On 22 April 2004, more than 500 retrenched workers from the Jilin branch of the China Petroleum & Chemical Corporation (Sinopec Corp.) in Songyuan City, Jilin Province, gathered together outside the local Petroleum Administration Bureau (PAB) in their most recent protest against what they regard as the dishonest and abusive retrenchment policies employed by the corporation. According to CLB sources, police had blocked the area around the PAB since the early morning in an attempt to head off the protestors who were, according to one witness, outnumbered. The protestors were calling for their retrenchment compensation levels to be increased from 3,000 Yuan per year of service to 4,200 Yuan, the highest average compensation within the petroleum industry. They also called upon the corporation to undertake employment programs for their children.

This most recent protest was held to commemorate the second anniversary of their initial mass protests on 22 April 2002, when several workers were detained and one, Zhou Zhenhua, was later formally arrested and reportedly assigned to an unspecified term of ‘re-education through labour”. Zhou Zhenhua is now dead, having committed suicide in response to the ongoing failure of the government to address their concerns.

Earlier this year, on 10 March 2004, driven to despair by their increasing poverty and by the ongoing failure of the authorities to respond to their requests for action, a group of workers (the exact number is not known) attempted suicide by poison. Zhou Zhenhua, detained earlier in July 2002, was found dead, but the rest survived.

Unfounded threats of company closure leads some 16,000 workers to accept unfair retrenchment

According to workers, in 2000, after the announcement of the nationwide restructuring of the oil industry, the leaders of Jilin Sinopec told all its workers that the corporation was soon to be shut down and that they must chose either retrenchment compensation (with a one-off payment) or buy corporation shares.

One female protestor told CLB that her husband felt cheated in the retrenchment progress. After hearing the news of the alleged imminent closure of the factory and the ultimatum to either retire or buy shares, since they could not afford the share subscription, they took retrenchment. He received 90,000 Yuan for a total of 30 years’ of service in the corporation. However, they later discovered, as did thousands of other workers who had also bowed down to the ultimatum, that the corporation, although now restructured to form two companies, was running better than ever and there was no sign of it shutting down.

In another interview, a relative of an oil worker, who had been working as a cleaner for more than 10 years, stated that the corporation used to deduct a sum from their wages, claiming that it was for their labour insurance premium. However, after the restructuring of the corporation two years ago, all previous years of labour insurance premiums had been cancelled and workers were not eligible for benefits or refunds. According to the worker, the company had not provided any receipts for the deductions and refused to enter into any discussions over refunding the payments, stating simply that she was not insured.

National oil industry restructuring - the rise of worker resistance

In 1999, Chinese Premier Zhu Rongji ordered the start of major restructuring in the oil industry. China National Petroleum Corporation [CNPC] branches throughout the country were to be divided into two separate companies in every oil field: Petrochina Co Ltd (PCL), for the oil exploitation business; and China Petroleum Group Co. Ltd (CPGCL))), for the oil manufacturing and refining work.

On 4 March 2002, up to 50,000 oil workers of Daqing staged a series of protest demonstrations. They were protesting at the unfair restructuring policies that saw many workers with years of service forced out of jobs and left without benefits or back pay. The protests continued for several months despite threats from local public security and government officials. The Daqing protests slowed down oil restructuring in Daqing until local police began to detain and threaten large numbers of Daqing workers. [NOTE 1]

In Jilin, due to internal resistance to the restructuring, a new manager, Rao Yongjiu, was appointed to run CPGCL in Jilin. However, Rao Yongjiu began the restructuring by allegedly contracting out the most profitable sub-companies at low prices to friends and high-ranking corporation leaders, thereby divesting the SOE of its most well managed and profitable parts.

In 2000, the Jilin oil field, with more than 70,000 workers, was finally restructured to form two separate oil companies in accordance with national policy. Both companies started retrenching workers, paying them some 3,000-Yuan per year of service or giving them early retirement at 80 percent of their previous salary per month, without any other benefits. At first, there was little interest among the workers in accepting either retrenchment or retirement, but after several months of official propaganda, threats of imminent factory closure and misleading information, some 16,000 workers gave up their jobs.

Between 2000 and 2002, laid-off workers found that they had been cheated, as the newly formed companies were in fact highly profitable, and those workers who had not taken retrenchment were now earning higher wages, especially the higher-ranking workers and managers. The workers who had taken retrenchment early in 2000 found that other workers who applied for retrenchment later on in 2000 were receiving higher benefits than the 3,000 Yuan per year of service that they had been given. Workers who had taken formal retirement, on the other hand, had received no monthly pension payments since the end of 2000.

In March 2002, in a follow up to their mass protests, workers from the Daqing Oil Field traveled to Beijing to take their case to the central authorities. In Jilin, retrenched company officials from the Jilin oilfield took similar action. While the requests of the Daqing workers were ignored, the request by the company officials in Jilin to return to work was later granted.

On 22 April 2002, when ordinary workers in Jilin, inspired by the success of Jilin company officials and the mass actions of the Daqing workers [NOTE 2], gathered outside the company’s offices to make similar demands, several worker representatives were briefly detained, while others were kept at home or were reportedly bribed to stay away from the protests.

