middle East. During the Mission's stay in Iraq, attention was drawn
to a number of matters which were being dealt with by the Iraq Petroleum
Company at Kirkuk on similar lines to those adopted by the AngloIranian Oil Company. These included such subjects as the construction
of housing accommodation, the provision of medical and hospital
services, the supply of water and electricity, the sale of food and clothing
at subsidised prices, and the organisation of vocational training facilities.
Many of the problems in Iraq are indeed similar to those in Iran, but
there are some significant differences. For example, the problems are
far bigger at Abadan, where over 30,000 workers are employed, than at
Kirkuk, where 5,000 are employed; moreover Abadan has had periods
of extremely rapid growth, during which the difficulties were aggravated.
Again, many of the workers at Kirkuk have found accommodation
in the town, which has been in existence for centuries, whereas all the
housing at Abadan has had to be built since the Company began operations there. Further, much of the food needed by the population of
Kirkuk can be grown locally, whereas it is quite impossible to grow
enough food in the Abadan area for the requirements of the population.
Other oil-producing areas which are confronted with some of the
problems of the petroleum industry in Iran are Kuwait, Bahrein Island
and Saudi Arabia, in all of which the companies have been faced with
the need to provide housing accommodation, food supplies, health
services, training facilities and so on. The Mission did not visit any of
these areas, but it gathered that in all of them the problems are for the
most part on a somewhat smaller scale than those in Iran. Apparently
the area most nearly comparable with the oil-producing area of Iran is
Saudi Arabia, where the next largest number of workers is employed
and where there has been a rapid development of the industry in conditions somewhat similar to those at Abadan.

In connection with the seven-year plan an Iranian Oil Company is being formed
to prospect for oil in the areas not covered by existing concessions.

CHAPTER X
CONCLUSIONS
In the foregoing chapters the Mission has contented itself with
describing the conditions which it found in Iran. It now remains to
sum up its impressions and formulate its conclusions.
The first observation to be made is that the oil industry in Iran,
with its large-scale activities and its modern techniques, is not operating
in an industrial area, alongside other industries, but in a remote and
almost barren region, in a country in which industry is of very recent
growth. The same is true, of course, of the oil industry in a number
of other countries, but the point needs to be borne in mind.
Regarding the oil areas in Iran, it is necessary to remember also
their situation, climate and general characteristics—the desert surroundings of Abadan, the wild and rocky hills in which the oil is found, the
low rainfall and the tropical heat. The great extent of the oilfields is
another factor : each large field stretches for many miles, and the fields
are separated from one another by several hours of driving over mountain
roads. Even by aeroplane the journey from Abadan to Masjid-i-Sulaiman or from Masjid-i-Sulaiman to Agha Jari takes an hour. Abadan,
though a single area, is nevertheless of the size of a very large town.
Its concentration of tens of thousands of workers, nearly all dependent
upon the one great refinery, is one of the most important factors to be
taken into account in any attempt to understand the industry's problems.
Hardly less important is the fact that the growth of this population has
during certain periods been extremely rapid.
Added to these circumstances are the virtual isolation of Abadan and
Fields, which are far removed from the other important industrial areas
of the country, and the inadequacy of communications of all kinds or of
local public services.
Concerning the oil workers, there is a striking difference between the
qualifications which the local labour possesses and the qualities which the
industry needs. The petroleum industry calls for men with every degree
of skill to undertake a considerable variety of jobs, whereas the workers
available in Iran were atfirstilliterate, untrained and completely devoid of
any industrial background or traditions. Even now, after 40 years of

CONCLUSIONS

activity, almost every worker taken on by the Company has to be educated, trained and initiated into the ways of industry.
In dealing with this labour force account must be taken of their particular form of family life, their tribal loyalties, their attachment to
nomadic habits and the influence of their ancient traditions. While
mutual help is practised within the family and the tribe, there is still a
need for greater co-operation over wider areas. This is one of the obstacles to be overcome in developing a sense of common interest among
workers in the same grades and categories who work under the same conditions and have to face the same problems.
Workers bred in such an atmosphere expect to be cared for by persons
in authority; they are willing to follow a leader and to be told what they
should do; they do not look for responsibility and they regard their difficulties as personal grievances which should be brought to the notice of
people with influence. Their system of society for many centuries was
autocratic. Their minds have been formed in what used to be called the
unchanging East, but profound changes have occurred and are still occurring, sometimes with disconcerting effects. The development of modern
industry in Iran implies that people whose minds are firmly set in traditional ways are exposed to powerful influences from a different world of
thought and action. The fact that the old ways are so deeply rooted
constitutes one of the big problems of the industry; but an even greater
problem arises from the fact that the new ideas are producing profound
and rapid changes in people's lives and thoughts.
Clearly, therefore, the labour and social problems of the petroleum
industry in Iran—and presumably in the other countries of the Middle
East—are very different from those encountered in highly industrialised
countries, particularly in the West.
RECRUITMENT

