MAC: Mines and Communities

China update

Published by MAC on 2007-08-30

China update

30th August 2007

Three weeks ago, we spotlighted the serious cosequences of blaming so-called "natural" events for corporate or administrative negligence in protecting miners' working environments. This followed the likely drowning of some 180 coal miners at Chinese coal workings in Shandong; blame for which was officially attributed to abnormal floods [See:]

The Chinese Minister of Civil Affairs thereupon announced that, since these deaths were not classifianle as "accidents" but due to "natural disaster", the government couldn't pay compensation to their bereaved families .

Although the minister has since authorised some payments, according to the China Labour Bulletin (CLB) any implication that the government "was somehow doing the victims' families a favour by providing them with compensation is highly opportunistic and irresponsible."

.Violence was recently meted out against workers protesting at misappropriation of their redundancy payments at a coal mine in Hubei province. The previous month a strike was held in Sichuan, by employees of a cement plant taken over by Lafarge, who claim they were awarded derisory sevrance payments and left without any welfare safety net.

Comments CLB: "[It] is becoming increasingly common for management and local government to respond with violence to peaceful workers' protests. Some company owners hire gangs of local thugs to do their dirty work, while those with influence in local government can often rely on the police to break up protests or strikes that threaten their interests."

Minister claims the government is not legally bound to give miners' families compensation after a "natural disaster."

China Labour Bulletin

23th August 2006

The suggestion by the Minister of Civil Affairs, Li Xueju, that the government was not legally obliged to pay compensation to the families of victims in the Shandong mining tragedy because it was a "natural disaster" is both irresponsible and alarming.

Although the official investigation into the cause of the disaster has yet to begin, Mr Li announced during a press conference in Beijing on 22 August that the flooding of the Huayuan and Minggong mines in Xintai which trapped 181 miners was a "natural disaster," and that "China currently has no compensation system for people killed and injured in natural disasters."

China's regulations on compensation payments for deaths in coal mines make it clear that if anyone dies in a coal mine accident they are entitled to a compensation payment no lower than 200,000 yuan. The compensation figure of 200,000 yuan was first mandated in the Shanxi provincial "Regulations on the responsibility for coal mine safety and the prevention of serious and major accidents," issued in November 2004, and soon became the accepted standard across the whole of China with the approval of the State Administration of Work Safety.

However, the wording of the regulations refers to "accidents" (shigu) not "disasters" (zaihai), which may indeed provide the mine owners with some kind of get-out clause. If true, this would be a serious cause for concern.

Mr Li went on to say that even though the Shandong flood was a natural disaster, the government would make an exception in this case and provide some form of compensation to the victims' families. Indeed the government has already provided the families of victims with 2,000 yuan each in emergency relief. However, for the Minister of Civil Affairs to suggest, before all human error has been ruled out by an official investigation, that the government was somehow doing the victims' families a favour by providing them with compensation is highly opportunistic and irresponsible.

There is considerable evidence that the flooding was not the "natural" disaster the government claims. The Shandong Provincial Coalmine Safety Administration warned of the danger of flooding due to heavy rain just one day before the levee of the nearby Wenhe River was breached and an estimated 12 million cubic metres of water flooded into the Huayuan Mine trapping 172 miners. A report on the organization's website warned that; "Especially in areas along rivers and lakes and low-lying areas where water easily accumulates and leaks, we must take preventive measures." The flood waters around the town of Xintai had been rising steadily for several days but the mine's management did not even take the basic precaution of suspending production while the flood defenses were checked. Even if the inundation was the result of a "70 year flood" as the authorities claim, if the mine had been closed as a precaution - as many others in the area had been - the miners would not have been trapped.

The government's determination to emphasize the "natural" causes of the Shandong mining disaster is understandable. In a natural disaster every one is a victim and no one is to blame. The government can not be held accountable for a natural disaster, indeed a natural disaster presents the government with an opportunity to demonstrate trs concern and compassion for the Chinese people by organizing the rescue effort and compensating the victim's families even though they claim they are not legally obliged to do so.

