LABOR SECRETARY CHAO'S MEETING WITH SAWS MINISTER

UNCLAS SECTION 01 OF 05 BEIJING 024655 SIPDIS SENSITIVE SIPDIS STATE PASS CEQ 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 SUMMARY -------------- ¶1. (SBU) Summary: Li Yizhong, Minister for the State Administration for Work Safety (SAWS) met with Labor Secretary Chao on December 15, after the conclusion of the SIPDIS Strategic Economic Dialogue (SED). SAWS did not participate in the SED. Secretary Chao told Li that the SED was a historic occasion and very important to both the United States and China. Li agreed and said Chinese Ministers were anxious to see the results. Minister Li said his Government places great value on its cooperation with the United States on work safety, especially mine safety. Secretary Chao and Minister Li exchanged information about each Governments' respective work safety watchdog agencies. Minister Li provided detailed information about workplace accidents in China. He explained the high accident rate in the coal sector as a result of low mechanization and the relative backwardness of China's coal industry, and explained some of the coordination problems between China's central and local governments. Li described Chinese Government efforts to reduce workplace injuries, and said the media plays an important role. Secretary Chao invited Minister Li to the United States and encouraged him to remain in touch with the Administrators of the Occupational Safety and Health Administration (OSHA)and the Mine Safety and Health Administration (MSHA). There was no discussion of new projects. End Summary. ¶2. (SBU) Li Yizhong, Minister for SAWS met with Labor Secretary Elaine Chao and her delegation at SAWS headquarters SIPDIS on December 15. (Meeting participants listed in para. 14) Minister Li warmly welcomed the Secretary, noting that this is her first visit to China since SAWS,s elevation to the level of a Ministry in 2005. Li said the Chinese Government places great value on cooperation with the United States Department of Labor (USDOL) on work safety, particularly in the area of mine safety. Throughout the meeting, Li repeatedly cited the importance of studying the United States, experience in improving work safety. Secretary Chao recalled the Letters of Understanding on cooperation that she signed with SAWS in 2004, as well as USDOL,s existing mine safety program in China. There was no discussion of new projects. The Secretary described the duties and responsibilities of OSHA and MSHA, including how these agencies interact with state governments in the United States. She invited Minister Li to visit the United States and encouraged him to remain in touch with the OSHA and MSHA administrators. Secretary Chao briefs SAWS on the SED SIPDIS -------------- ¶3. (SBU) Secretary Chao briefed Minister Li on the Strategic Economic Dialogue (SED),in which SAWS did not participate. Secretary Chao said the SED was a historic occasion and very SIPDIS important to both the United States and China. She thanked the Chinese side for its hospitality and complimented China on its meticulous arrangements. Secretary Chao observed that Americans tend to prefer informality and spontaneous discussion, while the Chinese are more formal and put more BEIJING 00024655 002 OF 005 emphasis on detailed preparation. She said the discussions were useful and that the American side appreciated Chinese hospitality. Secretary Chao said the United States delegation brought a large press contingent to help publicize the posit points emerging from the SED, saying it was important to show Americans what China is really like. ¶4. (SBU) Minister Li observed that Chinese and Western cultures are growing closer. As an example, he said the Chinese Government is much more concerned with &putting people first8 than 30 years ago. He congratulated the United States on the productive outcome of the SED and said Chinese Ministers were anxious to see the results. Structure of SAWS and the Work Safety Situation -------------- -- ¶5. (SBU) Minister Li gave a brief introduction to SAWS and its areas of responsibility. He said that SAWS was responsible for occupational safety and health (OSH) supervision and workplace accidents. Natural disasters are the responsibility of the Ministry of Civil Affairs, public health emergencies are the responsibility of the Ministry of Health, and national security emergencies fall under the jurisdiction of the Ministry of Public Security. Li said SAWS has two major duties: 1) to supervise the OSH supervision and management activities of other Ministries which have OSH responsibilities for certain sectors of the economy, such as the Ministries of Construction and Railways, and 2) to take primary responsibility for OSH in industries where there is no other designated OSH watchdog agency, such as in the coal, oil, metals and chemical sectors, and light industries like textiles. To coordinate the activities of SAWS and the OSH watchdog agencies of other ministries, the State Council has its own Work Safety Supervision Committee, headed by Vice-Premier Huang Ju. Minister Li said this same structure is duplicated at the provincial level in each province, and that SAWS provides guidance on OSH issues to all provincial authorities. ¶6. (SBU) In the coal sector, however, Minister Li said China learned from the United States, experience and has set up 29 regional SAWS operations in key coal-producing provinces and cities that answer directly to SAWS in Beijing. SAWS and its provincial and local subordinates have a total of 50,000 inspectors, 3,000 of whom are coal safety officials who answer directly to Beijing. The remaining 47,000 deal with non-coal industries and mostly answer to provincial or local governments. ¶7. (SBU) Minister Li said that China had 718,000 work-related accidents in 2005, which included 127,000 fatalities, but these figures include traffic accidents. 100,000 traffic fatalities accounted for 77 percent of all work-related fatalities in China in 2005. The "second killer,8 Minister Li said, is the rail sector, which accounted for 7,000 deaths in 2005. Coal is the &third killer.8 Minister li said 5,938 coal miners died on the job in 2005, amounting to 4.5 percent of all work-related deaths, but that the coal sector is responsible for more than half of all accidents in which 10 or more people die. The next BEIJING 00024655 003 OF 005 highest number of deaths in 2005 were in the construction (2,600 people) and non-coal mining (2,300 people) sectors. ¶8. (SBU) Minister Li said the Government is paying 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 BEIJING 00024655 004 OF 005 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 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 BEIJING 00024655 005 OF 005 ¶15. (U) Associate Deputy Secretary of Labor Laura Genero cleared this message. Randt