The arrangements made by the Anglo-Iranian Oil Company for the
recruitment of its workers seem to correspond closely to the needs and
conditions of the country. The arrangements appear to be well organised
and complete. Full employment records are kept in respect of each
worker, and it is therefore possible for every man's position to be considered at any time in full knowledge of the facts.
There is no apparent over-all shortage of recruits for the industry,
though the number of men presenting themselves for employment tends
to vary considerably with the seasons. There is, however, a definite
shortage of workers with the required skills. The problem of recruitment,
and many of the other personnel problems, is complicated by the high

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

rate of turnover in some at least of the grades. It may be anticipated
that as long as the general shortage of skilled labour in Iran persists, many
trained workers will leave the Company's service every year in order to
take jobs in more attractive areas or in their native towns and villages.
Accordingly, the Company will presumably continue to enrol and train
many more workers than would normally be needed for its own operations.
On the other hand, it will be difficult to increase the rate at which
Iranian nationals are recruited for employment in the higher categories
of wage earners and as members of the supervisory staff. There is no
reluctance on the part of the Company to recruit and promote Iranians
for those categories. On the contrary, the Mission understands that
the positions are open to all who acquire the necessary qualifications and
experience. In any case, the proportion of Iranians in the Company's
employment is large, even in the higher categories, and it is increasing.
TRAINING

The Mission was impressed by the extent of the Company's training
scheme and the efficient way in which it is organised. Training is provided by the Company for every kind of job, industrial and commercial,
and for every category and grade. Theoretical and practical instruction
are successfully combined, and it is obvious that the courses have been
carefully planned and that considerable thought has been given to the
teaching methods to be employed. The Technical Institute inAbadan,
which is the apex of the Company's training system, is considered to be
one of the foremost educational institutions in the country. The Mission
was struck not only by the arrangements for training but also by the
serious and concentrated manner in which the trainees apply themselves
to their tasks, whether in the Technical Institute or in the adult training
centres or in the apprentice workshops. Another notable feature of the
scheme is that it provides opportunities for further training for those who
fail to pass their tests. The whole scheme offers an inducement to workers
to improve their education and skill and thus to quahfy for increments in
wages and for promotion. On the whole, the Mission formed the view
that the Company's training scheme is adequate and will in time provide
all the trained Iranian personnel required to fill any post in the Company's
service.
WAGES AND PRICES

The Company's wage structure includes definite rates for every grade
and category, with provision for increments after periods of satisfactory

CONCLUSIONS

service and promotion from grade to grade. As a result, the overwhelming majority of the workers receive more than the statutory minimum
wage. Such complaints as the Mission heard related not so much to
the wage scales as to the relation between wages and prices. As far as
the Mission was able to judge, the Company scrupulously observes the
provisions of the law concerning the minimum wage ; the Mission feels,
however, that a bigger effort might be made by the authorities to control
the prices of essential commodities on the free market and to ensure that
greater quantities of these commodities are made available.
Some of the trade union representatives complained that the authorities have fixed the minimum wage on the basis of a combination of free
market prices and of the prices of goods obtainable in the Company's
shops, whereas they felt that it should have been fixed on the basis of
the free market prices only. If this idea were adopted, however, it would
seem (a) that there would no longer be any reason for the Company to
continue its present policy of importing and distributing essential goods
at controlled prices ; (b) that an immediate and substantial increase in
wages would be necessary; and (c) that, as a result of inflationary pressure
and the discontinuance of Company imports, the prices on the free market
would increase in even greater proportion than wages. The consequences
of such developments would be disastrous for all the parties concerned.
In the Mission's view the real problem—and it is a serious one which
needs the full co-operation of the Company, of the workers and of the
authorities—is to maintain the purchasing power of wages. For this
reason it would seem to be essential to retain the Company's food distribution scheme for the time being and to support it by effective measures of
price and rent control. It would also be desirable to encourage every
effort made to increase the production of food and other necessities in
the Company's areas and to promote the import of such commodities.
HOURS OF WORK

No specific complaints were submitted to the Mission with regard
to hours of work, and it would indeed seem that the hours will bear
comparison with those of other industries in Iran and with those worked
in the petroleum industry in other countries. Such grievances as exist
can be dealt with through the existing machinery of consultation.
WORKING CONDITIONS

Generally speaking, the working conditions appear to be acceptable
to the workers and the unions, though there are naturally a number of
grievances, some slight, some transitory and others more serious. The