The government has been more determined than usual to make sure nothing tarnishes its image in the run up to the 17th Communist Party Congress this year and the Olympic Games next year. The government can not afford to found culpable for yet another major mining disaster when it has time and again publicly declared its commitment to improving mine safety. However the government's decision to blame this disaster on natural, unavoidable causes has clearly backfired. When Mr Li's comments were carried by the state media, relatives of the victims in Xintai reacted with anger, some threatening to sue for appropriate compensation.

"I feel very angry," the brother of one miner told the South China Morning Post. "Yes, the rain was heavy, but the management of the mine should be held responsible for making them work in such conditions."

There have already violent protests outside the Huayuan Mining Company Office in Xintai and riot police have been stationed outside to protect the building.

Local police and security guards break up peaceful workers' protests

China :Labour Bulletin

16th August 2007

In two separate incidents over the last week, local riot police and security guards have been used to break up peaceful workers' protests.

About eight o'clock in the morning on 15 August, striking miners at the Tanjiashan Coal Mine in Hubei Province were suddenly surrounded by more than 200 part-time security guards hired by management to break the strike. According to a report by Radio Free Asia, the security guards set about the workers and in the ensuing clash at least one worker and one security guard died.

The conflict lasted about two hours, during which time the workers vented their anger by attacking company offices and two nearby police vehicles they believed had been used to transport management's hired security guards to the mine.

One of the strikers told Radio Free Asia on the evening of 15 August that another hundred or so people were gathering around the perimeter of the mine, and the miners feared that another attack intended to drive them off the premises was imminent.

The 800 miners had been on strike for six days after they discovered that 360 million yuan allocated by the central government for the workers' redundancy payments as part of the mine's privatization plan had allegedly been appropriated by mine's board of directors.

The previous week, more than one hundred riot police broke up a long running workers' protest outside the offices of the Qingyang Municipal Transport Company in Gansu Province. The workers had been protesting at the company offices since January after the transport company (previously the largest state owned enterprise in Qingyang) was privatized and sold off to property developer in the neighbouring province of Shaanxi. All the workers were laid off without any social security or unemployment benefits.

According to the Boxun news agency, on the morning of 7 August, local riot police cordoned off the company offices, preventing anyone from entering or leaving the premises. The police detained eight of the workers' leaders, later placing them under house arrest, and proceeded to beat up the remaining protestors. One female protestor was badly beaten by the police and a male worker's hand was broken.

China Labour Bulletin has noted that it is becoming increasingly common for management and local government to respond with violence to peaceful workers' protests. Some company owners hire gangs of local thugs to do their dirty work, while those with influence in local government can often rely on the police to break up protests or strikes that threaten their interests.

Such actions clearly demonstrate the serious imbalance of power in China between workers on the one hand and management, often in collusion with local government, on the other. And CLB once again urges the central government to address that imbalance by giving workers the freedom to form their own democratic and independent trade unions, and the legal right to strike, so that workers can begin to protect their own interests.

Diary of a Strike: 3,000 workers at the Shuangma Cement Plant strike in protest at management's compensation offer

China Labour Bulletinn

26th July 2007

At 7.00pm on 29 June 2007, more than 3,000 workers at the giant Shuangma Cement Plant in Mianyang, Sichuan Province, downed tools and went on strike to protest against the company's proposed severance package.

Shuangma, a former state-owned enterprise, was in the process of restructuring after being acquired in May by the world's leading building materials company, Lafarge. Shuangma's proposed severance package of 1,380 yuan for each year of employment was the equivalent of the average monthly wage in Mianyang and included a clause which meant workers agreed to forgo all other retirement, medical and welfare benefits. When this package was presented to the workers on 27 June as the company's final offer, it was immediately rejected. Management failed to address workers concerns and instead held a banquet in Mianyang City with local government officials to celebrate their good fortune after the Lafarge buyout. They had just started the banquet when the strike began.

