Wal-Mart, Kodak and other major American corporations are coming under heavy fire in China for resisting the mainland’s labour laws by forbidding their employees to set up trade unions, according to a series of recent articles in the official mainland Chinese press.

According to a report in Legal Daily on 20 October, other multinationals that have been preventing workers from organising trade unions include Dell Computer (China), the eight subsidiaries of Samsung, and the American fast-food chains McDonald’s and Kentucky Fried Chicken. “They have not established trade unions for many years,” the newspaper reported. It added that as the number of foreign-invested and privately-owned companies had risen, official attempts to establish trade unions on the mainland had faced increasing resistance.

According to a report of Xinhua News Agency on 25 October, the All-China Federation of Trade Unions (ACFTU), the only trade union legally allowed in China, has threatened to blacklist and take legal action against multinational corporations which try to prevent mainland workers in the private sector from forming unions. By the end of 2003, altogether 734,000 non-state-owned enterprises in China employed more than 24.87 million people. Xinhua’s report cited a Wall Street Journal article saying that Wal-Mart would dismiss any employee found organising a trade union.

Yong Honglin, a senior ACFTU cadre, said the organization would work with local authorities and employees to collect information about multinationals that refused to allow trade unions. It would also send its representatives to organise unions at factories controlled by multinationals and take court action if such opposition continued, he added.

Guo Wencai, head of the ACFTU’s grassroots organisation department, emphasized that more efforts should be put into establishing trade unions and penalizing companies which refused to abide by the law. According to mainland labour law, foreign or domestic companies must allow employees to establish trade unions and should bear all the operating costs entailed. Guo Jun, director of the ACFTU’s legal department, said some multinationals had prevented union representatives from even visiting their factories. “This is obstructing the forming of unions and therefore violates the trade union law,” he was quoted as saying. Xinhua said local authorities would seek punitive fines against multinational companies that persisted in this behaviour.

Wal-Mart, the US-based retail giant, which is notorious for banning trade unions from all of its factories and stores worldwide, has refused to allow any of its more than 19,000 employees in China to set up a trade union, the Legal Daily said. Wal-Mart has 37 stores in 18 cities including Shenzhen, Dalian, Kunming, Beijing, Xiamen and Fuzhou, and the municipal trade unions in Shenzhen, Dalian and Kunming had approached the Wal-Mart stores there on several occasions but management had refused to cooperate in the establishment of trade unions. The reason given, according to People’s Daily, was that “Wal-Mart has no tradition to establish trade union, so China is not an exception.”

An official from the Trade Union Federation of Xiamen, the southeastern city where Kodak and Dell base their manufacturing operations, was quoted in the South China Morning Post as saying: “Giant multinationals can use their economic muscle to get around rules and even impose their will on policymakers.” The official said the ACFTU had asked Kodak and Dell to establish union organizations in their factories on numerous occasions. However, he added, it was hard to bring multinational companies into line with national labour law. “It’s not that we have weak labour standards, but we’re concerned about not jeopardising the relationship,” the official said. Both companies had invested millions of US dollars in the city, “which means new jobs and less unemployment.”

After coming under fire in the official news media, Kodak issued a statement claiming that the Legal Daily had “misrepresented” the company’s position. The company fully supported the establishment of trade unions, the statement asserted, but they must be “voluntary associations of employees.” It continued: “If our employees chose to do so, Kodak would fully support them.”

Sources: Legal Daily, The Standard, People’s Daily, South China Morning Post.

27 October 2004