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

smaller grievances can, of course, be adjusted without much difficulty,
but there are a few which are not so easily disposed of, especially those
which arise out of the nature of some of the industrial processes.
Requests for a more generous distribution of ice to men employed
in parts of the refinery where the work is particularly oppressive, or for
more frequent rest periods in hot weather for the women employed in
the laundry, are examples of problems which need not present any great
difficulty. On the other hand, it is clear that difficulties of a more
serious nature are likely to arise in connection with processes which
are by their nature disagreeable and perhaps even dangerous. The
workers drew the attention of the Mission in particular to the discomforts of the men who work in dust while handling sulphur and to the
anxiety of those employed in the S0 2 plant who fear that their lungs
may be affected by the fumes. Work of this kind has to be done, but
the reactions of the men are only to be expected. Similarly, with
regard to the wearing of protective clothing by men in contact with
acids, although the men know that the clothing is needed for their own
protection, they feel aggrieved at having to wear it, especially in the
heat of the Persian Gulf. Problems of this kind are not easy to remove
entirely and they should be given continuing attention through the
machinery which already exists.
SOCIAL INSURANCE

Social insurance provisions in operation in Iran provide (a) benefits
to wage earners who suffer accidents and illness as a result of employment, and (b) benefits in case of marriage, pregnancy, large families,
childbirth, burial and legal aid. The Labour Law also provides for
assistance to workers and members of their families in case of accident
or illness not caused by employment and for old-age and disablement
benefit, but the regulations for the application of these provisions have
not yet been issued and the provisions of the Law are not in force. This
gap is partly filled by the various benefits provided voluntarily by the
Company for its workers. The situation would, however, be eased for
all concerned if these regulations could be issued and the intentions of
the Law put into operation.
SAFETY

The Company is giving serious attention to the safety of the workers,
both by attempting to make their jobs as safe as possible and by
providing safety devices and protective clothing when the risks cannot

CONCLUSIONS

be removed entirely. Although safety questions are already discussed
to a certain extent by the joint departmental committees, it would
be an advantage if special safety committees could be established for
the various parts of the Company's operations. This would encourage
safety consciousness and at the same time promote the broad idea of
joint consultation between the Company and the workers. Consideration might also be given to the possibility of extending job safety
training among the supervisory staff.
CONTRACT LABOUR

The problem of contract labour is a serious one in the oil industry
of Iran by reason of the conditions of the country and of the large
number of contract workers involved—over 7,000 in Abadan and over
8,000 in Fields. There is, of course, a case for letting out certain jobs to
contractors, but it should not be overlooked that the workers employed
by the contractors are carrying on activities which are essential for
the industry. In every country in which this industry exists some
work is normally done by contractors. In the industrial countries,
however, the contractors' men enjoy the same protection from the
law and from collective agreements as other workers, and they have
their own homes. Where a contract has to be carried out in a
remote district of one of these countries it is usual for temporary
accommodation to be provided. In Iran, however, the workers employed
by contractors are not so well protected as the Company's employees,
principally because the legal provisions are not so strictly applied. The
purchasing power of their wages is less, since they do not receive the
same advantages as the men employed by the Company in regard to the
provision of food and medical aid. The jobs of the contractors' men
are also more precarious because the contractors depend almost exclusively on the Company for their business and do not as a rule have
alternative sources of employment. In these circumstances the welfare
of the contract labour is a matter of far greater concern to the Company
than it would be in an industrial country. The Company has recognised
its position in this matter by the insertion of a special clause in contracts,
but it is doubtful whether this clause completely fulfils its purpose. The
Mission formed the impression that more energetic action needs to be
taken by the public authorities to safeguard the position of contract
labour. Much could be done, for example, by the organisation of an
efficient system of labour inspection to ensure the observance of the
minimum statutory standards for conditions of employment and by the
control of rents and prices which was suggested in an earlier paragraph.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

The position would be greatly eased if the Company could reduce
the amount of work done by contract labour and employ more of these
workers directly. This would give a large number of workers greater
protection and the right to participate in the benefits which the Company
provides for its own employees. It would appear, however, that the
amount if not the proportion of contract labour has recently tended to
increase, in part, no doubt, in response to a desire on the part of the
Iranians themselves that greater opportunities be given by the Company
to local contractors. The employment of more direct labour would, of
course, aggravate the Company's problems in regard to housing, food
supplies, health services, etc. In the long run the remedy would seem
to lie in the development of local enterprises and the assumption of
greater responsibility by the public authorities for the welfare of their
citizens.
HOUSING

