China's coal industry urgently requires reform

Published by MAC on 2010-12-06
Source: China Labour Bulletin, FoE, Caixin

Safety violations and bribery still abound

Time to overhaul coal mine safety in China

China Labour Bulletin release

30 November 2010

China Labour Bulletin is calling on the Chinese government and trade unions to radically rethink their approach to coal mine safety and comprehensively overhaul the country's occupational health and safety system.

Prompted by the disturbing increase in the number of coal mine accidents in China this year, and by the growing incidence of occupational disease in the industry, CLB director, Han Dongfang, has written to senior government and trade union officials arguing that the current system is fundamentally flawed. The system, he points out, relies on mine managers to take the initiative on safety issues, and assumes government regulation and monitoring can be effective, even when all the evidence points to the contrary. And crucially, it excludes coal miners, the one group with the greatest interest in coal mine safety.

CLB argues that there is an urgent need to put coal miners at the centre of the health and safety monitoring system by creating committees, comprised exclusively of coalface workers, that would work with mine management to establish an occupational health and safety system in mines, decide on the purchase of safety equipment and installation standards, and carry out regular inspections of safety equipment above and below ground.

In addition, democratically elected trade unions in the mines should help establish a system of collective bargaining in which employees from all sectors of the mine would be represented in negotiations on wage levels, overtime pay, social insurance benefits, working hours, working conditions, and occupational health and safety.

In conclusion, Han Dongfang expresses the hope that that the "Chinese government and trade unions will be able to fundamentally change their approach to coal mine safety and health management, so that China's coal industry will follow a path of sustainable development which puts people first and respects human life."

An edited translation of CLB's letter, issued on 19 November, follows. A copy of the original letter can be found on our Chinese language website. - http://www.clb.org.hk/schi/node/1301448

A letter to the central government and trade unions regarding the health and safety of China's coal miners

Qiao Chuanxiu, Vice Chairman, All-China Federation of Trade Unions
Luo Lin, Director, State Administration of Work Safety
Minister Chen Zhu, Ministry of Health

Dear Vice Chairman Qiao, Director Luo and Minister Chen,

My name is Han Dongfang, the director of China Labour Bulletin (CLB), a Hong Kong-based non-governmental organisation which has worked for many years to promote and defend the rights and interests of workers in China. Based on our research and our experience in labour rights litigation over the years, CLB has drawn up a number of practical proposals to improve safety and occupational health in China's coal mines (see CLB's research reports). In light of the recent sharp rise in pneumoconiosis (black lung disease) among coal miners and the growing number of mining accidents in China, we again submit these proposals directly to the government and to the All-China Federation of Trade Unions (ACFTU).

ACFTU Vice Chairman Zhang Mingqi told the media on 9 November 2010 that 18,128 cases of occupational disease were officially registered in China in 2009, an increase of 32 percent from the previous year. Pneumoconiosis accounted for about 80 percent of all occupational disease cases, with 14,495 new cases registered last year. In the coal mining industry, which accounts for more occupational disease cases than any other industry, pneumoconiosis is now responsible for nearly three times as many deaths each year as mine accidents. And the number of mine accidents and deaths are also going up. According to Zhao Tiechui, director of the State Administration of Coal Mine Safety, as of 27 June this year, there had been 617 coal mining accidents involving 1,192 deaths, an increase of 6.7 percent from the previous year.

The central government is obviously very concerned about the deteriorating safety of China's coal mines and has taken various measures designed to address the problem. But the increasingly grim reality tells us that these measures have failed to effectively curb mine accidents. On 7 October 2010, the State Administration of Work Safety introduced a directive requiring mine managers to go down into the coal pits with miners in order to monitor and inspect the safety of mines. Less than 10 days later, on 16 October, a gas explosion at the Pingyu coal mine in Henan killed 37 miners.

Clearly, even when existing measures designed to hold mine managers accountable, such as fines and mine closures, are reinforced by sending them down the mine in a system that has already cynically come to be known as "burial with the dead," it still cannot stem the growing number of serious accidents and cases of pneumoconiosis in the coal mining industry.

There is now an increasingly urgent need for a rational and comprehensive review of the deficiencies in the current system, and then to rebuild the coal-mine safety and health monitoring system in China. It will be both difficult and time-consuming but it is the only way to solve the problem.

The current "top-down" system of occupational health and safety monitoring is fundamentally flawed: It relies exclusively on mine managers' own willingness and initiative to make improvements in safety and assumes there is no limit to the remit of government regulation and oversight. Moreover, the coal miners whose health and lives are under direct threat are completely excluded from the current safety monitoring system, and are seen as mere units of production, or worse still as potential rule breakers.

Coal will almost certainly remain the primary energy source for China's economic development for many years to come. But although our country's economy is developing by leaps and bounds, coal miners can no longer be regarded as mere tools for economic growth; nor should economic development continue at the cost of the life and health of miners.

