Identifier
Created
Classification
Origin
07SHANGHAI464
2007-07-24 03:42:00
CONFIDENTIAL
Consulate Shanghai
Cable title:  

SHANGHAI MUNICIPAL TRADE UNION COUNCIL: PROTECTING ECONOMIC

Tags:  ELAB PGOV PHUM CH 
pdf how-to read a cable
VZCZCXRO0445
RR RUEHCN RUEHGH
DE RUEHGH #0464/01 2050342
ZNY CCCCC ZZH
R 240342Z JUL 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6061
INFO RUEHBJ/AMEMBASSY BEIJING 1279
RUEHCN/AMCONSUL CHENGDU 0788
RUEHGZ/AMCONSUL GUANGZHOU 0768
RUEHHK/AMCONSUL HONG KONG 0906
RUEHSH/AMCONSUL SHENYANG 0790
RUEHIN/AIT TAIPEI 0637
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 6501
C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000464 

SIPDIS

SIPDIS

DEPT FOR EAP/CM AND DRL
LABOR FOR ILAB - ZHAO LI
TREAS FOR OASIA/ISA-CUSHMAN
USDOC FOR ITA/MAC/MCQUEEN, MELCHER AND DAS KASOFF

E.O. 12958: DECL: 7/24/2017
TAGS: ELAB PGOV PHUM CH
SUBJECT: SHANGHAI MUNICIPAL TRADE UNION COUNCIL: PROTECTING ECONOMIC
INTERESTS AND WORKERS RIGHTS

REF: BEIJING 4467

CLASSIFIED BY: Veomayoury Baccam, Acting Pol/Econ Section Chief,
U.S. Consulate , Shanghai .
REASON: 1.4 (b),(d)



C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000464

SIPDIS

SIPDIS

DEPT FOR EAP/CM AND DRL
LABOR FOR ILAB - ZHAO LI
TREAS FOR OASIA/ISA-CUSHMAN
USDOC FOR ITA/MAC/MCQUEEN, MELCHER AND DAS KASOFF

E.O. 12958: DECL: 7/24/2017
TAGS: ELAB PGOV PHUM CH
SUBJECT: SHANGHAI MUNICIPAL TRADE UNION COUNCIL: PROTECTING ECONOMIC
INTERESTS AND WORKERS RIGHTS

REF: BEIJING 4467

CLASSIFIED BY: Veomayoury Baccam, Acting Pol/Econ Section Chief,
U.S. Consulate , Shanghai .
REASON: 1.4 (b),(d)




1. (SBU) Summary. In a July 16 meeting, Shanghai Municipal
Trade Union Council (SMTUC) Deputy Director Huang Qi called the
new Labor Contract Law (LCL) a positive development because of
its emphasis on the role of the trade union in labor contracts.
Although SMTUC's primary responsibility was to protect workers,
the representative noted that the organization also had a
responsibility to promote harmony and often encouraged workers
to settle problems without resorting to the courts. She also
said SMTUC had to protect "economic interests" and had good
relations with many companies. In separate meetings, academics
and labor lawyers said the trade union was not very effective at
representing workers and lacked accountability. End Summary.

--------------
SMTUC's Role and Programs
--------------


2. (SBU) On July 16, Poloff and FSN Political Assistant met
with Shanghai Municipal Trade Union Council (SMTUC) Legal Work
Department Deputy Director Huang Qi to discuss the new Labor
Contract Law (see reftel). SMTUC, founded in 1925, acts as the
Shanghai branch of the All China Federation of Trade Unions
(ACFTU) and has 14 departments and over 120 staff members.
According to Huang, the Legal Work Department had four major
functions: advising the Shanghai Municipal People's Congress
(SMPC) on legislation; monitoring labor law enforcement;
organizing labor law training for lawyers and workers; and
providing workers with legal assistance in resolving labor
disputes. The SMTUC worked closely with local security and
labor inspection organizations to investigate reports of labor
violations. It also co-hosted an annual meeting with local
entrepreneurial associations to discuss work-related issues such
as salary levels, overtime pay policies and work-related injury

insurance. In addition, the SMTUC participated in a few
exchange programs with overseas trade unions. For example, it
planned on visiting trade unions in Los Angeles this year to
learn how to better deal with migrant workers. In March 2008,
the SMTUC planned to host a U.S. delegation from International
Longshoremen's Association. When asked whether the SMTUC would
be interested in receiving technical assistance from the United
States, Huang noted that the SMTUC was reluctant to spearhead
any programs and suggested that the Consulate raise this issue
with the Labor Inspection Bureau.