Housing is the most serious problem in the Company's areas and
the one which gives most cause for concern. The problem of providing
houses for the oil workers is a gigantic one, especially in Abadan, because
of the large numbers to be housed, the fact that there have been periods
of extremely rapid increase in the population, the almost complete
absence of building materials and housing components, and the shortage
of qualified building labour. These factors increase the difficulty of
providing houses in sufficient numbers and render the cost of building
extremely high. The provision of homes for such a large population
would be a major problem even in a well-organised country where there
were no shortages and where all the resources of municipal and private
enterprise could be mobilised. It must be recognised therefore that the
Company has had a colossal task to face in coping with this situation.
The difficulties were further increased by the fact that during a part of
the war period the building of houses was practically brought to a
standstill, though the labour force was being rapidly extended.
When all this is said, however, the conclusion can hardly be avoided
that a large and rapid increase in the construction of houses is both
necessary and possible. The shortage of housing accommodation is one
of the most serious causes of discontent in the Company's areas. In
spite of the tremendous effort that has been made, the end of the programme of construction is not yet in sight. Although thousands of
houses have been built and hundreds are still under construction, very
large numbers of workers see no hope of securing a house for years to
come. In this connection a question arises concerning the relation

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Section of Agha J ari oilfield

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Artisans going to work, Abadan

Filling station at Ahwaz,
S.W Iran

Well at Masjid-i-Sulaiman,
S. W. Iran

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CONCLUSIONS

between the standard of accommodation and the rate at which it can
be provided. It has been suggested that if houses of a lower standard were designed, they could be built more rapidly and
could accommodate larger numbers of workers. So far, however, the
Company has set its face against the building of houses which are not
of substantial construction and provided with water-borne sanitation,
individual drinking water supplies and other necessary services. It may
nevertheless be possible, without depressing the standard of accommodation below a decent level, to construct a larger number of less costly
houses which fulfil all reasonable requirements. The problem is so big
and so acute that only an urgent effort on a large scale can meet it.
Complaints were heard by the Mission regarding the points system
under which the houses are allocated. The system has hitherto worked
well, but it would seem that the time has now come for it to be adjusted in
order to give more weight to length of service. In present circumstances
wage earners in the lower wage groups with many years of service may
have to wait a long time before acquiring the necessary number of points.
It would seem to be desirable to give such men an opportunity of qualifying for a house more quickly. A readjustment of the points system
to permit of this would not, of course, solve the problem of shortage of
accommodation. Only a much greater building effort could do that.
In addition to whatever measures the Company itself might take,
it would seem to be indispensable for the Government and the local
authorities to encourage the greatest possible amount of private building
and to insist upon adequate rent controls until a sufficient number of
houses has been built.
DISTRIBUTION OF COMMODITIES

One of the Company's most remarkable achievements has been the
organisation of its scheme for the distribution of food, clothing and
other essential commodities. This has involved the purchase of articles
in short supply and arrangements for importing, storing and distributing
them in an orderly manner among large numbers of people. As part
of this scheme it has been necessary to work out a rationing and price
system, to build stores and shops, to organise transport, to open canteens and restaurants and to undertake agricultural development projects.
There can be no doubt that this scheme has resulted in the provision
of vast quantities of commodities which would not otherwise have been
available and has contributed towards holding down prices and supporting the purchasing power of wages. In the circumstances which
at present exist in the area, the continuance of the scheme would seem
6

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

to be an absolute necessity. If the scheme were abandoned there would
soon be an acute shortage of articles of prime necessity, and prices
in the local markets would soar. It is difficult to see what other
arrangements could be made to supply the needs of the population of
Abadan and Fields, unless the public authorities were to organise
the supply and distribution of commodities on an adequate scale. One
step in the right direction, however, would be the organisation of
co-operative societies among the oil workers. Plans for this are already
on foot and it is to be hoped that the initial difficulties will soon be
overcome.
HEALTH SERVICES

No one who visits the Company's areas can fail to recognise the effort
which the Company has made in organising its health and medical services. In addition to the usual safety, hygiene and first-aid arrangements
inside the plant, there are health services for the prevention of disease
and medical services for the various forms of treatment. The preventive
services include drainage, sewerage, the provision of pure drinking water,
anti-malarial campaigns, inoculation and vaccination and the destruction
of pests; while facilities for treatment include hospitals, dispensaries and
various kinds of clinics. The hospital at Abadan is claimed to be the
finest in the Middle East. These arrangements are all the more important because the health services of the municipality were quite rudimentary
until recently, there is no other hospital in the area, and the number of
doctors and dentists other than those employed by the Company is very
small indeed.
A great strain is thrown upon the Company's medical services by the
fact that although they were designed primarily for the Company's own
employees, they are in fact used extensively by the workers' families and
even by people who have no connection with the Company. It is desirable
that the Company's medical facilities should be extended, and the Company is taking steps towards this end, but it is also evident that more
vigorous action should be taken by the public authorities to provide for
the health needs of the local population. It is therefore to be hoped
that the Company's programme for the extension of the main hospital
in Abadan and for additional clinics in the oilfield areas, as well as the
plans for the erection of a municipal hospital in Abadan, may soon
be carried out. The Mission fully appreciates the difficulties, financial
and otherwise, in the way of a large-scale development of the medical
services of these areas, but the needs of the local population are pressing
and the facilities are still far from adequate.

