China’s Exportation of Labour Practices to Africa

Poster from http://www.iisg.nl/~landsberger/

China, the “world’s factory”, has started to move the factory floor off shore. Driven by a growing need for raw materials, an increasing consumer base and a desire to invest profits made over the last decade, the Chinese Government, as well as private Chinese companies, are looking to invest outside of China. In particular, China and Chinese companies are investing heavily in Africa.

However, along with Chinese investments, Chinese companies are bringing Chinese labour standards, including poverty wages, cutting corners on occupational health and safety and refusing basic workers rights, such as the right to collectively negotiate through an independent trade union.

The global union movement faces a massive new challenge as China attempts to export its labour practices.

This paper will consider China labour practices in Africa. This paper will:

• Give an overview of China’s investment in Africa, including China’s role as employer and Chinese labour in Africa;

• Consider labour standards in Chinese Companies in Africa focussing on wages, workers’ right to join an independent union and occupational health and safety; and

• Note local responses to Chinese Companies

1.         BACKGROUND

  1.2 China’s investment in Africa

By way of background to Chinese labour standards in Africa, it is important to understand the nature and extent of Chinese investment in Africa.
 
President Hu’s February 2007 visit to eight African countries highlights the growing importance of Africa to Chinese investment. Between 2002 to 2006 Sino-African trade more than quadrupled to greater than $55 billion, and is expected to hit $100 billion by 2010. [NOTE 1]

China’s clear and ongoing efforts to establish good relations with African governments illustrates the importance of Africa to Chinese investment. In November 2006 Beijing held a summit meeting attended by almost every African head of state. In February 2007 President Hu toured eight African countries.

Much of China’s interest in Africa stems from its hunger for raw materials. Africa now supplies one third of China’s crude oil imports [NOTE 2] . Chinese owned Companies in Africa are also involved in the extraction of copper, uranium and rare metals.

Chinese investment in Africa is often accompanied by Chinese aid, leading some commentators to remark that China provides aid to secure lucrative mining contracts. [NOTE 3] There are currently more than six hundred Chinese infrastructure projects in Africa, many of which are attached to resource extraction agreements.

 In any event, China is a major supplier of aid to Africa. In 2006 China announced it would provide US$10 Billion assistance to Africa from 2006 -2009. [NOTE 4] It is worthwhile making a number of comments in relation to Chinese investment and aid in Africa.

First (and probably most obviously) Chinese investment and aid is often desperately needed and sought by African countries, and often plays and important role in the economic development of an African country.

Second, Chinese investment and aid in Africa has attracted criticism from human rights groups as China is prepared to turn a blind eye to the activities of Governments in the receiving countries. For example Ben Schiller notes in regard to Chinese oil investment in Sudan [NOTE 5] :

“Because much of the world’s prime oil supplies are already under contract, China is turning to countries which (for reasons of human rights or ideology) are currently out of favour with Washington. Chinese oil companies have invested at least $2 billion in Sudan – ignoring US sanctions, the genocide in Darfur, and a full-scale divestment campaign from NGOs. Sudan now accounts for at least 5% of China’s oil imports, and Chinese investment is said (by Human Rights Watch, among others) to be funding arms imports, and a local arms industry based on Chinese technology.”

In fact, China’s investment in Sudan has lead to some groups calling for a boycott of the Beijing 2008 Olympic Games. On 9 May 2007, 106 members of the United States Congress added strength to the boycott calls by warning China that it faced a potential backlash if it did not use its influence in Sudan to help curtail the violence. [NOTE 6] In response to this criticism China has recently appointed a senior diplomat to focus on Darfur.

In addition to aiding oppressive regimes, China’s “no strings attached” aid has been criticized on the basis that it is said to undermine local efforts to increase transparency and good governance supported by international regimes and development institutions. For example Chines aid to Angola has enabled Angola to resist pressure from IMF to improve transparency in oil sector. [NOTE 7]  

Third, there is growing concern from both within and outside Africa regarding the unequal bargaining positions of China – a burgeoning world power - and the poor African countries it choses to invest in. South African President Thabo Mbeki has repeatedly cautioned that China risks replicating in Africa a “colonial relationship” of the kind that existed under white rule. [NOTE 8]

For the purposes of this paper, we note that a country which is reliant on China for desperately need funds may be inclined to turn a blind eye to oppression of labour rights, and to indeed, assist companies oppress labour rights.

1.2. Chinese Companies in the role of Employer in Africa

Both State and privately owned Chinese Companies are operating as employers in Africa in a wide range of industries and business.

