Report Release: “Suppliers Escaped: Disney Abandoned Mizutani Toy Makers Viciously”

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Mizutani (Shenzhen) Toy Factory Co. Ltd., a Hong Kong-registered enterprise producing for Tokyo Disneyland since 1997, announced its sudden closure and relocation to the Philippines in June 2015. A total of 9 million yuan of severance compensation, social insurance and housing provident fund payments covering 196 employees has been in arrears. The livelihood of Mizutani workers, among which a lot of them are middle-aged and find looking for a new job challenging, is seriously affected by the sudden change.

Worker Empowerment (WE) and the Hong Kong Confederation of Trade Unions (HKCTU) have been assisting Mizutani workers in their protests against Mizutani and Disney and subsequent rounds of negotiations. So far Mizutani simply agree to settle the dispute with one tenth of the compensation to which workers are entitled according to the Labour Contract Law and Social Insurance Law, and workers refuse to accept such an unlawful compensation. Disney in Japan and USA has remained silence since a symbolic meeting with WE and HKCTU in mid-July 2015, regardless of repeated demands for their intervention.

This case demonstrates how Disney has failed to fulfill its corporate responsibility. The report titled “Suppliers Escaped: Disney Abandoned Mizutani Toy Makers Viciously” jointly published by WE and HKCTU aims at disclosing how Mizutani and Disney violate Chinese labour regulations and its betrayal to frontline workers. It is important for the general public, especially customers of Disney-branded products, to pay attention to workers’ suffering behind them.

The full report is available here, with an executive summary.

Key findings include:

1. By underpaying social insurance contribution, severance compensation and unlawfully dismissing workers, Mizutani has violated China’s Labour Contract Law and Social Insurance Law.

2. The livelihood of 196 Mizutani workers has been severely affected by the sudden factory closure. Most of these middle-aged workers have served in Mizutani for 10-20 years and seeking new jobs would be a big challenge for them. Missing social insurance contribution would leave them no pension and this would create serious trouble when they retire.

3. Walt Disney Co.’s International Labour Standards Programme requires all its suppliers to follow local laws, they are specifically required not to threaten workers and respect freedom of association (including rights to organize and collective bargaining). However, it has ignored Mizutani’s grave violations of the above-mentioned labour rights, including:

a. Violations of Chinese labour legislations: Mizutani is moving to the Philippines and is financially sound. Yet, it deliberately violates Labour Contract Law and Social Insurance law and owes workers some 9 million Yuan.
b. Rejection of collective negotiation: since the announcement of the closure of the factory, workers had requested to negotiate with Mizutani but it refused.
c. Denial of workers’ rights to organize: out of desperate, workers launched a strike and road blockage. They were violently taken away by riot police and 23 workers were detained.
d. Refusal of paying severance compensation and threatening workers to “voluntarily resign”: when it announced to close its Shenzhen plant in June 2015, it forced workers to sign “voluntary resignation agreements”.

4. Walt Disney Co. has been informed of these labour rights violations and the dispute at Mizutani through formal complaint and media exposure, yet it has only reacted to this dispute through emails, phone calls and a non-constructive meeting. Until now, no formal investigation has been seen and no solution has been provided to these violations.

We strongly demand for the following actions of Mizutani and Disney:

1. Disney must investigate the case and fulfill its commitment to workers’ rights across the supply chain and help the Mizutani workers reclaim their missing compensation in the wake of the company’s abrupt factory closure in June 2015.
2. Mizutani unilaterally terminated workers’ labour contracts. By law, it should pay double severance compensation and Disney should pay the missing part of the compensation, which should be calculated by wages payable.
3. Mizutani must pay the missing premiums of workers’ social insurance and housing provident fund since their dates of commencement.

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An Investigation on the Implementation of the Labour Contract Law in the Manufacturing Sector

Labour Contract Law 2014 cover

        The Labour Contract Law of China, which aims at regulating employment and protecting workers’ legally abided rights, has been in controversy since its implementation in 2008. Recent trends in industries, such as factory relocation from well-developed coastal areas due to industrial upgrade and the subsequent labour disputes, also the employment of dispatched workers becoming popular in factories, show the need to strengthen legal protection for workers. An amendment of the Labour Contract Law was introduced in July 2013 to serve this function, but the effectiveness is yet to be observed.

        As a grassroots labour organisation based in the Pearl River Delta, Worker Empowerment concerns about the welfare of workers in the manufacturing sector and supports their right-defending efforts. Therefore, following our long-time interest in the Labour Contract Law, a survey to investigate its implementation in the Pearl and Yangtze River Deltas was conducted in 2014, in order to have a better understanding of how the law works to protect workers, particularly the dispatched ones.

        The survey covers eight cities in the Pearl and Yangtze River Deltas, namely Shenzhen, Guangzhou, Dongguan, Huizhou, Shanghai, Nanjing, Suzhou and Jinhua. With the help of a number of labour organisations and university students, questionnaire survey and field study were conducted. 515 valid questionnaires were collected. Some case studies offered by the co-operating labour organisations were also adopted for analysis.