CONCLUSIONS

EDUCATION

It will have been noticed that in addition to organising training
schemes the Company has participated in the arrangements for the
education of children and in the organisation of night classes for adults.
The shortage of schools and teachers in Iran is so great that it will be many
years before it will be possible to provide every child with an elementary
education and to develop satisfactory arrangements for secondary and
higher education. Remarkable progress is, however, being made in
some areas and among these Abadan and Fields take a high place,
thanks to the combined efforts of the authorities and the Company.
The future industrial and social development of Iran will be influenced
in a high degree by the progress which is made in the sphere of education,
and the efforts put forward in the Company's areas to provide increased
educational facilities will produce their reward not only for the Company
but for the country generally. Continued close co-operation between the
Company and the authorities in these matters is therefore to be recommended. Among the practical measures which are urgently needed are
the provision of more primary and secondary schools and the training
and settlement of a greater number of school teachers in these areas.
TRADE UNIONS

It is important to bear in mind that trade unionism in Iran is of very
recent growth, and that the trade union movement is not united. It
will be recalled that the main division inside the trade union movement
is between the E.S.K.I. and E.M.K.A. organisations. In addition to
this, however, the oil workers' unions are virtually separate, though
links are now being forged between them and the organisations in other
industries. Trade unions are legally recognised in Iran and are given
certain important functions under the Labour Law, but it is obvious that
their members still stand in fear of arbitrary administrative action and
of dismissal or other forms of victimisation for their trade union activities.
From statements made to the Mission it appears that the fear is genuine,
though to what extent it is justified it is difficult to say.
It is unfortunate that the oil workers are not united among themselves.
There seems to be no compelling reason why the split in the organisation
in Abadan should continue or why there should be separate unions for
Abadan and Fields. It would be an advantage if there could be a single
union or federation for the oil workers in Abadan and if the organisations
in Fields could be associated with it. There are difficulties in the way
of maintaining contact between the oil workers in Abadan and those in

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

Fields, and even between the workers in the different parts of the Fields
area, but these could be overcome if there were a real desire for united
organisation and action.
Closer organisation and more effective action will presumably come
as the organised oil workers develop a greater measure of genuine trade
union activity. To do this, however, they will need to recognise that
the personal grievances of an individual are the problems of whole
groups of workers and that such problems should be decided according
to common rules or principles to be applied to all who are concerned.
The oil workers' unions—like other unions in Iran—also need more
experience in organising, in the conduct of union business and in the
formulation of policy, but such experience is not likely to be acquired
quickly.
Other factors which would encourage the growth of sound and
responsible trade unionism among the oil workers are a development in
the processes of collective bargaining (in which the joint departmental
committees could play an important educative role among representatives
both of the workers and of the management) and improvements in the
handling of differences and disputes. Here it is not so much a matter
of devising new machinery—since the existing machinery has not yet
been fully tested—as of encouraging the joint examination and discussion
of questions at all levels and thereby preventing differences from developing into open disputes.
Much could be done to assist the oil workers in improving their organisation and acquiring greater responsibility if closer contacts could
be developed between them and the trade unions of other countries.
They would benefit, in particular, from a closer knowledge of the aims,
purposes and methods of trade unionism as understood in other countries,
the successes, failures and lessons of trade unionism, and the methods and
procedures employed for the organisation and financing of unions, the
holding of union elections, the conduct of meetings and the formulation
and application of union policies.
One matter which seems to have caused deep feeling among the oil
workers' unions is their failure to secure a seat on the High Labour
Council at the conference held in December 1949 for the purpose of electing the workers' representatives to this body. As the voting at the Congress was on the basis of one vote per union the oil workers were at a
disadvantage and their candidate could only have been elected with the
help of a number of votes from other organisations. These were not
forthcoming. It is nevertheless desirable for the oil workers to be represented on the High Labour Council, since they are the largest single body
of workers in the country and constitute a high proportion of the total

CONCLUSIONS

labour force. Such representation could be secured if the other unions
were willing to give due weight to the claims of the oil workers. Alternatively it might be possible either to alter the basis of voting at the Congress or to amend the regulations concerning the High Labour Council
so as to reserve a seat for a representative of the oil workers.
LABOUR-MANAGEMENT RELATIONS

