Labor Conditions in the Pearl River Delta (Part 3

C O N F I D E N T I A L GUANGZHOU 032432

SIPDIS

PACOM FOR FPA
STATE FOR EAP/CM, DRL/IL
STATE PASS USTR FOR STRATFORD, WINTER
LABOR FOR ILAB NEWTON, LI ZHAO, SCHOEFFLE
TREASURY FOR OASIA/ISA-DOHNER AND KOEPKE
USDOC FOR 4420/ITA/MAC/MCQUEEN
GENEVA FOR CHAMBERLIN

SIPDIS

C O R R E C T E D C O P Y - TEXT ON SECTION 02

E.O. 12958: DECL: 12/19/16
TAGS: ELAB PHUM EFIN PGOV SOCI CH
SUBJECT: Labor Conditions in the Pearl River Delta (Part 3
of 3): NGO Efforts and Concerns

Ref: A) Guangzhou 32431; B) Guangzhou 32421; C) Guangzhou
32364; D) Guangzhou 32233


1. (U) Classified by Consul General Robert Goldberg.
Reason 1.4 (d).


2. (C) Summary: Pearl River Delta (PRD) labor conditions
remain poor because many migrant workers are ignorant of
their basic rights, too destitute to pursue complaints
legally, are barred from receiving minimum wages and lack
any effective government support, according to several NGOs
in the area. As many as 100 labor NGOs have formed in the
PRD over the past few years to address these issues. Such
groups seldom coordinate with the government, or worse, are
subject to intimidation and repression when they try to
cooperate among themselves. This is the third of three
cables on labor conditions in the PRD. End Summary.

Background
--------------


3. (C) This cable, the third of three cables on labor
conditions in the Pearl River Delta (PRD),analyzes the
role of labor NGOs, their assessment of government policies
and the pressures they face. Tang Jingling (protect),
formerly of China Labor Watch, has estimated the PRD has
about 100 NGOs (both large and small),with 70 percent of
them based in Shenzhen. These groups formed to fill a void
in worker's legal education and protection. The groups and
people active in the PRD are diverse in their intentions
and activities. Among them are:

-- Liu Kaiming (protect),from the Shenzhen-based Institute
of Contemporary Observation (ICO),which is dedicated to
auditing factories (over 1,000 so far) and providing worker
training sessions. In March 2004 the ICO started a Migrant
Worker Community College, which teaches basic computer
skills, English, health care and labor rights.

-- Li Weizhong (protect),from the New York-based China
Labor Watch (CLW),which distributes small labor rights
leaflets with stories of other migrant workers, basic labor
law information and telephone numbers of PRD NGOs.

-- Jing Xiang (protect),leader of the Friends of Workers
Service Center (FWSC),a Guangzhou-based group and PAS
small grant recipient, which conducts lectures with
university students from various Guangzhou universities
about the hardships of migrant workers.

-- Zhou Litai (protect) provides pro bono legal services to
migrant workers. Since 1996, his law offices (in Chongqing
and Shenzhen) have processed 6,000 cases. The goal of the
organization is to promote legal rights awareness and
increase labor legislation in Shenzhen.

-- Wei Wei (protect),leader of "Little Bird" (Xiao Xiao
Niao) a large NGO with offices in Beijing and Shenzhen (and
soon Shenyang),with about 100 lawyers providing legal
advice to workers through a telephone hotline.

-- Zeng Feiyang (protect),leader of the Migrant Workers
Documentation Center (MWDC, considered one of the PRD's
first labor NGOs),focuses on life skills training for
workers such as labor rights law, Cantonese and English
skills and computer skills. Zeng was a 2003 participant of
the International Visitors Program.

Poor Understanding of Labor Rights
--------------


4. (C) Virtually all of the labor NGO's agree that migrant
workers have a poor of their labor rights. Many groups,
such as CLW, provide free labor rights training to workers
on weekends to enhance understanding of their rights.

Congenoff witnessed one of these training sessions focused
on overtime wages. Many of the workers were unaware how
much overtime pay they should legally receive (if at all).
FWSC's Jing Xiang said that other important topics for
training include arbitration, contracts and work injury
insurance. Unfortunately, the number of workers attending
such sessions is often limited because many are too tired
to attend during their free time.


5. (C) A group of migrant workers who had attended CLW's
training session told Congenoff that they found training on
overtime wages and social insurance to be the most useful.
The workers had many questions about the U.S. labor system
and labor unions. Nevertheless, some workers who had been
to multiple sessions said they still needed advanced legal
advice.

Arbitration/Legal Representation
--------------


6. (C) CLW's Li Weizhong complained that even if migrant
workers receive rights training, they still need help
taking their case through the complex legal channels of
China's labor complaint system. According to China's Labor
Law, there are three steps in the labor complaint system:
mediation, arbitration and lawsuits. First, the worker
must apply to the labor dispute mediation committee of
their work unit for mediation. If the worker is
dissatisfied with the mediation outcome, he must apply to
the labor dispute arbitration committee for arbitration.
The document must be hand written by the complaining worker,
with no mistakes in the written Chinese. Such a task can
be particularly difficult for a worker with a hand injury
or missing limb. The arbitration committee is typically
expected to make a decision within 60 days from the date of
receiving the application. If the worker is still
dissatisfied, he has 15 days after the date of the
arbitration decision to bring a lawsuit to court.