Chinese State owned companies are involved in the extraction of raw material through out Africa. Of particular importance are the three State owned oil Companies - China National Petroleum Company (CNPC), China National Offshore Oil Company (CNOOC), and China Petroleum and Chemical Corporation (Sinopec). Chinese oils are most active in Sudan, Angola, Nigeria, Algeria and Gabon, with pre-investment talks ongoing in Chad, Libya, and the Central African Republic. [NOTE 9]

Chinese owned construction and engineering Companies are also involved in constructing roads, bridges, dams, schools and other projects arising out of integrated aid packages. (China has even announced the building of a labour college for the Organisation of African Trade Union Unity. [NOTE 10] ) Chinese aid is often conditional on Chinese Companies receiving lucrative contracts. For example in Angola, when a project is reliant on assistance from China, China is only obliged to contract 30% of the work to domestic companies. [NOTE 11] The fact Chinese companies are guaranteed contracts as a result of integrated aid packages has attracted criticism in Africa from commentators who believe African companies should be benefiting from national infrastructure projects.

In addition to extraction of raw materials and implementing aid packages, privately owned Chinese companies are establishing business in everything from fishing to textiles to bamboo furniture to restaurants, shops and hotels.
 
1.3. Importation of Chinese Labour

It is worth noting that Chinese companies, particularly those involved in construction, often import Chinese labour. As Schiller notes [NOTE 12] :
“Another feature of Chinese investment overseas is the use of Chinese rather than local workers. Thousands of Chinese labourers and engineers have been imported to build Ethiopia’s $300m Takazee Dam. In Sudan, Chinese workers have constructed an oil pipeline; 74,000 Chinese remain in country, 10,000 employed by CNPC. Chinese workers are also being used in Namibia, Zimbabwe, and a host of other African states.

The use of Chinese labour has created considerable resentment in African countries where unemployment remains a significant problem. [NOTE 13]
Chinese labour is preferred over local labour, partly for skills and to avoid the cost of training African workers. However Chinese labour is also preferred because Chinese workers have no experience free trade unions and are unlikely to complain about working conditions.[NOTE 14] Imported Chinese workers are often subjected to dismal labour conditions, including being housed in dormitory style buildings on the outskirt of town. [NOTE 15]

2.         LABOUR STANDARDS IN CHINESE COMPANIES IN AFRICA

Chinese companies in Africa often pay dismal wages and have substandard conditions. In this paper we consider low wages, violation of workers rights relating to freedom of association and sub-standard safety conditions.

2.1 Low Wages and Conditions  

Information from a variety of industrial sectors throughout Africa suggests Chinese Companies pay amongst the lowest wages in the continent and generally less than other foreign investors.

In Zambia, miners say that Chinese Companies have lower pay and working conditions than other foreign companies. [NOTE 16] Workers in Chinese mines are getting paid as little as $100 a month. In comparison the lowest paid miner at the Konkola Copper Mines, Zambia’s largest producer, earns $424 monthly. [NOTE 17]

There are also reports that the Chinese owned textile Company “Zambia China Mulungushi Textiles” pays low wages and mistreats employees.  [NOTE 18]

In Nigeria, factory workers at the Chinese owned CWAY Food & Beverages company and CWAY Nigerian Drinking Water, are paid just 7 000 naira (equivalent to 426 yuan or 42 Euros) per month.  In comparison managerial staff earn 35 000 naira per month, and Chinese managerial staff earn 700 US per month (5 420 yuan). [NOTE 19]

In August 2006, employees from the wire manufacturer, Nigerchin, took industrial action against, amongst other things, poultry wages and long working hours (see below for more details of dispute). [NOTE 20]

The low wages and conditions also extend to Chinese small business. In Botswana security guards working in Chinese shops have complained about being underpaid and having to work 12 hour days . [NOTE 21] A sales man working in a Chinese grocer's shop in Lusaka, Zambia claimed "We are not allowed to go for lunch every day, and yet we only get 180,000 Kwacha [$40] every month. We are not given any transport or housing allowance." [NOTE 22]
 
Chinese companies have also been reported to rely heavily on casual labour.  [NOTE 23]

2.2 Violation of Freedom of Association

In China, free trade unions are illegal, and labour activists are often detained. Chinese companies are used to working in an environment where low labour standards meet little resistance from workers. In comparison, many African Countries have a strong trade union history. The information available makes it clear that Chinese Companies in Africa intend to continue their practice of prohibiting free trade unions in Africa. 

In Nigeria the Chinese owned company CWAY Food & Beverages Company and CWAY Nigerian Drinking Wager sacked its entire workforce in October 2005 following workers agitating for the establishment of a union. [NOTE 24] In June 2006, Nigerchin, another Chinese company in Nigeria attempted to force all employees into a Union of the company’s choice. When employees refused to change unions, the Company reportedly sacked approximately 100 workers and required them to reapply for their jobs. [NOTE 25]

The 2006 Annual Survey of Violation of Trade Union Rights noted that Chinese Companies in Swaziland had engaged in severe anti union behaviour. The report notes : [NOTE 26]

“..Chinese owned textile companies, in particular Brand Knitting and First Garments, have violated freedom of association by refusing to recongnise trade unions; surveillance of activists both in and outside work by hired security staff; victimisation of activists and representatives and known union members; a ban on workers gathering in groups during breaks, and physical assaults by security guards..