The response of management and the local authorities and police to the strike was to seal the town off from the outside world to prevent news leaking out, however, in the early stages of the strike at least, internet postings and blogs provided a valuable insight into the day to day developments in one of the most significant labour protests in China this year.

The strike has now ended but it is still unclear as to whether or not the workers have agreed to management's terms.

The following is an edited compilation of news from Shuangma during the first week of the strike before the media clampdown made it difficult to attain anymore information. The veracity of the information below can not be independently verified but CLB publishes it here as a candid account of the strike from the workers' perspective.

30 June: When tools were downed at 7 o'clock in the evening on 29 June, Mianyang government officials and the management of Shuangma were at a banquet in the city to commemorate the handover of Shuangma to the French construction-materials multinational Lafarge. At 11 o'clock, Shuangma Cement President Tang Yueming and local government officials hurried back to Shuangma, but they were cornered in a Shuangma hotel by angry workers and detained there until this morning, when they left under the armed escort of the riot police. At noon today, a female employee of Shuangma was seized by company officials. Enraged workers blocked all the entrances to the company office building, demanding the release of their colleague. Six senior managers were trapped by the workers in a meeting room until five o'clock that evening when the detained worker was freed.

A few hours later, once the senior managers had been released from the meeting room, Shuangma Radio broadcast a speech made by the police chief of Jiangyou (the district north of Mianyang that includes Shuangma) alleging that; "a handful of criminal elements provoked and used the workers, who did not understand the true situation, to cut the power supply at the plant, leading to the production shutdown and strike." The broadcast appealed to the workers to return to their workplaces and support production, and featured a written self-criticism by a worker in a Shuangma laboratory. The speech and self-criticism were broadcast continuously in a loop until eight o'clock in the evening. Shuangma's television channel also aired the speech and the self-criticism continuously in place of its schedule programming. The infuriated workers all flocked back to the company office building after their evening meal, and then as the evening wore on gradually filed home. However, nobody went back to work.

Today an Internet cafe manager said there is an Internet blackout on comments about the Shuangma strike, and that print shops and photocopying facilities had been told by officials not to print or copy posters for Shuangma workers. Police are on guard at the bus station, and any Shuangma worker wanting leave the town must present their identification documents, register and give a reason for wishing to leave before being allowed to pass. The bus that runs once a day from Shuangma to Mianyang has been suspended. Shuangma's workers are already (effectively) under house arrest.

Another Shuangma employee was seized today in broad daylight, and four police were posted at the entrance of the police station. Two cameras have been mounted on the first floor, and armed police patrol the balcony at the top of the building. Two more workers have been detained. Details are unclear.

2 July. This morning, all workers held a meeting at the end of the bridge leading to the entrance of the Shuangma plant. Police were occupying the factory entrance and inner forecourt, and a loudspeaker van was playing the same broadcast over and again at the entrance, urging the workers to see reason, support the business reorganization, and firmly rebuff the handful of criminal elements creating a disturbance, destroying public property and affecting production.

The workers dispersed at around 10 o'clock in the morning today due to a rainstorm. Some 500 police officers have been sent in from Houba, approximately 10 km from the Shuangma plant. At present, the situation is calm, and we've heard that some people from Lafarge came to visit the plant yesterday.

One of the four detained workers, a woman, cut her wrists at a police station at Houba. She was sent to the hospital at Zhongba where she is believed to have died. Official nerves have been rattled by this young heroine's brave self-sacrifice, and they released the other three workers one by one during the evening. Yesterday afternoon also saw a gradual scaling back of the police presence, and now 90% of them have left Shuangma (the reason is that in Jiangyou, approximately 50 km away, citizens and country people are besieging the city government buildings, evidently because of a problem over the relocation of residents). Many rank-and-file policemen, while chatting with the workers, praised their actions, and said they thought they could win this dispute in the end. The morale of the strikers is growing firmer.