        Among workers who completed a valid questionnaire for us, 60% of them are male. 70% are below 36 years old. A significant proportion of them work in electronics factories. 80% of them are formal workers, and the rest are either dispatched or temporary workers.

        In general, 84.3% of the surveyed workers signed a labour contract with their employer. The proportion has increased in comparison with a survey of similar scale that we conducted in 2009, and is slightly lower than the figure officially announced by the Ministry of Human Resources and Social Security. However, it is shown that establishing an employment relationship in written form is still not a compulsory practice between enterprises and workers. A higher percentage of surveyed workers from big cities signed a labour contract, but the figure is significantly lower in lower-tiered areas. Enterprises of domestic capital are less inclined to sign a labour contract with workers.

        The rationale of the Labour Contract Law is to establish a legal framework for stable employment relationship between workers and their employers. Labour contracts should also be signed under the prerequisite that both parties are entitled to equal rights to negotiate on contract terms. From the survey, however, many workers are not protected as such. For example, contracts are often incomplete, and the terms are not the same as what workers are required to do in the workplace in reality. Due to a low risk in violating the law, employers still tend to act in expediency. Examples include making working overtime regular, signing fixed-term contract with workers continuously, propelling resignation of workers to evade from paying compensations, and many more. The workers’ lack of knowledge and confidence in the law, as well as low capacity to fight against the employer collectively become an obstacle to tackle the problems from the deep root. They are also discouraged to strive for better working conditions and remunerations by renewing the contract.

        In terms of employers’ malpractices related to labour contracts, some improvements are apparently shown over the years, but mostly in big cities. During the relocation of industries and labour power from coastal to inland areas, it is observed that the law is worse implemented in the latter, meaning that demonstrative effect of big cities is often limited. When improvements in coastal areas are achieved only after years of monitoring and supervision, whether inland regions would be benefited is still questionable.

        The amendment of the Labour Contract Law has been implemented since July 2013 to regulate labour dispatch. Measures include keeping the use of dispatch workers within the bound of temporary, auxiliary and substitutive positions; ensuring equal pay of formal and dispatched workers; and setting a higher bar for starting a labour dispatch business. The Interim for Labour Dispatch announced in April 2014 also restricts the proportion of dispatched workers in an enterprise to 10%. From the survey, it is found that many enterprises still use an exceeding proportion of dispatched workers. Most dispatched workers do not know how their work nature is different from formal workers, and they are also generally less well paid.

        Adding insult to injury, although more legal measures are introduced to regulate labour dispatch, the demand of enterprises on a flexible workforce remains high. Even if labour dispatch no longer works, hiring temporary workers and outsourcing still enable them to play down their role as employers. This makes it harder for workers to identify the party to be held responsible in case disputes arise in an employment relationship.

        To strengthen the enforcement of the Labour Contract Law to protect the legal rights of workers, we reckon that the labour department should make an effort in the following perspectives:

  1. Inputting resources in promoting and enforcing the Labour Contract Law, in order to increase the awareness of workers and understanding of their own rights;
  2. Closer supervision in inland areas and enterprises of domestic capital, to block transfer of bad practices by relocation;
  3. Increasing risks for enterprises by more proactive prosecution and criminalisation of repeated violation of the law;
  4. Monitoring labour dispatch and other forms of flexible employment which are out of the legal framework;
  5. Opening up rooms for workers to organise and negotiate with their employers on equal grounds.

         This investigation may have its own limitations due to restraints in resources, but surveys as such from a grassroots perspective should continue. It is hoped that the survey would keep going year after year and extend to more regions, so that more workers would be better informed of the Labour Contract Law, fight for their own rights and ultimately benefit from it.

The full report in Chinese can be downloaded here: Labour Contract Law_WE_2014-7

Latest Publication – A Single Spark (in Chinese)

Chun Tae-il cover_final
A Single Spark: a Biography of Chun Tae-il

 

Subsidised by the Korea Democracy Foundation and Korea Working Women Academy, Worker Empowerment proudly presents the Chinese version of “A Single Spark”, a biography of the late Korean labour activist Chun Tae-il. For more information, please refer to our website in Chinese.

In order to celebrate the publication, a book launch will be held in late August 2013. Details are as follows –

Date: 31st August, 2013 (Saturday)
Time: 3:00-5:00pm
Venue: 1908 Bookstore (Room 202, 2/F., Universal Commercial Building, 69 Peking Road, Tsim Sha Tsui, Kowloon, Hong Kong)
Guest speakers:
Mr. Park Kye-Hyoun (former garment worker and unionist; Director of the Chun Tae-il Memorial Foundation)
Prof. Liu Jianzhou (Associate Professor at Shanghai Administration Institute; translator of the book)
Remark: Korean/Mandarin interpretation will be available.

