Speech by Cai Chongguo, due to be delivered at the 23rd Round of the China-EU Human Rights Dialogue in Berlin, Germany. May, 2007.
Compared with previous administrations, the new government under Premier Wen Jiabao does emphasize the protection of workers' rights. From tackling coal mining safety to implementing equal treatment for migrant workers, the Chinese government has promulgated a series of initiatives and policies to improve employment, and better workers' lives and working conditions. In particular, to protect the interests of migrant workers, the government has brought out a series of policies opposing discrimination, and providing vocational training and employment services.
However, these policies and other national laws protecting workers are rarely enforced at the enterprise level, and there is often collusion between officials and companies that is tantamount to a barrier at the main gate of the workplace or mine to protect the employer. This is currently the major problem impeding protection of the interests of labour in China. As a result, we see certain phenomena occurring: on the one hand, there are more and more laws and government policies on labour, but on the other hand, the working and living conditions of workers are not only not improving, they are deteriorating. The main reason behind this is the lack of a fundamental balance of power between labour and management. Workers - and this naturally includes migrant workers - do not have the most basic rights, such as the right to collective bargaining and to organize their own unions. With no supervision or advocacy from the collective power of labour, laws and central government resolutions will not be respected or administered.
The imbalance of power between labour and management
In this regard, I will take the current situation of the Chinese government and its laws as a point of departure and propose some concrete measures to thoroughly address this imbalance between labour and management in enterprises. I will also suggest ways of promoting collective bargaining mechanisms and methods of integrating contract negotiations and corporate social responsibility, to address the problem of the failure to implement laws and regulations intended to protect the interests of labour.
As we shall see, more than two decades of economic reforms have wrought enormous changes in China's economic and social structure. In the cities and towns, on the one hand, private and foreign capital and joint ventures are increasing rapidly. Many state-owned enterprises have been transformed by bureaucrats and private capital using black box operations to become privately-owned, private-sector companies. Huang Mengfu, chairman of the All China Federation of Industry and Commerce, announced on January 31, 2007 that as of the end of 2006, there were 4,977,000 private companies registered in China, and the private economy accounted for approximately 65 percent of the nation's GDP. On the other hand, with the state having withdrawn from operations of the remaining state-owned enterprises, these SOEs are essentially no different from private companies: their leadership can unilaterally decide work conditions and income for workers, and unilaterally hire and fire. They have become economic entities in search of the greatest possible profit. The pointed confrontation between labour and management that had disappeared from Chinese society after 1949 is now making a structural reappearance.
With such a conflict of interest between the parties, owners of companies and enterprise managers in China today not only have the power of capital, they are also very tightly linked to public power and the mass media controlled by that power, and this makes them particularly strong. And standing on the other side of this conflict of interest is the individual worker, with both hands empty. These huge changes to the economic structure of society and the severe imbalance of social power they engender are the core reasons for the deterioration of the living and working conditions of Chinese workers and for the ever more marked contradictions in society.
If there is no change to the very low position of workers in society and their lack of basic rights, the implementation of state laws protecting workers and related government administrative orders must rely on moral quality and determination to implement law on the part of the owners and leaders of companies and local government leaders. History and experience have shown early on that reliance on ethical will to resolve conflicts of interest affords no guarantees. Moreover, widespread corruption and wholesale corporatization of education, health and other public areas have deepened the moral crisis in Chinese society. Those in charge of local government are most concerned with doing all they can to attract foreign capital and raise economic growth rates. Given this situation, the idea that workers' rights can be guaranteed and laws implemented on the basis of the consciences of the owners is nothing more than an illusion.
Wages in arrears and coal mine accidents
And indeed, that is the situation. Wages currently in arrears and coal mining accidents, two issues that Premier Wen Jiabao has particularly espoused, are telling examples. At the end of 2003, Wen Jiabao met with Xiong Deming, a worker whose wages were in arrears, and personally inquired about the problem of wage arrears nationwide. Three years later, many provinces and cities have not yet established dedicated Handling of Wage Arrears offices as they were instructed to do.