Coal must be produced, and the life and health of miners must be protected! The failure to effectively protect the safety and health of miners not only runs counter to the goal of economic development, but it also undermines government credibility, turns the building of a harmonious society into empty talk and, more importantly, will devastate millions of families.

We argue that only by establishing a stable, long-term mechanism to monitor coal mine safety and occupational health will it be possible to reduce the number of mining accidents and cases of occupational disease. Crucially, the miners themselves must form the core of such a monitoring system. Miners at the coalface are the ones who care most about their own health and lives. Unlike government officials and mine owners, they are motivated to monitor mine safety not because they want to be promoted, nor because they are afraid of fines, nor because they are worried about being fired, but out of a simple and fundamental determination to save their own lives!

The government and trade unions need to fundamentally change their mindset and get away from this top-down model that relies on the initiative of mine owners and on government monitoring. Instead, they need to adopt a model that places coalface miners at the centre of efforts to improve mine safety and health conditions and turn the millions of miners who have hitherto been sidelined into active participants in ensuring safety.

The government should make a simple financial calculation: Having miners participate in the monitoring of coal mine safety and occupational health would involve very little additional cost; certainly when compared with the cost of expanding the government's safety monitoring bodies and increasing the number of regulatory staff. The funds the government would need to invest would be negligible but there would be a world of difference in terms of effectiveness.

Based on the above, CLB submits two basic recommendations designed to improve China's coal mine heath and safety system:

The government should set up coal miners' occupational health and safety monitoring committees in all coal mines. The ACFTU should implement this system through grassroots trade unions. These committees should be composed exclusively of coalface workers elected by their fellow miners, work under the leadership of the coal mine trade union, and come under the protection of the Trade Union Law. These committees should work with mine management to establish an occupational health and safety system, decide on the purchase of safety equipment and installation standards, and carry out regular inspections of safety equipment above and below ground.

The committees should meet regularly to assess the mines' overall safety and health conditions, draw up a list of health and safety risks, and make requests to mine management for improvements. The committees should meet regularly with mine management to discuss occupational health and safety issues, negotiate plans of action to improve conditions and monitor the implementation of such plans.

The government and ACFTU should establish a collective bargaining system in coal mines. In accordance with the Trade Union Law, Labour Law, Production Safety Law, Occupational Disease Prevention Law, Labour Contract Law etc, and under the auspices of the trade unions, miners in state-owned as well as in privately owned coal mines should elect collective bargaining representatives. These representatives should include mine employees in all areas of work, both above and below ground. They would be responsible or such matters as wage levels, overtime pay, social insurance benefits, working hours, working conditions, and occupational health and safety.

Acting on behalf of the miners, the representatives should hold regular collective bargaining sessions with mine management to sign collective labour agreements. Collective bargaining can be held once a year or at least once every three years. If conditions change in the period between two bargaining sessions, resulting in necessary amendments to the contents of the original collective agreement, then either the mine management or the trade union can request provisional collective bargaining so as to amend the clauses of the agreement.

China Labour Bulletin sincerely hopes that the Chinese government and trade unions will be able to fundamentally change their approach to coal mine safety and health management, so that China's coal industry will follow a path of sustainable development which puts people first and respects human life.

Han Dongfang
19 November 2010

Email:clbeditor@clb.org.hk
Tel(852)27802187
Fax:(852)23594324

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Chinese listed companies must disclose environmental incidents within 1 Day

China Sustainable Finance Analyst

Friends of the Earth-US -Newsletter 10

November 2010

Companies listing shares on China's stock markets must report sudden and unexpected environmental incidents within one day of the occurrence, according to draft guidelines from China's Ministry of Environmental Protection.

On September 14, 2010, the MEP released the draft "Guidance on Environmental Information Disclosure of Listed Corporations", which instructs listed companies to fulfil more explicit environmental protection responsibilities and environmental information disclosure obligations. Also, a MEP official stated that the Guidance lists corporations in 16 heavy polluting industries (coal-fired power, steel, cement, electrolytic aluminum, etc.) that should publish annual environmental reports to periodically disclose pollution discharging, environmental law compliance, environmental management, and other environmental information.

The draft guidelines follow a July 2010 notice from the MEP to listed companies, which call for more disclosure of environmental information.

The new rules were sparked by the July 2010 chemical waste spill at a mine owned by Zijin Mining Group in Fujian Province.

The accident, which the company failed to disclose for nine days, was called China's worst mining pollution disaster in two years. The local environmental protection agency fined the company RMB 9.6 million (US$1.4 million), which was well below earlier reports that the fine could be as much as RMB 500 million (US$74 million).

Additionally, Zijin said it would compensate local fishermen for their losses, however in September the company had not paid out most of the money because it said it was receiving fraudulent claims from local village governments.

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Police Couple Pays Dearly for Business Badge

By Liu Chang

Caixin

30 November 2010

A luxury apartment that a Linfen traffic cop and his wife bought with illegal profits later became a murder scene

Wang Jianxiong's neck bore strangulation creases, and his head had been slashed at least seven times. Nearby, his dead wife Han Huifang showed no obvious signs of injury, although her hands had been bound.

