China has a long history and has been through many political changes to this day. This work emphasizes the Chinese human right problems, labour rights in the country and cases of companies that are good and bad examples of business ethics. Furthermore there is an emphasis on how China’s economy is faced against the human rights issue and CSR corporate social responsibility of the companies studied. Human rights in China hit the international sense when confronted with the people that are forced to work in prison camps. The denial of these rights to the people makes them live below the level of acceptance for economic reason of other cause, e.g. (supply chain of multinationals). And they continue doing it and selling the goods produced internationally. As regards the Labour Rights, China is a recent player that had in 1995 created the first comprehensive Labour Law. On the other hand, Independent worker unions are not allowed making the government with full empowerment control by the measures of the All-China Federation of Trade Unions (ACFTU). As to balance between good and bad examples we have pointed out HEG Electronics – Samsung’s Chinese Supplier (as a bad example) and KPMG China & William E. Connor & Associates Ltd. (as good example). The first company, the bad example, seems to use child labour, excessive overtime, lack of safity educantion, lack of labour protection and so on. That creates a big gap between official labour law and the actual fact. The second examples are two companies, based in Hong Kong, that are doing a good job in maintaining a clear evironment of work to employees and taking care of business, social and public sectors.
China has a 5,000-year history of civilization. We decided to have a brief review of some key dates that have marked China’s history, which will allow us to get a better understanding of what is happening today in China.
Our first focus will be on the period from 1966 to 1976, known under the name of “Cultural Revolution”. (Szczepanski, n.d.) Under the lead of Mao Zedong, the young people of China rose up against what they called the “Four Olds” : old customs, old culture, old habits and old ideas. Mao Zedong, used this wave of communist movement to bring the Chinese Communist Party (CPC) in charge of the country.
The revolution generated a big chaos for the Chinese people and the country as a whole. The economy was collapsing, objects associated with China’s pre-revolutionary past were liable to be destroyed, religion was banned, etc.
Most importantly, “for the entire decade of the Cultural Revolution, schools in China did not operate; this left an entire generation with no formal education.”pointed out by Szczepanski (n.d.) The sufferings for the chinese population was enormous.
At the end of the 1970s, the CPC had learned painful lessons from the “cultural revolution” and decided to shift the focus from national work to socialist modernization, as well as adopted the policies of reform and opening-up.
The second focus of China’s recent past will be on the “Democracy movement” in 1989.( BACKGROUND TO THE 1989 DEMOCRACY MOVEMENT, n.d.)
During the spring of 1989, a peaceful protest movement had been carried out by students and civilians in China’s major cities over a period of two months. More than a million people demanded a democratic reform and a halt to China’s escalating corruption problem.
The troops of the govermnent opened fire on unarmed students and civilians who resisted the suppression. It is said that more than 2000 people died and around 500 were imprisoned, but the official numbers of dead, imprisoned or disappeared people is unknown because the Chinese government refuses to carry out a investigation or accounting of the events of June 1989.
Today, China has a major political and economic importance in the contemporary world. It’s phenomenal economic progress has made China one of the most important players in world economy. Its growing economic power has strengthened its political authority in Asia and the world.
China is still widely perceived as a country which does not, or only scantily respects human rights. This poor reputation does not just refer to Communist China in general and the Cultural Revolution, but has been carved into our brain since the violent crackdown of the 1989 democracy movement.
Whether we are outspoken critics of China as one of the worst human rights offenders or feel it is better to praise China for its progress than to nag on the shortcomings, it is clear that the issue is of major importance and that the future of China and human rights are interdependent.
Tiananmen Square 1989 China
Laogai – forced labour prison camps
As we have seen in our introduction, China is still in their first steps of becoming a democracy in western standards. It’s recent history is marked by communism, where human rights were not always respected. One example to illustrate this are the forced labour prison camps known as “Laogai”. We will see how these camps are directly or indirectly linked to western corporations and how products made by people in those prison camps under very poor working conditions end up in our hands.
First of all, let’s have a closer look what a “Laogai camp” exactly is:
The term “Laogai” means “reform through labour”, which is the Chinese system of labour prison factories, detention centers, and re-education camps designed by Mao Zedong in the early 1950s. It has been adapted across China to punish and reform criminals by enforcing them working as free labour. However¼Œinstead of looking at the contribution to the Chinese economy made by those prision labour force¼Œthe Laogai system hightlights the deprivation of individuals of basic human rights. It can be easily found inside the Laogai system that prisoners are frequently exposed into cirrcustances such as cruel,degrading treatment and oftentimes tortured. These human rights abuses¼Œ to a large degree, violate both Chinese and international human rights norms. (Pejan, n.d.) While, The Laogai system has also been criticized of creating an incentive to incarcerate increasing numbers of potentially innocent individuals. (THE LAOGAI: EXERCISING DICTATORSHIP OVER DISSENT,n.d.)
