The following is an edited version of a speech given by Han Dongfang, director of China Labour Bulletin, during the annual international conference of Rights & Democracy (International Centre for Human Rights and Democratic Development) in Toronto on 14-15 June this year.
People ask about the role of foreign investors promoting good labour practices in China. This is not a logical question. The goal of investors is to make a profit, not to protect labour rights, and similar questions are not asked to foreign investors regarding the protection of labour rights in Canada. Workers rights can only be protected by organised workers.
Foreign corporations and investors all have codes of conduct that are supposed to protect workers' rights in their factories. Yet practical examples demonstrate that these codes are not implemented or enforced in China. Not only does this result in worker exploitation, but there is also a cost to business. A case point is that workers at the Stella shoe factory in Xing Xiong, who were not paid for over three months. Eventually, the workers' rights abuses led to mass protests and many arrests and convictions, which were successfully overturned eventually. Throughout the protests, productivity at the Stella plants plummeted.
Codes of conduct are simply moral codes. In the world of business, people who follow them are often considered stupid; those who do not are deemed smart business people. The key is ensuring that moral codes are made into binding, enforceable legal responsibilities.
It is naive to expect foreign investors to promote good labour practices. In fact, the reason they go to China is to take advantage of cheap labour and improve their profits. A more fundamental question is what can be done to ensure that multinational companies respect Chinese law?
Two months ago, the National People's Congress introduced a new law aimed at enforcing collective labour contracts. The American and European Chambers of Congress in Shanghai immediately opposed it, threatening that businesses would leave China if the law were adopted. Not only does foreign investment fail to promote labour rights, foreign corporations use all their power to stifle any reforms – even those introduced by the Chinese government.
The only way good labour practices can be promoted is through the organisation of workers. Chinese workers do have some power. There were more than 87,000 human rights protests in China in 2005, a 17% increase from the previous year. Most were workers' actions. Not only are more actions happening, they are happening more constructively with more tangible results.
It must be reiterated that multinationals do not promote good labour practices. In fact, they must be made to comply with Chinese law. If they do not, Chinese workers must hold foreign companies responsible and take legal action insisting on the protection of workers' rights. The most fundamental element of democracy is people's participation. The future of China must be built on a new foundation of the rule of law and participatory civil society.
1 December 2006