During April and May 2002, the Jilin oil workers stepped up their protests and expanded their complaints and petitioning activities to include various local authorities as well as the central authorities in Beijing. Finally, in May 2002, after several requests, Rao Yongjiu agreed to meet with the workers’ representatives. However the negotiations failed after the workers demands were rejected outright.

Shortly after the failed talks, Sinopec’s head office sent a representative to Jilin on 7 May who claimed that the company had been justified and legally correct in its handling of the retrenchment and that if the workers’ continued to protest, their participation would be monitored and punished. This message was broadcast on local television.

Despite these threats, between May and June 2002, more workers joined the ongoing peaceful protests. Some of the participants were detained and then released after 24 hours detention, with warnings against any future involvement in protests. At the same time as the detention of workers was taking place, in an attempt to show how an end to the protests would be in the worker’s best interests, several of the minor requests of the workers were answered, including a request to provide more recreation facilities for retired workers. However, the most pressing issues - such as the request by the retrenched workers to return to work at the now profitable company - remained unanswered.

Disregarding these cosmetic gains, on I July 2002, over 5,000 Jilin workers turned out in a mass protest with many more Jilin residents lining the streets in support. In the aftermath of the July protest, in mid July several leaders from the Sinopec head office arrived in Jilin to renew the threat that workers would suffer serious consequences if they continued with their protest actions. At the same time however, officials promised to return some 22 months of overdue and unpaid unemployment benefits. They also assisted in the formation of a medical network meant to provide the retrenched workers with a certain amount of subsidized medical care. Once again, despite these minor gains, the oil workers’ most pressing issues – the demand that they be allowed to return to work and that unpaid pensions be promptly settled – remained unaddressed.

On 26 July 2002, the local Public Security Bureau issued five official notices condemning the workers protests and defining their actions as illegal. It sent several hundred armed police to block the path of the protestors and detained scores of workers. Several later appear on local television, confessing to their participation in ‘illegal’ demonstrations - reportedly as the price of their release. The worker who eventually committed suicide, Zhou Zhenhua, refused to “confess” and was then formally charged and arrested. He was later reported to have been assigned to an unknown term of “re-education through labour”. By the end of July, with scores of workers in detention, the protestors had finally been forced off the streets.

Despite the end to their street demonstrations, workers from the Jilin Oil field continued to make repeated trips to Beijing in 2003 and early 2004 to complain to the central authorities about their situation. Their complaints, however, were consistently rejected and the workers’ representatives were forcibly returned to Jilin by PSB officials on several occasions.

It is the outright failure of the official complaints mechanisms in both Beijing and Jilin, combined with the continued intransigence of the new company management, that forced the Jilin oil workers to take to the streets once again in the mass public protests of April 22. For many of the workers, time is fast running out, since their redundancy compensation money has now been exhausted.

Background

Sinopec – “Corporate Governance”?

Throughout 2003, according to the Sinopec website, Sinopec has won several awards for good “corporate governance” and investor relations”. These include: Best Petrochemicals Company in Asia (January, 2004: Euromoney), The Most Valuable Listed Companies for Investment (December, 2003: Securities Times and Merchants Securities), Best Managed Company (April, 2003: FinanceAsia), The Best Corporate Governance in Emerging Market (November, 2003: Euromoney), Best Corporate Governance Among Chinese Companies (April, 2003: FinanceAsia) and Most Committed to Creating Shareholder Value (April, 2003: FinanceAsia). There has been little mention in the Chinese press, however, of the ongoing protests, strikes and detentions of the Jilin Sinopec workers, and no information about worker relations appears on its website.

According to information from Sinopec:

“Jilin Oilfield is headquartered in Songyuan City of Jilin province in northern China, with Daqing on its northwest and Liaohe on its southwest. Jilin oilfield began its exploration of oil and gas in 1955, and the commercial oil flow was on stream at the end of Dec.1997. Jilin manages 25 oilfields with oil bearing area of 1384.3 km2 and a gas-bearing area of 118.9 km2. The oilfield has proven oil in place of 771 million tons and proven gas in place of 9.8 billion cubic meters. The oilfield currently produces 4 million tons of crude oil and its refining capacity has reached 700,000 tons per year.”

NOTES

Note 1: The situation in Daqing was reported extensively by CLB at the time. More information can be found here [2]

Note 2: According to a retrenched oil worker from the city of Chongqing (a city more than a thousand kilometres distant from Daqing): “The workers here wouldn't have had the idea and the courage to organize ourselves if it weren’t for the actions taken by the Daqing workers in March."! No sooner had the Daqing oil workers’ protests come to a halt, than laid-off oil workers in Chongqing also began following their example. Following a month of preparations, hundreds gathered in front of the Chuandong Oil Exploration & Drilling Company (COEDC) – a subsidiary of Sichuan Petroleum Administrative Bureau (SPAB) – to protest against unfair and illegal redundancy agreements.

As in Daqing, managers threatening mandatory lay-offs had forced the compensation agreements on the workers. While the numbers of workers involved in the Chongqing protests were much smaller, they seemed to be better prepared. At the same time as organising the sit-ins, they planned to file a lawsuit against the SPAB for violations of Chinese Labour Law, Trade Union Law, and Contract Law.

For more details, see CLB interview of 14 September 2002 [3]

30 April 2004