The authorities appear to be colluding with the Chinese factory owners. On several occasions, police have beaten up workers at shop floor level when they approached the employer with their demands, or have fired tear gas and rubber bullets at workers. Police officers at the Zheng Yong factory received bribes or rewards for brutalising workers.”

2.3 Occupational Health and Safety

Workers report that Chinese Companies have lower occupational health and safety standards than other foreign companies. [NOTE 27]

As noted above under 2.1 Lower Wages and Conditions there are numerous reports of long hours of work with no break. Chinese Companies have also been known to lock employees in the factory during night shift so they cannot leave work or steal merchandise. On 16 September 2002, it is reported that 29 workers on night shift at the Chinese company West African Rubber Products Company Ltd were burned death because they were locked inside the factory without any outlet in case of emergency. [NOTE 28]

As in mainland China, Chinese mining companies have an atrocious reputation.  There are reports about employees being sent under ground with no protective clothing. [NOTE 29] In Zambia some employees have been forced to sign forms before going underground to declare that they are working at their own risk, so that there will be no compensation in case of an accident. [NOTE 30]

Perhaps the most infamous mining disaster involving a Chinese company is the explosion at the China Non-Ferrous Metal Mining (Group) Co in Chambishi, Zambia in April 2005 which killed approx 50 Zambian workers. [NOTE 31] Following this disaster the Company bowed to public pressure and allowed the establishment of a free trade union, in part to address safety issues. However, the Company continued to employ workers on substandard conditions. On 24 July 2006 a protest broke out when employees not paid as expected. As a group of approximately 40 employees approached the residential compound of Chinese employees a Chinese supervisor fired on the approaching crowd. Four employees were hit and wounded. The Chinese supervisor left Zambia the next day. The wounded employees were sacked. [NOTE 32]

3.         AFRICAN RESPONSES – COMMUNITY RESPONSE AND INDUSTRIAL ACTION

As noted above, Chinese investment in Africa, particular when Chinese companies are given lucrative contracts instead of African companies and Chinese labour is used instead of local labour, has resulted in considerable resentment in African communities. This resentment has been tapped into by a number of African politicians and has put pressure on African governments to respond to exploitative labour practices of Chinese companies.

Zambia provides a clear example of where Chinese companies are coming under increasing pressure to improve labour standards. In the run up to the Zambian election in 2006, the opposition leader Michale Sata made China’s investment in Zambia a campaign issue. As IRIN notes, while Sata was undoubtedly drawing on racist sentiments “the campaign proved effective, and resulted in a win for Sata in Lusaka and Copperbelt, the two most prosperous provinces, where the Chinese presence is very strong”. [NOTE 33] In June 2006 the Zambian Government shut down the Chinese mining company Collum Coal Mining Industries Ltd on the grounds that miners had been forced to work underground without safety clothing and boots. In February 2007 President Hu had to cancel a visit to Chambishi to announce a $20 million investment in a copper plant following reports that miners and families of deceased miners planned to demonstrate.   [NOTE 34]

African workers and local trade unions have also played an important role in reacting to labour conditions in Chinese companies. This is of particular significance considering many Chinese companies would not have come up against free trade unions in China.

In June 2006 employees of Niggerchin (Nigeria) went on strike for two months following attempts by the company to force employees into a company chosen trade union. What was the outcome of the dispute?

In early February 2007 “workers of the Zambia- China Mulungushi Textiles, the country’s largest textile mill, protested outside the Chinese embassy to complain about poor wages, mistreatment and the temporary closure of the plant because of massive losses” . [NOTE 35] What was the outcome of the dispute?.

CONCLUSION

Research indicates that China is exporting poor labour conditions to Africa. Of course we hasten to add that China and Chinese companies are certainly not the first to exploit African workers and impose poor labour conditions in Africa. In many ways Chinese companies are simply following the lead of many trans-national corporations which have operated in Africa for decades. However, there are two notable differences.

Firstly, some trans-national corporations have come under pressure from human rights activists and consumer campaigns regarding treatment of workers both in China and Africa. This has led to a number of trans-national corporations adopting corporate social responsibility policies which have lead to some improvements in labour conditions in developing countries. In contrast, considering the Chinese government accepts poor labour conditions in China, Chinese companies are unlikely to bow to pressure from human rights groups. Indeed, Chinese investment in countries such as Sudan and Zimbabwe suggests China is not concerned by pressure from human rights organisations in relation to investment in Africa.

Secondly, in China free trade unions are illegal and labour activists are often detained. In comparison, many African Countries have a strong trade union history. Research discussed above indicates that Chinese companies are intent on prohibiting free trade unions in their businesses in Africa. The Union movement should place great importance on ensuring Chinese companies do not succeed in banning free trade Unions in companies in Africa, as this will no doubt have an impact on Unionism throughout Africa (and possibly the world). On the flipside, if the Union movement can succeed in establish free Trade Unions in Chinese companies in Africa, this may greatly assist the free Trade Union movement in China.

NOTES

Click here for the ITUC's Annual Survey of violations of trade union rights