ACFTU and Trade Unions

Recent ACFTU Activity: Collective Contracts and Campaigns[August 2008]

There has been a spurt of reported activity in the past few weeks concerning the ACFTU, especially in relation to ACFTU branches at Wal-Mart which remain the ‘poster child’ of the ongoing government backed ACFTU campaign to “unionize” foreign MNCs and increasingly the Fortune 500 companies.

Much has already been written and this update is designed to give a brief overview of the most useful articles as well as summarizing the key points.

Wal-Mart

The starting point for the new reporting on the Wal-Mart unions began with the China Labour News Translations (CLNT) series of articles, which for the first time gave concrete details in English on four specific Wal-Mart branch unions by translating various articles and blogs from the internet:

The commentary starts: The trade unions in Chinese Wal-Mart stores are often dismissed as hollow shells set up by the All China Federation of Trade Unions (ACFTU) without workers’ involvement. But through monitoring Chinese media and online blog discussions among Chinese Wal-Mart employees, CLNT has found workers who take an active interest in their store union, and at least in one case, of an elected rank and file trade union chair using the trade union platform to actively defend workers’ interests. While most – if not all – of the trade union branches are heavily dominated by Wal-Mart management or local governments, some workers have seized this union-building exercise and try to turn the unions into a body that they identify as their own to protect and to use in their struggle against Wal-Mart management.

That the ACFTU managed to establish unions in Wal-Mart (and so many in such a short time frame) is clearly a success for the ACFTU, for the government and in some respects for Wal-Mart management itself, but not necessarily for the workers. The evidence, however small, that these union branches are encouraging workers to use them in struggles over pay and conditions is however a success and one of the few reasons for the international union community to support such “organizing” drives.   

In one of the most interesting pieces from CLNT, the Nanchang Bayi Wal-Mart union shows how Wal-Mart management successively tried – and succeeded – in getting the local union on its side causing the enterprise union to seek help – and succeed – from the national ACFTU headquarters.  This is a pattern of intra-ACFTU discord that we are seeing in many different cases. The local unions are deeply entrenched in local politics and business to resist or want to resist local management or indeed to support troublesome enterprise unions. Some enterprise unions then try to seek support from provincial or national level ACFTU leaders who are following more closely the general push towards reform. They do not always succeed and obviously some exceptions exist when the local branch is the more progressive.

“It has become a pattern that whatever Wal-Mart management does, the city-level union seconds it. Time and again Gao (from the enterprise union) had to seek help from the ACFTU in Beijing to issue instructions to overturn the city union’s decisions. Gao openly laments the stance taken by the middle levels of the union. It is rare for a low-level trade union chair to engage in this type of frank criticism.”

CLNT continues to say: The comments made in the blogs bring out clearly that most workers in China do not totally dismiss the ACFTU. They can be disappointed and cynical about Chinese trade unions, but there is no mention of a desire to set up an independent trade union. When given the space to struggle against management through existing legal and institutional structures, if competent and committed leadership emerges they are willing to rally around it.

Collective contracts at Wal-Mart

In July Chinese and overseas media reported on the signing of a collective agreement between local Wal-Mart managements and their respective union branches in various cities. The first begin Shenyang which saw an agreement around an eight percent wage increase. One China related Blog, China law Blog  talks about the agreement using an interesting Forbes Magazine article("Wal-Mart Strikes Pay Deal With Chinese Union) on the initial agreement with union branches in Quanzhou, Shenyang and Shenzhen.

Summing up they correctly state: …What happened to Wal-Mart is no surprise. It is just another step in China's efforts to move away from being a destination for foreign companies seeking super low paid workers. Just as with so much else in China, we are seeing foreign companies getting out in front in terms of going along with what China wants to do with its economy. Domestic companies are and will continue to follow in terms of having to deal with unionized and higher paid employees. … anybody who still thinks China will do anything for foreign investment is living in the past. Times have changed and China is getting more and more selective in terms of the foreign (and even domestic) companies it wants….