Wen Jiabao has visited many coal mines and spoken before many People's Congresses of his determination to have the government resolve the issue of mine safety. County-level governments, as well as a few on the village and township levels, have set up State workplace safety supervisory and management structures.
According to official sources, over the last few years, senior leaders of the Chinese Communist Party and the government filed hundreds of written comments and instructions on these matters. However, based on official statistics for the beginning of 2006, the total amount of wages in arrears in 2005 was the same as in 2004, a sum of RMB 100 billion each year. In other words, after a year of intense government focus, the problem of wage arrears had not seen any improvement. After this, the government no longer made public official figures on wages in arrears, but we have seen many reports of workers climbing atop tall buildings and cable cars to demand payment of back wages with the threat of suicide. An Internet report from Hubei in July of 2006 cited statistics saying that from June 1 through July 15, fire-fighters in Wuhan were summoned on 44 calls to aid individuals who'd threatened to jump off buildings. Some 70 percent of these prospective suicides were workers with wages in arrears.
The results of the Chinese government's attempts to rectify the problems of coal mine safety are similarly limited. Indeed, according to figures released by the State Administration of Work Safety, compared to the previous year, the number of deaths due to coal mining accidents did decline in 2006, however, the government also admits at the same time that there was a rapid increase in cover-ups of such incidents. In particular, since last winter, a new wave of mining accidents has been seen, with March 2007 deaths up a dramatic 100 percent or more over those in February. There are 30,000 to 40,000 small coal mines in China, both legal and illegal. An article in the February 2, 2007 edition of the Chinese-language weekly China Newsweek [Zhongguo Xinwen Zhoukan] quoted a source in the coal mining industry as saying that it was common for two miners to perish each year in every small-scale coal mine.
Increasing levels of protest
Despite the government's concern for workers' interests, relations between labour and management are growing tenser by the day. In 2005, 31,400 labour disputes went to arbitration. This represents an increase of 20.5 percent over the previous year. In April, 2006, the State Council's Office of Research released its Report on Displaced Migrant Workers in China. According to the report, only 47.78 percent of migrant workers were able to draw their salary on time. Just 13.7 percent of them work 8 hours a day, and more than 70 percent of migrant workers had no benefits. Of the women, 79.8 percent were not paid a salary during maternity leave. In particular, in recent years, due to the mysterious black-box operations of SOE restructuring, forcing workers to accept severance payments to end their relationship with companies, low unemployment subsidies and retirement benefits, as well as the low wages and long working hours resulting from privatization, there have been continuing worker strikes, demonstrations and marches, sit-ins blocking highways and railroads, and other group actions.
Statistics show that in 2004, throughout China, there were over 70,000 group actions involving 100 people or more. In 2005, this number exceeded 87,000. On December 8, 2006, the Xinhua Network reported that, "major group actions continue to occur, and are becoming broader and broader...the degree of violence in the confrontations is clearly stepping up, and there exists the potential for bloody incidents to develop." Experts estimate that of these group incidents, over 30 percent were actions involving the defence of migrant workers' rights, and more than 20 percent were actions by workers in which migrant workers were involved. These actions sometimes involved tens of thousands of people. For example, to protest arbitrary dismissals and raise the amount of severance subsidies, in August of 2005 several thousand workers at the Chongqing Special Iron and Steel Plant blockaded the roadway. In November, 2005, several thousand workers from four state-owned construction companies took to the streets, and on November 29, 2005, a few thousand workers who had been dismissed blockaded the office building for the Shengli Oil Field Management Bureau. In February, 2006, over 1,000 workers from Heze Textiles in Shandong went out on strike for a raise in wages; in July, 2005, Dalian Development District saw more than 30,000 on strike for higher wages.