Police surveyed the gruesome scene in the couple's Linfen home November 12 and announced a week later that the case had been solved. At a press conference, police said three suspects had been arrested for premeditated murder. Their motive was robbery.

But the press conference lasted only five minutes and fell short of addressing critical questions about the deaths, the couple's lives and the crime itself - including questions still troubling this Shanxi Province community.

Wang, 52, was a traffic police officer for the Public Security Bureau of Hongdong County, a section of Linfen with a population of about 700,000, making it Shanxi's largest county. Han, meanwhile, worked in the security bureau's complaints office.

Theirs were modest civil service jobs in a community with a coal-based economy. Another officer said Wang and Han probably each earned about 2,000 yuan a month.

Yet within just a few years, the couple managed to amass a minor fortune, ran a steel mill, lived in a luxury villa, drove a BMW and sent two daughters and one son to study in the United States. Their wealth apparently became well-known in the community and, according to police, eventually attracted their killers.

How did they get rich? Answering that question requires an understanding of the fuzzy boundary between questionable business dealings and public service in Hongdong's coal economy.

Not Just a Cop

No account of the Wang and Han road to riches, which apparently included payoffs and criminal protection schemes before its deadly end, should overlook the fact that they were relatively small fish in a sea of wealthy sharks.

Sources at the Hongdong security bureau, the local commerce bureau and other agencies said civil servant couples who dabble in business - and profit from double-dipping - are quite common in the area. Wang and Han were "small players," said one source. "They weren't high up, and they weren't that rich."

The lean, amiable Wang was one of nine children born in a village to a father who worked for the Hongdong traffic bureau. He served in the army and later worked as a driver for a county security director, Zhang Deying.

Wang's first pot of gold was filled with traffic policing payoffs. One source who said he bribed Wang several times in his office said an area traffic officer on patrol can pocket nearly 1,000 yuan a day from drivers and others.

Yet even daily payoffs could not have accounted for Wang and Han's wealth, estimated in the hundreds of millions of yuan when they died.

The real money apparently started flowing after Wang was promoted to captain of the highway patrol in 2003, at a time when local police were starting to provide special protection for illegal coal mines that opened in the area after coal prices skyrocketed.

Coal mining became more lucrative than ever after power shortages wreaked havoc in 19 provinces across the country in the summer of 2003. And soon, shady entrepreneurs were finding ways to dodge the government's mine licensing process in pursuit of easy profits.

One local coal sector source said unlicensed mines sprouted across the county after the 2003 price increase, each built on a network of government-business relationships and under a protective umbrella of agencies, including police departments that oversee roads and the coal business.

"At that time, there were illegal coal mines everywhere," said a source. "Each brought in several hundred thousand yuan per day."

Mine operators who "could go a month without accidents, without deaths" in the pits "could get rich overnight."

Yet operators had to share that wealth to stay in business by, for example, paying off key police personnel, such as highway patrol captains. One strategy was to let the cops partly own their illegal mines.

"In exchange for your protection, you'd own a portion of the illegal mine," the source said.

Wang's stake was in the Lusheng Mine, about 20 kilometers northwest of Hongdong, where about 200 workers annually extracted around 1.5 million tons of coal. The mine's annual revenues topped 100 million yuan.

Around 2007, a source said, Wang sold his share in the mine for between 100 and 200 million yuan. At the time of the murders, Wang was still owed up to 70 million yuan.

Wang also built wealth through a steelworks that he sold about five years ago for approximately 2.5 million yuan. He apparently operated the business without a license, according to a local industry bureau official.

"He was a state public servant" and legally could not operate a business, the official said.

In some ways, Wang was frugal. He smoked cheap, 10-yuan-per-pack cigarettes, for example, and kept a low profile.

Anyone paying attention to Wang's real estate, however, would have known that the couple was not as down-to-earth as they appeared.

One of at least two homes was a three-story building with a courtyard built in the 1990s on more than 300 square meters of land. And their apartment - where their bodies were found - cost more than 360,000 yuan is in the country's highest building with an excellent view.

Wang's life changed radically in 2008, after his former boss Zhang - who had risen to the job of Linfen deputy mayor - was convicted for illegally pocketing 1.05 million yuan. Zhang lost his job and was expelled from the Communist Party.

The same year, Wang was demoted to officer from captain as part of a Hongdong traffic force personnel shakeup.

Yet Wang, like other traffic officers, continued making money on the side. Officers can make money by chauffeuring, operating small businesses or demanding payoffs. "The proportion of businessmen" in the police force "is very high," said one officer.

"Most traffic police you see on the road work for 870 yuan a month," the officer said. "Full police officers only make 1,800 or 1,900 yuan a month.

"With the cost of living so high, what would they do if they didn't go into business?"