Organised by Worker Empowerment
Enquiry: workerempowerment@gmail.com

How Should Minimum Wage Promise a Decent Living for Workers?

How Should Minimum Wage Promise a Decent Living for Workers?

  • Report Abstract

Shenzhen Dagongzhe Migrant Worker Centre

February 2013

 

As a grassroots civil organisation concerning migrant workers in Shenzhen, the Shenzhen Dagongzhe Migrant Worker Centre (hereafter Dagongzhe) have been paying attention to work and living conditions of frontline workers in the city. Reform in the income distribution system has been proposed by the state in recent years, in which improving the mechanism of primary income distribution is emphasised – “regulating the distribution order, boosting residents’ income, and regulating the high-income group”. We believe that a good minimum wage system plays an important role here. The adjustment of minimum wage is closely followed by both workers and employers, yet how it is determined is not known by the public.

 

Earlier in 2013, the minimum wage of Shenzhen was raised to 1600 yuan, 100 yuan higher than in 2012. Regardless of the media frenzy to boast Shenzhen of having the highest wage level nationwide, it does not mean that workers in the city live a better life. In fact, to many workers, the minimum wage is the highest basic wage they can get. Also, since it is still too low that it can just barely satisfy basic needs for the workers and their family, they are compelled to work overtime for higher income.

 

How is living in Shenzhen like for workers who pay their effort to build the city and produce for enterprises in exchange for a minimal level of wage? In late 2012, Dagongzhe investigated living and work conditions of workers in Shenzhen by conducting a questionnaire survey, a market survey of basic commodities, case studies of monthly expenses of different types of households, as well as a focus group session with workers. From the study we try to learn more about what criteria should be considered in the minimum wage adjustment mechanism, so that decent living for low-wage earners can be guaranteed.

 

Decent living does not necessarily mean living in luxury. A normal and nutritious diet, comfortable and stable shelter, entertainment and social security should be included, and none of the above should be forgone out of economic reasons. Our study found that factory workers nowadays do not live the worst life, at least with their basic needs in food, clothing, shelter and other basic services fulfilled. However, there are also items which they regard as “something a normal person ought to enjoy”, such as healthcare, leisure, educational and cultural activities, but are eventually given up because they cannot afford them. Even worse, such a relatively indecent living has to be maintained by overtime work. If they adhere to the standard working hours (8 hours per day, 5 days per week), earning a wage for decent living is absolutely impossible.

 

When the state repeatedly stresses on narrowing income disparity and establishing a normal wage increase mechanism, we consider the adjustment of minimum wage by no means a haggle among the government and businesses, and it should not be a focal point in the competition between cities for human resources. Rather, it should serve its real functions of guaranteeing workers’ basic needs, ensuring that they enjoy their fruit of labour, narrowing disparity between rich and poor and eliminating social conflicts, so that a harmonious society can be realised.

 

Therefore, we propose the following criteria for minimum wage adjustment –

 

  • The minimum wage level should reach 40% of the average wage in society, making sure that income of the lowest-wage earners would not fall too far behind the rest of the population. The average wage of Shenzhen in 2011 was 4595 yuan, so the minimum wage should be at least 4595 x 40% = 1838 yuan.

 

  • The minimum wage should be determined on the basis of workers’ daily needs, including basic expenditure on food, accommodation, daily commodities, transport, communication, clothes, medical services, transport back home once a year, entertainment, etc. It should also cover expenditure of a 3-person family in Shenzhen, as well as their parents at home. If two adults (presumably husband and wife) in the family work at the same time to fulfil the basic family needs and their responsibility to support their parents, we estimate the approximate monthly cost as 5783.2 yuan, and therefore 2891.6 yuan for each working adult. This amount is approximately 60% of the average wage in Shenzhen, which is a benchmark proposed by the All-China Federation of Trade Unions in 2010. Since the current level of minimum wage in Shenzhen is far lower than this, we propose lifting it to 40% of the average wage promptly, and a progress to 60% in the long run.

 

  • Commodity price fluctuation should be taken into account. An adjustment of up to 3-5% should be added to the basic expenditure, so that workers are more protected in price fluctuation of commodities.

 

Workers contribute their labour power to businesses. The latter could only produce and make a profit because of the former’s hard work. It is fair to conclude that workers actually create profits for businesses. As the most important component of the production line, workers and businesses should enjoy equal say on wage level. This report attempts to explore workers’ conception on basic needs and what affect their living standards, but indeed they should be investigated by the government systematically and comprehensively for the sake of better adjustment in minimum wage. In the long run, an open, transparent and well-established minimum wage adjustment mechanism, or even collective negotiation on wage should be the best way to guarantee a decent living for workers.

