LABOR SECRETARY CHAO'S MEETING WITH SAWS MINISTER

UNCLAS SECTION 01 OF 04 BEIJING 024641 SIPDIS SENSITIVE SIPDIS STATE PASS CEG FOR CONNAUGHTON STATE PASS CEA FOR BLOCK STATE PASS USTR FOR STRATFORD/ALTBACH/CELICO/ROSENBERG STATE PASS FEDERAL RESERIVE BOARD FOR JOHNSON/SCHINDLER NSC FOR HUNTER/SHRIER/TONG COMMERCE FOR 4420/MCQUEEN TREASURY FOR SMITH/DOHNER/HAARSAGER/BAKER/CUSHMAN GENEVA FOR CHAMBERLIN AND USTR DOE FOR INTERNATIONAL/PUMPHREY/GEBERT EPA FOR INTERNATIONAL/AYRES, FIDLER, MCCASKILL HHS FOR STEIGER, ELVANDER AND BHAT LABOR FOR OSEC-HUI, OSHA-DEMESME-GRAY AND ILAB E.O. 12958: N/A TAGS: ELAB ECON PREL PHUM EMIN ENRG PBIO CH SUBJECT: LABOR SECRETARY CHAO'S MEETING WITH SAWS MINISTER LI YIZHONG BEIJING 00024641 001.2 OF 004 ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR CABLE CANCELED AND WILL BE RESENT UNDER A NEW MRN ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR ZFR BEIJING 00024641 002.2 OF 004 ZFR ZFR ZFR ZFR ZFR ZFR CABLE CANCELED AND WILL BE RESENT UNDER NEW MRN ZFR ZFR ZFR ZFR ZFR ZFR BEIJING 00024641 003 OF 004 increasing attention to OSH, incorporating it into the five-year plan and other major economic policy documents. The Government is taking a number of legal, educational and technical measures to improve the OSH situation, including examining OSH records when evaluating the performance of local government officials and managers of enterprises. He said China has tightened investigation procedures and increased punishments for workplace accidents, including punishing officials for holding shares in coal mines or colluding with employers to circumvent safety regulations. Minister Li also said the media plays an important role in alerting SAWS to mine accidents and publicizing Government efforts to investigate them. ¶9. (SBU) Secretary Chao asked whether the collection and publication of OSH statistics is something new for China. Minister Li said the Government has maintained and published OSH statistics since 1949, but has recently improved its reporting. He said the National Bureau of Statistics (NBS) began publishing four new OSH indicators in 2005, including fatalities per 100 million RMB of GDP, fatalities per 100,000 workers, fatalities per 10,000 registered motor vehicles, and coal mine fatalities per 100 million metric tons (mmt)of coal produced. Minister Li said the Chinese Government will use these indicators to track progress in OSH. For example, the 2006-2011 five-year plan sets the goal of reducing the first two NBS indicators by 25 and 35 percent respectively over five years. ¶10. (SBU) Minister Li said that projections for 2006 indicate that workplace fatalities will be about 10 percent lower than in 2005, and 21 percent lower in the coal mining sector. However, he said he warns his staff not to be complacent or boast about their achievements. Li said China,s goal is to reach a level of workplace accidents comparable to a moderately developed country within 15 years. He said that studying the experience of other countries, this is a rapid rate. In the United States, for example, Li said, industrial accidents increased every year for 60 years before beginning to decline. In the UK, this took 70 years, and in Japan, 26 years. Minister Li said that countries with per capity GDP of $1000 to $3000 face the highest rates of industrial accidents. Problems in the Coal Sector -------------- ¶11. (SBU) Minister Li said there are 5.5 million coal miners in China, and 25,000 mines. In 2005, China produced 2.2. billion tons of coal in 2005, a rate of 400 tons per worker, compared with a rate of 10,000 tons per worker in the United States. There were 2.8 fatalities per mmt of coal produced in 2005, and SAWS expects the rate for 2006 to be 2.2. Minister Li acknowledge that this rate is about 100 times the rate of the United States (0.03). Of the total number of coal mines, Minister Li said, 23,000 are classified as &small,8 meaning they produce less than 30,000 tons per year. Li said these small mines are responsible for most of the accidents and fatalities. Larger mines are highly mechanized and have much better safety records, Li said. The small mines are labor-intensive and do not make necessary BEIJING 00024641 004 OF 004 investments in safety. Li said all small coal mines are privately-owned, and that many of them are illegal. (Note: most small mines are owned by township or county governments and contracted to private mine operators. End note.) Li said the Central Government and most provincial governments are resolved to close these small mines, but face considerable resistance from county and township governments. Li said the Government would use economic and technical measures to limit these small mines, access to the market, and thus force them out of business. Part of this would be to require mine operators to pay royalties for the coal they extract, and force them to comply with higher environmental and safety standards. ¶12. (SBU) Part of the mine safety problem, Minister Li said, is also the level of education of miners. Fifty-six percent of all miners are migrant workers, with no work experience aside from farming, and low levels of education. The Minister added that in many parts of China, local farmers live on top of thin or low quality coal seams, and find it more profitable to illegally mine this coal than to farm. Li said government policies to improve rural education would hopefully help workers protect themselves. ¶13. (SBU) Recalling his experience as Chairman of Sinopec (one of China,s largest state-owned petroleum companies,) Li said China,s coal industry is underdeveloped. Unlike most of China,s oil companies, Li said most of China,s coal companies are not publicly listed. He said China,s coal sector needs to open itself up to the outside world to attract foreign capital and management expertise. Participants List -------------- ¶14. (U) United States Participants -------------- --Elaine L. Chao Secretary of Labor --Laura Genero, Associate Deputy Secretary of Labor --Robert Athey, USDOL Midwest Regional Representative --Randolph Clerihue, Assistant Secretary of Labor --Anna Hui, Special Assistant to the Secretary of Labor --Bruce Levine, Embassy Labor Officer (notetaker) --Interpreter Chinese Participants -------------- -- Li Yizhong, SAWS Minister -- Wang Dexue, SAWS Vice-minister -- Liang Jiakun, SAWS Vice-minister -- Tian Yuzhang, SAWS Director General -- Huang Yi, SAWS Director General -- Bai Ran, SAWS Director General -- Interpreter ¶15. Associate Deputy Secretary of Labor Laura Genero cleared this message. Randt