ACFTU and Trade Unions

Guangdong Provincial ACFTU finds itself in muddy waters

Guangdong ACFTU - A champion of the workers or of the bosses

The ACFTU has long been recognized as a complex organization by the international trade union movement. Its role as promoting and protecting the government and the Communist Party’s rule in China is widely recognized as problematic for developing its role as a protector of workers rights and as a stumbling block in efforts to fit in with China’s neo-capitalist economy.

The Pearl River Delta is often seen as a portent for changes that will take place in other regions of China. Its proximity to Hong Kong, the relative depth and variety of labour rights groups, the long history of its special economic zones and private enterprise and the ensuing vibrancy of its worker protests and organizing mean that the local ACFTU has been exploring its new roles for a good few years now.  However May 2008 saw the division between rhetoric and reality in the ACFTU emerge quite clearly with on the one hand an “historic” meeting between the Guangzhou Municipal banch of the ACFTU and the San Mateo Labor Council’s Airport Labor Coalition [http://www.ilcaonline.org/ht/display/ArticleDetails/i/69522] discussing a “new breed of union officials dedicated to improving the rights of workers” and on the other hand a pronouncement by the Guangdong Provincial ACFTU that a recent report into labour rights abuses at a prominent printing company were part of a western campaign to discredit China after the Lhasa riots and before the Olympic Games.

NGO vs. Corporate

On 12 April 2008, a report focusing on labour rights abuses at five Hong Kong listed companies operating in China was issued by a Hong Kong based labour group; SACOM (Students and Scholars Against Corporate Misbehavior). The report looked at Nine Dragons Paper Holdings Limited(2689HK), Hung Hing Printing Group Limited (0450HK), Dream International Limited (1126HK), two mainland factories Fuda Manufacturing Enterprise (making plastic covers of mobile phones for Nokia) and Xinsheng Shunjing Manufacturing Enterprise (a handbag factory).

However, the majority of the criticisms were targeted at Nine Dragons, the biggest paper maker in China and its founder and director, Zhang Yin (also known in Hong Kong as Cheung Yan) who was the first woman to top the list of richest people in China with a net personal worth of US3.4 billion. In January 2008 Zhang was elected to the Chinese People’s Political Consultation Conference (CPPCC) under the category of “returned overseas-Chinese” but has been a member of the body since 2003, at that time, under the category of “news and publication”).

Staring from early 2008, Zhang has been high profile in attacking national policies on labour protection, stating that “from a developmental perspective, a nation cannot be rich without the polarization between rich and poor” and “if the law over protects the labour, [then] the corporate cannot function”. She has also attacked the new labour contract law and argued that a “labour contract without a fixed period is equal to the iron bowl policy of the planned economy, giving pressure to the capitalist and unskillful labour”.

In March 2008 Zhang put forward a proposal to the ongoing session of the CPPC which contained three controversial parts. She proposed to amend the Labor Contract Law, which was put into effect in January 2008 to exempt labor-intensive companies from signing permanent contracts with their employees who have served the company for more than 10 years. Her second proposal was to cut personal income tax from 45 to 30 percent for people earning more than 100,000 Yuan (about US$14,000) a month and  finally she proposed that the government to lift the duty levied on imported environmental remediation facilities for five to seven years. Her proposals met with much criticism but some limited support.

Her criticism of the new labour contract law caused the Guangdong provincial ACFTU to propose her to meet and discuss. However the meeting never was conceived as Zhang reportedly said meeting with ACFTU was unnecessary and she had no time available.

Then the SACOM report came out, exploring a number of  deadly industrial accidents at Nine Dragons’ plant in Dongguan and the subsequent fining of workers for being so “careless” as to get involved in accidents.  The report found poor and unsafe working conditions and extensive fining systems. The report further said that half of Nine Dragons’ employees were employed as temporary workers without any contract or benefit. In order to avoid the labour contract law, Nine Dragons subcontracted temporary workers to labour services agencies under even worse conditions. [NOTE 1]

According to Sacom’s interviews with workers at the Nine Dragon’s Dongguan factory, on 13 December 2007, about 2,000 workers of the stockyard department went on strike for three days because the factory management deducted their wages in September, October and November, forced them to sign a labour contract with a labour dispatching company at a lower wage level and wrote off their years of employment (the wage offered by the new contract signed with the labour dispatching firm was only 960 yuan per month , much lower than 1,500-1,700 yuan per month in the past). The workers caused a traffic stoppage by blocking the highway in front of the factory. Additionally Sacom reported that workers from the Nine Dragons plant in Taicang told them that at the end of 2007, about 500 workers from the raw materials department organized a strike for four days against the company’s arrangements of labour contracts. The two strikes were not triggered by the new Labour Contract Law but instead caused by the factory management’s illegal move to wipe clean the workers’ employment year record and withhold or deduct wages unreasonably.