About the Development of Labour NGOs – Letter to the Provincial Government of Guangdong and the Municipal Government of Shenzhen

About the Development of Labour NGOs – Letter to the Provincial Government of Guangdong and the Municipal Government of Shenzhen
9th September, 2012

Since February, over a dozen of
labour NGOs in Shenzhen, including Shenzhen Chunfeng Labour Disputes Services Center, Shenzhen Yuan Dian Labour Service Center, Dagongzhe Migrant Workers’ Center (Shenzhen), Worker Online (also known as QingCao), Shi-Dai-Nu-Gong, Hand-in-Hand Migrant Workers’ Center, Little Grass Workers’ Home, have been suffering from inquisitions of multiple authorities, such as the Administration of Industry and Commerce, the Administration of Taxation, the Administration of Work Safety, the Fire Department, the Administration of Social Security, the Administration of Housing, the Administration of Labour Supervision, etc. Besides these inquisitions, the landlords of the labour NGOs’ offices have terminated tenancy contracts before the expiry or threatened the NGOS to move away, using all sorts of uncanny excuses and force in some instances. Regarding the harassment simply as rental disputes, the police took no action to stop it nor facilitated the NGOs for any legal procedure. Instead, the staff of some NGOs was even dispersed by the police when petitioning to the Municipal Party Committee. In all these years, these NGOs have been working very hard to provide work safety training, consultation services, cultural and art programs, as well as other legal and social services to workers. These services and the regular operation of the NGOs have been paralyzed by now. Up to now, great concern and support has been shown to what has happened to these labour NGOs.

We are a group of academics from the field of social sciences. We believe that the current situation is far from normal
. We would like to express our concern and opinions to the provincial and municipal government in the below.

1. In July, 2011, the ‘Decision of the CCPC and People’s Government of Guangdong on Strengthening Social Construction’ (the Decision) was passed in the Ninth Plenary of the 10th CPC Committee of Guangdong Province. It was followed by the account given by Comrade Zhu Mingguo which elaborates the relationship between economic construction and civil society building, the urgency of civil society development and reform, as well as the importance of nurturing social organizations. The public reacted positively, acknowledging the significant exploration in civil society administration and development in Guangdong. Under the spirit of the Decision, constructive relations and collaborations have begun between the municipal trade union federation of Guangzhou and some of the labour NGOs. This is however baffled by what happened in Shenzhen recently which is, in our opinion, a turning back on the the Decision. If the NGOs have violated the law, they deserve rectification. Yet, irregular administrative intervention was taken without a sound reason and a legal ground. Is it what we should expect from the provincial and municipal government? The practices of the local government of Shenzhen, taken in the eve of the change of the leadership of the 18th CPC Central Committee, are damaging the harmonious labour relation and image of the government.

2. The emergence of labour NGOs, (including labour rights organizations), is inevitable in history. It is the freedom to associate as promised in the constitution. Regardless of the government’s position, labour NGOs would flourish and grow since there is a huge gap between the pressing needs of the working mass predominated by the new generation of migrant workers, and the services provided by the current trade unions. And as long as the power between the employers and employees is imbalanced, labour disputes become severer day after day. As for the government, the wise choice to make is to take the opportunity, administer the labour NGOs by law and promote their development for the mutual benefits of employees, employers and the society. This has been demonstrated in the experiences of many developed countries.

3.
The emergence and development of labour NGOs is a leap in history as they shoulder enormous social responsibility which is beyond the capacity of government to take, such as resolving labour conflicts and providing needed services to workers. Based in the civil society, the public-interest oriented, non-profiting making and grass-root nature of the labour NGOs provide them with unique advantage over the government and the administrative-driven trade unions. The labour NGOs have also demonstrated their unique function in relieving social pressure and lessening social conflicts. If labour NGOs have a chance to take part in public management effectively, the needs of workers would be expressed more effectively, the communication and negotiation amongst different strata of the society would be more comprehensive. Through active engagement with the NGOs, the reforms of the trade union such as separation from the administration, democratization and consolidation of the mass base of the trade union could also be speeded up, leading to its transformation to becoming the genuine representative and defender of workers’ interests.

4
. The lack of labour organization in a society always brings disastrous aftermath. The mass incidents broken out amongst the migrant workers in Zhengchen and Guxiang in Guangdong province demonstrate that the new generation of migrant workers’ expectation on public services is getting more and more vigorous. Without labour NGOs acting between the government and the disadvantaged, it is hard for the government to find the target and channel to begin any rational negotiation in the middle of a labour dispute or a strike. Between the government and the un-organised people, more channels viewed as un-biased should be found in order to maintain social stability. Indeed greater frustration would be provoked if the government only knows to rely on the state machine to maintain stability. The rational people are able to organize and manage themselves. On the other hand, dis-organised people are vulnerable to tides and using violence as they do not have the means to protect their genuine interests. The result is damaging to the social structure.

5
. The legitimacy of labour NGOs should not be solely determined by the government and the trade union. Nor should they treat the NGOs based on the ‘contact, utilize and convert’ principle with the intention of using, promoting and offering protection to some favoured organizations, and remodeling, suppressing, banning the dis-favoured ones. The benchmark of judgment on NGOs should be genuine protection of the rights of workers, the support of workers for the organisation, the promotion of mutual benefits and harmonious labour relation. The government and the trade union may have their stance. This should better be taken under a framework of laws on labour NGO regulation adopted by the National People’s Congress after thorough discussion amongst the government, the employers, employees and the society. A legal framework as such shall be the basis of future government regulation on the NGOs.