The original Forbes article highlights the “win win” nature of the agreement

Dave Orlins, president of the National Committee of U.S. China Relations, said the agreement is crucial to Wal-Mart's business. "To expand in China, one needs government support," he says. "This is what you should be doing in China."

And Wal-Mart knows as much.

" We support these efforts because of the valuable, mutually beneficial partnership the government-run union offers and because of their commitment to assisting businesses in our growth and development in China," said Kevin Gardner, a Wal-Mart spokesman.
On the first contract to be signed in Shenyang, one Xinhua article from July writes that “Ju Xiuli, chairman of Shenyang City Trade Union, praised the contract, saying it reflected Wal-Mart's commitment in fulfilling social responsibilities and its sincerity while implementing China's law of labor and contract.”

Contracts mushroom

In a further development showing the virus like nature of ACFTU work in a single enterprise – once management is amenable - since the original contract was signed on 14 July in Shenyang, a total ofNineteen Wal-Mart China branches have signed collective contracts with Wal-mart China trade unions. Interestingly, 16 of these are in Shenzhen. The agreements include the standard details of contracts, remuneration, working hours, insurance, welfare benefits, and training. And in Shenzhen at least, the enterprise unions will also be able to negotiate with the company about increased wages in December each year with the minimum wage higher than the local official minimum wage standard announced by Shenzhen municipal government.

Management has also reportedly agreed that the unions will provide a standard collective contract text - a joint agreement between the ACFTU and Wal-Mart headquarters for signing by all Wal-Mart branches (currently estimated at around 100)

China labour Bulletin adds from the Worker’s Daily that ACFTU Chair Wang Zhaoguo paid a high profile visit to Shenyang shortly before the first contract was signed highlighting the importance of the agreement for the ACFTU. The ACFTU claimed on its website that Wal-Mart was singled out for the collective contract campaign because, as a major Fortune 500 company, its initiative would spur other foreign invested enterprises to sign collective labour contracts too. CLB rightly points out that for the “process to be truly effective, unions at the grassroots level will have to vigorously represent the interests of employees and fight for the best deal possible rather than simply go through the motions of collective bargaining at the behest of their ACFTU superiors”.  

In tandem with the rash of signed agreements, two internal documents have been circulating which are indicating that the drive for collective contracts is increasing. Reportedly entitled "The Opinion on the Making of Collective Bargaining Offers" and "The Opinion on the Development of a Group of Collective Bargaining Instructors", the documents  give instructions for higher level unions to support enterprise unions in collective consultation and agreements including helping finalize salaries and financial details. The higher level unions are also asked to negotiate with the enterprise management if the enterprise union themselves are having difficulties and the higher level unions should also “organize and manage teams to assist with collective bargaining. Teams must consist of individuals who have experience in employment matters, such as teachers, lawyers, social workers and managers from other companies.” (Baker and Mackenzie)

Commentaries

One US blog article entitled:  Wal-mart subdued by Chinese unions: An embarrassment to U.S. unionists, leftists” misses the point. The successful completion of the ACFTU-Wal-Mart agreement is a success for Wal-Mart and the Chinese government, through the ACFTU. At least however, unlike other past successes - such as the initial “organizing” at Wal-Mart, this agreement does provide some improvement for workers on the ground.

A particularly good article from the Financial Times shows clearly the different roles and status between the ACFTU and labour NGOs /labour activists. One quote in particular stands out when interviewing a prominent labour group head who states;   “”Union organization "is a sensitive subject", Mr. Zhang says. "We would like to [help workers organize] but that's the government's job. We are just trying to make workers more aware of their legal rights." [emphasis added]  

ACFTU in other Companies

In another interesting development the ACFTU at a local level followed up on two NGO reports detailing labour rights abuses at Chinese factories. One was from the Hong Kong Based group SACOM which IHLO covered earlier. The other was from a US-based group PMO which detailed abuses at a General Electric joint venture.