--------------
"Win-Win" Scenario
--------------


3. (SBU) Huang said that although the primary role of a trade
union was to better safeguard worker's rights, it was also
important to protect "economic interests." No one benefited
when companies closed their doors and went bankrupt. In
addition, as the trade union was under the Communist Party's
supervision, it needed to implement the Party's policy of
building a harmonious society. Therefore, the SMTUC encouraged
workers to settle disputes without going to court. She called
this a "win-win" scenario. The trade union enjoyed good
relationships with local companies as many companies realized
that the trade union could help them manage the workers. Huang
noted that this was very different from trade unions in America
which had a more "aggressive" style. She said that such a style
did not fit China's current situation and would result in
instability, not harmony.

--------------
The Labor Contract Law
--------------


4. (SBU) According to Huang, SMTUC participated in the
consultation process for the Labor Contract Law (LCL) by

SHANGHAI 00000464 002 OF 003


forwarding the suggestions and opinions of workers in Shanghai
to the National People's Congress and the Chinese State Council.
She noted complaints by some multinational companies (MNCs)
that the law was not necessary. Nevertheless, although
Shanghai's local labor contract regulation was more advanced
than the LCL and most MNCs complied with the law, redundancy was
good. She was pleased that the LCL had given the trade union a
greater role in the contract negotiations. Before workers sign
contracts, trade union representatives must explain the
contracts clearly to the workers, especially the articles on
employee and employer's rights and interests, probationary
period and confidentiality agreement. However, in many cases
this was a mere formality and as long as the companies informed
the trade union in advance of the contract there should be no
problems for approval. To promote the law, SMTUC planned on
organizing four large-scale training sessions, in which it would
provide training on the law to its subordinate trade unions.
The trade unions would then provide training to workers. The
first session was scheduled for July 22 and was targeted at
labor lawyers.

--------------
Migrant Workers
--------------


5. (SBU) Huang acknowledged that more needed to be done to help
migrant workers and said that the SMTUC was active in helping
this group. SMTUC operated evening schools for migrant workers,
teaching them technical skills as well as how to act in a
"civilized" society. Huang believed that this type of training
helped migrant workers to become more competitive in the job
market and eventually gave them more bargaining power in
negotiating contracts. This was one way in which SMUTC was
improving labor rights.

-------------- --------------
Scholars and Lawyers' Views on the Trade Union's Role
-------------- --------------


6. (C) Before the LCL was passed, Poloff and FSN Political
Assistant had discussed the role of China's labor union with
local labor scholars and lawyers. All agreed that China's labor
rights problems stem from weak enforcement and said that the
union needed to be more accountable to workers. However, none
believed the Chinese government would allow the union to be
entirely independent or strong. On June 8, Jun He Law Offices'
Partner Ma Jianjun said the key problem with the trade union in
China was that it received its funding from companies and,
therefore, had competing loyalties. While it was important to
reform the trade union, he thought China was not ready for
European style unions, independent from the government. Baker
and McKenzie Lawyer Jeffery Wilson, in a discussion on June 13,
noted that Chinese labor officials lacked manpower and
incentives to enforce labor laws. The government would like the
trade union to take on some of this responsibility and to be
more aggressive in protecting workers.


7. (C) East China University of Political Sciences and Law
Professor Dong Baohua, who participated in drafting the 1995
Labor Law, told Poloff and FSN Political Assistant in a separate
meeting on June 13 that the trade union enjoyed all the benefits
but none of the responsibilities of protecting workers. Its
leaders, many of whom were Communist Party leaders, had a great
deal of power and influence, but did not answer to workers and
were not held accountable for their actions. He did not think
that trade union leaders were interested in reform and
strengthening their connection to workers. Shanghai Normal
University Professor Liu Cheng, on June 7, acknowledged that the
trade union was not very effective in representing workers. He
believed, however, that the union eventually would become more
active in protecting workers rights after the LCL was
implemented. A stronger trade union would improve democracy and
increase rule of law.

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

SHANGHAI 00000464 003 OF 003




8. (C) The SMTUC's emphasis on economic development and harmony
as well as its cozy relationship with companies make it unlikely
that the organization will become more active in promoting
workers rights or change much of its actions because of the LCL.
It still is subordinate to the Communist Party and will
continue to look to the party for guidance.
SCHUCHAT