6
. Currently, the most pressing task is to enforce the Decision by means of ministerial regulations on particular areas of social administration. This shall provide the legal basis and fundamental support to the development of social organizations in Guangdong province. We hereby make two recommendations.

(1
) The un-reasonable harassment on labour NGOs taken by the local government departments and authorities should be stopped immediately. The operation, offices and facilities of those labour NGOs which were forced to close down or move out from their locations should be resumed.

(2
) A platform which includes the participation of the government, the trade union, the employers, workers, the labour NGOs, the academics and representatives of different strata of the society should be created to discuss about the appropriate regulation on labour NGOs. Based on the discussion, the National People’s Congress of the Shenzhen municipality and the Guangdong province should proceed to stipulate laws accordingly that cover labour NGO establishment and registration, the rights and duties, the content, scope and modes of NGOs’ activities, as well as the legal responsibility etc. This should offer all the involved parties with the legal ground to follow and to rectify abuses in order to reform the social administration in Guangdong province by law and develop social organizations.

T
he reform in Guangdong and Shenzhen has earned the government reputation, credibility and legitimacy. At the crossroad between expansion of government or promotion of the society, the Decision endorsed by the top authority of Guangdong province has already given us the answer. However, the all-round administrative role has stereotyped the local government departments, implanting them with defensiveness, making them believe that administration over the society must be secured in the hands of the government. Such mentality has led them astray from the reality. Indeed, the separation of our people from the units and the land has yielded much to be taken care of in the society. The vast blankness could be filled only if the government delegates power to social organizations. The more effective the social organizations are, the less the government has to do in releasing the social pressure. The challenge ahead lies in the genuine enforcement of the spirit of Decision amongst the local government departments. They should walk away from the administration-dependent model and concede more space to the social organizations. Only by speeding up the reform of social administration and development of social organization, establishing a legal, policy and support system could we truly stimulate the strength for sustainable development of the society.

Co-signed by:

Chen Min (Xiao Shu), Current Affairs and Politics Commentator, Member of
the Editorial Board of Yan Huang Chun Qiu
Yuan Yang, Economist
Zhang Lifan, Historian
Ye Kangzheng, poet, cultural study scholar
Shen Yuan, Sociologist, Professor of Tsinghua University
Guo Yuhua, Sociologist, Professor of Tsinghua University
Lu Huilin, Sociologist, Associate Professor of Beijing University
Pun Ngai, Deputy Director of Research Centre for Social Work, Beijing University, Professor of The Hong Kong Polytechnic University, Sociologist
Duan Yi, Director of Shenzhen Laowei Law Firm, professes in labour law
Chang Kai, Professor of Renmin University of China, professes in labour law
Wang Keqin, news reporter
Wang Junxiu, independent scholar
Wang Changcheng, Professor of Zhongnan University of Economics and Law, Scholar of labour and social securities, professes in labour relations
Chan Kin-man, Director of Centre for Civil Society Studies; Associate Professor of the Chinese University of Hong Kong, Sociologist
Liu Jianfeng, Reporter
Teng Biao, Lecturer of China University of Political Science and Law, Legal Scholar
Xiao Xuehui, professes in Ethics
Feng Xiliang, Professor of Capital University of Economics and Business, professes in labour sociology
Wang Jiangsong (the author of the letter), Professor of China Institute of Industrial Relations, professes in labour theory and labour culture

(Listed according to the order of signing this letter)


Petition Letter: Please confirm the legitimate work of NGOs and support their continued development

To:
The Provincial Government of Guangdong, the Municipal Government of Shenzhen, the Municipal Government of Dongguan.
Wang Yang, Secretary of the Guangdong Provincial Standing Committee of the Communist Party of China.
Wang Rong, Secretary of the Shenzhen Municipal Standing Committee of the Communist Party of China.
Xu Jianhua, Secretary of the Dongguan Municipal Standing Committee of the Communist Party of China.

Please confirm the legitimate work of NGOs and support their continued development

Last July, the Guangdong Provincial Party Committee approved the Decision on Strengthening Social Construction, which states that, as of 1 July this year, civil society groups in Guangdong can register directly with the Department of Civil Affairs. This lowering of the registration threshold was considered by many to be an innovative reform. However, over the last few months, many Shenzhen-based non-governmental organizations (NGOs) helping to defend workers’ rights have come under pressure and were forced to close down. These organizations have consistently provided migrant workers with legal assistance, education, training and social services. They act as a voice for and defender of the long over-looked rights and interests of migrant workers. We call on local governments to halt the suppression of these NGOs and acknowledge their legitimate work.