The provisions of the Labour Law concerning labour-management
relations are of great importance, since they embody the tripartite principle of discussion and decision in councils and committees containing
representatives of the Government, the employers and the workers.
The Law itself has only been in existence since 1946, and it is still too
early to express a confident opinion regarding its provisions, especially
as a number of changes are only now being put into effect. It is, however, clear that bodies such as the factory councils, the boards for the
settlement of disputes and the High Labour Council are needed at their
respective levels, though there may be room for differences of opinion
regarding their composition and their achievements.
In general it may be said that the setting up of these bodies was calculated to improve labour-management relations by making provision
for the regular discussion of labour problems at the plant and national
levels and by providing procedures for the settlement of disputes. The
factory councils give opportunities for discussing problems that arise at
the plant level; they appear to deal mainly with welfare problems,
grievances and minor disputes, though they are entitled to exercise certain
other functions, e.g., in regard to problems of production. The Mission
feels that the factory councils, whether in their present form or on a
more widely representative basis, should be encouraged, both because they
help to give the workers' representatives greater experience and responsibility and because they provide a channel through which the managements can give and receive information and opinions. The boards for
the settlement of disputes seem to be concerned mainly with complaints
regarding dismissals and with the fixing of minimum wages. The
Mission was not able to form a very clear opinion as to the suitability
of their composition and procedure, but it is obvious that some bodies of
the kind are needed at this level. Regarding the High Labour Council,
the Mission can be more definite. This body has apparently given most of
its attention to the preparation of draft laws and regulations, the fixing
of minimum wages, the application of labour legislation and the supervision of funds. The establishment of the High Labour Council was
an important development in such a country as Iran. The Council has

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

great responsibilities and considerable power, and its membership
therefore needs to comprise men of experience and ability who truly
represent their respective interests. It is to be hoped that the departments and organisations concerned will continue to participate fully in
its work.
Good results may also be expected from the joint departmental committees set up on the initiative of the Anglo-Iranian Oil Company.
These bodies bring the process of consultation right down to earth, so
to speak, since they deal with problems affecting the workers in each of the
various departments of the plant and comprise representatives who are
workers themselves. They may therefore be of great value in dealing with
problems which the workers understand and by which they are directly
affected. The joint departmental committees are not yet fully appreciated by the workers, however, and there is still some reluctance to
accept them. This is due in part to a natural slowness in understanding
the aims and methods of such bodies and in part, perhaps, to a certain
suspicion of them among the leaders of the unions. Nevertheless the
confidence of the general body of workers in the joint departmental
committees seems to be increasing, even if only slowly. At present the
workers' representatives tend to use the meetings of the committees too
largely for the ventilation of complaints and too little for putting forward
constructive suggestions, while the management places more emphasis
upon the explanation of regulations and questions of discipline than
upon the discussion of some of the more fundamental problems which it
would be desirable for the workers to understand. Further experience
of the working of the committees, however, will no doubt help to make
them more effective.
Generally speaking the Mission formed the impression that relations
between the Company and the workers, though not completely harmonious, are developing on the right Unes. Some of the suspicion which
grew up in the past has not yet been entirely dissipated. Relations are
for the most part friendly on the job and there is a marked mutual
respect among the workers and their immediate supervisors. It is not
surprising that difficulties arise in view of the numerous opportunities
for friction, and it is interesting to note that the complaints made against
the Company as an employer are fewer than those which relate to its
housing facilities, food and clothing schemes and health services. The
Company appears to be genuinely anxious to promote good industrial
relations, and in this respect its policy seems to have advanced considerably in recent years. Difficulties must still arise when such large numbers of workers are concerned, and when so many problems present
themselves. The Mission is confident that if political complications

CONCLUSIONS

could be avoided the relations between management and workers would
continue to improve.1
GENERAL OBSERVATIONS