The mainland Chinese media then picked up the news. One newspaper   sent a reporter to the Nine Dragons plants, interviewed workers and took pictures of the plants, confirming Sacom’s reports poor & unsafe working condition, long hours and similar problems.   [NOTE 2]

Two weeks after the report came out, on 23 April; Zhang Yin herself broke the silence and denied all accusations made by Sacom. She then counterattacked the report and called Sacom part of an anti-Beijing Olympic game movement. Referring to Sacom she stated; “that organization is very powerful, it got money from Europe and sent the report around. They told our big clients not to buy from us. They are doing it to (spoil) the Olympic Games. We are one of their targets.”  According to an interview with Netease, a mainland web-newspaper.

In response, Sacom admitted they got European funding giving the name of one of their Swiss funders but stating that; “ our sources of funding never intervene in our research… we have done research on HP, Apple, Nokia… our focus is on labour conditions… Nine Dragons and the Olympic Games have nothing to do with each other… does criticism of Nine Dragons equal being anti-Olympic? ”Parry Leung, the spokesperson of Sacom said.

ACFTU’s stand questioned

The battle between Sacom and Nine Dragons escalated when the Guangdong ACFTU stepped in. Since late April, the ACFTU has defended Nine Dragons on several occasions and as a result generated much criticism.

On 21 April, nine days after the report was first published, the Guangdong ACFTU received a copy when Sacom asked the union to investigate. The ACFTU at the township, Dongguan municipality and Guangdong provincial levels, all visited Nine Dragons, including the vice chairperson of Guangdong provincial ACFTU, Kong Xiang Hong, who made a visit on 24 April. Although Kong Xiang Hong admitted that Nine Dragons had violated the labour law but not on a ‘serious scale’:

 “[The penalty of a minimum fine of 300 Yuan in] the factory’s old rule book violated the labour law, Nine Dragons has noticed this problem and is about to correct it. They plan to refund those workers who were subjected to fine” stated Kong who also judged that Nine Dragons was not a “sweatshop” as Sacom described. “To the trade union, a sweatshop has to meet all four criteria, namely refusing to sign contract with workers, failing to provide labour insurance, forcing workers to work overtime, and providing poor, unfair working conditions. Yet Nine Dragons is not that bad.” Mr. Kong said after his visit.

Kong Xiang Hong, for the first time also arranged a meeting with three student-representatives from Sacom in the Guangdong ACFTU office on 12 May.  After the meeting, Kong analyzed Sacom’s accusations and told local reporters that “it is true that Nine Dragons’ management is problematic and to a certain degree, hurting the workers’ rights and interests. But its seriousness and intention are not reaching the degree of sweatshop. Sacom’s research method is rather limited, and therefore its conclusion is not entirely fair.” Sacom expressed its gratitude for the ACFTU’s willingness to investigate and explain and stated that it would give a further reply after it double checked the evidence.

On 26 May, ACFTU delivered its final judgment. It criticized Nine Dragons’ managerial skills but insisted that Nine Dragons generally speaking, was a relatively good enterprise. He then condemned Sacom by stating that it had been sponsored by some “human rights foundation” to conduct their research.

“After the report’s launch, [Sacom] called for a boycotting Chinese sweatshops and criticized human rights in China. Their timing is matched to the calls from those western forces’ after the violence in Lhasa, [the sweatshop issues] have become the ‘bombs’ for them to attack China’s human rights problem.” Mr. Kong told the journalist.