Nine Dragons: The ACFTU “investigation” into (coming after much media coverage) reports of abuses at Nine Dragons (printing and paper) ended when in May the local ACFTU delivered its final judgment. It criticized Nine Dragons’ managerial skills but insisted that Nine Dragons generally speaking, was a relatively good enterprise. The official then stated, in reference to the labour rights group that, “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.” As further evidence of the alleged link between Sacom and a hostile “western” campaign against China he stated 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.”  See IHLO report which also gives details of the local reaction to the ACFTU statements.

General Electric: After a US group (PMO) issued a report on conditions on the GE joint venture Xiamen Topstar Lighting Co. the ACFTU, again after initial media coverage and investigations also investigated the company. A union official told local media that ACFTU would ask Xiamen Topstar Lighting Co. Ltd, a joint venture company of General Electric in Xiamen, China to rectify its work hours and fulfill payment to employees for overtime work and would also suggest the labour department and law enforcement department issue a punishment to the company for its violation of Chinese labour law. The report is here

Note: Nine Stars is owned by an NPC official and one of China’s richest women

Nestle: The China Daily writes that Nescafe Co Ltd in Dongguang, south China is also currently being investigated by the local municipal ACFTU after news that the Nestle Dongguan company had kept the same union chair, which is also the head of the Chinese operation for over 12 years.  One former Nestlé employee allegedly reported the company to the municipal union branch after he was sacked for calling for the election of a new enterprise union. In the report, a municipal union official is quoted; “We have received complaints from some of Nescafe's former employees and have approached the firm to begin an investigation...Initial findings indicate there are some problems with the union and we are urging the firm to deal with them in accordance with the law.”

ACFTU Campaigns

There is a concise official piece by the China Daily on the most recent targets for ACFTU organizing in MNCs – 80 percent by September (nationwide). The article gives Tesco Lotus and Maersk Logistics as examples of where MNCs have “conceded that the question is not whether a trade union should be allowed, rather it is how to make it function better.” (perhaps that should read how to make it function more to the company liking) – “ Some multinationals have changed their attitude after realizing that trade unions not only safeguard the rights and interests of workers, but also contribute to a company's development” As many know there was a violent protest at Maersk in January 2008 over calculations on holidays (where the company required workers to work overtime in the days preceding a holiday in order to be able to take that holiday)  and the beating of a worker by security guards.  

At the end of August the ACFTU will publicize the names of those companies refusing to allow ACFTU branches.

Here is another US article looking at other aspects of the joint ACFTU- government campaign to unionize MNCs and foreign companies in particular. It translates a short Chinese legal Daily article which gives details on the methods used to establish new unions at related MNC outlets and companies. It should be noted that the drive to unionize not only sees increased visits by ACFTU officials to company offices (large and small), but a raft of other measures including rather unfriendly visits, the taking of the union fees (2 percent) by the local Tax department regardless of whether or not there is an official union as well as public campaigning. IHLO has covered several of these tactics in earlier articles.

Indeed The Economist sums it up nicely:

Unrelenting pressure is applied to convince companies to sign up with the ACFTU. Many are visited every two weeks by union representatives. Firms that are willing to co-operate receive two critical benefits: the ability to influence who their union chairman will be, and some negotiating freedom around a 2% payroll “tax” to the national union, much of which is remitted back to the municipal and company branches and, in the best circumstances, may then be used to pay for social functions, medical benefits and bereavement leave. These two benefits are far more important than they sound. The union chairman is typically tied to the government and the Communist Party, must be consulted on critical issues and, in effect, cannot be fired. The union chairman is therefore critical to a firm’s management. And the ability to negotiate on the payroll levy can mean, for example, that expatriate salaries are excluded from the payroll figure, or that a smaller figure from a previous year is used as the basis of the calculation.

IHLO
August 2008