It is necessary to emphasise once again that the petroleum industry
in Iran is a unique feature of the country's economic life. It should
also be made clear that it is an industry regarding which a great deal of
misinformation and misunderstanding prevails. The general population
knows little of the industry or of the conditions of its workers, and is
unable to compare its conditions with those in other industries. Having
regard to the great distances and to the difficulties of communication,
it is not surprising that relatively few people from other areas visit
Abadan and Fields to see things for themselves, but this does not suffice
to explain the extent of the misapprehensions. In view of the importance of the industry to the country it would be a public service if the
authorities and the press would take steps to provide the population
with more information regarding the true state of affairs in the petroleum
areas. The publication of factual material regarding conditions in the
petroleum industry in other countries would also be helpful.
At the risk of repetition the Mission feels it desirable to refer once
more to the general conditions of the country—its great size, its comparative isolation, its natural resources which are so difficult to exploit,
its extremes of climate and its retarded industrial and agricultural
development—all of which must be taken into account when the conditions
of the petroleum industry are being considered. The Mission would
also recall the widespread poverty, malnutrition and disease, the low
standards of housing, the inadequate educational facilities, the need
for improved health and medical services and the failure to develop many
of the public services, such as water supplies, sewage disposal and local
transportation. Against this background the working and living conditions of the oil workers appear as an encouraging example of what can
be done. Notable improvements have also taken place, of course, in
1
The International Labour Office has been informed that since the departure of
the Mission from Iran Mr. A. G. Mohammadi, who was one of the two Iranian
workers' delegates at the second session of the I.L.O. Petroleum Committee, has been
dismissed from the Company's service. Mr. Mohammadi was adviser to the Trade
Union of Workers of Khuzistan, and it appears that the Company took exception
to the manner in which he organised opposition to the dismissal of a number of
redundant workers. It also seems that he was obliged to leave the area by order of
the local Governor. The Office has had the advantage of hearing the views
of Mr. Mohammadi himself and of representatives of the Company and it has received
information on the matter from its correspondent in Teheran. The Office does not
consider that it is in a position to express any opinion as to the merits of the case.
It feels, however, that the action taken against Mr. Mohammadi, who was an adviser
to one of the trade unions, was regrettable even if the incident does not hamper the
development of improved relations between the Company and its workers.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

some of the other industries and these developments have been greatly
stimulated by the example of the factories set up by the Government.
The existence of unsatisfactory conditions in other industries and in
other parts of the country does not imply that the oil workers have no
cause for complaint. But the fact that such conditions are still so
widespread emphasises the great effort which the oil industry has
already made. It is true that the Anglo-Iranian Oil Company may be
better equipped than some of the other employers to deal with industrial
relations and with the social problems of its workers, and it is also true
that the Company has various conditions to fulfil under the terms of
its Concession, as well as moral obligations towards the country and
its people. But in a sound national economy it is necessary for progress
to be general and not to be confined to favoured industries or areas;
improvements in working and living conditions should therefore be
accelerated for all workers throughout the country. It is gratifying to
note that efforts are being made to bring about some of the much needed
improvements, e.g., through the machinery of the seven-year plan and
the services of the Ministry of Labour.
It seems to the Mission that there is a clear need for improvements
in the Labour Law and for a stricter enforcement of its provisions
throughout the country. The regulations for carrying out the intentions
of the Law are not yet adequate and there is a strong case for a more
effective system of labour inspection, which implies, among other
things, better facihties for the training of inspectors. The Ministry
of Labour, which is still in its infancy, needs to be given greater support,
and its services, both at the centre and in the localities, require considerable reinforcement.
Alongside the efforts to promote improvements in industry generally
there should be more adequate arrangements for contact and co-operation
between the Anglo-Iranian Oil Company and the authorities. The
Mission was struck by the large number of problems which are handled
by the Company, not only as an employer of labour but as a provider
of public services, and it felt that there was an urgent need for more
representatives of the national and municipal authorities to be co-operating in the solution of these problems with officials of the Company at
the various levels. It seemed to the Mission that there was a good deal
of misunderstanding regarding the nature and extent of the problems
and the efforts made to overcome them, and that this should be dissipated in the interests of all concerned.
In this connection the Mission would point out that the Government
of Iran is^strongly critical of the Company's policy and activities in
regard to some of the problems mentioned in the preceding paragraphs.

CONCLUSIONS

The Mission has attempted to describe the situation objectively and to
give an honest opinion on every point. It has not hesitated to express
approval when it was favourably impressed or to draw attention to
matters in regard to which more energetic action might be taken or a
different policy pursued. It realises, however, that the Government
might not be disposed to endorse all the favourable comments made by
the Mission and that in regard to some of the subjects it would go much
further than the Mission in criticising the Company's policy and actions.
Furthermore, the Mission is aware that on certain questions the Government takes a different line from the Company with regard to the division
of responsibility between the Company and the authorities. For these
reasons it would emphasise the view expressed in the preceding paragraph
regarding the need for dissipating misunderstandings.
Among the subjects on which divergent views exist are wages,
housing, food supplies, health services and education. The Company
feels that it is fulfilling its obligations in regard to these matters and
that in some cases it is doing more than can reasonably be expected of it,
though it admits that there are still problems which have not yet been
satisfactorily solved. It claims, moreover, that in some instances the
responsibility for action lies with the country's authorities, though it is
willing to co-operate in such action where possible and appropriate.
On the other hand, the Government feels that the problems of the
petroleum areas have been created by the operations of the Company,
that the Government has already incurred heavy expenditure in these
areas, and that it cannot be expected to expend more money and effort
on what it considers to be a vast factory called into being by the
Company. The Government maintains that the Company should pay
more attention to the problems of housing, health, food supplies and
education in the petroleum areas and that the Company has the main
responsibility for supplying the needs of the workers and the general
population. In view of the important issues involved, the Mission
expresses the hope that these and other unresolved questions will be
further discussed between the Company and the authorities at all levels,
and that all their aspects will be kept constantly under review.
Suggestions were made to the Mission by Government officials in
Iran to the effect that a comparative study of some of the economic
problems of the petroleum industry and of certain aspects of the industry
in the producing countries, such as the problem of wages and that of
royalties payable to the Governments of the countries concerned, would
be of considerable importance and it would seem that consideration
might well be given to the possibiHty of undertaking studies of
this kind.