He even said, as further evidence of the alleged link between Sacom and a hostile “western” campaign against China that he had received information that before the Olympic torch reached Guangdong and Shenzhen, an unnamed anti-China international organization, together with a Hong Kong Trade Union, would distribute leaflets about “sweatshops”. “Can you still call this a coincidence?” He added that companies should be monitored, but the investigators should not exaggerate the facts. “Some Hong Kong trade union people [i.e. the HKFTU] told me that the whole case [of Sacom’s motives] is very complicated.”

Public reaction to the ACFTU’s defence

Kong Xiang Hong and the Guangdong ACFTU’s high profile defense of Nine Dragons comes with a cost.

Responses online to the ACFTU report included the following questions (translated by IHLO)

Q1: “How come the ACFTU acted like a trade association defending its member? What is its interest there?”
Q2: “ACFTU’s officials went openly into the factory, what did they expect to find out? Sacom did it over two months by undercover investigation. Whose methodology is more trustworthy?”
Q3:  “Let me draft a questionnaire. Do you think ACFTU is an accessory? Do you think ACFTU really speaks for the workers? Use your work experience, can you tell us under the protection of the biggest trade union in the world, if you have ever sought help from ACFTU or ACFTU has ever helped you?”  [NOTE 3]

Within 24 hours of ACFTU’s release of its investigation, online forums on the mainland received more than 100 comments. These were later temporarily unavailable (“harmonized” to use a popular term for censorship).Some comments complained that “oh yes, Nine Dragons isn’t that bad. I am in a worse factory; it’s just that nobody comes to check.” But the majority of netizens expressed doubts and even outright criticism of the ACFTU’s investigations. “If you would trust ACFTU that means you would believe that pigs could climb trees” one netizen wrote. “Well even if pigs could climb trees, it still doesn’t mean that ACFTU would be trustworthy.” Another netizen replied in a humorous manner. “Did ACFTU receive money from Nine Dragons?”, “Total nonsense. Nine Dragons has already cleaned up everything before the ACFTU came. Of course it [ACFTU] can’t call it a sweatshop if it sees only the bright side. With the ACFTU’s method of investigation, we workers are doomed.” [NOTE 4]

Even the Hong Kong newspaper Mingpao, which usually does not cover labour issues, wrote, “as the Guangdong provincial trade union, it looks so odd for it to defend a so-called sweatshop factory. It looks even stranger for a country which calls workers’ class as its owners… but those who are familiar with China’s political system would understand why it is like this. Big companies are often the treasures of the local government. Their production, taxation and even employment are highly related to the local officials’ prospect. If the media created negative impact of a company’s profit, local officials could be as worried as the companies… so no surprise then that ACFTU, as an subsidiary organ of the local government, acts like that” [Mingpao 27 May]

Contrast with General Electric

One month earlier, in April 2008, a US group called Policy Matters Ohio published a report with allegations of overwork and underpayment of Chinese employees at a General Electric supplier making light bulbs - Xiamen Topstar Lighting Co. Ltd  The report resulted in similar visit to the joint venture plant by local ACFTU officials. In this case however the ACFTU found that general Electric “seriously Violated China's Labour Law” and called on the Labour department to punish the company for its labour law infringements.

The difference between the two investigations are remarkable even though it is apparent, on reading the original research, that working conditions and issues such as low wages were in fact remarkably similar in the two cases – except that Topstar were accused specifically of underpaying local workers after local media began their own investigations into the factory. This issue then became a major concern inside China. This particular issue and the fact that the owner of Nine Dragons is a well known domestic tycoon and member of the CPPCC while Topstar is a joint venture with a foreign MNC may or may not have influenced the final results. Possible…but also possible is that the two responses are simply different reactions of different ACFTU branches and officials with different political sensibilities and outlooks. The problem is that no one really knows.

That the Guangdong ACFTU met with a Hong Kong labour rights group is a step forward – that it also defended a major employer is however evidence of the long road ahead for reform within the ACFTU. Indeed in late 2007, that the local ACFTU in Shenzhen visited Huang Qingnan, the labour activist who had been brutally stabbed in Shenzhen was also a major step forward, but the fact that they offered him tacit official support for the continued work of his rights centre in return for silence and the ending of communication with overseas groups again highlights the often contradictory nature of ACFTU moves to remake itself as a proper trade union.  While the ACFTU is changing we must be aware that it is a debated and politically sensitive area.

IHLO
May 2008

NOTES