We understand that the Shenzhen Spring Wind Labour Dispute Service Centre, the Time Women Workers Centre, the Yuandian Workers Centre, the Dagongzhe Migrant Worker Centre, the Green Grass Workers Centre, the Little Grass Workers’ Home and the Dongguan Youwei Workers Centre have, as a result of local government pressure, been forced to relocate, suffered harassment, had their utilities cut off, undergone sudden tax inspections, and even seen workers participating in their activities being threatened. This pressure has forced these groups to close down.

In February 2012, just three months into a three year rental contract for its office in

Shenzhen’s Bao’an district, the Spring Wind Labour Dispute Service Centre was told by its landlord that the rental contract had been cancelled, the water and electricity was cut off and its signs taken down. They were strongly urged to leave.

In March 2012, the Yuandian Workers Centre was inspected by numerous local government departments and the landlord issued a notice of contract termination.

In April, the Dagongzhe Migrant Worker Centre suffered surveillance and interference by unidentified individuals, after which the landlord terminated the rental agreement and the utilities were cut off. Dagongzhe’s representative Huang Qinnan was brutally attacked in 2007, and the centre was forced to relocate in 2008 and 2010.

In May, the Green Grass Workers Centre was subject to numerous local government inspections and was informed by the landlord of the termination of the rental agreement.

In June, the Time Women Workers Centre was the victim of selective law enforcement by the Industry and Commerce department, which ordered it to close down and relocate because it had not registered.

At the same time, the Little Grass Workers’ Home suffered numerous local government inspections and was informed by the landlord that their rental agreement would be terminated ahead of schedule. Moreover, two fulltime staff had their residential leasing agreements cancelled in quick succession.

And in July, the Dongguan Youwei Workers Center was informed by the landlord that the rental agreement would be cancelled. The landlord complained of repeated police harassment. Afterwards, the group’s bank account was frozen because of an investigation by the local tax authorities.

We can see from the above incidents that the Shenzhen and Dongguan governments’ monitoring of NGOs has not relaxed; on the contrary, they have engaged in multifaceted oppression. Many people working in labour organisations have also complained of harassment by local governments, placing intangible pressures on their work. These consecutive moves by local governments against labour groups, we believe, gives the impression that the policies of the provincial government have been subverted, and that the Spring Wind of Guangdong’s reforms is now bringing in a bitter winter.

We urge the Guangdong provincial government to respond to this suppression of labour groups and implement its more relaxed policy for the registration of civil society groups. Respect civil and labour rights and allow public interest groups the space to develop.

Asia Monitor Resource Centre
China Labour Bulletin
The Chinese Working Women Network
Globalization Monitor
Hong Kong Confederation of Trade Unions
Hong Kong Christian Industrial Committee
Hong Kong Catholic Committee for Justice and Peace
IHLO (Hong Kong Liaison Office of the International Trade Union Movement)
Labour Action China
Labour Education and Service Network
The Labour Party (Hong Kong)
Neighbourhood Workers Service Centre
Students and Scholars against Corporate Misbehaviour
Worker Empowerment

15 August 2012

Bloomberg BNA: Labor NGOs Face Tough Times in Guangdong; Group Alleges Child Labor, Corruption in Factory Audits (16-8-2012)

Labor
Labor NGOs Face Tough Times in Guangdong; Group Alleges Child Labor, Corruption in Factory Audits

Key Development: Seven labor rights and labor education groups have been evicted due to pressure on landlords by local governments.

Potential Impact: Groups see the crackdown as part of a new effort of social management that steers all labor issues through official channels while at the same time trying to eliminate or pressure independent voices.

SHENZHEN, China – Up to seven labor nongovernmental organizations (NGOs) and migrant worker advocacy groups in south China’s Guangdong province have been forced to move or close their offices in the past six months after being evicted by landlords who came under pressure from local authorities, groups affected told BNA on August 15.

Students & Scholars Against Corporate Misbehavior (SACOM), a labor rights group based in Hong Kong, released a statement on August 6 detailing what it called a “crackdown” on such groups in the cities of Shenzhen and Dongguan.

SACOM also issued an open letter from dozens of international scholars who follow China labor policies on Aug. 15 that calls on the Guangdong government to address the “apparently systematic repression” against the labor groups.

The push against the labor NGOs comes at a time when authorities in Shenzhen have begun to allow greater freedom for workers to organize under the only official labor union in China, the All-China Federation of Trade Unions (ACFTU), in order to participate in direct elections of worker representatives in their factories.

Following one such election at OMRON Electronic Components (Shenzhen) Ltd. on May 27, the head of the Shenzhen branch of the ACFTU said that 163 companies could hold direct elections for union representatives over the next year, though labor watchers have not seen any indication that this has started two-and-a-half months into the pilot project.

Geoffrey Crothall, a spokesperson for Hong Kong-based labor rights group China Labor Bulletin, told BNA by phone on August 16 that it was difficult to know how well the direct election process is going since the Shenzhen ACFTU, which is directing the pilot process in the municipality, has not announced any election results from other factories.