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It has been noticed by LAOGAI RESEARCH FOUNDATION(2011, p.5) that China’s Laogai system is mainly drived by production for both domestic and international consumption. The involements of Laogai camps in production process are highly varied. For instance, Laogai prisoners may take care of the whole production process of one certain item or just simply assemble part of it. The thing is those products made under laogai system are not accepted by U.S. law. Which means it is illegal to import products produced in Laogai camps to the USA market. However, it seems this law is not widely respected by big multinational corporations. As Corsi (2006) argued in his article that most of U.S companies¼ˆincluding Wal-Mart¼‰are willing to sell Chinese made goods by taking advantage of the chinese slave labor. Moreover, even worse in Europe, there is no regulation exist that forbids the importation of such goods, claimed European Parliament(2010).
More recently, the broadcaster Al Jazeera pointed out the Laogai camps by launching a documentary called “Slavery: A 21st Century Evil”.(2012)
Shortly after this, the international broadcaster Al Jazeera was forced to close its offices in China.( Al Jazeera English forced out of China,2012)
In China, as we saw with the example of the Laogai prisons, basic human rights can be closely related to the labour rights. We will now have a closer look on the evolution of labour rights in China and how they are (or not) respected by international corporations.
China’s socialist legal system was first set up in 1949. During he period from 1949 to the mid-1950s, China promulgated the Common Program of the Chinese People’s Political Consultative Conference, in the character of an interim constitution and some other laws, which had a significant influence on consolidating the new-born political power, maintaining social order and reviving the national economy.
The concept of a labour law is very recent in China. Its first comprehensive labour law went into effect on January 1. 1995, and represents the regime’s most recent efforts to grapple with problems brought on by the transition to a socialist market economy.
The PRC Labour Law extends a number of specific benefits to workers. These include « guarantees » respecting equal opportunity in employment, job selection, compensation, rest, leave, safety and health care but also vocational training, social security, welfare, and the right to submit disputes to arbitration.
The People’s Republic of China has seen many changes in the structure of its economy and in the treatment of workers employed by economic enterprises. While the Labour Law of the PRC represents a major step toward articulating legal norms on the protection of workers rights, it still reflects the imperatives of Chinese government policies of economic growth and the Chinese Communist Party’s concerns with political control. Thus provisions on contract labour and the role of trade unions appear to serve the interests of the Party/state to a greater extent than they do the interests of Chinese workers. The new law also faces significant impediments to full implementation. Nonetheless, in the context of the transition to a socialist market economy the new labour code does represent significant progress in the ongoing challenge of managing labour relations in China.
In 2008, the government introduced a Labor Contract Law that rolled back some of the “laissez-faire” approaches to the workforce that the government introduced in the 1990s. This new law abolished the system of at-will employment for most full-time employees and required employers to provide employees with written contracts. Since 2008, the government has also revisited its policy of tight control over the All-China Federation of Trade Unions (ACFTU). While all unions must still be approved by and affiliated with ACFTU, it appears that the government is allowing the ACFTU greater authority to advocate for the rights of workers than it did just a few years ago. That said, the government continues to imprison workers who advocate for the formation of independent trade unions.
In China, 2010 was a year of significance in the development of labour-related legislation. It saw the 60th anniversary of New China’s first Trade Union Law and the 15th anniversary of the country’s first Labour Law. It was also a year that witnessed a significant increase of labour disputes in the country, including the scandal of workers suicides in Foxconn (Apple’s contract manufacturer for many products) and the strikes in Honda China. It was against this background that an international conference ”Chinese Trade Union and Labour Law: Past, Present and Future’ was organised in August in Beijing to critically review and assess these laws and their implementation as well as other relevant issues concerning labour in China and to identify the prospects for Chinese workers in future.( Zhao,Zhao and Fan, 2011)
It has been well illustrated in World Report 2012: China (2012), China 2011 presented a lack of representative work union which creates a problem for the workers that cannot ask for the betterment of wages and general conditions. The government prohibits independent labour unions which makes out of All-China Federation of Trade Unions (ACFTU) the only legal representative of workers in China.
Systemic discrimination on migrants is continued to be imposed by the hukou (house hold registration), said a government survey on migrant workers in January. The system unfairly limits the access to housing, medical services, and education. In august 2011 the government ordered closure of 24 illegal private schools that catered to migrant children. Most found alternate schools other had their children was sent to hukou-linked schools in rural areas because the parents could not afford school in Beijing.
1) HEG Electronics – Samsung’s Chinese Supplier Employs Underage Workers
With the example of “HEG Electronics” we will try to illustrate that the labour rights in China are in some cases not respected which leads to poor working conditions for their employees.