5 July: Today was peaceful and relations between the factory managers and the workers have returned to the kind of "Cold War" state. In Mianyang, large numbers of officials, at a high-level meeting called by Shuangma, were really shocked at the production shutdown and the length of the strike.

The retired employees of Shuangma have organised themselves, and written an open letter to the Standing Committee of Sichuan Provincial People's Congress, the provincial anti-corruption bureau, disciplinary inspection committee and trade union federation, in which they allege the misappropriation of funds to build, among other things, luxury villas for company bosses. The letter claims that over the last decade, company president Tang Yueming turned the plant from one of the most profitable businesses in the municipality into a loss-making enterprise, and demand that his tenure as president be investigated.

The workers of Shuangma are a good lot. They are dedicated to their work and to the company. Over the last 50 years, they have made a major contribution to China's economic development and helped maintain Shuangma's sterling reputation.

They have until recently suffered in silence under years of repressive management policies implemented by President Tang and his team. At one time, Shaungma generated over one billion yuan in state taxes each year but in the ten years since President Tang took over, basic wages at Shuangma have stagnated, while pay in the broader Chinese economy has risen rapidly.

Today, while the average workers' wage in Mianyang has reached 1,380 yuan per month, ordinary Shuangma employees have to support their families on just 500 to 800 yuan a month. Many have to rely on their retired parents for financial assistance. By contrast, Tang's top managers live in luxury houses and drive BMWs and Mercedes. This is a disgrace. Workers have waited so long for this day, only to learn they will be paid just 1,380 yuan for each year of service to compensate their economic losses.

Under severe pressure and provocation, the ordinary workers of Shuangma have decided to break their silence.

As the strike entered its second week, local government officials in Mianyang intensified their propaganda efforts, sending out three member work teams to visit and canvas opinion from the families of the workers, and attempt to persuade them to abandon the strike. This is well established practice in Chinese labour relations whereby management, in collusion with local government, seeks to disrupt worker solidarity by pressuring and even intimidating individual workers and their families rather than engaging in genuine collective bargaining.

And in the case of Shuangma, the approach seems, for the time being at least, to have been successful. CLB has long argued the need for genuine collective bargaining. Indeed if a democratic and representative union had been in place at Shuangma, it might have been able to negotiate an acceptable severance package with management during the restructuring process and averted the need for strike action in the first place.

China Urges Electricity Suppliers to Buy ‘Green’ Power Ling Li

China Watch

30th August 2007

Starting next month, China’s State Electricity Regulatory Commission (SERC) will assume nationwide oversight over power companies that are required under the country’s renewable energy law to prioritize purchases of the maximum amount of ‘green’ electricity available in their coverage areas, according to a recent regulation released by SERC. This renewable power includes energy generated from sources such as hydropower, wind power, biomass, solar power, tidal power, and geothermal energy.

The regulation also details the authority, measures, and responsibilities necessary for SERC to facilitate the integration of renewable sources into power systems. It allows all renewable power facilities, with the exception of medium- and large-scale hydropower plants, to receive government subsidies in power pricing rather than having to participate in competitive bidding.

China adopted its first law on renewable energy in 2005 and has since issued several supplementary rules and regulations to boost the use of renewable energy. Yet renewable sources still account for only a very small portion of domestic power supply, mainly because of the high generation costs. The cost of electricity generated from solar power, for example, is some 3 yuan (39 U.S. cents) per kilowatt-hour, while that from a typical coal-fired power plant is only around 0.22 yuan (2.8 U.S. cents) per kWh.

A supplementary regulation on renewable power pricing and cost sharing, authored by the National Development and Reform Committee, has helped break this cost bottleneck by requiring power suppliers on the grid to purchase renewable electricity at either a government-fixed or a government-directed price. The additional cost of renewable energy is to be borne by electricity users. An extra “renewable energy” charge of 0.001 yuan (0.013 U.S. cents) for every unit of electricity has been added to household utility bills since June 2006.