7. (C) Many labor NGOs said this process is too long for
poor, uneducated workers. Thus legal activists, such as
Zhou Litai, provide much-needed legal services. Zhou said
his cases most frequently involve issues of industrial
injury compensation (Zhou said coal mines, battery
factories and shoe factories had the highest number of
injuries),social security, unpaid wages and government
officials who are corrupt, malfeasant or arbitrary. Zhou
said that few lawyers are willing to take on migrant worker
cases because, even if they win the suit, the compensation
claims are small and the arbitration process is time
consuming. Moreover, after winning some suits, Zhou
complained that migrant workers have been known to leave
the city and not pay him any fee - he says he is owed at
least 1 million RMB (USD 125,000) in such fees.

Minimum Wage Criticism
--------------


8. (SBU) The Guangdong government recently increased the
monthly minimum wage for cities throughout the PRD (ref B).
Nevertheless, many NGOs are skeptical the change will have
a tangible effect. Liu Kaiming recently said at a
conference that the PRD's minimum wages have historically
not kept up with the rise in average wages. According to
Liu minimum wages globally are between 40-60 percent of a
region's average wage, while Shenzhen and Guangzhou's
minimum wages are only 18 and 20 percent of the average
wage. The average monthly minimum wage for workers in the
PRD increased by only 68 RMB (USD 8.5) between 1992 and

2004. In a recent survey of 300 factories, the ICO found
50 percent of workers received the minimum wage, 30 percent
did not, and 20 percent received wagers higher than the
minimum (ref D).


9. (C) Little Bird's Wei Wei said that even if a worker

receives the minimum monthly wage required in Shenzhen (RMB
810, USD 101.25),roughly RMB 120 (USD 15) is typically
taken away for food and housing expenses. Moreover, Wei
said that "no company pays all of the overtime, especially
for weekends and holiday work" (Note: Weekend overtime
should be 200 percent of normal wages and holiday work
should be 300 percent of the norm. End note.). Wei noted
that two of the PRD's largest employers, Huawei and Foxconn,
only paid overtime to their middle managers.

Inadequate Labor Policies
--------------


10. (C) In general, labor NGOs are very cynical about
government efforts to fight labor violations. Almost all
of the labor NGO leaders interviewed said they could not
think of a single effective government policy in promoting
workers' rights. Moreover, volunteers from Little Bird
told Congenoff of collusion between officials and factory
managers. One of the Little Bird employees, who had
previously worked at Foxconn, said that managers used to
joke to one another before having dinner with labor
officials that they were "going to corruption" (qu fubai).
Little Bird's Wei also complained that inadequate labor
statistics make it difficult to track labor violators.
Some NGOs said, however, that the labor situation had
"improved slightly" from a few years ago. For example, in
the past workers had no idea of the need for health and
social welfare insurance. Today, Little Bird's advice
hotline receives many calls from workers asking about what
kind of insurance to buy.

Government Pressure
--------------


11. (C) In late 2006, government officials appear to have
become more concerned about the activities of labor groups,
particularly regarding collective protest. In addition to
the recent investigation and confiscation of computers from
12 Shenzhen-based NGOs (ref C),the Public Security Bureau
(PSB) has also pressured MWDC's Zeng Feiyang and FWSC's
Jing Xiang. Zeng Feiyang told Congenoff he was questioned
by local Public Security Bureau (PSB) officers about
whether he had joined the petition campaign to eliminate
the RMB 500 minimum arbitration fee. Additionally, on
several occasions Zeng has asked the Consulate to discuss
with the Civil Affairs Bureau the poor treatment of labor
NGOs. In a recent interview with the Guangzhou-based
Xinkuaibao newspaper, Zeng said, "some people think that
NGOs are opposing the government. This is a
misunderstanding. Our goal is to relieve social conflicts
and promote harmonious development. We are a constructive
and useful supplement to the government's work."


12. (C) Jing Xiang said that two PSB officers questioned
him on November 7, two days before the investigations of
the 12 Shenzhen NGOs began. The PSB officers wanted to
know about Jing's affiliation with Consulate Guangzhou and
his NGO's activities. Additionally, Jing said the PSB
wanted him to provide intelligence about the Consulate's
activities. Jing believes the PSB has been actively trying
to infiltrate NGOs for the past few years, and may already
be working inside some groups.

Comment
--------------


13. (C) Despite the suspicion of NGOs, many honest PRD
labor officials are working to improve migrant workers'
rights. The problem is that NGOs and government groups
have traditionally distrusted one another, particularly as
a consequence of China's fears of "color revolutions". The
government is especially suspicious of attempts by NGOs to
coordinate among themselves. At the heart of the PRD's
labor problems is the lack of the rule of law. For example,

the increase in minimum wages in various cities could
potentially raise the standard of living for migrant
workers. Nevertheless, blatant wage arrears or
administrative deceit (for example, withholding wages for
housing and food) is preventing countless workers from
receiving their proper wages. Another example - where NGO
and government cooperation could actually be very effective
- is labor rights knowledge. As demonstrated recently in
Shenzhen, the government also represses groups that are
legally petitioning on behalf of workers.

GOLDBERG