In the past, people participating in collective actions to fight for workers' rights were primarily of two types: one was laid-off workers from the towns and cities, while the other was the migrant workers unable to obtain residence rights in the city. The majority of workers employed in cities and towns feared dismissal and were unwilling to get involved in any actions to defend workers' rights. In recent years however those workers who are still employed have begun to organize strikes and other collective actions to defend their rights. This is because, after the restructuring of state-owned enterprises (privatization), the town and city-based workers in enterprises are seeing wages and benefits similar to the wages and working conditions of the migrant workers. Their motivation for coming out is virtually the same as that of the migrant workers: to seek higher wages and reduce working hours. The difference is that workers in the cities and towns usually demand retirement benefits at the same time, as well as medical care and social insurance, while the migrant workers are unable to make such demands because of their inferior residential status.
In coal mines, where accidents are frequent, in companies where there are problems of wages in arrears, or wherever there are worker strikes and demonstrations, the workers either have no union, or have a union whose leadership is appointed by the company or the government, and which affords no protection for the interests of workers. Thus, ordinarily, the company leadership and the employer are under no pressure from organized workers within the company, and they openly violate the labour laws and government laws and regulations involving enterprise restructuring and workplace safety. This leads directly to explosions and other accidents in the mines. In other enterprises, workers do not have the right to collective bargaining, and in the beginning can only accept what is coming. In the end, daily dissatisfactions and indignation accumulate until they reach a flash point and are expressed as sudden, often forceful collective action.
The need for true collective bargaining
Moreover, during these actions, the workers understand that, because the employer despises them and there is no true collective bargaining system, the problem can never be solved within the company. Only an outburst of collective action can break out of the factory confines and bring their problems to the attention of the outside world. Only in this way can the masses be energised and public opinion and government agencies become focused on the issue at hand. And when these external forces start to have an impact, worker demands will finally stand a chance of gaining at least minimal satisfaction. Furthermore, these workers often know of the oppression of local government and the risks they are running. They realize the price they might have to pay. As a result, these collective actions often occur only when the workers are at their most desperate and feel they have no choice but to protest.
The above examples show that to solve problems like wages in arrears or mine accidents, and to reduce collective protests by workers and resolve them in a timely manner, the most important thing is not new laws nor constant announcements of new policy documents by the government. Instead, it is to change the imbalance of power between labour and management, both within enterprises and throughout society as a whole. Workers must have their own power to organize, they must have the legal right to strike, they must have their own publications, and there must be academics, reporters, authors and lawyers who respect them, understand them and support them. In this way, they can finally become a group that has influence and dignity within enterprises and within society. Similarly, in the course of ordinary business management, employers should not disrespect workers´ interests, and they must fear that if they violate or fail to implement laws or government policies they will encounter organized opposition from the workers. At the same time, a genuine collective bargaining mechanism between labour and management must be established both within enterprises and between enterprises in the same industry. In this way, worker grievances and specific demands can be expressed and met in a timely manner.
Even if a few demands cannot be met, the communication during the negotiation process serves to deflect the antagonism and prevent the matter from escalating into a mass protest. At the same time, this sort of group negotiation also serves to encourage greater transparency in enterprise management and restructuring. This in turn can discourage large-scale corruption problems in these areas. Likewise, only in this way will those who run enterprises no longer dare to withhold wages from workers, and a whole laundry list of government policies intended to prevent this will finally be implemented.
Dialogue helps reduce protests
During the process of enterprise restructuring, many worker interests are infringed upon. The various government documents regulating enterprise restructuring have been ineffectual in dealing with this problem. But the solution to this problem can be found with unionisation. If all the SOEs being restructured had a union that workers could believe in, if this union could represent the workers as per the Union Law right from the outset, and if it could proactively participate in the restructuring process, then workers' jobs would be protected and post-contract reassignments and social insurance issues could be eliminated. There would be negotiations with the government officials and the enterprise managers undertaking the restructuring, and the restructuring of enterprises would not infringe worker rights as it does today - and China would not see workers taking to the streets in protest, as we see today.