China’s rapid economic growth relies heavily on coal-fired power and poses a serious challenge to the nation’s energy supply as well as to its natural resources and environmental quality. The central government has recognized the importance of promoting renewable energy as a fundamental national strategy to achieve the dual goals of energy efficiency and sustainable development. According to China’s middle- and long-term plan for renewable energy development, the share of renewables used in primary energy consumption is to be increased to roughly 10 percent by 2010 and nearly 16 percent by 2020, up from some 7 percent in 2005. ‘Green’ electricity, meanwhile, is to account for some 6 percent and 8 percent of the nation’s total power generation by 2010 and 2020, respectively.

The success of renewable energy typically requires both government supports and market incentives, according to some entrepreneurs in the power industry. They argue that in addition to the current price subsidy, the Chinese government needs to further develop a mix of strong policies to encourage renewable power generation, such as providing loans or tax credits to green power producers.

China Watch is a joint initiative of the Worldwatch Institute and Beijing-based Global Environmental Institute (GEI)

China Says May Sack Energy-Guzzling State Firms' CEOs

PlanetArk CHINA

30th August 2007

BEIJING - China's state asset watchdog pledged on Wednesday to crack down on state-owned firms that fail to meet energy efficiency targets, saying the bosses of non-compliant firms could lose their jobs.

Environmental deterioration has become a growing concern for policy makers, as the country's ravenous economy consumes ever larger amounts of resources and factories belch out pollution that fouls the air, land and water.

Falling in line behind central government targets to reduce energy intensity and pollution, several ministries have issued rules and new initiatives targeting companies that pollute and use too much energy.

On Wednesday, the State Asset Supervision and Administration Commission (SASAC) joined the list.

"Whether China can meet its targets for energy-saving and pollution cuts hinges on the performance of centrally controlled state enterprises in this regard," Li Rongrong, head of the commission, told a meeting of managers at state firms.

The firms' performance was especially important because many of them are involved in core industrial sectors including oil, coal, chemical and power, which are both big energy producers and consumers, he said.

Beijing is aiming to cut energy intensity -- the amount of energy used to produce each dollar of national income -- by an average of 4 percent a year through the end of this decade.

It has so far lagged behind this target; energy intensity fell only 2.78 percent in the first half of this year from a year earlier after decreasing just 1.33 percent in all of 2006.

Beijing is also aiming to reduce pollutant emissions by 10 percent between 2006 and 2010.

Although many state firms have been striving to boost energy efficiency, some still have little awareness of the issue, said Huang Shuhe, deputy head of SASAC.

Huang said that state firms under the agency's supervision in core sectors of petroleum, chemicals, power generation, metallurgy, coal, transportation and construction materials would have to reach their energy-cutting targets by the end of 2009, one year ahead of the national deadline.

Huang also set out specific quantitative targets for firms in different sectors, with varying timeframes.

Chief executives will be seriously punished or even sacked if their firms fail to meet the goals, Huang added.

China is expected to overtake the United States as the world's top emitter of carbon dioxide soon but has resisted calls for emissions caps, saying its efficiency targets help cut emissions without biting into growth.

Separately, Ma Kai, head of the National Development and Reform Commission, the economic planning agency, said that his office had penalised more than 8,000 firms for pollution offences so far this year.

By February, 12 projects that seriously violated environmental rules had been permanently shut down, Ma was quoted by the Xinhua news agency as telling the parliament.

Another 103 projects involving total investment of 330.9 billion yuan (US$43.8 billion) that were not up to environmental standards had been refused or delayed approval this year, he added. Ma also said that small coal-fired generation units with a total capacity of 5.5 million kilowatts had been closed in the first half.

Story by Eadie Chen



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