China Labour Watch, a non-profit organisation based in New York. As stated on their official website, they have been aimed at assessing and re-evaluating labour conditions in hundreds of manufacturing factories most of whose partners are transnational companies. In August 2012, it published a report called Samsung’s Supplier Factory Exploiting Child Labor(2012) which points out the following working conditions in “HEG Electronics”:
Child Labour Abuse Hiring Discrimination
Labour Contracts, Wage Rates, Reward and Punishment System
Appalling Cafeteria and Dormitory Conditions
Lack of Safety Education and Labour Protection
The problems also haven been addressed by European Parliament (Infringement of normal labour standards in some Chinese factories, 2012), especially the abuse of underage labour. As indicated by members of China Labor Watch, the student labour accounts for 80% of total labour force in HEG factories and most of them work under the same harsh working conditions as adults but with even less wage paid. (China Labor Watch, 2012,p.3)
Furthermore, an interesting website called “stop samsung – no more deaths!” describes the correlation between Samsung and his subsidiary HEG Electronics:
“Samsung provides fixed assets and other equipment to the Chinese contractor, the survey said. More than 50 Samsung employees are posted to HEG production facilities.”(stopsamsung,2012)
On the HEG Electronics website you can find the following statement:
“Heg always adhere to the people-oriented concept, so that development for staff development rely on employees, corporate efforts to the fruits of development to benefit the general staff.
Employees are our most valuable resources and wealth, and the healthy growth of the employees is the success of our cause and an important foundation for enterprises to obtain sustainable development and protection. We always adhere to the people-oriented, advocating equality and non-discriminatory employment policies to respect and protect the legitimate rights and interests of employees and cherish the staff of life, health and safety; respect for labour, respect knowledge, respect talent, respect for creation, major decisions and important production operating activities focus on the mobilization of all the staff’s enthusiasm and creativity, and focus on improving the quality of staff. Enterprise development innovations to benefit the general staff efforts to achieve the organic unity of the enterprise value and the value of employees.
Enriching the cultural life of the employees, the company is active in a variety of cultural and recreational activities such as basketball, soccer, table tennis, and staff in his spare time to relax, keep fit, cultivate character, enhanced teamwork for employees to create a good the casual environment conditions.”
If you put into contrast HEG Electronics declaration on their website where they describe their employees as their “most valuable resource and wealth” and the report from the organisation China Labour Watch which points out that the company is exploiting child labour, you can deduce that there is a big gap between what is the “official labour law” and what some companies are doing on an everyday basis.
1) KPMG China – Caring Company Award
KPMG China has been presented with the Caring Company Award by the Hong Kong Council of Social Service for tenth consecutive years (from 2002 – 2012). The award recognises private companies in Hong Kong which demonstrate good corporate citizenship. It is complimented by the Outstanding Partnership Project Award in 2006 and 2008, which honours KPMG’s partnership with the Society of Community Organization (SoCO) for supporting the children in need and Youth Business Hong Kong (YBHK) for mentoring the entrepreneurial youth on starting up and running their businesses respectively.
The mission of the Caring Company Scheme is to build a caring community by encouraging corporate citizenships and strategic partnerships among the business, public and social service sectors in Hong Kong. Awards are presented each year to recognise organisations with outstanding involvement in corporate social responsibility programmes.
2) William E. Connor & Associates Ltd. – One of World’s Most Ethical Companies
Behind some of the biggest household names in luxury fashion and home accessories is a name the average consumer may not know, William E. Connor & Associates Ltd. (www.weconnor.com). The Hong Kong based global sourcing company, representing elite worldwide brands, announced today that it has been recognized by the Ethisphere Institute, the leading U.S. business ethics think-tank, as one of 2012 World’s Most Ethical Companies. Connor is the first Asia based company in the sourcing industry to receive the award.
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Meeting demanding scrutiny, Connor secured a hard-earned spot on the list by employing and maintaining upright business practices and initiatives that are instrumental to the company’s success; benefit the communities in which the company operates; and raise the bar for ethical standards within the industry. Connor’s business model is unique among its global competitors – the company does not hold an equity interest in any factory, nor receive any financial benefit from factories. Connor’s earnings are generated only from client commissions. Connor has the highest standards in the industry, ensuring their clients – and ultimately, consumers – receive apparel, decorative items and furniture, manufactured under responsible, fair working conditions.
China is a country that is economically very relevant in the present times, but it potentially could easily become the first world power in a certain period of time. The question is: is China ready? On our opinion, it has a long way to go, specially on the ethics field.
On one hand, it is undeniable that there has been some change over the years, implementing new legislation to protect workers and to regulate the business environment, but on the other, China still has a lot of dark episodes where human rights are not respected at all, and in order to progress, this has to change. To make this possible, a good initiative would be eliminating the Laogai prisons. They were created many years ago, and the fact that they still exist is a sign of the poor mentality that remains in certain areas of the country. To push this forward, western countries should also put political pressure on China, making them see that human rights must be respected above all things.
Another good improvement would be the implementation of a renovated corporate social responsability. Although there has been some efforts, companies in China are far behind in this matter compared to other parts of the world. The end does not justify the means, and child labour or overexplotation are not acceptable in a country with so much economic weight. With a new CSR, the ethical awarness of the companies will be higher, and as a consecuence, the reputation of many enterprises will change.
China has a lot of work to do, but future could be very bright if the rights approaches are taken. The good examples that we have found in our research show the path to follow, and hopefully with the years they can become a model of how an ethical country should be.
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