Chen Mao, an officer at the Shenzhen Migrant Workers Center (Dagongzhe), one of the labor NGOs recently evicted from its offices, told BNA in an interview during a visit to the group’s new office location on August 15 that most workers feel the pilot election process is a more of a highly orchestrated “show” than a real push for giving more electoral powers for workers.

Guangdong province also issued new regulations on July 1 regarding the registration of NGOs, allowing such groups to register for the first time without having to have a governmental or institutional sponsor as their backer, which has long been seen as a way to manage such groups and restrict their independence.

Debby Chan, a project officer with SACOM, told BNA in a phone discussion on August 15 that there was “a lot of speculation” as to why the crackdown is occurring, saying one possibility was that it is related to government concern about social stability due to the upcoming political transition among the top leadership in Beijing.

Another speculation is that the Shenzhen government – where most of the NGOS impacted are based, besides one other in Dongguan – is trying to “co-opt NGOs that are loyal” while getting rid of those that are not, Chan said.

The third theory is that recent reforms launched in Guangdong and Shenzhen are simply new social management policies by directing any possible social conflict through official channels rather than a real liberalization.

Crothall said he suspected that the moves against the labor NGOs had more to do with the Shenzhen and Dongguan local governments than anything being ordered from higher authorities in Guangdong, though other labor activists are uncertain.

The Dagongzhe center, which has conducted educational and labor rights discussion programs with migrant workers in Shenzhen since 2000, first started getting eviction requests from its landlord in November last year.

The group had signed a three-year lease just two months before, Chen said, but then the landlord started to call on them to leave and “implied that they needed to move and that the local government was behind” the pressure.

An official eviction notice giving the group a week to move came in April, though under their contract the group should have been given a two-month notice, group members said.

Francine Chan, an officer from Worker Empowerment, the Hong Kong-based partner of Dagongzhe, told BNA during the visit that they didn’t realize it was a series of crackdowns until they contacted other labor NGOs and found out they were all having similar eviction problems.

While these pressures on landlords initially have come from the village committees in the localities where the offices are based, Chan said, “no one really knows who it comes from” above that level.

Chen of Dagongzhe said the labor NGOs are “confused” about why this is going on and people are questioning whether the recent relaxation policy toward NGO registration is a “real opening or [just] a new social management policy.”

Chen said they approached the government in the Longgang district of Shenzhen where their offices have been based to discuss the possibility of registering their group, which currently operates under a business license, as an officially-recognized NGO and “the government denied that the policy even existed.”

The group has also reached out to the local ACFTU and was told that they should send their workers to the official labor union for education and that officers there implied that their group did not need to exist and was competing with them, Chen said.

Chen said he “didn’t see a conflict” between what the ACFTU and his group were doing and thought there could be a mutual relationship, but added that “many workers don’t know what a trade union is when they come to us” and questioned whether the ACFTU was actually doing much to educate workers about their rights.

Crothall of China Labor Bulletin said there had recently been a spike in strikes in Guangdong in July related to wage arrears, mainly in construction and manufacturing industries.

Chen echoed his thoughts, saying wage issues were among the top three concerns for workers that come through his center, mainly because the wages have not kept up with rising living costs.

While the minimum wage was raised in Shenzhen officially in February to 1500 yuan per month ($235), many smaller and medium sized companies were not following the rule, while foreign enterprises and domestic companies with over 500 employees are meeting the standards, Chen said.

Other top concerns are related to social insurance and pension that is taken out of salaries, since it is not transparent to many workers where these payments go and confusing about whether they can collect them eventually or how they can transfer what they have paid in to where they have their hukou, or household registration, which is usually back in their hometown.

The increased use of labor dispatch agencies had also “seriously affected the construction industry,” Chen said, because there are so many layers of employment agencies and outsourcing within that industry that it is “often difficult for the workers to track back to their real employer” when they have wage arrears or other wage concerns.

Samsung Accused of Child Labor, Government Denies

A New York-based labor group China Labor Watch (CLW) released a 31-page report on August 7 alleging child labor violations at HEG Electronics (Huizhou) Co., Ltd., a manufacturer of Samsung Electronics Co. phones and DVD players in the city of Huizhou in Guangdong province.

The group conducted investigations by sending investigators to work at the factory in June and July of this year, finding at least seven workers under the age of 16 in their division of the factory and leading them to estimate that there were around 50 to 100 such under-age workers at the facilities in Huizhou.

The investigation also alleges that some auditors from auditing firm Intertek, which did the social responsibility audit on the factory, had been accepted bribes in the past from companies in order to receive passing audits, calling into question the company’s ability to conduct qualified audits.

In a hearing on July 31, CLW founder Li Qiang addressed the Congressional-Executive Commission on China and raised the Intertek issue while also alleging the “audit system used by multinational corporations” in China was “not effective” and “corrupt.”