LABOUR CONDITIONS IN THE OIL INDUSTRY IN IRAN

Finally, the Mission is aware that many of the problems dealt with
in these pages exist in other oil-producing countries as well. It feels
that the possession of more information about the conditions in these
countries would be helpful to all who are interested in the welfare of
this important industry. Studies of these problems would help to
establish the facts, to clear away misunderstandings, and to encourage
further progress. The Mission hopes that it will be possible for such
studies to be undertaken.
To sum up, the Mission feels that the following subjects might well
receive further attention from the parties concerned :
1. Control of prices of essential commodities in Abadan and Fields.
The provision of greater quantities of such commodities by increased
production in these areas and by increased imports.
2. Working conditions on disagreeable and dangerous processes.
3. Issue of regulations for the application of the social insurance
provisions of the Labour Law.
4. Establishment of joint safety committees.
5. Wages and conditions of employment of contract labour.
6. Acceleration of the Company's housing programme.
7. Revision of the points system for allocating quarters provided by
the Company.
8. Encouragement of house building for oil workers by the Government and the local authorities.
9. Control of rents in areas where housing accommodation for oil
workers is inadequate.
10. Continuance of the Company's scheme for the supply of commodities.
11. Organisation of co-operative societies among oil workers.
12. Extension of the Company's medical services.
13. Provision of more extensive public health services by the authorities in Abadan and Fields.
14. Provision of more primary and secondary schools in Abadan
and Fields. Training and settlement of a greater number of school
teachers in these areas. Continued close collaboration between the
Company and the authorities in these matters.
15. Promotion of trade union unity among the oil workers.
16. Assistance to oil workers' unions by the unions in other countries.

CONCLUSIONS

17. Development of collective bargaining processes and improvements in the methods of handling differences and disputes.
18. Representation of the oil workers on the High Labour Council.
19. Encouragement of the work of the factory councils.
20. Development of the activities of the High Labour Council.
21. Extended use of joint departmental committees.
22. Provision of more factual and objective information regarding
conditions in the petroleum areas of Iran and other countries.
23. Improvements in the Labour Law. Stricter enforcement of the
provisions of the Law. Development of a more effective system of
labour inspection. Training of labour inspectors.
24. Strengthening of the Ministry of Labour.
25. Closer co-operation at all levels between the Company and the
authorities.
26. Further discussion of unresolved questions between the Company
and the authorities.

PUBLICATION OF THE IliTERiiflTIOIIflL LABOUR OFFICE

Freedom of Association
and Conditions of Work in Venezuela
Studies and Reports, New Series, No. 21
The report of the mission sent by the International Labour
Office to Venezuela at the request of the Venezuelan Government
(22 July - 1 September 1949). The two main problems dealt with
are the position of trade union organisations in Venezuela and
conditions of living and employment of Venezuelan workers. The
conclusions arrived at by the mission are given in the last chapter.

CONTENTS
CHAPTER I.

General Survey.
Topography and Climate—Population —Development of the Petroleum Industry—The Governments of López Contreras and Medina
(1936-1945)—Democratic Action Party in Power (1945-1948)—The
Coup d'état of 24 November 1948.

CHAPTER I I .

The Position of Trade Union Organisations.
The Trade Union Movement prior to 24 November 1948—Legal Status
of Trade Unions prior to 24 November 1948—The Trade Union
Situation after the Coup d'état—Dissolution of Trade Union Organisations—Reorganisation of the Trade Union Movement.

CHAPTER I I I .

Living Conditions and Conditions of Work.
Labour Legislation—Collective Agreements—Social Security—Labour
Inspection—Dismissal of Workers—Views of Workers and Employers.

CHAPTER IV.

Conclusions.

Present Position of the Trade Union Movement—Living Conditions
and Conditions of Work.

Geneva, 1950. 185 pages

Price : $1; 6s.