The solution for coal mine safety lies here too. The majority of private mine owners simply disregard the government's laws and the many pronouncements of government leaders. This is because of corruption and lack of any responsibility in the local government agencies charged with supervising the administration of the law. Mine owners essentially have the right to decide whether workers live or die, and great numbers of peasant miners have no organized power whatsoever. To reduce mine accidents, the most important and practical task facing the Chinese government and society at present is not to create more regulations. Rather, it is to establish workers' workplace safety supervisory organizations, and give the miners their own organized power. When mine owners violate the law or workplace safety regulations, they will encounter from the miners organized opposition that will enjoy the support and legal protection of the government. This is the only way that we can begin to improve mine safety in China.
There is a huge imbalance of power between labour and management within Chinese enterprises. This means that the administration of policies and other national laws protecting workers, as well as safety, relies on the moral goodwill of the employer as well as an external administrative authority. To date, the government has not yet adopted any measures to give workers the power to organize unions, and redress this huge imbalance. The only plans so far have been to intensify the efforts of law enforcement agencies. The result is that not only is there no improvement in the enforcement of these laws and regulations, but, even more serious, the idea is being instilled and reinforced that the Chinese worker is always a pitiable figure, one that requires saving, and that workers are some sort of "disadvantaged group" requiring charity. Because of this, many people believe that workers in China cannot protect themselves or even control their own fate. Without the assistance of the government, or the employer, or some social group, they are lost. Chinese workers are falling into a vicious spiral where "the more protected they are, the weaker they become."
Workers must be given more power
The more workers are despised, the worse their living conditions become. There is no point in simply establishing new legal policies to guarantee the implementation of laws and regulations. If this is done, there will be no end to it. On the contrary, China's workers must have power. They must have respect. They must have the power to protect themselves and to rely on themselves to make sure that their legal rights are respected. This requires Chinese labour to have the power to organize itself. With this kind of organizational power in place, the imbalance between labour and management within enterprises can be ameliorated.
This has the potential to fundamentally improve the status of workers and also rationalize the behaviour of enterprises and local government. Often, it is only when facing off with labour in a protest that these parties are forced to consider the interests of labour and their own long-term interests. With a collective bargaining mechanism based on labour's own power, the group actions described above, as well as street protests, would decline. In fact, they would drop dramatically. The political, social and financial cost paid by society and the government would be reduced, as would the chances of labour disputes escalating into political conflict and anti-government action. Thus, rectifying the balance of power between labour and management would rationalize all the elements of society and social governance.
At present, what is most needed is not the implementation of government documents and the articles of law. Rather, it is for concrete action on the part of the government to adjust the balance of social power. The first step must be to release imprisoned labour activists, and to openly pledge to abandon and forbid any further persecution of those activists who form the backbone of the labour movement. Arrests and persecution of the labour movement not only violates international labour standards and goes against basic ethics of governance, it is also the prime cause of the weakened power of labour and the imbalance between labour and management in China.
This persecution is a sign of collusion between capital and political power, and causes workers all over China to lose their leaders as well as resulting in the workers living in constant fear of the dual punch of political power and capital. They meekly accept the blows dealt to them and dare not organize themselves in opposition. This kind of fear causes resentment to build up until finally, all too often, it explodes in violence, anger and hatred. This kind of persecution also makes disputes between labour and management more difficult to foresee and resolve, because prior to and after the conflict, workers are usually unwilling to put themselves forward as representatives. Management and local government are thus unable to find a true counterpart for negotiations in a timely manner, and it becomes more difficult to use negotiation and bargaining to resolve conflicts. The ones who pay for this are not only the workers; all of society is paying an enormous price for the government's persecution of the labour movement.
In many ways, the government itself is directly responsible for conflicts between labour and management and for other conflicts within society. The Chinese government must change its essentially passive role, get out from behind one side in the labour-management dispute and play the role of facilitator and arbitrator in social conflicts. It must assist all levels of society, and particularly assist labour - scattered, silent, fearful, and without experience in organization - to independently organize itself, and on that foundation construct a systematic and legally enforceable mechanism for negotiations between labour and management. In this way, the laws of the nation and the policies of the government will finally have an effective basis for implementation. In this way, the government and the state can finally have the neutral authority, public trust and effectiveness required to order society and manage the market economy. This is the only way to guarantee social stability and harmony for the long term.