Authorities in Huizhou denied there were child labor violations at the factory in a statement on the official municipal government website on August 9, saying they had checked the ages of the seven workers alleged to have been underage and found that all were over the age of 16.

The China Labor Watch report can be found here:
http://chinalaborwatch.files.wordpress.com/2012/08/samsung8-271.pdf

By Michael Standaert

Reproduced with permission from Daily Labor Report, 159 DLR A-5 (Aug. 16, 2012). Copyright 2012 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com


Labour NGO crackdown in Shenzhen (latest update: 25-9-2012)

In recent months, a number of grassroot labour NGOs in Shenzhen have been facing crackdown in different degrees. Dagongzhe Centre, Worker Empowerment’s partner organisation in Shenzhen, was forced to move by the landlord in April 2012, and was cut water and electricity supply for 2 months. After several attempts of petition by the staff and supportive workers, the centre did not manage to stay and resorted to move to a new location in July 2012.

Apart from Dagongzhe centre, 6 other labour NGOs have been facing similar situations. This does not comply with the new policy direction of social management boosted in Guangdong in recent years. The dim future of civil society development in Guangdong has aroused concern from both domestic and overseas media, and reports in English include the following –

27-07-2012     South China Morning Post: Guangdong shuts down at least seven labour NGOs
28-07-2012     Wall Street Journal: Labor NGOs in Guangdong Claim Repression
13-08-2012     In These Times: Chinese Labor Activists Get Shut Out, But Won’t Shut Up
16-08-2012     Bloomberg BNA: Labor NGOs Face Tough Times in Guangdong; Group Alleges Child Labor, Corruption in Factory Audits
02-09-2012 Global Post: Government crackdown on labor groups worsens in South China
10-09-2012     AFP: Crackdown on China Workers’ Rights Groups
24-09-2012 Wall Street Journal: Hon Hai Riot Highlights Squeeze on Chinese Manufacturers

Further discussion –
Ivan Franceschini: Another Guangdong Model: Labour NGOs and New State Corporatism
Hsiao-hung Pai: China, the View from the Ground

Petition letters –
International Scholars Call on Guangdong Government to Stop Repression Against Labour NGOs
Open Letter by a group of Hong Kong-based labour organisations: Please confirm the legitimate work of NGOs and support their continued development
Open Letter by a group of Chinese Academics: About the Development of Labour NGOs – Letter to the Provincial Government of Guangdong and the Municipal Government of Shenzhen
Statement from War on Want: Crackdown on Labour Organisations in China

For more articles in Chinese, please refer to the Chinese version of our website.

SCMP: Guangdong shuts down at least seven labour NGOs (27-7-2012)

Guangdong shuts down at least seven labour NGOs
South China Morning Post  27-7-2012

Guangdong authorities have shut down at least seven Shenzhen non-governmental groups that advocate for the rights of migrant workers.

Veteran labour-rights activists have described the five-month crackdown as unprecedented.

Ironically, authorities have pledged that the province will be the mainland’s first to ease registration requirements for NGOs from July 1.

Several activists told the South China Morning Post that they were evicted from their offices after their landlords were pressured by officials who conducted frequent checks of the facilities.

Mainland labour-rights NGOs often report of harassment from the authorities, who fear that foreign-funded and lobbying groups could organise large-scale strikes, incite protests or trigger social unrest.

Zhang Zhiru , director of the Shenzhen Spring Breeze Labour Disputes Service Centre, said he had rented the seven NGO offices that were shut down.

They include the Yuandian Worker Service Centre, the Shenzhen Migrant Worker Centre, the Green Grass Worker Service Centre, the Times Female Worker Service Centre, the Little Grass Workers’ Home and another labour NGO in Longgang district that declined to be named.

Our office was the first to be closed in February, only three months after we moved to a new location in the outskirts of Baoan district, Zhang told the Post.

The landlord demolished our signboard and suspended our water and power supply even though we had signed a three-year contract and paid enough rent. It’s ironic that authorities said publicly that they would take a more open-minded approach to NGOs, and meanwhile they were conducting a widespread crackdown on us.

Zhang said his office mainly provided legal aid to migrant workers with labour disputes.

Chen Mao, an NGO worker with the 13-year-old Shenzhen Migrant Worker Centre, said he was shocked at the magnitude of the crackdown.

Our office was forced to shut down in May, he told the Post. In the past, most harassment and retaliation [against us] came from employers who were angry because of our work in upholding migrant workers’ rights. I have never seen such a large-scale clampdown from authorities in our centre’s history.

Chen, who petitioned Shenzhen authorities last month to find out why the closure was ordered, said his landlord had frequently been harassed by local officials since November. He would not speculate on the reasons behind the crackdown, but said he did not think it was because the authorities were afraid of social unrest sparked by migrant workers before the next party congress.

Shenzhen officials told me that all NGOs in the province are still required to find a government department to act as a sponsor before they are able to register. They said they had not received any orders from the provincial government to ease registration controls, he said.